One Voice Newsletter

Legislative Update – Week 18

And that’s a wrap (well, sort of)! The 2^nd regular session of the 126^th South Carolina General Assembly has adjourned Sine Die. Many of SCMC’s top priorities made it across the finish line this year, including income tax reform, manufacturing property tax relief, small business tax relief, and much more. Overall, it was a great year for the business community.

Lawmakers will return to Columbia today, and in the coming weeks, to address redistricting and outstanding conference issues, as Governor Henry McMaster has called a special session. More below.

Congressional Redistricting Headed to Special Session

Since the U.S. Supreme Court’s late April ruling in the Louisiana v. Callais case — which struck down Louisiana’s congressional map and significantly reshaped the legal landscape surrounding congressional redistricting — pressure has mounted on South Carolina lawmakers to revisit the state’s own congressional districts ahead of the 2026 elections.

On Tuesday, the Senate voted 29-17 to reject the House-amended sine die resolution, falling short of the two-thirds majority needed to authorize lawmakers to take up congressional redistricting after the regular session adjourned.

Shortly after the General Assembly gaveled out at 5 p.m. yesterday, Governor Henry McMaster called lawmakers back for a special session — the state’s first since 2023. The House is expected to gavel in this morning and focus exclusively on redistricting, with leadership aiming to advance a new congressional map designed to make all seven seats favorable to Republicans and send it to the Senate early next week. A companion measure moving alongside the map (H.5683) would separate the congressional primary from the statewide June 9 primary election and move it to August 18. The proposal would also reopen candidate filing from June 1-5.

The path forward remains uncertain, particularly as lawmakers work against the clock to finalize district lines ahead of the 2026 election cycle. Because the Legislature is now operating in special session rather than under a sine die agreement, a new congressional map will require only a simple majority vote instead of a two-thirds threshold.

This is a developing story. SCMC will continue to monitor developments closely.

Small Business Tax Relief Heads to Governor’s Desk

One of SCMC’s top priorities is on its way to Governor Henry McMaster’s desk for his signature after lawmakers incorporated the “Small Business Tax Cut Act of 2026” into the Unemployment Insurance (UI) Tax Relief bill (S.688).

The bill exempts 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 in BPP.

The bill also modifies 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.

Following its passage, SCMC President and CEO Sara Hazzard released a statement saying, “When small business wins, we all win. They enrich our communities, create jobs, and make products that are uniquely South Carolina. In passing small business tax relief – an SCMC priority – legislators, with critical support from leadership, delivered small business owners with a victory to celebrate.”

DOT Modernization Heads to Governor’s Desk

On Tuesday, the House and Senate both adopted a conference report on the Department of Transportation (DOT) Modernization bill (S.831), sending it to Governor Henry McMaster’s desk for his signature.

The final version of the bill:

• 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.

• Provides greater oversight over county transportation committees.

• Makes the DOT Secretary a cabinet position appointed by the Governor.

• Eliminates the DOT Commission effective January 1^st, 2027.

Following the General Assembly’s approval of the conference report, SCMC President and CEO Sara Hazzard released a statement saying, “This commitment to faster project delivery strengthens South Carolina’s foundation for long-term economic development success and serves as an important reminder that our best days are ahead.”

Other Notable Action

• Small Business Regulatory Freedom Act (H.3021) – The House and Senate are heading to conference on a bill that seeks to reduce the regulatory burden on job creators in our state. The bill would strengthen 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, and also require proposed regulations with an estimated financial impact of over $10 million to receive joint approval by the House and Senate. It would also end judicial deference to state agencies in legal disputes. Concerns exist over automatic sunset provisions included in the House passed version. The conference committee is expected to meet in the coming weeks.

• Sales Tax Exemption for Broadband Equipment (H.5122) – This week, the Senate passed a bill that would exempt equipment and related purchases by broadband and communications service providers, when used in producing or distributing internet access and communications services, from the state sales tax. An amendment was adopted to clarify that data centers do not qualify for the exemption. The bill now heads to the Governor’s desk for his signature.

• Abandoned Buildings Tax Credit (S.853) -This week, the House concurred in Senate amendments to a bill that clarifies eligibility rules for these tax credits in response to a S.C. Department of Revenue (DOR) ruling released earlier this year. The bill now heads to the Governor’s desk for his signature.

• Admissions Tax Exemption (H.5093) – This week, the House concurred in Senate amendments to a bill to exempt chambers of commerce from the admissions tax. The bill now heads to the Governor’s desk for his signature.

• Guarantee Banking Act (H.5538) – This week, the Senate passed a bill that would prohibit financial institutions from discriminating against individuals for their political or religious beliefs, or other economic activity. The bill now heads back to the House, who will likely take it up during the special session.

• Workers’ Compensation Fee Schedule Flexibility (H.3874) – This week, the House concurred in Senate amendments to a bill that would give the Workers’ Compensation Commission broader authority to establish and adjust medical fee schedules for medical services provided by practitioners. The bill now heads to the Governor’s desk for his signature.

• S.C. Drone Regulation and Public Safety Act (H.4679) – This week, the House concurred in Senate amendments to a bill to restrict unauthorized drone usage near sensitive sites like military installations and correctional facilities. The bill now heads to the Governor’s desk for his signature.

• Stop Harm from Addictive Social Media (SHASM) Act (H.4591) – This week, the House concurred in Senate amendments to a bill that would require large social media platforms to verify user ages, obtain parental consent for account holders under 16, and remove “addictive” features and targeted ads from minors’ feeds starting January 1, 2027. The bill now heads to the Governor’s desk for his signature.

• Aircraft Property Tax Reduction (S.436) – This week, the House concurred in Senate amendments to a bill that would allow commercial aircraft carriers to enter into fee-in-lieu agreements (FILOTs) approved by the Coordinating Council for Economic Development. The bill now heads to the Governor’s desk for his signature.

• U.S. Produced Iron and Steel (H. 4709) – This week, the Senate passed a bill that requires public works contracts to include provisions mandating that iron and steel products permanently incorporated into projects be produced in the United States, with limited exceptions. The bill now heads to a conference committee where the House and Senate will try to work out differences.

• S.C. STEM Opportunity Act (H.3863) – This week, the House concurred in Senate amendments to a bill that would consolidate the state’s existing STEM education organizations into a unified, Clemson-housed coalition backed by a dedicated state fund, with the goal of aligning K-12 and higher education programming with the workforce needs of South Carolina’s business community. The bill now heads to the Governor’s desk for his signature.

Full Recap Forthcoming

With lawmakers now operating under a special session, the General Assembly may technically conduct business under its normal procedural rules. In practice, however, any legislation that did not pass before adjournment at 5 p.m. yesterday is effectively dead for the year and will need to be reintroduced when lawmakers return next January. A full list of all bills passed this year can be found here.

SCMC will be working on a comprehensive legislative recap to be shared in the coming weeks. Stay tuned.