Copper Dome Chronicle: New State Fiscal Year Edition
Welcome to this week’s edition of the Copper Dome Chronicle, sponsored by Advocatus. We strive for substantive writing with brevity, inspired by the book Smart Brevity.
This week’s edition is 959 words or a 4 minute read. The 2024 regular session has adjourned pursuant to S.1192. The state fiscal year ends June 30; happy New State Fiscal Year to all who celebrate! Thanks for reading and sharing; we welcome your feedback and commentary!
Resources
SC Election Commission Candidate Filing Tracker
June 26 Session Day Review
The House and Senate met on Wednesday, June 26 to consider conference committee reports. The most important item adopted were the conference committee reports on H.5100 (FY25 budget) and H.5101 (capital reserve bill). Read our budget conference committee recap to learn what is in next year’s budget.
Below is the list of bills where both chambers adopted a conference report and the final version sent to Governor Henry McMaster for his signature or veto:
S.142 (safe harbor for exploited minors)
S.314 (higher ed permanent improvement projects)
S.577 (apprenticeship tax credit)
S.862 (caregiver requirements in childcare facilities)
S.969 (income tax deduction for law enforcement and firefighters)
S.1031 (Uniform Money Services Act)
S.1046 (judicial merit selection commission reform)
H.3865 (coroner qualifications)
H.3988 (pharmacy practice act)
H.4087 (tax credits omnibus bill)
H.4386 (blue crab bill & robust redhorse fish protection)
H.4820 (wild turkeys)
H.4843 (consumption of food & beverage on commercial docks)
H.5100 (FY25 budget)
H.5101 (capital reserve bill)
One conference report that was not adopted was H.3728 (Transparency and Integrity in Education Act). Commonly called the anti-CRT (critical race theory) bill, the conference committee decided to request free conference powers from both chambers. Under House Rule 5.19.c and Senate Rule 50, the motion to grant free conference powers requires a 2/3 vote of the respective chamber’s membership (83 House and 31 Senate).
The Senate vote to grant free conference powers was 25-13, so the motion failed. This vote leaves only two realistic options: the conference committee reconvenes and adopts a version that does not require free conference powers, or the bill will die and not become law.
Lastly, House Speaker Murrell Smith stated during the end of the session that the House would not return in July or August unless it was an emergency situation. Furthermore, Speaker Smith stated that depending on Gov. McMaster’s budget vetoes or legislation vetoes, the House may not return at all. During its floor session, the Senate did not discuss or mention its plan for extra session days prior to the November elections. But typically both chambers would return on the same day for an extra session.
What’s Left?
There are four bills that remain in the posture of a conference committee:
S.1017 (low income housing property tax exemption)
H.3728 (Transparency and Integrity in Education Act)
H.4187 (retail theft)
H.5118 (comprehensive energy bill)
Both S.1017 and H.4187 had scheduled conference committee meetings but they were canceled. As mentioned above, H.3728 is in limbo after the Senate did not agree to the motion for free conference powers. The conference committee on H.5118 has never met and given the stark differences between the two versions - the House version creates public policy while the Senate version is essentially a resolution making findings - this conference committee may never meet.
Also, the Senate overrode Gov. McMaster’s vetoes of S.112 (check fraud expungements) and S.1166 (dismissal of pending handgun possession charges), but the House did not take up the vetoes on June 26.
First Industry Bill of 2025
On June 26, 2024 the South Carolina Supreme Court ruled a popular sales tax exemption contains an unconstitutional clause and struck the entire exemption. Since 2013, after the enactment of Act 32 in 2011, sales and use taxes were not imposed on durable medical equipment (DME) as administered by the South Carolina Department of Revenue (DOR).
In a 5-0 opinion authored by Justice John Kittredge (and the next Chief Justice as of August), the Court ruled in Orthofix v. SCDOR that a provision requiring a “principal of business in South Carolina” is “unconstitutional under the dormant Commerce Clause.” The final paragraph of the Court’s opinion summarizes the decision succinctly:
“The State, through the DOR, cannot provide sales tax exemptions in a manner that discriminates against interstate commerce. We affirm the circuit court’s decision declaring the “principal place of business in South Carolina” language of the DME exemption unconstitutional under the dormant Commerce Clause. However, because Respondents have not carried their burden to show the legislature's intent, we decline to sever the unconstitutional language and instead declare the entire DME exemption invalid. Under the facts of this case, we affirm the circuit court’s decision to order refunds to Respondents for the sales tax imposed upon the DME they sold during the contested time periods. However, having found the DME exemption as a whole is invalid, we assume going forward that all sellers of DME - including Respondents - will be required to pay sales tax unless and until the legislature enacts a new, modified DME exemption. The decision of the circuit court is therefore affirmed as modified.”
DME includes equipment such as:
Blood sugar meters
Blood sugar test strips
Canes
Commode chairs
Continuous passive motion machines, devices & accessories
Continuous Positive Airway Pressure (CPAP) machines
Crutches
Hospital beds
Infusion pumps & supplies
Nebulizers & nebulizer medications
Oxygen equipment & accessories
Patient lifts
Pressure-reducing support surfaces
Suction pumps
Traction equipment
Walkers
Wheelchairs & scooters
Sales taxes, in general, are passed directly to the purchaser of the product, so the cost of this equipment increased by 6% (the state sales tax rate) overnight, plus any local option sales tax.
Legislation was filed in 2023 (H.4320) that may have addressed the issue, but the bill never received a hearing. It is very likely the healthcare industry has found its first legislative priority for the 126th General Assembly.
Committee Schedule July 1-5 2024
Some committee meetings that will generate some debate and news. If a live stream link is not provided with a committee meeting that means no live stream is available.
House Legislative Oversight Economic Development, Transportation and Natural Resources Subcommittee; July 2 at 10am; Agenda; Live Stream
Summary: The committee will meet to receive a presentation from the South Carolina Forestry Commission. This will be the eighth meeting on the Forestry Commission.
Key Dates
January 9: Session Convenes
January 16: Judicial Merit Selection Commission final report published
January 24: State of the State
February 7: Judicial elections (subject to change)
February 15: Board of Economic Advisors (BEA) February revenue estimate
February 20-22: House Ways & Means Committee budget deliberations
March 6: Election of the Chief Justice of the State Supreme Court
March 11-14: House floor budget deliberations
March 16: Candidate filing opens for all House and Senate seats at 12pm
April 1: Candidate filing closes for all House and Senate seats at 12pm
April 1-5: House furlough week
April 9-11: Senate Finance Committee budget deliberations
April 10: Crossover Day
April 17: Judicial Elections
April 23-25: Senate floor budget deliberations
May 9: Session Adjourns
June 5: Election of an Associate Justice of the State Supreme Court
June 11: Nominating Primary Elections
June 18: Budget conference report votes (tentative)
June 25: Nominating Primary Runoff Elections
June 26: Budget conference report votes
July 1: Fiscal Year 2024-2025 begins
October 6: Last day to register to vote
October 21: Early voting opens
November 2: Early voting closes
November 5: General Election Day
