Statehouse Update May 5-7

Update 5/6/26: Adjustments have been made to this summary to reflect developments that occurred throughout the week.

The end of the 2025-26 regular legislative session is quickly approaching. Last week, the House passed a major bill reforming the Department of Transportation that the Senate assigned to conference committee. This week, the House will likely send the budget to conference committee, while the Senate has a bill regulating data center energy usage and citing that was advanced out of committee and onto the Senate floor.

Taxes & Spending

Insurance tax credits and fraud protection H.4817– Increases the maximum amount of the residential retrofit individual income tax credit for a taxpayer’s legal residence from $1,000 to $2,000, and increases the maximum individual income tax credit for excess insurance premium taxes paid for property and casualty insurance from $1,250 to $3,000. The bill expands the allowable uses of Catastrophe Savings Account funds that are eligible for the individual income tax deduction and establishes an annual Disaster Preparedness Sales Tax Holiday to initially be held from Friday May 2, 2026, through Sunday, May 4, 2026. This bill also increases the insurance fraud oversight, investigation, and enforcement responsibilities of the Department of Insurance and transfers certain responsibilities to the Attorney General and SLED respectively. This bill is on the Senate floor.
Commercial airline incentives S.436– Projects that qualify for fee in lieu of tax agreements to promote economic development may include commercial aircrafts as part of the project until June 30, 2027. Projects will be approved by the Coordinating Council for Economic Development subject to existing state law. A House Ways & Means subcommittee is scheduled to hear this bill on Wednesday, May 6 at 9am. Update: This bill was found favorable by the full Ways & Means Committee and advanced to the House floor.

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. The full House Education & Public Works Committee is scheduled to hear this bill on Tuesday, May 5 at 11am.
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. Click here for the full breakdown of this bill. This bill is on the House floor. Update: The House concurred with Senate amendments, passing the bill and sending it to the governor's desk for signature.
Workforce readiness H.3197– Establishes the goal of 60% of all working-aged South Carolinians to have a high-quality postsecondary degree by 2032. This bill also directs public and charter high schools to offer remediation in math and literacy to high school seniors seeking postsecondary education that are not academically prepared. This bill is on the House floor.
Teacher safety H.5483– Increases protections for teachers when enforcing classroom rules, directing schools to have clear procedures for the referral, removal, and administrative response to students that threaten teacher safety. This bill is on the House floor.

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. This bill is currently on the Senate floor.

Department of Transportation

SCDOT modernization S.831 – Designates the Transportation Secretary as the sole governing authority of SCDOT, eliminating the Commission and transferring all of its responsibilities to the Secretary and four deputy secretaries accountable directly to the Secretary. Brings the federal National Environmental Policy Act (NEPA) permitting process to the state, shifting accountability to SCDOT. The bill introduces 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 or choice lanes added onto existing roads. The bill does not allow for existing roads to be converted entirely into toll roads. Strengthens internal audits and requires an external audit every four years. County Transportation Committees (CTCs) are no longer required to spend a portion of their funds on the state highway system. CTC plans must include specific project selection criteria and must be updated at least every four years. CTC members must abide by the State Ethics Act and are required to live in the county they serve. Finally, the bill allocates $15 million of existing SCDOT funds to pothole mitigation program so the public can report potholes on the state highways via an app. Click here for an in-depth breakdown of how the current bill differs from past versions and what the proposal lacks. Last week, the Senate sent this bill to conference committee after nonconcurring with House amendments.
Digital driver’s license S.371 – Authorizes the DMV to create digital IDs. The bill requires drivers to have a printed license while driving. This bill is on the Senate floor.

Regulatory reform

Small business regulatory freedom H.3021 – State agencies will conduct an internal review of their regulations to determine whether they need more, less, or the same regulations. The report is submitted to the Legislative Audit Council (LAC), who will conduct their own review to ensure the proposed regulations are statutorily authorized and determine whether they are effective. Review will happen every five to eight years depending on the agency, with the schedule for each agency set by the legislature. The LAC will submit their report along with internal reports to the appropriate House committees, who will make the final say on regulation promulgation. Any regulation with an estimated cost of at least $10 million over five years must be approved by a joint resolution. The bill also ends the practice of judicial deference, prohibiting courts from favoring agency interpretations over the way a law was written. This bill is on the Senate floor. Update: This bill has received second reading.
Rural transportation H.3474 – Amends the Transportation Network Company Act to redefine “personal vehicle” and “prearranged ride,” allowing smaller for-hire companies to qualify as Transportation Network Companies (TNCs). This would enable operators to select more affordable insurance coverage and file their own inspection reports, just as Uber and Lyft do. This bill is on the Senate floor. Update: This bill has received second reading. Update: This bill has received second reading. Upon third reading, it heads to the governor's desk for signage.
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 is on the Senate floor. Update: This bill has received third reading as amended. It will be sent back to the House for consideration of Senate amendments.

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. This bill is on the Senate floor.
Liquor liability S.184 – Provides definitions for visible intoxication and a basis for holding a person or establishment liable for serving alcohol to a visibly intoxicated person. This bill is on the Senate floor.