Session Week 17

Key Points for This Week
● Three Legislative Days Remain
● House Tackles the Budget
● Redistricting steals the show

The One-Minute Drill
The Big Picture:
Just three legislative days remain. 

The House spent Wednesday afternoon debating the sine die Resolution. Normally a perfunctory resolution about what the legislature can and cannot return to Columbia to debate (budget, conference reports, vetoes). This year, thanks to a call to the GOP from President Trump on Tuesday, this year’s resolution includes the ability for the body to be called back to take on Congressional redistricting. That has kicked off a firestorm at the Statehouse.

The Senate
Senate Advances Small Business Priorities
The Senate advanced H. 5006, the “Small Business Tax Cut Act of 2026”. The bill would exempt the first $10,000 of a small business’s personal property (BPP) from county taxation, ease compliance burdens, and effectively eliminate the tax altogether for small businesses with less than $10,000. However, proponents worry the bill may be dead upon re-arrival to the House, as leadership is not thrilled with the numerous amendments tacked on by the Senate, including the contested increased homestead exemption property tax cut for Seniors. 

The Senate advanced a version of H. 3021, the “Small Business Regulatory Freedom Act,” which aims to reduce the regulatory burden on businesses in South Carolina. As amended, the bill strengthens the state’s existing regulatory review process by adding independent oversight to ensure regulations remain within statutory authority and are not outdated, while holding agencies accountable for compliance. The bill heads back to the House.

The House
House Takes Final Crack at Budget
On Wednesday, The House took their final stab at the FY2026-2027 budget. Debate was significantly shorter this time around, with the body spending just hours debating the large strike and insert amendment as well as a handful of additions.

The House version:
● Largely re-set funding levels to the House’s original line items.
● Included over $300 million in member requested funds for district specific projects.
● An increase of legislators' in-district pay to $2,500 per month, starting Dec. 1. (A stand-alone bill to do the same advanced from the House Ways & Means Committee Thursday).
● Reinstated language to offer every public school student free breakfast at no cost.
●Funds to allow the state to hire a third-party firm to help with monitoring compliance with recommendations over the AlixPartners forensic accounting report connected to the investigation into the $1.8 billion accounting error.
● Funds to require the public health department to spend up to $7.5 million to start and administer a statewide firefighter occupational health program for cancer screenings, working with the Office of the State Fire Marshal.

What did not get added to the budget?
● Any direct line item to meet the $150 million additional funds requested by Scout Motors and the Department of Commerce.
● A request by Spartanburg Republican Rep. Josiah Magnuson to suspend the state's gas tax from July 1, the start of the new fiscal year, until Aug. 1, or for 30 days. (House budget Chair Bruce Bannister, R-Greenville, said the tax generates around $80 million a month, and around 30% of the tax is also paid for by out-of-state visitors.)

The Senate did not concur with the House’s amendments, as expected, and the bill is now headed to a conference committee. Should the budget not be agreed upon by June 30, both bodies have agreed to a concurrent resolution, funding the government at FY25-26 levels. 

What Else
This week, the House also advanced:
● S. 863, legislation that would allow Technical Colleges in our state to offer Bachelors Degrees in Culinary Arts. The lack of a four-year degree program is cited as a huge workforce barrier for our state’s hospitality industry.
● S. 439, legislation that would increase the cap for the Manufacturing Property Tax exemption from $170,000 to $300,000. Based on current projections, the state is expected to exceed the cap in FY2026, creating a major recruitment and new investment challenge for South Carolina. Increasing the cap allows businesses and industry to continue to plan and invest.

The Week Ahead
The bodies should be done with committee meetings, and will spend long days debating legislation on the floor. The final week is a chaotic whirlwind, especially in the second year of a two year session, where any uncompleted work dies.