Session Week 15

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.