Update 3/3/26: Adjustments were made to this summary to reflect developments that occurred throughout the week.
Last week, the Senate passed the income tax bill (H.4216) with an amended tax rate, cutting the top rate by an additional 0.18%. Click here to learn more about the proposal in a recent piece by Vance Ginn, Ph.D., Senior Economic Fellow at the Policy Council.
Taxes & spending
- Income tax H.4216 – Establishes two new tax brackets (1.99% up to $30,000 and 5.21% for anything above), eliminates all standard and itemized deductions, and adds a graduated deduction of up to $30,000 for those earning under $110,000. Also conditionally lowers the top marginal tax rate until it reaches 1.99%, then lowers the total tax rate until it reaches 0%. Last week, the Senate passed this bill with amendments, sending it back to the House who can either concur with the bill or send it to conference committee.
- Income tax on overtime H.3368 – Excludes overtime pay and the first $2,500 of bonus pay from state gross income. A House Ways and Means legislative subcommittee is scheduled to hear this bill on Tuesday, March 3 at 11:30am. Update: This bill was amended and found favorable by the full House Ways and Means Committee, who then advanced the bill to the House floor.
- Sales tax swipe fee H.4613 – Prevents credit card payment processors from charging a swipe fee on the sales tax portion of any retail transaction. A House Labor, Commerce and Industry subcommittee is scheduled to hear this bill on Tuesday, March 3 at 10:30am.
- Commercial airline tax exemption S.436 – Provides property tax exemptions for 36.8421% of the fair market value of all aircraft of each airline company. A Senate Finance subcommittee is scheduled to hear this bill on Tuesday, March 3 at 3pm.
- Boat tax package H.3858 – Exempts 42.8571 % of the fair market value of a boat from property tax, which effectively lowers the current 10.5% assessment ratio to 6%. This bill also removes the requirement to title an outboard boat motor, raises the boat title fee from $10 to $20, and allows an auditor to combine a boat and outboard motor on a property tax notice. Finally, this bill removes the provision that marine dealers that sell a minimum of ten outboard motors can renew marine dealer permits, and marine dealers who only service outboard motors are no longer allowed one demonstration number. This bill is on the Senate floor.
Education
- ESA approved items S.692 – Updates the Education Scholarship Trust Fund by removing previously approved personalized learning expenses, specifically home-based programs. It also eliminates certain additional parent reporting requirements and removes the provision allowing a parent’s signature alone to satisfy South Carolina’s compulsory school attendance law. A Senate Education subcommittee is scheduled to hear this bill on Tuesday, March 3 at 10:30am. Update: This bill was found favorable and advanced to the full Senate Education Committee.
- Grading floors ban H.5073 – Prevents schools from assigning a student a minimum grade that exceeds his or her actual achieved score. Also establishes a task force of education officials to evaluate and propose changes to the Uniform Grading Policy. This bill is on the House floor.
- Private providers in school H.3974 – Parents can request authorization for a private medical provider to perform necessary services for their child at a public school during school hours. Local school districts are required to consider requests on a case-by-case basis. The State Board of Education will develop parameters for private providers that are approved to operate during the school day. This bill is on the Senate floor.
Regulation
- Small business regulatory freedom H.3021– For every new regulation introduced, two existing regulations must be removed, aiming to reduce regulatory requirements by 25%, and changes the regulatory review process to prevent major regulations from persisting without legislative approval. Also ends the practice of judicial deference. A Senate Judiciary subcommittee is scheduled to hear this bill on Thursday, March 5 at 9:30am. Click here to read the Policy Council's full bill analysis.
- Dentistry instruction H.4342 – Removes limitations on certain credentialing requirements for licenses that allow qualified dentists to teach dental education programs in South Carolina. Last week, the bill passed second reading in the Senate and is expected to pass third reading this week. Update: This bill has passed the Senate. It will now be sent to the House.
- Regulation of charitable funds H.4662 – Strengthens protections for donors by updating the state's charitable solicitation laws to require clearer disclosures, higher registration thresholds for mid-sized nonprofits, and stricter rules for professional fundraisers and commercial co-venturers. The full House Labor, Commerce and Industry Committee is scheduled to hear this bill on Thursday, March 5 at 9am.
