Key Points for This Week
● Income Tax Reform Heads to Governor’s Desk
● Senate Amends, Passes School Bathroom Bill
● House Passes Limited Lawsuit Reform Measures

The One-Minute Drill
The Big Picture: On Wednesday, Senate President Thomas Alexander (R-Oconee) and House Speaker Murrell Smith (R-Sumter), ratified acts – a formal proceeding after a bill has passed both chambers. This week, that included H.4216, the income tax reduction bill, which is a major change in tax policy in this state. The bill now officially heads to Gov. Henry McMaster’s desk.

The Senate
School Bathroom Use Bill Passes
In a sweeping bipartisan vote of 33-2, the Senate advanced H.4756, legislation that would restrict bathroom, locker, and changing room use at public K-12 schools, colleges and universities to that which corresponds to a person’s biological sex at birth. The bill codifies language that already exists in state law under a budget proviso, but expands the application to colleges and universities and adds a private cause of action for violations. The bill was slightly amended by the Senate, so it will head back to the House to see if the body concurs in their amendments.

What Else?
The Senate advanced H.4763, the HALO bill, by a unanimous vote on Thursday. The bill prevents individuals from “approaching, impeding, causing harm to, or harassing” a first responder or emergency medical care provider. The Senate slightly amended the House version of the bill by removing the 25 foot perimeter. The bill was a Republican Caucus Agenda item in both bodies.

The House
House Passes Limited Lawsuit Reform Measures
While the House was expected to take up the Insurance Rate Reduction Act, the body instead tackled two pieces debated by the Judiciary Committee that limit lawsuit abilities in South Carolina. H.4760 deals with time-limited demands for settlements, setting a minimum amount of time of thirty days for an insured to respond. Representative Jay Jordan (R-Florence) who chaired the bill’s subcommittee said it’s to ensure bad actors can’t create artificial deadlines without guidelines and drag parties into bad faith claims. H.4544, medical malpractice legislation, modifies situations in medical malpractice cases where noneconomic damage caps do not apply, and adds a limit of 8x the current limitations on noneconomic damages to those situations. The bill also tweaks the definition of “occurrence.” Rep. Jay Jordan (R-Florence) said the bill aims to protect payments to ensure fair and timely compensation while preventing"excessive and unpredictable” lawsuits that can drive up healthcare costs.

Both bills passed the House unanimously and are headed to the Senate.

What Else?
The House voted unanimously to concur in Senate amendments to H.3858, a boat tax reduction bill, that would cut the property taxes paid on boats registered in SC by nearly half. The reduction would phased in over three years, and eliminate the requirement for owners to title an outboard motor. An updated fiscal impact study indicates that the cut will cut property tax revenue by nearly $40 million at the end of implementation.

The House voted to override Governor McMaster’s veto of H.4902, the name, image and likeness bill that would shield NIL contracts between colleges/universities and student athletes. The Senate is expected to take up the override next week.

In Committees
Bachelor’s Degree in Culinary Arts - H.5177/S.863
A House Ways & Means Subcommittee and a Senate Education Committee advanced pieces of legislation that would allow technical colleges to expand their culinary programs to bachelor’s degree programs. The House limits that ability to Trident Technical College only, while the Senate opens it up to all Technical Colleges.

DOT Reform - S.831/H.5071
A House Ways & Means Subcommittee advanced the sweeping DOT Reform legislation Thursday morning. The House replaced the language in the Senate bill with their working language.

Abandoned Buildings Tax Credit - S.853
A House Ways & Means Subcommittee advanced language that would clarify language on property types eligible for the Abandoned Buildings Tax Credit. The bill is headed to the full committee.

The Week Ahead
In the Senate:
● Floor Watch: The Senate is working on clearing their calendar before the budget, so we expect them to continue clearing smaller bills. Senators are hoping to get to the Municipal Penny Sales Tax legislation.
● Committees: Senate Finance subcommittees will wrap up their work on the state budget. Senate subcommittees will continue their work on data center regulation.

In the House:
● Floor Watch: The House did not take up H.4817, the Insurance Rate Reduction Act, this week as was expected. We assume the body will take up this legislation next week before furlough.
● Committees: The House will continue to work through committees to prep for floor debate following their second furlough week (the week of April 6). A Senate Judiciary Subcommittee will take up H.3408, legislation that would prohibit a business whos’ principal place of business is located in a U.S. declared foreign adversary (the People’s Republic of China, the Chinese Communist Party, the Russian Federation, Iran or North Korea), from owning, leasing, possessing or exercising control over any real estate in South Carolina.

