Pursuant to the Sine Die Resolution (S. 1192), the House and Senate convened Wednesday to take up conference committee reports on the budget, H. 5100, and other key bills. The General Assembly may not reconvene until 2025 dependent upon vetoes issued by the Governor. In this session’s final Friday Report, the budget and other conference committee bills of interest to counties are discussed below. | |
General Assembly Passes 2024-25 State Budget | |
Budget Bill — H. 5100. The FY 24-25 Appropriations Bill includes, among other items of interest, increased funding to the Local Government Fund (LGF) by $13,872,845 statewide. This represents full funding to the LGF under the statutory formula. (See updated LGF County Allocation Estimates Chart).
Line items of interest in this year’s version of the budget include:
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$12 million for the Rural County Stabilization Fund (RCSF), which represents the same funding as the current fiscal year. (See updated RCSF Estimates Chart);
- $62 million to cover a $1,125 base pay increase for state employees making $50,000 or less and a 2.25% base pay increase for state employees making more than $50,000;
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$107 million to cover the state’s share of a projected 11.8% increase in premiums for the State Health Plan (See proviso 108.6 in the attached provisos document);
- $750,000 for PTSD treatment for first responders;
- $3 million to Labor Licensing and Regulation for the V-SAFE Fund;
- $3.784 million for the Firefighter Cancer Benefit Plan;
- $1 million to supplement the Councils of Governments;
- $1.1 million in additional recurring funding for State Aid to County Libraries;
- $1.1 million in additional money to the Department of Parks, Recreation and Tourism (PRT) for regional tourism;
- $10 million to PRT for destination-specific tourism grants;
- $2 million to PRT for tourism development;
- $30 million to the Office of Resiliency for the Disaster Relief and Resilience Reserve Fund;
- $18 million in additional money to the Conservation Bank for grant funding;
- $11.5 million in additional money to the State Election Commission for election operations;
- $750,000 to the State Election Commission for a Certified Poll Clerk Program;
- $2.5 million to the Department of Mental Health for the Alternative Transportation Program;
- $5 million in additional money to the Department of Commerce for the Closing Fund;
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$100 million to the Department of Transportation (SCDOT) for bridge modification on interstate and primary highways (See proviso 118.22 below);
- $100 million to SCDOT for the Bridge Acceleration Fund;
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$117.4 million to SCDOT for the Rural Road Safety Program (See proviso 118.22 below);
- $1 million to SCDOT for the “off-state roads” litter program;
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$200 million to the County Transportation Committee Acceleration Fund (See proviso 118.22 below);
- $11.4 million in additional funding to the Rural Infrastructure Authority (RIA) for the Water Quality Revolving Loan Fund;
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$16 million to the RIA for the Rural Infrastructure Fund and $15 million for the Statewide Water and Sewer Fund (See proviso 118.22 below);
- $20 million to the Department of Commerce’s SC NEXUS Program for Advanced Resilient Energy;
- $1.5 million to the Department of Environmental Services (DES) for the air quality program;
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$900,000 to DES for a Per-and-Polyfluoroalkyl Substances (PFAS) Pilot Program (See proviso 55.28 in the attached provisos document);
- $1 million to the Department of Administration for first responder 800MHz communication modernization;
- $10 million to the Department of Corrections for cell phone interdiction;
- More than $75 million to the Department of Veterans’ Affairs for veteran homes;
- $1.28 million to the Department of Veterans’ Affairs for the Veterans’ Cemetery;
- $1 million for the Veterans’ Trust Fund;
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$1 million in income tax credits to comply with H. 3121, the Recreational Trail Easement Tax Credit bill, that passed earlier this year;
- $5 million to the Attorney General’s Office for a new Crime Victim Assistance “SAVS” Program;
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$45,000 to the Department of Public Safety for the “Governor’s Law Enforcement Officer of the Year Award” (See proviso 63.9); and
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$2 million in recurring dollars and $2 million in nonrecurring funds to the State Law Enforcement Division for the Concealed Weapon Permit Training Program that was included in the Constitutional Carry Act of 2024 (H. 3594).
