House medical subcommittee hears testimony on bill to create Department of Behavioral Health and Developmental Disabilities

The Medical subcommittee of the South Carolina House on Tuesday heard testimony on Senate Bill 2, which would create the Department of Behavioral Health and Developmental Disabilities by consolidating the Department of Disabilities and Special Needs, the Department of Mental Health and the Department of Alcohol and Other Drug Abuse Services. The panel heard summaries and public testimony but did not take a vote because it did not have a quorum; the meeting was recessed and set to reconvene after the House adjourned.

The bill’s sponsors and supporters said the change is intended to improve coordination among agencies that serve overlapping populations and to increase executive-branch accountability. Senator Davis, who spoke to the subcommittee, said S 2 would place the new agency within the governor’s cabinet, with the DBHDD director appointed by the governor and confirmed by the Senate. “S 2 establishes the Department of Behavioral Health and Developmental Disabilities within the executive branch by consolidating the Department of Disabilities and Special Needs, the Department of Mental Health, and the Department of Alcohol and Other Drug Abuse Services,” Trey, a staff summary witness, told the committee.

The bill would create three component offices—an Office of Intellectual and Developmental Disabilities (formerly DDSN), an Office of Mental Health (formerly DMH) and an Office of Substance Use Services (formerly DAODIS). Each office would keep its statutory duties and office director but would be subject to oversight by a cabinet-level DBHDD director, who would be required to develop a comprehensive service plan, promulgate regulations, develop budgets, procure collaborative technology, ensure data sharing and consolidate administrative services.

Senator Davis framed S 2 as a narrower successor to a larger restructuring effort considered last year. She traced the current push to a multi-year review that followed Act 60 (2023), which divided DHEC into separate public health and environmental agencies and authorized a deep-dive review of health agencies. “We don't have an Olmstead plan in South Carolina,” Davis said, referring to the U.S. Supreme Court's Olmstead decision. She said S 2 includes a directive—referred to in the bill as an integration or Olmstead plan—that would require agencies to coordinate to provide services in less institutionalized, more community-based settings as the court’s ruling contemplates.

Members asked about fiscal impact and expected savings. Senator Davis and other supporters said the primary expected efficiencies come from eliminating duplicated functions, consolidating information systems and submitting coordinated budgets rather than separate appropriations requests. Davis said the bill contemplates a net reduction in full-time equivalent positions over time but acknowledged initial one-time implementation costs, particularly for technology integration and for implementing the Olmstead plan. “There are gonna be some initial costs ... but those will be onetime stand up costs,” Davis said.

Representative Thomas Beach, who raised fiscal concerns, said he needed a ballpark figure to explain potential costs to constituents. He noted a rough aggregation of the three agencies’ budgets and said, “I just did a little math, 1,200,000,000. That's if you add the the 3 different, agencies together.” Senator Davis and other speakers said exact savings are difficult to quantify up front because they depend on how redundancies are identified and the quality of administration after consolidation.

Public testimony included a policy perspective and legal-advocacy concerns. Orin Smith of the Palmetto Promise Institute supported the restructuring as a continuation of past reforms to strengthen executive accountability and reduce duplication. Beth Franco, executive director of Disability Rights South Carolina, described families’ experiences obtaining services across agencies. “It's like a ping pong match,” Franco said of people with dual diagnoses who are moved between agencies that ask for a primary diagnosis before providing services. She told the committee aging parents face difficulty finding appropriate community placements for adult children with co-occurring developmental and mental health needs.

Committee members also discussed litigation risk and funding obligations. Senator Davis noted the state is facing a federal lawsuit alleging failure to implement Olmstead obligations and said section 15 of S 2 is intended, in part, to respond to that litigation by requiring an integration plan. She said funding to implement an Olmstead plan will likely require line items in future appropriations and that a federal judge will watch whether the general assembly provides money to carry out the plan.

Because the subcommittee lacked a quorum at the start, it only took testimony and recessed without a vote. The panel scheduled to reconvene roughly an hour after the House adjourns to continue consideration and, if a quorum is present, proceed with any formal action.

Background: supporters described S 2 as a narrowed successor to a larger restructuring bill considered last year (Senate Bill 915) and as building on earlier state restructuring efforts beginning with a 1993 reorganization under Gov. Carroll Campbell and the 2023 Act 60 review. The bill’s text would require the DBHDD director’s appointment by the governor and confirmation by the Senate and would preserve component offices’ statutory duties while centralizing administrative functions.

Outlook: The subcommittee hearing provided lawmakers and advocates an opportunity to surface concerns about fiscal impact, implementation costs and services for people with co-occurring needs. A formal vote was postponed until the committee reconvenes with a quorum; any change in law would require subsequent votes by the full chamber and, ultimately, the governor’s signature.