Statehouse Update February 17-19

Update 2/19/26: Adjustments were made to this summary to reflect developments that occurred during the week.

The House passed a comprehensive overhaul of the judicial selection process last week empowering the Governor to control judicial nominations while the General Assembly would still confirm judges, more closely mirroring the federal model. Let’s hope lawmakers in both chambers can keep this momentum going.

Taxes

Income tax H.4216 – Establishes two new tax brackets (1.99% up to $30,000 and 5.39% 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%. This bill is on the Senate floor.
Homestead exemption S.768 – Raises the homestead exemption to $150,000 and adds a five-year state residency requirement. Taxpayers currently exempt will be grandfathered in. This bill is on the Senate floor. Update: The Senate amended S.768 to maintain the current $50,000 exemption while adding two new exemptions; $75,000 for qualified five-year residents, and $150,000 for qualified ten-year residents and residents who claimed an exemption on their 2025 taxes. All future recipients will have to abide by the residency requirements. The amended bill has passed the Senate.
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 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. The full Senate Finance Committee is scheduled to hear this bill on Tuesday, Feb. 17 at 3pm. Update: This bill has advanced to 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 Thursday, Feb. 19 at 9:30am.
School board ethics S.70 – Requires local school boards to adopt a code of ethics and training programs created by the State Board of Education, as well as something else. This bill is on the Senate 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.

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 heard this bill on Tuesday, Feb. 17 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 Thursday, Feb. 19 at 9:30am.

Click here to read a recent Policy Council analysis of these bills.

Regulation

Roadside market regulatory exemption H.5097 – Creates new regulatory exemptions around state inspections and permitting for farmers who sell their farm products directly to consumers at individual markets. These exemptions do not apply to famers markets. The full House Agriculture, Natural Resources, and Environmental Affairs Committee is scheduled to hear this bill on Tuesday, Feb. 17 one house after the House adjourns. Update: This bill has advanced to the House floor.
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. 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. The full Senate Medical Affairs Committee is scheduled to hear this bill on Thursday, Fed. 19 at 9am. Update: This bill has advanced to the Senate floor.

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.

Department of Transportation

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. A Senate Transportation subcommittee is scheduled to hear this bill on Tuesday, Feb. 17 at 9am.

Budget hearings

The annual budget process continues this week. The full House Ways and Means Committee will meet throughout the week to put together an initial proposal, while Senate Finance subcommittees will continue hearing from various state agencies.

Senate subcommittees

Criminal Justice Subcommittee – Wednesday, Feb. 18 at 8:45am; hearing from the Administrative Law Court, Department of Revenue, Commission of Indigent Defense, and Prosecution Coordination Commission.
Health & Human Services Subcommittee – Wednesday, Feb. 18 at 9am; hearing from the Department of Children’s Advocacy, Public Employee Benefit Authority, Department of Health and Human Services, and Department on Aging.
Constitutional Subcommittee – Wednesday, Feb. 18 at 9:30am; hearing from the Office of the Attorney General and Department of Administration.
Transportation & Regulatory Subcommittee – Wednesday, Feb. 18 at 12pm; hearing from the Procurement Review Panel, Office of Regulatory Staff, Public Service Commission, and Department of Consumer Affairs.
K-12 Education Subcommittee – Thursday, Feb. 19 at 10am; hearing from the Governor’s School for Arts and Humanities, Governor’s School for Science and Math, and the State Library.
Higher Education Subcommittee – Thursday, Feb. 19 at 10am; hearing from Clemson University and the Tuition Grants Commission.
Natural Resources & Economic Development Subcommittee – Thursday, Feb. 19 immediately after Senate adjourns; hearing from the Conservation Bank, Forestry Commission, and Office of Resilience.