The General Assembly adopted the following amendment relating to the $600 million Homestead Exemption Fund:
118.22. SR: Homestead Exemption Fund. This new proviso directs that $600 million from the Homestead Exemption Fund be distributed as a one-time, nonrecurring appropriation by Sept. 30, 2024, for the following purposes listed in order of priority:
- $99.5 million to the General Fund to accelerate the Income Tax Reduction to 6.2%;
- $200 million to the County Transportation Committee Acceleration Fund;
- $100 million to SCDOT for the Bridge Acceleration Fund;
- $117.4 million to SCDOT for the Rural Road Safety Program;
- $15 million to RIA for the Rural Infrastructure Fund;
- $15 million to RIA for the Statewide Water/Sewer Fund; and
- $53 million to the University of South Carolina Health Sciences Campus for bond avoidance.
Unexpended funds appropriated under this provision may be carried forward to succeeding fiscal years and expended for the same purposes.
117.149. GP: Homestead Exemption Fund. The General Assembly amended the existing proviso to update fiscal year references to provide that for FY 24-25, Section 11-11-156(C) of the Code of Laws, relating to remaining balances of the Homestead Exemption Fund at the end of a fiscal year, is suspended.
118.23. SR: Income Tax Reduction. This new proviso states that for the 2024 income tax year, the top marginal rate of 6.2% is imposed on the South Carolina taxable income of individuals, estates, trusts, and any other entity except those taxed or exempted from taxation under Sections 12-6-530 through 12-6-550 of the S.C. Code. The bracket to which the 6.2% applies must be the same as the bracket for which the top marginal rate would have otherwise applied.
View a list of budget provisos of interest adopted by the General Assembly.
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Other Revenue, Finance and Economic Development Bills Adopted | |
Income Tax Deductions for Firefighters/Law Enforcement — S. 969. This bill increases the individual income tax subsistence allowance deduction for law enforcement officers and full-time firefighters and EMS personnel from $8 to $16 per day beginning in tax year 2024. The bill also increases the maximum deduction for volunteer firefighters, rescue squad members, hazardous materials response team members, reserve police officers, Department of Natural Resources deputy enforcement officers, members of the State Guard, and volunteer state constables who meet the volunteer activity requirements as specified in the statute from $3,000 to $6,000. The allowable deduction per taxpayer must be certified by Revenue and Fiscal Affairs annually such that the total revenue loss does not exceed an aggregate limit of $3.1 million per year in total, which remains unchanged. The conference committee adopted the House amendment to allow counties with a local transportation sales tax to exempt unprepared food items eligible for purchase with U.S. Department of Agriculture food coupons from the tax through the authorizing ordinance. The amendment also includes the language from H. 5225, a bill to revise the current clinical preceptor tax credit.
Both chambers adopted the conference report, and the bill will be enrolled for ratification.
Income Tax Credits — H. 4087. As introduced, this bill amended the current corporate headquarters tax credit, tax credits for recycling facilities, job development and retraining credits, and sales tax exemptions for data centers. The Senate further amended the bill to prohibit political subdivisions from offering new economic incentives intended to induce a data center to locate or to expand operations in South Carolina that would require an expenditure of public funds, transfer of anything of value, reduce the rate or alter the method of taxation of the data center, or that would otherwise impact the political subdivision fiscally. The prohibition would not apply to any incentives agreed to prior to July 1, 2025, and only prohibits incentives offered between July 1, 2025, and July 1, 2026.
The conference committee struck the above prohibition on data centers and both chambers adopted the conference report. The bill will be enrolled for ratification.
