Session Week 8

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.