Statehouse Update March 31 - April 2

Update 4/1/26: Adjustments were made to this summary to reflect developments that occurred throughout the week.

The General Assembly passed a massive boat tax cut last week that will cut the effective property tax rate on boats from 10.5% to 6% by 2029. On Monday, Governor McMaster signed this bill and the income tax bill into law. This week, the Senate is moving on data center reforms and wrapping up their budget hearings, while the House looks to pass some major reforms to SCDOT.

Here’s what else we’re watching this week.

Taxes

• Film industry handouts H.3832 – Allocates rebates amounting to 30% of an annual production budget to film producers that spend over $250,000 and heightens that budget limit to $2 million annually. This bill also heightens the cap for tax incentives from $10 million to $30 million while allowing unused portions of that cap to carry over for up to three years. Last week, this bill was advanced to the full House Ways and Means Committee. Click here for an in-depth bill analysis done by the Policy Council.
• IRS conformity H.3368 – Conforms the state tax code to the provisions of the One Big Beautiful Bill for the current tax year, including no taxes on tips or overtime pay up to $2,500. This bill previously passed the House and is on the Senate floor. Update: This bill has failed to pass the Senate.
• 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 immediately after the full Finance Committee adjourns on Tuesday, March 31. Update: This bill was found favorable as amended and advanced to the full Senate Finance Committee.
• Lawmaker pay raise S.933 – Raises overall lawmaker pay from $22,400 to $47,500. That figure includes their salary plus in-district expenses. A Senate Finance subcommittee is scheduled to hear this bill immediately after the full Finance Committee adjourns on Tuesday, March 31. Update: This bill was found favorable as amended and advanced to the Senate floor.
• Pregnancy care tax credit S.32 – Creates a tax credit for taxpayers who donate to crisis pregnancy centers or pregnancy resource centers limited to 50% of a taxpayer’s total liability. The full House Ways and Means Committee is scheduled to hear this bill on Wednesday, April 1 at 9am. Update: This bill was found favorable as amended and advanced to the House floor.

Regulatory reform

• AI in therapy S.788– Prohibits licensed therapists from using AI in their practice for supplemental tasks such as transcribing meetings without informed consent from their patients. This bill is on the Senate floor.
• Drone regulations H.4679 – Creates new guidelines for lawful and unlawful drone use. The full House Judiciary Committee is scheduled to hear this bill on Tuesday, March 31 at 11am. Update: This bill was found favorable as amended and advanced to the House floor.
• AI in health insurance S.920 – Requires health insurance providers to disclose the use of AI when assessing prior authorization claims and ensures a human expert is reviewing any decision made by AI to deny, reduce, or defer a request for prior authorization. A Senate Banking & Insurance subcommittee is scheduled to hear this bill on Wednesday, April 1 at noon.
• Military skills for licensing H.4607 – Allows veterans to use their military experience towards licensing requirements. A House 3-M subcommittee is scheduled to hear this bill on Wednesday, April 1 at 9am. Update: This bill was found favorable as amended and advanced to the full House 3-M Committee.

Data centers

• Comprehensive data center regulation 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 31 at 10am.
• Utility usage regulations S.902– Tasks the Public Service Commission with managing data center applications and approving 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, data centers must cover their own energy costs, contracts, and infrastructure, preventing ratepayers from footing the bill unless they can present a compelling reason, seemingly negating the preceding ratepayer protection language. On-site power generation is allowed. Decommissioning plans are mandatory, and energy/water usage data is public via FOIA requests. A Senate Judiciary subcommittee is scheduled to hear this bill fifteen minutes after the Senate adjourns on Tuesday, March 31.
• Water use 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 fifteen minutes after the Senate adjourns on Tuesday, March 31.

Click here to learn more about the different data center bills working through the Senate.

SC Department of Transportation

• SCDOT modernization H.5071/S.831 – H.5071 outlines procedures for the government to enter into public-private partnerships to allow for private companies to help finance road projects, freeing up more state capital for repairs and maintenance. These projects would be funded via toll roads. This bill does not allow for existing roads to be turned into toll roads, but it does allow for the addition of choice lanes or express lanes on existing roads. This bill also makes significant leadership reforms, designating the Transportation Secretary as the sole authority of SCDOT and retaining the Commission for tasks like contracts and bond requests. It also creates a coordinating council in charge of determining roads that can be transferred to counties that choose to take responsibility for maintenance and repairs of those roads. Finally, it adds new requirements for county transportation committees (CTC), namely that CTC members must live in the county whose CTC they serve on. This bill also introduces new revenue streams for SCDOT, including raising the alternative fuel fee for EVs and hybrids to equal the average gas tax paid by drivers in regular gas cars and a new $0.045/kWh tax on public EV chargers. Both fees come with mechanisms for future increased based on the CPI. The House Ways and Means Committee amended S.831—which previously passed the Senate—to be identical to H.5071. The full House Ways and Means Committee is scheduled to hear these bills on Wednesday, April 1 at 9am. Update: These bills were found favorable as amended and advanced to the House floor.

Senate budget hearings

Tuesday, March 31

• Natural Resources & Economic Development Subcommittee; hearing from the Department of Commerce and Rural Infrastructure Authority at 10am.
• Full Finance Committee; hearing a revenue update from the Revenue and Fiscal Affairs Office immediately after the Senate adjourns.

Wednesday, April 1

• Health & Human Services Subcommittee; reviewing provisos at 9:30am.
• K-12 Education Subcommittee; hearing from Charter Institute at Erskine and reviewing provisos at 10am.
• Higher Education Subcommittee; hearing from the Lottery Commission and reviewing provisos at 10am.
• Criminal Justice Subcommittee; reviewing provisos at 11am.

Thursday, April 2

• Natural Resources & Economic Development Subcommittee; reviewing provisos at 10am.