Session Overview

Year one of the 126th session of the South Carolina General Assembly officially wrapped May 28th. Over the past five months, lawmakers focused heavily on school choice, tort reform, liquor liability, and energy. While the legislature will not reconvene until January 2026, significant interim activity is expected, including study committees, ad hoc working groups, and campaign events, especially with all House seats up for election next year.  When the General Assembly begins again in January issues such as income tax reductions, casino and horse racing, tort reform, regulatory reform, and several thousand other pieces of legislation will still be in play.

Final Budget Summary

The General Assembly finalized the 2025–2026 budget, a $14.7 billion spending plan. Late May revenue estimates from the Board of Economic Advisors revealed a $1 billion surplus, allowing for $150 million in recurring and $600 million in one-time expenditures. The remaining $470 million was left unspent, anticipating potential federal funding cuts or shifting priorities next session.

Key budget highlights include:

• Income Tax Cut: Top marginal rate reduced from 6.25% to 6%.
• Transportation: $200 million allocated for bridge repair and modernization; $35 million for Hurricane Helene recovery.
• Airports: $90 million for statewide enhancements.
• Commerce: $80 million for the LocateSC program to support site development and business recruitment.
• Education: First-year public school teacher salaries raised to $48,500; tuition freeze maintained at state universities.
• State Employees: Health insurance premium freeze and $66 million in pay raises.
• USC Brain Health Center: $150 million for a new facility.
• Legislative Pay Raise: For the first time since 1990, lawmakers received a raise—from $10,400 to a total of $40,400 annually, including an increased in-district stipend from $1,000 to $2,500/month.

Key Legislation Passed

Tort Reform / Liquor Liability

• H3430: Originally a bill on State Auditor appointments, it became the vehicle for tort reform this year. While much of the original reform bill (S244) remains pending in House Judiciary, key liquor liability insurance reforms were enacted to reduce rising premiums for bars and restaurants.
  → A Judiciary ad hoc committee will work over the interim to further study and advance broader tort reform measures in 2026.
  Bill link

Hands-Free Driving Law

• H3276: Prohibits drivers from physically holding mobile devices to read, text, email, or stream media while driving.
  → Law takes effect September 1, 2025. A 180-day grace period will be followed by enforcement: $100 fine (1st offense), $200 (repeat offenses), and 2 license points.
  Bill link

Energy Security Act

• H3309: Streamlines permitting for new energy projects and authorizes a Santee Cooper–Dominion Energy partnership to construct a new combined-cycle plant in Colleton County.
  Bill link

Key Legislation for 2026

“Path to Zero” Income Tax Plan

• H4216: Proposes lowering income taxes to 0% over time.
  • If passed: earners ≥$30,000 pay 5.39%, earners below $30,000 pay 1.99%, with phased reductions.
  • Impact: ~25% would pay more, 40% less, 33% unchanged.
    Bill link

Small Business Regulatory Relief

• H3021: The Small Business Regulatory Freedom Act passed the House unanimously. Requires agencies to justify proposed regulations to the Small Business Regulatory Review Committee and relevant legislative committees.
  Bill link

Interim Studies and Watch List

• DOT Oversight Committee: House formed a committee to examine SCDOT’s project prioritization and contract awards.
• Insurance Rate Review Committee: Will study rising property and casualty insurance rates and identify consumer relief strategies.
• Senate Health Initiative: Led by Senate Medical Affairs Chair Danny Verdin, this comprehensive review of healthcare aims to improve population health statewide.

Additional Resources

For a full list of bills signed into law in 2025, visit:
South Carolina Legislature Online – Legislation