One Voice Newsletter

Legislative Update – Week 9

It was another busy week in Columbia as lawmakers officially hit the halfway mark of this year’s legislative session.

Income Tax Reform Heads to the Governor’s Desk

On Tuesday, the House concurred with Senate changes to H. 4216, the South Carolina Income Tax Reform bill, sending the bill to Governor Henry McMaster’s desk for his signature.

A top priority of SCMC — the bill modernizes our tax system, strengthens our competitiveness, and helps make South Carolina more affordable for families and businesses. The bill will reduce income taxes by $309 million in year one.

Governor McMaster is expected to soon sign the bill into law.

House Passes FY2026-27 Spending Plan

After roughly 16 hours of debate spanning two days, on Tuesday, the House passed its version of the state’s $15.4 billion FY2026-27 budget. Notable items in the House budget include:

• $250 million to the Department of Transportation (DOT) for bridge repairs.

• $150 million to increase teacher pay and raise the minimum starting salary to $50,500.

• $125 million to DOT for the acceleration of interstate widening projects.

• $95 million in technical college scholarships for critical-needs jobs via SCWINS.

• $75 million to the Department of Education (DOE) for construction projects for rural K-12 public schools.

• $25 million to DOT for a road buyback program to transfer state roads to county control.

• $8.2 million for statewide water and sewer projects.

• $2.5 million for the Carolina Internship Program at the University of South Carolina (USC).

• $2.5 million to the Department of Environmental Services (DES) to develop an artificial intelligence (AI) pilot program to make environmental permitting more efficient.

The spending plan now heads over to the Senate, who will begin debating its version in the full Senate Finance Committee during the week of April 6.

House Passes Tax Conformity

On Tuesday, the House unanimously passed a bill (H.3368) that, as amended, would conform South Carolina to the Internal Revenue Code (IRC) for tax year 2025, thereby capturing all of the personal and business tax provisions of the One Big Beautiful Bill Act (OBBBA).

The bill, which carries a roughly $290 million price tag, now heads to the Senate.

Senate Continues to Talk Data Centers

A Senate Agriculture and Natural Resources subcommittee held an additional meeting this week to discuss the “Data Center Development Act” (S.867). Most of the discussion focused on the existing contractual arrangements utility providers already have in place with data center customers that cover infrastructure costs, including upfront deposits, and defined minimum terms, to ensure other customers are not shouldering additional costs. Other testimony centered on proposals to allow certain large electricity customers, including data centers, to procure power from third-party suppliers. No action was ultimately taken, but another meeting is expected to be held in the coming weeks.

Other Notable Actions

• DOT Modernization (S.831) – On Wednesday, the Senate gave 2^nd reading to this bill that seeks to modernize the Department of Transportation (DOT) and streamline the delivery of infrastructure projects across South Carolina. The bill should receive 3^rd reading and be sent to the House next week.

• Pharmacy Reimbursement Mandates (S.342) – On Wednesday, the Senate Banking & Insurance (B&I) Committee advanced a bill that would set minimum reimbursement rates for how pharmacy benefit managers (PBMs) pay pharmacies and pharmacists for dispensing prescription drugs or performing pharmacy services. It is estimated that the bill could increase costs for employers by $330 million annually. The bill now heads to the Senate floor.

• UI Tax Changes (S.688) – On Thursday, the Senate Labor, Commerce and Industry Committee (LCI) advanced a bill to modify the unemployment insurance (UI) tax system by adjusting the benefit ratio lookback period from 12 to 20 weeks, reducing the solvency target for the Unemployment Trust Fund to return tax dollars back to employers, and modifying penalties for delinquent reporting to alleviate the strain on business. The bill now heads to the Senate floor.

• Regulation of Hemp-Derived Products (H.3924) – This week, the Senate began debating a bill that would establish a regulatory framework for hemp-derived THC products by prohibiting sales to those under 21, banning most consumable products like gummies, allowing only regulated hemp-derived THC beverages sold through the state’s alcohol distribution system with potency limits, and maintaining current regulations for CBD products. Debate will resume next week.

New Bills Introduced

Notable bills introduced this week include:

• Franchise Act of 2026 (S.1007) – This bill by Sen. Tom Davis (R-Beaufort) establishes a clear legal standard for when a franchisor can be considered a co-employer of a franchisee’s workers. The bill was referred to the Senate Labor, Commerce and Industry (LCI) Committee.

• Negligent Security (S.1008) – This bill by Sen. Danny Verdin (R-Laurens) and others would establish a defined legal framework for negligent security claims against property owners and occupiers, assigning liability only when an owner had actual knowledge of a specific, foreseeable threat. The bill was referred to the Senate Judiciary Committee.

Next Week

Next week will be a lighter week at the Statehouse with the House on furlough. The Senate will continue debating the bill (H.3924) to regulate hemp-derived products.