COLUMN: Legislative Happenings — What did, didn’t pass this year in Columbia

First of all, let’s talk about what didn’t pass in the 2009 session of the South Carolina General Assembly. I think most people were disappointed that the cigarette tax did not pass.

There were two avenues of thought on how the money should be spent. The House version increases the cigarette tax by 2.5 cents per cigarette, or 50 cents per pack. Smoking cessation would be funded by $5 million provided to the Department of Health and Environmental Control, and half a cent would go to the Department of Agriculture for marketing of South Carolina-branded crops.

Meanwhile, 80 percent of the remaining tax goes to Healthy Family Insurance Trust Fund to provide premium credits to assist small business and individuals in purchasing insurance coverage; 10 percent of this amount must remain in reserve at all times.

Of the remaining tax, 20 percent goes to the Palmetto Health Care Safety Net Fund to provide premium assistance for individuals who cannot access insurance coverage.

The Senate version increased the cigarette tax by 2.5 cents per cigarette, or 50 cents per pack, until June 30, 2010, which would have generated $148.3 million in revenue. The Medical University of South Carolina’s Hollings Cancer Center would have received $5 million. The balance would have been deposited in the South Carolina Healthcare Trust Fund. 

Legislators couldn’t reach a decision on how the money should be spent. I believe strongly that all the revenue should be dedicated to health care. With Medicaid, the U.S. government matches each new state Medicaid dollar with three additional federal dollars.

When the governor said he wouldn’t support a cigarette tax that would fund South Carolina’s Medicaid system because the benefits of the tax were not revenue neutral, things took a sour turn.

In May 2008, the governor had vetoed a bill that would have kicked up the cigarette tax by 50 cents per pack and driven tax dollars into the state’s Medicaid system. The bill he vetoed then would have given $5 million to the state to support smoking cessation and prevention programs for youths and adults. The rest of the money generated from the tax would then be distributed equally, 50 percent going to Medicaid programs and the other 50 percent to assist in the healthcare costs of small businesses throughout the state.

Another bill that received a great deal of attention, but didn’t pass, is the point-of-sale measure. It would exempt the value of property above a 15 percent increase over the prior tax year’s value when a property undergoes an assessable transfer of interest. The capped tax value would be in place until the next reassessment, instead of full market value, as in current law.

At reassessment, the capped value could increase as much as 15 percent (the same 15 percent in place for properties that do not fall under the assessable transfer of interest provision). Properties that underwent assessable transfers prior to 2009 would remain at fair market value. Only properties sold after December 31, 2008, would be subject to the bill’s provision, and provisions of the bill would sunset after property tax year 2014.

As for what we did on the last day of the session, the Legislature overrode 10 of the Governor’s vetoes. The most controversial one was the payday-lending bill, which, while certainly not perfect, does help the consumer with industry regulation.

Another contentious veto the General Assembly overrode was a bill on the S.C. Ports Authority restructuring. The bill would prevent the governor from firing members of the authority, which oversees the state’s ports system.

A six-member conference committee was able to reach am unanimous compromise on an extremely important bill regarding a comprehensive tax study. The measure establishes the South Carolina Tax Realignment Commission (TRAC), which is designed to include 11 members, with no members from the General Assembly.

The commission can hire a consultant or consultants to direct the commission, but those people have to be approved and the funds for their hiring must be approved by the Senate Operations and Management Committee and the speaker of the House.

Members must meet certain qualifications such as certain levels of business experience and proof of South Carolina residency. Restrictions on lobbyist contacts with commission members result in a misdemeanor.

I was privileged to be appointed to another conference committee that concurred on a bill relating to revenue bonds. The legislation provides that the proceeds of local accommodations fees, hospitality fees and state accommodations fees may be pledged as security. It revises provisions, however, relating to state accommodations fees to provide that fees allocated for advertising and promoting tourism may not be pledged as security.

Thank you for letting me represent you as your senator again. I look forward to being back in my district.

— McGill can be reached at his home address, 601 Longstreet St., Kingstree, SC 29556, or at his legislative office, P.O. Box 142, Columbia, SC 29202. Call him at (843) 355-7217 in Kingstree or (803) 212-6132 in Columbia, or e-mail him at .