Legislative Wrap-Up

The SC General Assembly closed down on June 3rd and now it is time to assess how The SC Small Business Chamber of Commerce agenda fared. For five months, the Small Business Chamber worked hard both inside and outside the State House to advance the cause of small business. Overall, the results are positive. And as you read this, we are already preparing for the next Legislative Session in January.

Thanks to all who contacted legislators when asked. Our 10,000+ members provide the backbone of this organization and your efforts are very much appreciated.

Frivolous Lawsuits and Tort Reform
The Small Business Chamber has maintained that to effectively address the issue of frivolous lawsuits, it was very important to empower the public with the knowledge of how to fight frivolous lawsuits under the current law. As a result of our direct efforts, the great cooperation of the SC Court Administration and the approval of Chief Justice Jean Toal, both defendants and plaintiffs in a civil suit will now automatically be made aware of Rule 11 and the South Carolina Frivolous Civil Proceedings Sanctions Act. Defendants in a civil suit will now personally have the information they need to fight back against charges they consider to be frivolous.

Ironically, the Small Business Chamber’s efforts to administratively attack frivolous lawsuits turned out to be the only success in the push to address our civil laws. The omnibus tort reform bill, supported by many business groups including the Small Business Chamber, failed to pass the Senate in the final week of the session.

Regulatory Process
The Small Business Chamber worked hard to help pass the Small Business Regulatory Flexibility Act, already signed by the Governor. The Act creates a Small Business Regulatory Review Committee that will determine if regulations being promulgated by state agencies should have an economic impact statement performed to determine the implementation costs to small businesses and non-profits. This information will be presented to the General Assembly to help them in their decision making process and to protect small businesses from unnecessary regulatory requirements.

Unfortunately, our two-year effort to require affirmative legislative approval of new regulations did not pass the Senate. The bill passed the House and went through the Senate Committee process. At the request of the Small Business Chamber the bill was even placed on Special Order on the Senate calendar to give it high priority. However, the Senate was not inclined to be engaged in a potential filibuster on the bill after spending weeks on the seatbelt bill. Negotiations to amend the bill to secure a successful vote and send it to a House/Senate Conference Committee failed and time simply ran out. Consequently, the effort will start again in January.

The Small Business Chamber supported the successful Public Service Commission reform. The PSC is traditionally responsible for approving utility rates charged to consumers, including small businesses. The legislation will hopefully make the PSC more consumer/small business-friendly and a better watchdog over utility monopolies.

However, just as the General Assembly was making the PSC a better protector of the public’s and small business’s wallets, telephone and natural gas companies were pushing bills to limit the authority of the PSC over the utilities; thus putting small businesses at risk of unjustified rate increases.

The Small Business Chamber lead the effort to amend the highly controversial telephone deregulation bill to protect rural small businesses from unjustified rate increases. Thanks to the floor efforts of Senator Jake Knotts and a successful amendment by Senator Linda Short, the potential rate increases on thousands of rural small businesses under this legislation will be either eliminated or reduced dramatically. A special thanks goes to the following Senators who, in spite of massive pressure from BellSouth and rural telephone companies, voted to support small businesses on at least one of our amendments that failed: Anderson, Branton, Courson, Elliott, Fair, Giese, Gregory, Knotts, Malloy, Peeler, Ryberg, Sheheen, Short, Thomas and Verdin. The telephone deregulation bill was passed by the Legislature and is awaiting a decision by Governor Sanford to either allow it to become law or to veto it.

Getting less attention at the very end of the session was the Small Business Chamber’s efforts to stop a natural gas deregulation bill that was supported by SCE&G and Piedmont Natural Gas. The bill was an attempt to streamline the process by which the natural gas monopolies could adjust their prices to guarantee a certain rate of return without getting prior approval from the PSC. Automatic public rate hearings that now provide opportunity for organizations representing the consumer (such as the Small Business Chamber) to weigh-in on rate increase requests would be eliminated. Fortunately, our opposition efforts in the Senate allowed the clock to run out in the session before the natural gas deregulation bill could be debated.

