The Long and Winding Road
BY ALEX JAMES, DIRECTOR OF GOVERNMENT AFFAIRS, HBASC

Just a few weeks ago, state legislators reconvened in Columbia for the first year of the 2018-2019 General Assembly. While January 1, 2019 may have signaled many new beginnings, the State Senate and House of Representatives are still grappling with several issues from the past, but we can place the general election behind us at least temporarily. Any bill not signed into law at the end of the session last year has died and will not be carried over in the legislative process. This means that hundreds of bills filed in the last cycle may be filed again. The curve in the road ahead is the combination of high profile issues such as teachers pay, medical marijuana, and tax reform as well as hundreds of other bills that could bog down the legislature. Indeed it will be a long and winding road this year in the Statehouse, but with your help we will navigate through the traffic and push forward bills that will benefit our industry and state. To help make sense of the news stories you are likely to see and hear this year, I’ve put together a proverbial road map for the journey ahead.

BUSINESS LICENSE REFORM –In order to improve the business climate in South Carolina, reform is needed in the area of local business license fees. These fees represent a tax on local businesses with little oversight on fee increases, compliance requirements, and standardization across the state. While we agree that we must all pay our “fair share” for the services we use this fee only supports a “right to do business” in an area. This “right to do business” is a costly one as small S. C. businesses pay more than $300 million annually. Entrepreneurship and economic development is hindered in many areas of South Carolina due to the current system that places an undue burden on the backs of hard-working businesses. Our position was backed up by a recent study from the Tax Foundation that promoted various tax system overhauls that will allow South Carolina to continue to be successful for many years to come.

BUILDING CODE REFORM –The building code adoption process is long and arduous, and the current code cycle provides little time for education and understanding. The HBASC would support moving to a 6-year code cycle with greater flexibility to update those codes within the cycle, as well as input from a technical committee of individuals who work in construction related fields to produce and refine a code based on the specific geography and weather conditions of houses being built in S. C. Additionally, we would like to see affordability considered when adopting new codes.

2018 BUILDING CODES –Also on the agenda for this legislative session is the promulgation of the 2018 Building Codes which were passed by the Building Codes Council last year. The new code includes rolling back arc fault circuits out of the kitchen and laundry rooms and the addition of tiny homes to the code. If approved by the legislature the new codes will go into effect January 1st, 2020.

BUILDER LICENSING REFORM –HBASC is continuing its work to strengthen the requirements for licensure as a residential builder in South Carolina. The requirements include increased experience, criminal background checks, and voluntary continuing education. It is imperative that your profession be protected from unlicensed workers and the negative impacts on the industry and S. C. homeowners.

WORKFORCE DEVELOPMENT –The construction industry is facing a critical labor shortage. Legislation is needed increase educational opportunities and collaboration amongst stakeholders to provide a stronger workforce. The HBASC supports the “Be Pro Be Proud SC” initiative to bring a new generation of pride, progress, and professionals to South Carolina’s skilled workforce through a unique private/public partnership. We would ask that the general assembly help to fund this initiative to meet the increasing demand for skilled labor in South Carolina.

ROLL-BACK TAXES -Currently land classified for agriculture use receives special tax breaks but when this land is converted to residential or commercial usage the new owner is forced to pay roll-back taxes. The newly acquired or reclassified property is then taxed based upon the full value previously determined by the county, and five years of “roll-back” taxes are due. The HBASC plans to introduce legislation that would limit the rollback tax penalty to one year instead of the last five years when converting agriculture property to residential or commercial use.

As you can see, this session will be long and arduous with just a few issues dominating the spotlight. Last cycle, less than 10% of all bills filed actually received the Governor’s signature to become law, and a similar outcome is expected again this year. The HBASC will also monitor a number of other issues throughout the session. We will look for every opportunity to create a better environment for the building and construction industry while continuing to fight against onerous and overly burdensome legislation that would negatively impact our members. This year we will send out a weekly legislative newsletter via email to keep members up to date on all the bills we are following. If you are an HBA member, and do not receive the newsletter, please contact me so we can have you added to the list.

As always, if you have any questions, I can be reached at (803) 771-7408 or ajames@hbaofsc.com.SCBJ