Three Things to Know: April 18th

This week's information compiled by your SC Chamber team includes: 
Senate Amends House Liquor Liability Bill to Include S.244, New Study Shows Economic Benefit of Tax Reform Bill, Legislative Update - Week 14

 1. Senate Amends House Liquor Liability Bill to Include S.244

This week, the Senate amended the House-passed liquor liability bill (H.3947) by removing all of the House language and replacing it with the entirety of S.244, a comprehensive lawsuit reform package that will deliver much-needed relief for all sectors of the South Carolina economy that are being negatively impacted by the state’s out-of-balance civil justice system and one of the business community’s top legislative priorities this year, before sending the bill back to the House.

Despite only three weeks remaining in this year’s legislative session, there are many ways in which lawmakers can still enact meaningful lawsuit reform this year that benefits all sectors of the state’s economy.  A few different paths forward exist now for the amended version of the bill, including:

1. The House could concur with the Senate’s changes and send the amended bill (with the entirety of S.244 attached) to the Governor’s desk for his signature.
2. The House could amend the bill back to its original version of H.3497, as passed by the House, which would send the bill to a conference committee, while separately moving S.244 throughout the committee process during these final three weeks.
3. The House could amend the bill further by stripping and/or revising certain provisions before sending it back to the Senate, upon which the Senate can either concur or send the bill to a conference committee to ultimately decide the fate of lawsuit reform this year.

Now that both bills are pending in the House of Representatives, House members must continue to hear from businesses on this critical issue. Please contact your representative today and urge them to deliver much-needed relief for all sectors of the South Carolina economy that are being negatively impacted by the state’s out-of-balance civil justice system before the end of this year’s legislative session.

A section-by-section breakdown of S.244, as passed by the Senate, can be found here.

2. New Study Shows Economic Benefit of Tax Reform Bill

Last week, the Palmetto Promise Institute released a study on the economic impact of H.4216, a historic income tax reform proposal that would immediately replace the state’s current progressive income tax system, which places a higher tax burden on high earners, with a single, simple, flat tax rate of 3.99%. It also shifts how the state calculates an individual's taxable income from “federal taxable income” to adjusted gross income (AGI).

According to the study, the move to a 3.99% rate will add 1,000 jobs in 2026 and an additional 1,000 every year afterward from 2027 to 2030. In addition to the positive impact on the job market, estimates show that the state’s GDP will grow by $240 million in 2026 and an average of $250 million over the next 5 years. The study also concludes that a reduction in the rate would allow families to save and invest $100 million collectively over the same 5-year period.

The study was conducted using economic modeling to show how both businesses and individuals in the state would react to the change in policy. With these reforms, South Carolina would become more competitive with other Southeastern states that have recently enacted income tax reform. At 3.99%, South Carolina’s income tax rate would be lower and more competitive than our immediate neighbors in North Carolina (4.25%) and Georgia (5.39%). 

The SC Chamber has long advocated for meaningful tax reform to make South Carolina’s business climate even more competitive, including publishing A Roadmap for Tax Reform in 2018, championing the Comprehensive Tax Cut Act of 2022, and, most recently, having President and CEO Mike Brenan testify in support of H.4216 and organizing a letter with sixteen other local chambers of commerce from across the state highlighting the business community’s support for the proposal and urging its swift passage.

3. Legislative Update – Week 14

Only three weeks remain in the 2025 legislative session, and things are coming down to the wire. Many pro-business items still remain in play for this year.

While the House was in recess this week, the Senate spent time in committees and on the floor, most notably amending the House-passed liquor liability bill (H.3947) by removing all of the House language and replacing it with the entirety of S.244.

Notable actions taken this week include:

• Manufacturing Property Tax Exemption Cap (S.439) – On Tuesday, a Senate Finance Committee subcommittee advanced a bill that would increase the manufacturing property tax exemption cap enacted in the Comprehensive Tax Cut Act of 2022 from $170 million to $300 million. The Comprehensive Tax Cut Act of 2022 effectively reduced the manufacturing property tax rate from 9% to 6%, provided that the revenue loss to counties does not exceed $170 million. The cap increase is needed to ensure small to mid-size manufacturers do not experience a property tax hike in the coming years. The bill now heads to the full Senate Finance Committee, and a similar proviso is included in the Senate’s version of the FY2025-26 budget.
• Public Health Agency Restructuring ( S.2)– On Wednesday, the Senate sent to the Governor’s desk a bill to restructure numerous health-related agencies and establish the Department of Behavioral Health and Developmental Disabilities. This bill intends to better serve individuals by providing integrated care under one department. 
• Enhancement of Penalties on Assault Crimes (S.99) – On Tuesday, the Senate Judiciary Committee advanced a bill by a vote of 12-9 that would create a penalty enhancement of up to five additional years, and a $10,000 fine, for individuals convicted of a violent crime if the offense was committed against a victim because of their race, color, religion, sex, gender, national origin, sexual orientation, physical or mental disability, political views, or medical opinions. The bill now heads to the Senate floor.
• Reece Nomination Moves Forward – The nomination of Myra Reece to serve as Director of the Department of Environmental Services (DES) moved forward to the full Senate this week after she advanced the Senate Agriculture and Natural Resources Committee by a vote of 10-1. Reece is the current Acting Director of DES.
• Battle-Bryant Confirmed as Director of the Office of Statewide Workforce Development – On Wednesday, the Senate confirmed Dr. Rebecca Battle-Bryant as the first director of the Office of Statewide Workforce Development (OSWD) housed within the S.C. Department of Employment and Workforce (DEW). The position, created by the Statewide Education and Workforce Development Act, is tasked with coordinating, aligning, and directing workforce efforts across South Carolina. Dr. Battle-Bryant’s bio can be found here.

Both the House and Senate will be in session next week, with the Senate convening on Monday to discuss the impeachment of Treasurer Curtis Loftis.