Candidate Filing
Candidate filing remains open until Monday, March 30 at noon. 

Key Points for This Week
● DOT Reform Advances
● Hemp Consumables Legislation Advances
● Candidate Filing Opens

The One-Minute Drill
The Big Picture: The Senate passed its version of the sweeping DOT reform bill on Thursday, sandwiched between hours of lengthy debates over the Hemp Consumables Regulations bill.

1. Senate Advances Sweeping DOT Reform
The News: On Thursday, the Senate gave third reading to their sweeping DOT Reform Bill (S. 831), without adopting any of the previously carried over amendments.

● The Details:
○ Gives DOT greater ability to enter into public-private partnerships.
○ Expands DOT’s tolling authority.
○ Transfers National Environmental Protection Act (NEPA) authority for permitting to DOT from the Federal Highway Administration.
○ Allows counties and cities to take ownership of roads from the state.
○ Provides greater oversight over county transportation committees.

What’s Not Included: The Senate did not include language to make the DOT a cabinet agency under the governor. Several funding components of the bill were also removed, including an electric vehicle registration fee increase, electric car charging fee increases and mitigation fees for new housing developments.

What’s Next: The bill is headed to the House. If it follows the pattern the House established with their version of the DOT Reform bill, it will be referred to the Ways & Means Committee when the body gavels back in on Tuesday. From there, leadership will decide whether to add their language to this existing bill, or continue working through their iteration of the bill and hope for passage before the clock runs out.

The Senate Hemp Regulations Dominate Debate
The Senate spent the week debating H. 3924, legislation regulating hemp-derived THC products. For the first time in recent memory, the Senate went into the early morning hours Wednesday night (well Thursday morning), finally adjourning debate for the day at 12:15AM.

What happened?
The bill was amended throughout the week to permit entities to sell gummies and other hemp consumables, but restricted all sales to liquor stores only (as opposed to functioning much like beer/wine versus liquor with a milligram split. When time came to take a final vote on the bill, the legislation failed by a vote of 15-25, with Majority Leader Shane Massey saying the body expected to deal with the topic again on Thursday. 

And on Thursday? Thursday led to more behind-the-scenes negotiations with the Senate recessing for hour long periods of time to try to work out compromise language.

The bill finally passed late Thursday afternoon, restoring much of the language in the original version of the bill for convenience and grocery stores to sell hemp products at the 5% range, but behind a counter only. Gummies and other consumables can be sold, but only behind the counter. An additional amendment failed that would allow for and train servers to serve hemp based beverages at bars and restaurants.

Why It Matters: The debate exposed cracks within the Republican party and leadership. Additionally, these new restrictions will impact retailers and many bars and restaurants that are currently serving these products.
The House The House was on Spring Break this week… the first of two planned furlough weeks they’ll take before the end of the session.

In Committees
Municipal Tax Relief - S.866
The Senate Finance Committee advanced legislation that would allow a municipality to hold a referendum to enact a penny sales tax within municipal boundaries if their county does not currently have a penny sales tax.

Childcare Programs - S.770
A Senate Family & Veterans Services Committee took testimony on a bill that would expand access to certain childcare programs for individuals with certain income caps and employment. The bill was ultimately carried over. 

Regulatory Reform - S.254/H.3021
A Senate Judiciary Subcommittee continued to take testimony on bills that would lessen regulatory burdens on small businesses. No action was taken.

The Week Ahead
In the Senate:
● Floor Watch: The Senate will likely take up the tax conformity bill and the transgender bathroom bill.
● Committees: Senate Finance subcommittees will wrap up their work on the state budget. 

In the House:
● The House will begin heavy committee work again as they work to fill the calendar for the second half of session. 

Candidate Filing Opened
Candidate filing opened on Monday at noon for all partisan offices (non-partisan offices such as school board will open in August). Filing closes on March 30 at noon.

