Legislative Update

Last 5 Weeks of Legislative Year
Legislature on Track for Outstanding Small Business Session

The Small Business Chamber started out 2005 with what could have easily been described as an “overly ambitious” legislative agenda. But the S.C. General Assembly made small business issues a priority and has delivered some amazing results.

In our January 18th newsletter, a 12-item legislative agenda was announced. Since then, three more issues have been added to that list. The summary below gives the status of all these efforts.

Bills that have passed the House and which are in the Senate still have a chance of passage this year. The State budget will be approved before the Legislators go home in June. And because this is only the first year of a two-year session, bills not passed this year will pick up where they left off come January.

Small Business Income Tax Reduction (Phase in a reduced income tax on small businesses from 7% to 5%.) – Passed by the Legislature and signed by the Governor.

Tort Reform (Venue, joint & several liability, statute of repose, frivolous lawsuits and reduction of premiums due to reduced insurance company costs.) – Passed by the Legislature and signed by the Governor.

Workers Comp Reform (Adopt systemic changes for more efficient and faster handling of claims, better oversight of rating process, less fraud and fairness in claims responsibility in the construction industry.) – Funding for the Workers Comp Commission computer system and additional employees are in the House and Senate budgets. Funding and provisos are included in the Senate budget for an Insurance Fraud Unit and Workers Comp Advisory Board. Legislation dealing with construction businesses is still being developed.

Economic Development (Promote investment in new small businesses through a Capital Access Program and Investment Tax Credits. Encourage existing and new small business growth by reducing to only one the number of new jobs created to be eligible for Job Tax Credits.) – H.3006 reduces the number of new jobs to qualify for Job Tax Credits from 10 in the current law to two and also provides for the Capital Access Program and Investment Tax Credits. H.3006 has passed the House and is in the Senate Finance Committee.

Best Value Procurement (Determine the economic impact of all bids for state contracts over a certain limit and use this assessment along with price in the award process to encourage all vendors to use more in-state goods, services and labor. The result will be more procurement dollars staying in South Carolina with our small businesses.) – H.3742 requires this best value economic impact assessment. It has passed the House and is in the Senate Finance Committee.

Affirmative Approval of Regulations (Require all state regulations to be affirmatively approved by the Legislature before becoming law.)– H.3141 requires affirmative approval of regulations and has passed the House. It currently resides in the Senate.

Environmental Crimes (Prevent environmental crimes, which affect small businesses in the form of devalued property and the cost of tax dollars for clean-up, by giving subpoena power to the State Grand Jury to investigate these crimes.) – S.22 gives the State Grand Jury subpoena power for environmental crimes. It has passed the House and Senate and is in a Conference Committee.

Blue Laws (Eliminate the State’s Blue Laws that unfairly cause small businesses to lose customers and revenue to neighboring states and counties.)– H.3647 lifts the State’s Blue Laws. It has passed the House and resides in the Senate.

Check Cashing (Exempt small businesses, such as convenience stores and groceries, from the State’s stringent check cashing law when these small businesses aren’t in the business of cashing checks yet do so for the convenience of their customers.) – H.3490 provides for the proper exemption of many small businesses from the check cashing law while keeping proper limits on fees charged for such service. H.3490 has passed the House and is in the Senate Banking and Insurance Committee.

Technical College Tuition Assistance (Develop a well-trained workforce through lottery-funded technical college tuition assistance equivalent to 75% of tuition for qualified students.) – The Senate’s budget includes $43 million for Technical College Tuition Assistance that will only cover about 70% of tuition for the anticipated number of students. The House budget includes only $40 million of lottery funds for the program. A Conference Committee will resolve the difference for the final budget.

Medical Equipment Sales Tax Exemption (Phase out sales tax on durable medical equipment paid through the Medicare/Medicaid programs; small business are prohibited from collecting sales tax yet they must still pay the sales tax to the state.) – H.3950 and S.793, which phase out the sales tax for these items over 5 years, have been introduced in their respective chambers.

Universal Service Fund (Implement the recommendations of the Legislative Audit Council’s scathing USF report—scale back this telephone surcharge that costs small businesses and residential customers tens of millions each year, redirect the USF purpose to helping low-income people afford basic phone service, support a telephone company’s delivery of rural phone service only when costs are documented to be excessive, and have more effective administrative oversight to prevent the fund from being a “multi-million dollar piggy bank” for local phone companies.) – S.652 addresses all the statutory recommendations of the LAC report on the USF. This bill is in the Senate Judiciary Committee. The Office of Regulatory Staff is moving with all deliberate speed to implement the LAC administrative recommendations to ensure that the USF can no longer be used as a telephone company slush fund.

Small Group Health Insurance (Empower small businesses to join together via a state created, but not funded, vehicle to acquire group health insurance in order to use larger numbers to reduce rates.) – No specific legislation has been introduced to achieve this goal for small businesses although S. 472 has been filed to create a state health insurance plan for individuals who are not state employees. Instead of pursuing legislation, efforts have been put into a pilot project with the SC Primary Health Care Association that seeks to match small businesses without health insurance with primary health care centers to provide care to employees at lower costs.

Property Tax Relief (Decrease the burden of escalating property taxes to small businesses by increasing the state sales tax to permanently pay for all operating costs of school districts in a manner that is fair and equitable to school districts and ensures that all public school students have the necessary funding needed for their education.) – H.3714 and other bills have been introduced to address this issue but no legislative action has yet been taken.

State Agency Competition in the Private Sector (Require legislative approval of state agency activities that compete in the private sector with businesses.) – Efforts to develop legislation this year on this issue have been set aside in order to pursue issues that had a better chance for immediate success.

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