One Voice Newsletter

Legislative Update – Week 15

Just three weeks remain in this year’s legislative session, with Week 15 seeing a flurry of activity from both the House and Senate.

Senate Advances FY2026-27 State Budget

The Senate spent hours on the floor this week debating, and ultimately passing, their version of the state’s roughly $15.3 billion FY2026-27 budget.

Highlights of the Senate budget 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 road buyback 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.

• $1.5 million for the Manufacturing Extension Partnership (MEP).

• 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:

• A proviso suspending the mandatory minimum liquor liability insurance coverage requirement for bars and restaurants (more below).

• A proviso pausing state economic development incentives for data center projects.

• A proviso 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.

• A proviso requiring data centers to report monthly volume of surface, ground or other water used in the previous calendar year and its anticipated water use.

• A proviso establishing a Joint Recycling Study Committee.

• A proviso transferring $35 million from the Coordinating Council for Economic Development to the Department of Agriculture for agricultural relief.

Tort-Related Bills Head to Senate Calendar

Following the roughly two-hour discussion and adoption of Senator 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 by clarifying the circumstances where non-economic damage caps do not apply and redefining the definition of “occurrence,” to treat multiple negligent acts as a single occurrence when resulting in similar harm. 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. More importantly, it is a vehicle for broader amendments to South Carolina’s alcohol liability framework.

Manufacturing Property Tax Bill (S.439) Heads to House Floor

One of SCMC’s top priorities is closer to the finish line following unanimous passage by the full House Ways and Means Committee on Thursday.

The bill, which is now on the House floor, would raise the manufacturing property tax exemption cap established in the Comprehensive Tax Cut Act of 2022 from $170 million to $300 million. The original cap helped reduce the manufacturing property tax rate from 9% to 6%, provided county revenue losses did not exceed $170 million. Increasing the cap is critical to ensuring small and mid-sized manufacturers are not subjected to property tax increases in the coming years.

Other Notable Actions

• Local Government Zoning Determinations (H.4293) – This week, a House 3M subcommittee advanced a bill that would allow local governments to immediately void permits and halt construction on a property based solely on their own determination that approvals were obtained through misrepresentation — with no required hearing or independent review before work stops.

• Sales Tax Exemption for Broadband Equipment (H.5122) – On Thursday, the House Ways and Means Committee advanced 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. The bill now heads to the House floor.

• Foreign Adversary Land Ownership Restrictions (H.3408) – This week, the House passed 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.

• Guarantee Banking Act (H.5538) – This week, the House passed a bill that would prohibit financial institutions from discriminating against individuals for their political or religious beliefs, or other economic activity. A private right of action (PRA) was taken out of the bill during subcommittee deliberations. The bill was referred to the Senate Banking and Insurance (B&I) Committee.

• Abandoned Buildings Tax Credit (S.853) – On Thursday, the House Ways and Means Committee advanced 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 House floor.

• Admissions Tax Exemption (H.3371) – On Thursday, the House Ways and Means Committee advanced a bill that exempts chambers of commerce from the admissions tax. The bill now heads to the House floor.

• Textiles Communities Revitalization Act Clarification (H.5488) – On Thursday, the House Ways and Means Committee advanced a bill that clarifies the qualifying requirements for rehabilitation expenses under the SC Textiles Communities Revitalization Act, specifying that textile mill buildings included in a Notice of Intent to Rehabilitate must be either renovated or demolished to be eligible for the associated tax credit. The bill now heads to the House floor.

• Alcohol Delivery and Curbside Pickup (S.849) – On Tuesday, a Senate Judiciary subcommittee advanced a bill that authorizes licensed retailers to offer curbside pickup and third-party delivery of beer, wine, and liquor in South Carolina. The bill now heads to the full Judiciary Committee.

New Bills Introduced

• “Forever Chemicals” (H.5572) – This bill by Rep. Joe Bustos (R-Charleston) requires the SC Department of Environmental Services to develop comprehensive PFAS guidelines — in collaboration with the EPA — establishing science-based thresholds for safe and dangerous levels of PFAS compounds in drinking water, surface water, groundwater, and soil.

Next Week

The House will tackle the DOT Modernization bills (S.831/H.5071) on the floor, while the Senate will return its attention to bills on the calendar. Notable meetings already scheduled for next week include:

• Tuesday – Senate Banking and Insurance (B&I) Subcommittee on the “Insurance Rate Reduction and Policyholder Protection Act” (H.4817), followed by a full committee meeting on Wednesday.

• Tuesday – Senate Agriculture and Natural Resources Committee on the “Data Center Development Act” (S.867).

• Wednesday – Senate Labor, Commerce and Industry (LCI) Special Subcommittee on physician noncompete agreements (S.46 & H.4767).