Supporters of solar power claimed a huge victory in South Carolina last week …
By an overwhelming 64-33 vote, their signature piece of legislation – H. 4421 – cleared the S.C. House of Representatives and headed over to the State Senate.
“Lawmakers listened to citizens and passed House Bill 4421 with a strong majority of support so that a competitive free market can keep working to create 3,000 good-paying solar jobs in our state,” boasted Matt Moore, former SCGOP chairman and current chairman of the Palmetto Conservative Solar Coalition (PCSC) . “We hope our Senators saw the hundreds of people rallying at the capitol this week for energy freedom and will pass this pro-solar jobs legislation quickly.”
Senate passage of this bill indeed seemed eminent … with huge momentum building behind the solar movement. In fact this news site was already preparing another process story detailing how the entrenched legacy utilities (and neutered lawmakers like Bill Sandifer who support them) got their asses handed to them.
Unfortunately, it seems as though a wrinkle has emerged in this narrative …
Except it’s not so much a wrinkle as it is a land mine – one threatening to completely detonate the legislation that just cleared the House.
“Effective for property tax years beginning after 2017, a renewable energy resource property having a nameplate capacity of and generating no greater than twenty kilowatts, as measured in alternating current, is exempt,” the seventh section of H. 4421 reads.
Sounds good, right?
As we’ve stated repeatedly in the past, we don’t like tax exemptions that cater to narrow special interests. We believe tax exemptions are good when they target broad segments of the taxpaying electorate, because such relief has a stimulative effect on the economy.
Does this particular property tax exemption target such a segment of the electorate?
We don’t know … but that’s not the point.
Whether it’s good or bad public policy, the exemption’s inclusion within this legislation has created a serious problem for solar supporters.
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According to Article X, Section 3 of the South Carolina Constitution (.pdf), “the General Assembly may provide for exemptions from the property tax, by general laws applicable uniformly to property throughout the State and in all political subdivisions, but only with the approval of two-thirds of the members of each House.”
Why is that important as it relates to this bill?
Well, it’s the last thirteen words that matter …
“Only with the approval of two-thirds of the members of each House.”
Last time we checked, 64-33 was indeed a decisive victory … but not a two-thirds victory.
Obviously we learned math in a government-run school here in the Palmetto State (so double check it on your calculator at home), but the last time we ran numbers two-thirds of 124 was equal to 82.6. In other words, this bill would need to receive 83 votes in order to pass constitutional muster. Actually … because there is currently one vacancy in the S.C. House, the threshold is 82 votes at the moment.
See the problem?
With this property tax exemption included (and without the support of two-thirds of the S.C. House), the solar bill is … wait for it … unconstitutional.
Solar backers said the bill is constitutional because county governments currently to do not collect property taxes on solar panels.
“Counties don’t currently collect property taxes on solar panels, so there is no point of order,” Moore told us. “There is zero fiscal impact in this section of the bill because there’s already zero fiscal impact. We are clarifying the existing structure that allows solar in the state.”
Moore added that solar supporters were hopeful S.C. Speaker of the House Jay Lucas would “rule against this last minute, desperation tactic from big power and their crony Bill Sandifer.”
However Lucas rules, a bill that appeared to be a slam dunk headed toward the State Senate suddenly finds itself in real trouble (unless the law is either clarified or substantially amended to address this constitutional problem).
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