Workforce Development
The Small Business Chamber is a strong proponent of our Technical College Tuition Assistance Program funded with lottery money. This program is helping thousands of South Carolinians prepare for the technically skilled jobs our small businesses need. This year we supported a $40 million budget for this program to insure that qualified technical college students would have 75% of their tuition covered. The General Assembly increased the budget for the Tuition Assistance Program from the current year’s $34 million to $39.7 million for next year.

Efforts failed to pass legislation to decrease high school drop-out rates and help graduates be better prepared for immediate employment or pursuing career skills and education at 2-year colleges or 4-year universities.

Health Insurance
The Small Business Chamber supported the creation of a Commission on Health Care Access to address the crisis in small group health insurance. The Commission, which was approved as a proviso in the budget, will work toward the implementation of the recommendations of the Health Insurance Policy Advisory Committee. Frank Knapp, president of the Small Business Chamber, served on the Policy Advisory Committee that produced the recommendations. This Commission is important because if offers an opportunity to seek solutions to the affordability of small group health insurance. The General Assembly has otherwise refused to legislatively address the issue, including taking up a bill supported by the Small Business Chamber that would create a small business health insurance pool.

Economic Development
The Small Business Chamber believes that small businesses typically get short change when it comes to economic development incentives handed out by state and local governments. The State should look for more ways to make sure that our tax dollars are benefiting our small businesses.

The successful Textile Communities Revitalization Act, which we supported, offers tax incentives for the rehabilitation of abandoned textile facilities that will translate into a great deal of work for many local small businesses.

The Small Business Chamber worked to develop a “Best Value” proposal to be adopted in our state procurement process. Unfortunately, it was too late in the session to introduce the legislation when it was ready. A “Best Value” procurement approach would require an economic impact analysis of proposed contracts to determine which would leave more money in our state with our small businesses and workers and thus be more valuable in promoting economic development. We demonstrated the benefits of this approach on the recent statewide voting machine contract showing that one the contract offered by an unsuccessful vendor would have provided a $51 million economic benefit to the state versus the selected vendor’s $820 thousand benefit. Fortunately, the State Procurement Officer has called for new proposals and we hope to make sure that “Best Value” is a consideration. We have also begun working with three local units of government who are interested in possibly pursuing the “Best Value” procurement process.

Government Competition
To deal with the growing problem of state agencies competing with business in the private sector, the Small Business Chamber helped craft legislation offered by Rep. Mac Toole with 28 co-sponsors in the House and introduced in the Senate by Glenn Reese, Jake Knotts, John Drummond, John Kuhn and Arthur Ravenel. The legislation required agencies to get approval from the Budget & Control Board in order to produce goods and services and offer them to the private sector in competition with business. After many House Judiciary Subcommittee and full Committee meetings, the bill failed due to complaints from state agencies and concerns from legislators. However, the effort paid off in the development of a possible new approach to the issue. New legislation will be introduced in January.

At the local level, the Small Business Chamber took a leadership role in opposing the City of Columbia’s plans to finance a convention center hotel instead of allowing the private sector developer to fulfill the need. In March, Columbia City Council decided to re-bid the hotel project to find a private developer.

Property Rights
The Small Business Chamber supported a bill that would have prohibited local governments from imposing more stringent standards than those established by the state in regards to production of livestock and poultry. We sought to include the same protection to other types of businesses in the bill, which passed the House but failed in the Senate.

Enabling the SC Attorney General’s Office to effectively prosecute environmental crimes, which can destroy the property value of effected small businesses and cost tax dollars for clean-up, was also supported by the Small Business Chamber. The bill would have given subpoena power to the state grand jury to investigate this type of white-collar crime. The bill passed the House but failed to be voted on in the Senate as time ran out in the session.

The Small Business Chamber supported legislation that would have reduced the state income tax rate on all small businesses (sole proprietors, partnerships, S-corporations and limited liability corporations) from 7% to 5%, the same rate paid by C-corporations. The legislation was not successful but the issue arose during the debate in the Senate on Governor’s Sanford’s tax reform bill, which called for reducing the state income tax on everyone to less than 5% over a number of years. The Governor’s plan also failed.

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