Key Points for This Week
● Senate Advances Budget
● Tort Bills Head to Senate Floor
● House delays DOT debate

The One-Minute Drill
The Big Picture: After working well into the evening Thursday, the Senate has officially adopted their version of the FY 2026-2027 budget. Highlights include:
● $309 million to cut the state income tax from 6% to 5.21%. The Income Tax Reform bill (H.4216/Act 110) has been signed into law by Governor Henry McMaster.
● $248 million to fund the Senate-passed Homestead Exemption increase (S.768).
● $200 million to the County Transportation Committees (CTCs) for road work.
● $190 million to the Department of Transportation (DOT) for bridge repairs, with $50 million in recurring funds.
● $150 million to increase teacher pay and raise the minimum starting salary to $50,500. 
● $95 million in technical college scholarships for critical-needs jobs via SCWINS.
● $12.5 million to DOT for a program to transfer state roads to county control.
● $6 million for statewide water and sewer projects.
● $1.5 million to the Department of Environmental Services (DES) to develop an artificial intelligence (AI) pilot program to make environmental permitting more efficient.
● A proviso establishing a Transportation Economic Development Fund that can be used for road improvement, construction, or right-of-way acquisition to recruit or retain high impact economic development projects or expansions.

Much of the Senate’s budget debate centered on proposed provisos, temporary one-year policy provisions tied to state funding. Notable provisos adopted this week include:
● Suspending the mandatory minimum liquor liability insurance coverage requirement for bars and restaurants (more below).
● Requiring the Department of Revenue to report the total amount of the data center sales tax exemption and the number of entities claiming the exemption annually.
● Requiring data centers to report monthly volume of surface, ground or other water used in the previous calendar year and its anticipated water use.
● Transferring $35 million from the Coordinating Council for Economic Development to the Department of Agriculture for agricultural relief.

The bill is now headed back to the House, where budget writers will have their final chance to amend the budget through what is essentially a second House budget – “H2.” When the body will take up the final version of the budget, or work through the conference committee process is still up in the air. A sine die agreement still has not passed the House, but under the proposed bill, the budget process must be concluded by June 30. It’s highly unlikely that the budget will be completed before the primaries on June 9.

The Senate
Tort Bills Head to the Floor
Following the nearly two-hour discussion and adoption of Majority Leader Shane Massey’s (R-Edgefield) proviso suspending the mandatory minimum liquor liability insurance coverage requirement for bars and restaurants (during which lawmakers discussed the continued need to improve South Carolina’s legal climate) the Senate recalled three tort-related bills from the Judiciary Committee to the Senate floor.
● H.4544 seeks to close loopholes that are causing increased financial exposure to healthcare providers in medical malpractice litigation. The bill also increases the caps under the Tort Claims Act, adjusting liability limits for claims against governmental entities in civil actions.
● H.4670 codifies clear guidelines that must be met when making time-limited settlement demands in tort claims and implements a 30-day period by which insurance carriers can tender policy limits and avoid being charged with bad faith.
● H.4000 expands alcohol licensing to performing arts and convention complexes and municipal amphitheaters and establishes server training and compliance requirements for collegiate sporting venues. Political watchers see this bill as a vehicle for broader amendments to South Carolina’s alcohol liability framework.

What Else?
The Senate Medical Affairs Committee advanced another piece of legislation with sweeping abortion restrictions. This bill because this issue has the distinct possibility of shutting down work in the chamber for the next 9 legislative days.

The House
DOT Reform Debate Delayed
The House delayed its debate on the sweeping DOT reform bill, instead taking up Senate amendments to legislation that would regulate the sale and distribution of hemp-derived beverages. After multiple failed attempts to amend the bill or kill it for the year, the House agreed to a proposal by Rep. John McCravy (R-Greenwood) that completely bans the sale or consumption of hemp-derived products tied to definitions tucked into a federal funding bill passed in November to reopen the government. Then, after more rounds of amendments were voted down, the House eventually agreed to add back the core of the original bill, a ban on the products to anyone under age 21. So, the House bill bans the products outright, but also bans the possession and use of the products by anyone under 21. Confused? There's a reason why.

"We weren’t making law today. We were posturing to go to conference," House Judiciary Chairman Weston Newton (R-Beaufort) told reporters after the House adjourned. "Somewhere, perhaps in the middle is where we find that acceptable regulatory structure through the conference committee process."