Key Points for This Week
● House passes $15.4B state budget
● Income tax reform heads to Gov. McMaster
● DOT reform advances in the Senate

The One-Minute Drill
The Big Picture: The General Assembly has reached the midpoint of the legislative session, with nine weeks remaining before the May 14 Sine Die deadline. Expect longer days and faster legislative movement as lawmakers work to finish major priorities before adjournment.

1. House Passes $15.4 billion Budget
The News: After about 16 hours of debate, the House approved its first version of the $15.4 billion state budget. Despite the lengthy debate, the process moved faster than in recent years, with lawmakers finishing before midnight both nights. The Senate now begins its review.

What’s in the budget
State Workers
● $66.9M for a 2% pay raise for state employees
● $36.7M for the State Health Plan, avoiding premium increases
Education
● $150M to raise starting teacher pay to $50,500
● $95M for K-12 public and charter school facility and safety upgrades
● $8.7M to fully fund school breakfast statewide
Infrastructure
● $500M for roads and transportation
○ $249.2M for bridge modernization
○ $125M for interstate acceleration
○ $100M for county transportation funding
○ $25M for the road buyback program
Economic Development and Tourism
● $70M for airport enhancements to strengthen freight capacity and tourism
● $40M for tourism marketing
Tax Relief and Reserves
● $125M to reduce the top income tax rate from 6% to 5.39%
● $130M for property tax relief
● $179M added to the state’s reserve funds

What’s not included: The House version does not include earmarks or the $150M requested by the Department of Commerce for the Scout Motors project. 

What’s next: The Senate Finance Committee is expected to begin work on the budget in early April, where changes are common.

Why it matters
● Continued tax relief remains a legislative priority.
● Infrastructure funding signals ongoing focus on freight mobility and economic growth.
● The Senate budget process still provides opportunities for major revisions.

2. Income Tax Reform Heads to McMaster’s Desk
The news: After finishing the budget debate Wednesday night, the House approved the Senate’s income tax reform proposal, sending it to Gov. Henry McMaster.

Immediate changes
● Cuts the top income tax rate from 6% to 5.21%
● $308M in immediate income tax relief
● Taxes the first $30,000 of taxable income at 1.99%
● Existing exemptions remain unchanged

Impact: More than 77% of taxpayers are expected to see either a tax cut or no change in their tax liability.

​Long-term goal: The legislation commits to future incremental reductions, moving toward a 1.99% flat tax rate and potential elimination of the state income tax.

Why it matters
● Lower income tax rates can improve South Carolina’s competitiveness for investment and talent.
● Updated withholding tables mean workers may see higher take-home pay sooner, which can influence consumer spending.
● Future tax reductions will likely remain a major policy focus in upcoming sessions.

The Senate
DOT Reform
● The Senate gave S.831, the comprehensive Department of Transportation reform bill, second reading this week.
● Debate on amendments was carried over to third reading, which leadership expects to take up after completing debate on hemp beverage regulations.
● DOT governance changes could affect transportation planning, project prioritization, and infrastructure investment statewide.

Hemp Beverage Regulation
The Senate spent the week debating H.3924, legislation regulating hemp-derived THC products.
Key provisions
● Prohibits sales to individuals under 21, but keeps CBD products legal
● Places hemp beverages within the state’s three-tier alcohol distribution system
Product Limits / Restrictions
● 5mg THC drinks could be sold wherever beer and wine are sold
● 10mg drinks would be regulated similarly to liquor
● No on-premise consumption at bars or restaurants
● Gummies and other hemp consumables banned

Why it matters: The bill could significantly affect retailers, distributors, restaurants, and beverage manufacturers, particularly around where hemp beverages can be sold and how they are distributed.

The House
Tax Conformity
● After the budget and the income tax bill, the House passed tax conformity – aligning the state tax code with the federal tax code for 2025. One year only.
● This will include no tax on tips, no tax on overtime, and other provisions from the Big Beautiful Bill (2025). It will cost the state hundreds of millions in one-time money.
● This will also include full expensing of domestic research and experimental costs.
● The bill now goes to the Senate Finance Committee. 

In Committees
Municipal Tax Relief: S.866
A Senate Finance Subcommittee advanced legislation that would allow a municipality to hold a referendum to enact a penny sales tax within municipal boundaries if their county does not currently have a penny sales tax.

