Governor Releases CARES Act Spending Recommendations, Liability and Legislative Committee Meetings, Latest Unemployment Numbers

Email to COVID-19 Mailing List: June 11th

Today’s COVID-19 business information compiled by your SC Chamber Team includes: Governor Releases CARES Act Spending Recommendations, Liability and Legislative Committee Meetings, Latest Unemployment Numbers

1. Governor Releases CARES Act Spending Recommendations

As a part of the Coronavirus Aid, Response, and Economic Security (CARES) Act, South Carolina received $1.9 billion for the reimbursement of COVID-19-related expenses. Yesterday, in a letter to Senate President Harvey Peeler and House Speaker Jay Lucas, Governor McMaster released his recommendations about how to appropriate those funds – based in large part on the work of the accelerateSC Task Force.

Highlights include:

  • At least $500 million for the South Carolina Unemployment Trust Fund, which the Chamber advocates. 
  • $150 million for higher education institutions and the South Carolina Technical College System 
  • $17 million to create a 3- day personal protective equipment (PPE) stockpile. 
  • $215 million for K-12 schools to provide additional educational resources for students, including summer learning camps and an earlier start date for fall classes. 
  • $20 million for mobile hotspots across the state, providing internet through December 2020 for households with annual incomes of 250% or less of the poverty level. The household must also have a child that attends a public or private school (K-12), a public or private college, a university, or a technical college.
  • $250,000 for a state broadband plan, an item that the Chamber has continually supported.

The General Assembly returns June 23rd to begin debating the appropriation of the CARES Act money, and, while they are not required to adhere to the Governor’s recommendations, these recommendations will likely receive strong consideration.

2. Liability and Legislative Committee Meetings

Senate Re-Open SC Business Liability Subcommittee Meeting: Yesterday, this committee met and took testimony from the members of our coalition including Ted Pitts, Sara Hazzard and John Wall of the SC Manufacturers Alliance, Allan Stalvey and Edward Bender of the SC Hospital Association, and Richele Taylor of the SC Medical Association as well as opposing testimony from the SC Association for Justice and the Injured Workers’ Advocates.

Our group emphasized the business, education, and healthcare industries’ urgent need for liability protection legislation to pass as soon as possible – to give businesses the framework and legal clarity they need to reopen or ramp-up operations. Member discussion centered around the following items:

  • What types of companies should qualify for potential liability safe harbors?
  • What period should the safe harbor cover?
  • What specific guidance does a business have to follow to qualify for a legal, safe harbor?
  • Should there be a “presumption” that an employee got COVID-19 on the job when the claim goes through the Workers Compensation system? Should that presumption be rebuttable?

The plan is for the committee to have draft legislation early next week to review in a final meeting on Thursday, and to have a working session on the actual language at that time.

To reiterate: The General Assembly expects to be in session for only two (House) and three days (Senate). The only way liability protection can pass before September is if legislators hear from businesses across the state about how important it is that this gets done quickly. The legislation has little chance of passing if legislators don’t continue to hear from employers about how protecting businesses from unwarranted lawsuits is key to effectively rebuilding our state’s economy. Please contact us if you are interested in joining our campaign.

Senate Re-Open SC Select Committee: Today, the full Senate Re-Open South Carolina Select Committee met to hear reports from the two subcommittees as well as to present the final committee recommendations.

The Personal Protective Equipment (PPE) Subcommittee, chaired by Senator Katrina Shealy, reported the need for a state stockpile of PPE. They recommended that a four-week supply remain in a stockpile, especially for agencies and small businesses that do not have significant purchasing power.

The Business Liability Subcommittee, chaired by Senator Tom Davis, reported on the progress at yesterday’s meeting (described above) and specified that the outline of a bill is being worked on now by Senators and staff.

Additionally, the committee discussed its final recommendations, which include 19 items. Those include recommendations and financial resources for:

  • Education (both K-12 and Higher Education) and childcare
  • Broadband expansion
  • Unemployment Trust Fund
  • Tourism
  • The Local Government Fund

We will share the full list of recommendations when they are published.

House Education and Public Works COVID-19 Public Education Committee: Today, this committee met to discuss the status of broadband access and availability in South Carolina. The following individuals testified about the state of broadband in South Carolina and outline a few potential solutions:

  • Matt Hiott, Technology Director at Palmetto Care Connections
  • Ben Breazeale on behalf of the South Carolina Television Association
  • Mr. John Frick, VP of Governmental Relations, Electric Cooperatives of South Carolina
  • Brad Wright with the SC Telephone Coalition

The SC Television Association outlined that the “take rate” is a significant part of the current problem. Laying fiberoptic cable is extremely expensive and many companies anticipate only about a third to a half of residents will actually purchase the internet service (take rate) – this can create a cycle where it takes a company six-seven years to recoup their investment.

The SC Electric Co-ops testified that there are currently three cooperatives providing broadband right now, two that will begin building infrastructure within 90 days, seven that are waiting to see what funding may become available to help them build out infrastructure, four which have decided not to provide broadband because their area has already coverage, and the remaining co-ops are somewhere in-between. They stated that the wording of particular easements makes it difficult for electric providers to jump into this work and that legislation would be helpful in that area.

The SC Telephone Coalition stated that rural telephone companies and cooperatives serve 400,000 rural broadband customers, have laid 200,000 miles of fiber, and have over $1 billion invested in rural broadband. They agree with the electric cooperatives that easements and pole attachments can present a barrier in building out infrastructure. They also clarified that they agree that electric cooperatives have a role to play in solving the broadband problem, but many are concerned that they can cross-subsidize their work. They would like legislation that creates an “even playing field.”

The committee will continue this discussion in a meeting next week on Wednesday, June 24th at 10:00 am where they will hear from the Office of Regulatory Staff (which has created a draft State Broadband Plan) and Jim Stritzinger (who has created maps that show unserved or underserved areas).

3. Latest Unemployment Numbers

The SC Department of Employment and Workforce (DEW) released updated weekly unemployment numbers today:

  • For the week ending June 6th, the initial claims filed were 22,734.
  • This is an increase of 3,748 initial claims from the week prior.
  • This is the 1st increase in two months, ending a seven-week decrease streak that began in mid-March.
  • In the last twelve weeks, the total number of initial claims received is 582,265.
  • The agency has paid more than $2.1 billion in a combination of state unemployment insurance benefits and federal CARES Act programs.

DEW Director Dan Ellzey provided the following breakdown of the top 10 industries with the highest number of claims and possible explanations for the increase last week:

  • This is the third year we have noticed an uptick in initial claims being filed the week after Memorial Day. The specifics of this 3-year trend are unclear but worth mentioning.
  • Manufacturers, which represent four of the industry sectors above, are still dealing with supply chain constraints and potentially reduced demand overall, a trickle-down effect experienced by this industry as opposed to the immediate shut down of leisure and hospitality businesses at the onset of COVID-19.
  • Temporary staffing agencies experienced massive layoffs, in part due to their connection to manufacturing and healthcare – sectors that are both still experiencing layoffs.