The bill now goes back over to the Senate, which is expected to reject the House changes and send the legislation to a committee of three House and three Senate lawmakers to negotiate a compromise between the two versions. 
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What Else
This week, the House largely worked to remove House bills from the Calendar, and moved several Senate bills through the committee process.

● On the floor, the House passed H.3408, a bill that, as amended, would prohibit foreign adversarial nations, as defined by the U.S. Secretary of Commerce, from acquiring any agricultural land in the state on or after July 1, 2026. The bill was referred to the Senate Judiciary Committee.
● On Thursday, the House Ways & Means Committee Advanced two bills that will be beneficial to workforce and economic development. The Committee advanced legislation that would allow technical colleges to offer a bachelor’s degree in Culinary Arts (S.863) - a program unavailable in our state. The hope is this offering will allow talent to stay in state. The Committee also advanced S.853, a bill that clarifies eligibility rules for the Abandoned Buildings tax credits in response to a S.C. Department of Revenue (DOR) ruling released earlier this year. Both bills are headed to the House floor.

The Week Ahead
In the Senate:
● The Senate is expected to take up the Tort Reform bills mentioned above, and likely begin work on their sweeping data center bills.
● A Senate Banking and Insurance Subcommittee will meet again on the “Insurance Rate Reduction and Policyholder Protection Act” (H.4817), followed by a full committee meeting on Wednesday.

In the House:
● The House is expected to tackle the DOT Reform Debate next week on the floor.
● House committees will continue to work to prepare for the last three weeks of session.

There are three weeks left in the legislative session, giving us just nine days to the end of session. The next three weeks will be a whirlwind of activity as legislators race to complete agenda items for the year.

Key Points for This Week
● Income Tax Bill Signed
● Senate Expands Monument Protections
● House begins DOT debate

The One-Minute Drill
The Big Picture: The Income Tax Reduction Act is officially law. Gov. Henry McMaster joined state leaders on Tax Day to hail the passage of H. 4216, The Income Tax Reduction Act, lowering the top income tax rate down to 5.21%, a cut from 6%.

Starting in the next tax filing year, the law also raises the income tax rate to 1.99% for anyone earning less than $30,000. Eventually, the tax would flatten to 1.99% for everyone, then phase out completely if the state brings in enough revenue year after year.

For years, South Carolina has had one of the highest income tax rates in the Southeast, putting us at a competitive disadvantage when it comes to business recruitment. 

The Senate
Monuments
After several days of debate, The Senate voted to expand protections under a portion of state law commonly called the Heritage Act to all memorials on public property in South Carolina. The legislation also would stop the use of digital codes or informational plaques placed near some monuments in recent years offering broader context on the thorny parts of history. Private groups could sue to enforce the measure, allowing a judge to order restitution.

What Else?
An insurance subcommittee of the Banking and Insurance Committee met to discuss H.4817, The Insurance Rate Reduction Act, which deals with insurance fraud oversight, and penalties for violations of policyholder protections. No action was taken and the bill is scheduled for an additional subcommittee.

The House
DOT Reform Debate Begins
The House began its debate of the sweeping DOT reform working through a few amendments before the bills were placed on the contested calendar. 

Committee Work & Clearing the Calendar
The major priority of the House this week was advancing House bills with the limited time on the calendar. Of note:
● H.3408 Advanced out of the House Judiciary Committee that restricts foreign ownership of agricultural land and property near sensitive military and infrastructure sites.
● The “Truth in Labeling Bill” (H.4248) passed the House unanimously. This bill is a direct response to the news stories last summer of non-local shrimp being marketed as such. The legislation requires clear country-of-origin labeling, preventing imported seafood from being passed off as local.

The Week Ahead
In the Senate:
● The Senate will spend the majority of next week debating the budget, going in to session on Tuesday at “high noon.” Senate Majority Leader also expects the body to work through a “chunk” of confirmation votes on Tuesday as well.
● Additionally, the Senate Medical Affairs Committee will meet on Tuesday at 9AM to continue debate on the newest Abortion Restriction bill. The outcome of this bill will be crucial - if it passes, there’s a good chance the legislation blocks up the calendar for the remaining nine days of Session following the budget.