Pharmacy Benefit Managers: S.342
The Senate Banking and Insurance Committee advanced legislation that would further regulate pharmacy benefit manager programs and set a minimum drug reimbursement price and a $10.50 minimum dispensing fee for all prescriptions filled. This legislation will cost residents $300 million per year and increase health insurance premiums by 3%.

The Week Ahead
In the Senate:
● Floor Watch: The Senate is expected to continue their work on Hemp regulation and DOT reform.
● Committees: Senate Finance subcommittees will work on the state budget.
​
In the House:
● The House will take their first of two furlough weeks next week.

Key Points for This Week
● House preps for marathon week
● Training for alcohol service heads to McMaster’s desk
● DOT reform heads to senate floor

The One-Minute Drill
The Big Picture: We’ve hit the point in the two-year legislative session when the two chambers are starting to get really ticked off at the actions of the other. This happens every session, but the stakes are pretty high this year. Tax cuts, conformity, and the budget are serious challenges for the House in a gubernatorial election year.

1. House Preps for Marathon Week
The News: On Thursday, the House set four bills for Special Order next week - meaning no other legislation can be taken up before the completion of these bills. Members are prepping for a long week of debate, with the House gaveling in at 1:00 p.m. on Monday and possibly staying in session for the entire week.
● The Details: First on the agenda is the budget (H.5126). They’ll take up the “non-controversial” sections and then move into sections with amendments and lengthy debates. In past years, this process has stretched well into the night for several days. Following the budget, the House will take up the state’s rainy-day funds. Unlike past years, this isn’t where debate will end. The House will then take up the amended income tax reduction bill (H.4216), and the notorious “tax conformity” bill to extend Trump’s tax cuts for the 2025 tax year (H.3368).
● The Rub: The Senate’s version of the Income Tax bill increases the fiscal impact, leaving the House with even fewer funds to allocate in this year’s budget process. The House will need to decide whether to concur with the Senate’s amended version – both options being problematic in an election year. Meanwhile, tax conformity isn’t something the Senate wants to take up since the newly passed income tax bill decouples SC Income Tax from Federal taxes, but that would keep state taxes on tips and overtime, which is not popular. 
● What’s Next: These spats during the budget process aren’t unusual. Political watchers are placing bets on whether we see a budget done before June’s primary elections, especially given that the Senate has already passed a Continuing Resolution.

2. DOT Reform Heads to Senate Floor
The News: The Senate Advanced DOT Reform to the floor, and is expected to be taken up after the Senate finishes their work on Hemp Legislation.
● The Details: The Bill was amended in full committee and:
○ Gives DOT greater ability to enter into public-private partnerships.
○ Expands DOT’s tolling authority.
○ Transfers National Environmental Protection Act (NEPA) authority for permitting to DOT from the Federal Highway Administration.
○ Allows counties and cities to take ownership of roads from the state.
○ Provides greater oversight over county transportation committees.
● What’s Not Included: The Senate did not include language to make the DOT a Cabinet department under the governor. Several funding components of the bill were also removed, including an electric vehicle registration fee increase, electric car charging fee increases and mitigation fees for new housing developments.

On The Floor
Judiciary Race
● Justice Few Withdraws: In a surprise announcement on Tuesday, Supreme Court Justice John Few withdrew from the race for his seat on the bench. As the incumbent, his withdrawal forced a cancellation of the race and reset the process. Few’s term is set to expire on July 31, but law says he can stay on the bench until his replacement is selected - likely in 2027.

House
● “HALO” Act: The House passed legislation (H.4763) that would require the public stand 25-feet away from first responders and law enforcement if given a verbal warning. Knowingly ignoring that warning either from medical or law enforcement personnel would result in a misdemeanor charge, punishable by a fine of up to $500 and up to 30 days in jail. 

Senate
● Alcohol Server Training Extension: This week, the Senate unanimously passed H.5261, a joint resolution to extend the deadline for restaurants and bars to comply with the new alcohol server training requirements (as outlined in last year’s alcohol regulation overhaul) to May 1st. The Resolution is headed to the Governor’s Desk.
● Boat Taxes: On Thursday, the Senate passed a bill that aims to restructure boat taxes and registrations. The Senate-amended bill, which would eliminate the requirement to register outboard motors and reduce boat taxes by roughly $50 million, now heads back to the House.