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Public Safety, Corrections, and Judicial Bills Adopted | |
Coroner Qualifications and Law Enforcement /Judicial Personal Privacy Act — H. 3865 and S. 841. As introduced, these bills would have extended the qualifications for a coroner to include a licensed paramedic who has at least three years of experience. The Senate amended H. 3865 to add the provisions of S. 841, to change the effective dates of Act 56 of 2023, the “Law Enforcement and Personal Privacy Protection Act”, and the “Judicial Personal Privacy Protection Act” from July 1, 2024, to July 1, 2025.
The conference committee struck the coroner qualification language originally in H. 3865 but kept the provisions changing the effective dates of the “Law Enforcement Personal Privacy Protection Act” and the “Judicial Personal Privacy Protection Act” to July 1, 2025. This will allow SCAC to work with stakeholders during the off session to draft a workable bill to carry out the intent of Act 56 of 2023 that does not place an undue burden on clerks of court and registers of deeds. H. 3865, as amended, will be enrolled for ratification.
Judicial Merit Selection Commission Reform — S. 1046. A Conference Committee met this week to debate two versions of a bill to reform the process for selecting members of the Judicial Merit Selection Commission (JMSC). The House language can be found in H. 5170 and the Senate language can be found in S. 1046.
The Conference report provides for the JMSC to be comprised of 12 members (instead of 10) – four members appointed by the House of Representatives, four members appointed by the Senate, and four members appointed by the Governor. No person is eligible for appointment who contributed to a campaign of one of the appointing authorities in the most recent election and nonlegislative members may not be a public employee or serve in another elected office. The bill requires JMSC to conduct judicial midterm reviews and submit these reviews to the Supreme Court. The bill also states that JMSC must submit no more than six “best qualified” candidates, instead of three, for each judicial office under consideration to the General Assembly. All JMSC’s public hearings shall be live streamed except for the portions conducted in executive session. Further, the bill provides that each county legislative delegation has the option to submit the name of a qualified master-in-equity candidate to the Governor; however, the delegation also has the ability to reject a candidate and direct JMSC to reopen the process. Finally, the bill takes effect on July 1, 2025. The House and Senate both adopted the conference report and S. 1046 has been enrolled for ratification.
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Land Use, Natural Resources, and Transportation Bills Adopted | |
Critical Area Structures — H. 4843. As passed by the House, this bill allows a business with a commercial deck or marina in a critical area to use the structure for purposes related to the operation of the business as long as the business receives Department of Health and Environmental Control (DHEC)/Department of Environmental Services (DES) approval. DHEC/DES must determine that the dock is being used for a commercial purpose to grant approval. The Senate amended the bill to limit the use of the structure to allowing patrons to consume food and beverages and to prohibit the use of a kitchen, food preparation area, or bar on the deck or marina.
A conference committee met to debate the difference between the House and Senate versions of the bill. The conferees agreed to remove the Senate’s amendment, thereby taking the House version of the bill. Additionally, the conference committee tasked DHEC/DES with drafting and circulating an interpretation memo regarding what activities are prohibited on these types of structures in a critical area. The House and Senate both adopted the conference report on the bill, and H. 4843 has been enrolled for ratification.
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Conference Committee Failed to Reach Compromise on Low-Income Housing Property Tax Exemption Bill | |
Low-Income Housing Property Tax Exemption — S. 1017. This bill would address a potential loophole created by Act 145 in 2020 that provides a property tax exemption for “all property of nonprofit housing corporations or instrumentalities of these corporations when the property is devoted to providing housing to low or very low-income residents” as long as the corporation or its instrumentality satisfies the safe harbor provisions of Revenue Procedure 96-32. There is nothing in the statute that requires property owners to annually report that they continue to meet the qualifications in subsequent years after they acquire the property, and several counties are concerned that developers and owners of highly valuable property are taking advantage of this by getting a property tax exemption for property that should be taxed.
The conferees were unable to reach a compromise prior to both chambers adjourning so S. 1017 will need to be filed again next session.
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