Judicial reform
- Magistrate reform H.3530 – Requires the JMSC to review magistrate candidates. Also expands magistrate jurisdiction to civil cases up to $25,000 and criminal offenses punishable by up to $25,000 in fines or one year of imprisonment, and all future magistrate appointees must be attorneys in good standing with the South Carolina Bar. Finally, this bill imposes a 14-day limit on magistrate holdover service before the Governor must appoint a temporary replacement. This bill is on the House floor.
Tort reform
- Medical malpractice H.4544 – Changes the definition of an occurrence to include multiple acts without breaking the causal chain, even if those errors are made by one or more individuals or entities. The bill also directs the Revenue and Fiscal Affairs Office to raise existing damage caps annually according to the Consumer Price Index. A House Tort Reform Ad Hoc Committee is scheduled to hear this bill on Tuesday, March 3 at 1:30pm.
Data centers
- Comprehensive data center regulations S.867 – Creates a statewide office under the Department of Environmental Services to manage data center applications and approve sites, reducing risks presented by local county decisions. There are financial assurance requirements, along with provisions for water usage, noise, light, buffers, and sites that can be used based on infrastructure adequacy. Also establishes a tax incentive program for brownfield site usage that's more targeted than the current incentive structure. Finally, data centers must cover their own energy costs, contracts, and infrastructure, preventing ratepayers from footing the bill. Onsite power generation is allowed. Decommissioning plans are mandatory, and energy/water usage data is public via FOIA requests. A Senate Agriculture and Natural Resources subcommittee is scheduled to hear this bill on Tuesday, March 3 at 9am.
- Data center siting S.902 – Nearly identical to S.867 but makes two notable changes. Tasks the Public Service Commission with the permitting process rather than creating a new office, and adds language that seemingly negates ratepayer protections. A Senate Judiciary subcommittee is scheduled to hear this bill on Tuesday, March 3 at 3:30pm.
- Data center water usage reporting S.724 – Requires commercial data centers that use at least three million gallons of water a month to report their water usage to the Department of Environmental Services. A Senate Judiciary subcommittee is scheduled to hear this bill on Tuesday, March 3 at 3:30pm.
Department of Transportation
- DOT Modernization S.831 – Creates a Coordinating Council for Transportation and Mobility, clarifies internal auditor qualifications, mandates DOT's long-range plan, and defines deputy secretaries' duties. It authorizes public-private partnerships, reciprocal toll agreements, conditional tolls, state immunity waivers, and municipal costs for delays. The bill transfers non-essential roads, imposes development congestion fees, adopts phased design-build and construction manager methods, and updates turnpike funding, studies, bonds (non-state debt), and issuance. Revenue includes higher EV/hydrogen fees to the Highway Fund, public charging taxes, enhanced county "C" funds oversight, procurement exemption for DOT information technology, and designating the Transportation Secretary to the Infrastructure Bank board. The full Senate Transportation Committee is scheduled to hear this bill on Wednesday, March 4 at 9:30am.
State budget
Last week, the House Ways and Means Committee finalized their budget proposal. On Thursday, March 5 at 9am, a House Ways and Means subcommittee will hold a budget briefing to explain their proposal to House members. Meanwhile, the following Senate Finance budget subcommittees are meeting to finalize their own proposal:
- Natural Resources and Economic Development Subcommittee – Tuesday, March 3 at 10am; hearing from Clemson Public Service and Agriculture, Department of Parks, Recreation & Tourism, Palmetto Trail, and Patriots Point.
- Health and Human Services Subcommittee – Wednesday, March 4 at 9am; hearing from the Retirement System Investment Commission, Department of Social Services, and Department of Environmental Services.
- Higher Education Subcommittee – Thursday, March 5 at 10am; hearing from Coastal Carolina University and College of Charleston.
- K-12 Education Subcommittee – Thursday, March 5 at 10am; hearing from the Governor’s School for Agriculture, SC Confederate Relic Room & Military Museum, and Arts Commission.
- Constitutional Subcommittee – upon Senate adjournment; agenda is not available online.