In Committees
Data Centers: S.867/S.902
A Senate Agriculture and Natural Resources subcommittee and a Senate Judiciary subcommittee met this week to discuss the “Data Center Development Act” (S.867) and the “Data Center Siting Act” (S.902). Testimony during these hearings focused on water and energy usage and on which entities should have governing and regulatory authority. Additional hearings are expected.

Regulatory Relief: H.3021/S.254
A Senate Judiciary subcommittee held another hearing on a bill that seeks to reduce regulatory burdens on job creators by requiring agencies to eliminate two regulations for every new one proposed, ending judicial deference to state agencies in legal disputes, establishing a regulatory “shot clock,” and implementing other reforms. Additional hearings are expected.

Insurance Reform: H.4817
The House Labor, Commerce and Industry (LCI) Committee advanced a bill that aims at reducing insurance rates, combating fraud, and increasing policyholder protections. The bill now heads to the House floor. 

Chinese Land Ownership: H.4974
A House Medical, Military, Public and Municipal Affairs (3M) subcommittee advanced a bill that would restrict companies owned or controlled by the People’s Republic of China or the Chinese Communist Party or whose principal place of business is located within China from acquiring land within 25 miles of military installations for the purpose of installing telecommunications or broadcast towers. The bill sent to the full House 3M Committee.

The Week Ahead
In the Senate:
● Floor Watch: The Senate is expected to take up legislation that would regulate hemp based consumables. The bill (H.3924) passed the House in April 2025, but has been heavily amended since then by the Senate. 
● Committees: Senate Finance subcommittees continue to meet in the Senate as they begin their work on the state budget, and an Agriculture and Natural Resources subcommittee will continue taking testimony on S.867, the data center overhaul bill. The full Senate Banking and Insurance Committee will meet on Wednesday to discuss S.342 the Pharmacy Benefit Manager Bill that will add a minimum dispensing fee to all prescriptions dispensed in SC.

In the House:
● Floor Watch: The House will spend the week on the budget, capital reserve funds, income tax reform and tax conformity.
● Committees: No House committees will meet this week.

Key Points for This Week
● Senate Amends (and passes) Income Tax Reform
● Training for alcohol service
● DOT reform moves in Senate

The One-Minute Drill
The Big Picture: Income Tax reform advances, hospitality community gets a break, DOT reform moves in the Senate with no new taxes included in the bill.

1. Senate Amends and Advances Income Tax Reform
The News: The Senate advanced H.4216, the income tax reduction bill, by a vote of 39-5.
● The Details: The SC Senate amended and advanced the income tax reduction bill on Tuesday, with the amendment coming from a surprise source - Senator Lee Bright (R-Spartanburg), co-sponsored by Chairman Harvey Peeler (R-Cherokee). The amended bill accelerates the tax reduction process.

The amended version of the bill:
○ Eliminates the federal standard and itemized deductions, and lets state taxpayers claim a state income adjusted deduction
○ Shifts the state's 6% top income tax rate down to 5.21%
○ Requires that anyone with taxable income of up to $30,000 pay 1.99%
○ Requires that anyone with taxable income above $30,000 pay 5.21%
○ Phases the income tax to zero, if the state takes in enough revenue, but this could take decades.

● The Cost: The House version hit the state budget revenue in year one by $119 million. The Senate doubled that to $308.7 million, which will have a big impact on the budget as they continue to work through the FY 2027 budget process.
● What’s Next: The amended bill now heads back to the House for concurrence. If they opt not to concur, the bill will head to conference committee where three appointees from the House and three from the Senate will hash out the details.

2. Alcohol Training Courses
The News: On Wednesday, the House introduced a Joint Resolution (H.5261) extending the deadline for bars & restaurants to complete State-Mandated alcohol-serving courses, which were supposed to be completed by Monday. However, only about 20% of establishments have been able to complete the courses. Meaning 80% of these business would be operating illegally beginning Monday.
● The Details: Legislation in the alcohol regulation passed last year required bars and restaurant owners to have their staff complete alcohol training and safety courses. However the Department of Revenue failed to create the courses in a timely manner. The new resolution extends the deadline until May.
● What’s Next: The bill was fast tracked on Wednesday, with the body waiving the usual committee procedure. The Senate should get the resolution next week, and the hope is that the Senate will also fast-track the resolution, getting it done by late next week.