In the House:
● The House is expected to continue work on the DOT bill next week.
● A House Ways & Means general government subcommittee will meet on Tuesday afternoon to discuss the sine die Agreement, legislation that keeps the legislature from getting called back into the session by the governor and dictates on what terms the legislature can return to Columbia after May 14. Typically, that includes the budget, any conference committee reports and the governor's vetoes. The bill could become the subject of chamber infighting as various factions attempt to add particular legislation of their choice to it.
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There are four weeks left in the legislative session, giving us 12 days to the end of session. The next two weeks will be a sprint. 

Key Points for This Week
● Senate Rejects Tax Conformity
● House Advances Insurance Reform
● 18 Legislative Days Remain

The One-Minute Drill
The Big Picture: Four of the seven Republican Gubernatorial Candidates participated in the first GOP debate Wednesday. Senator Josh Kimbrell, Congresswoman Nancy Mace, Congressman Ralph Norman and Attorney General Alan Wilson engaged in a surprisingly civil debate. Questions included gambling, government spending, and tax cuts.

The Senate
Tax Conformity
In a bi-partisan vote, the Senate on Wednesday voted 27-16 to kill legislation that would change the state’s tax code to match federal tax law under President Trump’s “One Big Beautiful Bill.” The Senate’s decision defied both the House of Representatives unanimous vote and the urging of Governor McMaster. Opponents, including Senate Majority Leader Shane Massey (R-Edgefield), said the vote reflects letting South Carolina decide its own tax policy, He also said conformity undercuts tax cutting efforts, including those in the large scale income tax reduction bill, which would decouple our state tax code from the feds.

The Senate can still take up parliamentary procedures to reconsider the vote, and the House can continue to try to tack conformity language onto Senate bills residing in the House chamber. 

What Else?
By a vote of 32-9, the Municipal Tax Relief Bill received second reading in the Senate on Wednesday. The bill was amended and allows municipalities located in a county that has not enacted a sales and use tax to hold a referendum vote on a municipality-specific penny sales tax. The money is to be used for property tax relief (20%) and then other municipal infrastructure such as roads, bridges, other city facilities, civic centers, or police and fire stations. The referendum process is just like the county referendums and be held during a general election after 2026.

In a unanimous vote on Wednesday, the Senate approved legislation that will allow our technical colleges to offer four-year bachelors degrees in Culinary Arts Management. Across the state, the hospitality and tourism community has growing concerns for their workforce - this legislation will allow students to achieve four-year degrees and be better prepared to enter the culinary industry.

The House
House Passes Property & Casualty Insurance Reform
In a 96-7 vote, the House passed an expansive Property & Casualty Insurance Reform bill, the product of the Insurance Rate Reform ad hoc committee chaired this offsession by Representative Gary Brewer (R-Charleston). The bill increases oversight over insurance fraud, creates penalties for violations of policyholder protection.

What Else?
The House spent a significant amount of time Wednesday debating H.4764, legislation that requires all law enforcement agencies in the state that operate jails or detention centers to enter into cooperation agreements with federal Immigration and Customs Enforcement (ICE) operations. The bill quickly turned contentious and sparked hours of party-line debate over cost, safety and fears that national stories about the agency could come to fruition in South Carolina. The bill is headed to the Senate.

On Wednesday, the House also passed legislation that would increase penalties for people who hurt or harass police dogs and horses. The bill ultimately passed by a 106-2 vote, and is headed to the Senate.

In Committees
Foreign Ownership of Real Estate - H.3408
A House Judiciary Subcommittee amended and advanced a bill that would prohibit federally-defined foreign adversaries from owning, leasing, possessing or exercise any control over farm land in South Carolina.

DOT Reform - S.831/H.5071
The House Ways & Means Committee advanced the sweeping DOT Reform legislation Thursday morning. The House and Senate bill now include the same language that was originally in the Senate bill with their working language. 
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The Week Ahead
In the Senate:
● The Senate will meet in perfunctory session next week, with no floor time, and limited committee meetings. The Senate Finance Committee will meet to outline their version of the 2026-2027 budget.

In the House:
● The House will be on Spring Break Round Two next week. They’ll return on April 14.

While there is no crossover deadline in the General Assembly, both bodies are nearing the point of the year in which they will unofficially only begin to consider legislation that has only passed one body, and many committees are expected to only have one to two more full committee meetings for the year. It will be a sprint after next week to get bills out of committees in what we expect to be about a two-week window.