Statehouse Update February 24-26

Update 2/24/26: Adjustments were made to this summary to reflect developments that occurred during the week.

The Statehouse saw some exciting floor activity last week when the Senate passed S.768, an increase to the homestead property tax exemption. If passed by the House and signed into law, this bill would add 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 bill also maintains the current $50,000 exemption for all qualified residents regardless of residency duration. Click here for the full Policy Council breakdown of S.768.

The House Ways and Means Committee advanced a General Appropriations bill (H.5126) and a Capital Reserve bill (H.5127). Details will be publicly accessible once the bills are formally introduced in the House.

Taxes & spending

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. Update: This bill was passed as amended by the Senate. It will now go back to the House to either agree with the change or send the bill to conference committee.
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.
Unemployment tax code S.688 – Increases the period for calculating an employer’s unemployment insurance rate from 12 month to 20 months by 2028. This bill also increases funding to state unemployment insurance by creating a new “solvency surcharge” tax and removing the caps on several insurance penalties. The full Senate Labor, Commerce, and Industry Committee is scheduled to hear this bill on Thursday, Feb. 26 at 9am.

Education

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.
Charter school accountability S.454 – Adds reporting requirements for charter schools and charter authorizers, changes the process for terminating and transferring charter authorizers, and ensures charter school authorizers are subject to the same ethics and accountability requirements as public employees. A House Education and Public Works subcommittee is scheduled to hear this bill on Tuesday, Feb. 24 at 10:30am.

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.
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. This bill has been introduced and referred to the Senate Judiciary Committee.

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. This bill passed the House last week and has been referred to the Senate Judiciary Committee.
Dentistry instruction H.4342 – Removes limitations on certain credentialing requirements for licenses that allow qualified dentists to teach dental education programs in South Carolina. This bill is on the Senate floor.
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. A House Labor, Commerce and Industry subcommittee is scheduled to hear this bill on Tuesday, Feb. 24 an hour and a half after the House adjourns.
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.

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 Thursday, Feb. 26 at 9am.

Budget hearings

While the House Ways and Means Committee has a finalized version of the budget, the Senate Finance Committee is still meeting in subcommittees to finalize their proposal. The following Senate budget subcommittees are scheduled to meet this week:

Constitutional Subcommittee – Tuesday, Feb. 24 at 1:30pm; hearing from the Department of Veterans’ Affairs and State Election Commission.
Criminal Justice Subcommittee – Wednesday, Feb. 25 at 8:45am; hearing from the Judicial Department, Department of Public Safety, Department of Corrections, and Law Enforcement Training Council.
Transportation & Regulatory Subcommittee – Wednesday, Feb. 25 at 11am; hearing from the State Accident Fund, Workers’ Compensation Commission, State Transportation Infrastructure Bank, and Boad of Financial Institutions.
Higher Education Subcommittee – Thursday, Feb. 26 at 10am; hearing from Winthrop University and the Area Health Education Consortium.