On The Floor
House
● 10 Commandments: The House spent Wednesday debating a bill that would require the 10 Commandments to be posted in schools. The legislation passed by a party-line 84-31 vote and requires at least an 11-by-14 inch Ten Commandments poster to be displayed in every K-12 public school and college classroom no later than January 2027. The language mentions other historical documents — the Emancipation Proclamation, the Declaration of Independence, the Mayflower Compact, and the Northwest Ordinance — can also be displayed. 

Senate
● Name, Image & Likeness Wraps: A Senate Education subcommittee held some college athletic directors’ feet to the fire on Wednesday to ensure that public money was not being used toward Name Image and Likeness (NIL) deals for athletes in South Carolina, as they continue to debate whether or not these deals should be transparent for public view. Athletic directors told a South Carolina Senate committee on Wednesday that no "direct institutional support" from their respective colleges goes toward the revenue-sharing program with university athletes. The bill received third reading on Thursday and is headed to the Governor’s desk.
● Abandoned Buildings Tax Credit: The Senate also passed a bill (S.853) that clarifies eligibility rules for these tax credits in response to a S.C. Department of Revenue (DOR) ruling released earlier this year. Attempts to restrict data centers from utilizing the credit were defeated. The bill now heads to the House.

In Committees
Pharmacy Benefit Mangers: S. 342
A Senate Banking & Insurance Subcommittee advanced legislation that seeks to regulate Pharmacy Benefit Managers, and adds a dispensing fee to every prescription filled. This could cost South Carolinians an additional $330 million per year.

DOT Reform: S. 831/H. 5071
A Senate Transportation Subcommittee passed their DOT Reform bill, stripping out all new taxes and fees, leaving those for the House to tackle (by constitutional mandate). The House’s companion bill is awaiting a hearing in the House Ways & Means Committee.

“Clean Air Act”: H. 4624
A House Ag subcommittee took testimony Wednesday on a bill that would regulate aircraft emissions, stating no one can "inject, release, or disperse" any chemicals, or "apparatus and energy frequencies manipulation" in the state's atmosphere with the goal to affect temperature, the dimming of sunlight or storm intensity. The bill was carried over.

Notable Introductions
H1B Visas: H. 5273
This bill by Rep. Steven Long (R-Spartanburg) would bar companies from receiving state incentives, tax breaks, grants, FILOT agreements, or state contracts if more than 2% of their workforce are H-1B visa holders. The bill was referred to the House Ways and Means Committee.

E-Verify Penalties: H. 5279
This bill by Rep. Steven Long (R-Spartanburg) would increase penalties for private employers who violate state employment citizenship verification requirements, raising fines and other sanctions for hiring unauthorized workers. The bill was referred to the House Labor, Commerce, and Industry Committee.

Data Center Moratorium: H.5286
This joint resolution by Rep. Steven Long (R-Spartanburg) would enact a two-year moratorium on new data center construction in the state. The joint resolution was referred to the House Ways and Means Committee.

The Week Ahead
In the Senate:
● Floor Watch: The Senate is expected to continue to fast track the alcohol server bill from the House (above). Other bills on the calendar include a bill that relates to Medical Informed Consent protocols (S.343) and hemp regulation (H.3924).
● Committees: Senate Finance subcommittees continue to meet in the Senate as they begin their work on the state budget, and an Agriculture and Natural Resources subcommittee will continue taking testimony on S.867, the data center overhaul bill. The full Senate Transportation committee will meet to discuss the DOT reform bill (S.831). A Senate Judiciary Committee subcommittee will meet Thursday to discuss the “Small Business Regulatory Freedom Act” (H.3021).

In the House:
● Floor Watch: The House will continue to work to clear the calendar next week in preparation for the budget debate. Bills on the calendar include magistrate election reform (H.3530) and various education bills.
● Committees: The House Ad Hoc committee on Tort Reform will meet Tuesday afternoon to discuss Medical Malpractice (H.4544) and Time Limited Demands (H.4670).

Calendar Update: The House plans to take two weeks of furlough (weeks of March 16 and April 6). The Senate is expected to take the Thursday before Easter off, and be in a perfunctory session the week of April 6, meaning no floor work. The Senate expects to work in committee that week, since the Senate Finance Committee will need to finalize the budget.