Shaping the Future of South Carolina’s Hospitality Industry: A Recap of the 125th Legislative Session

Thursday, May 9th marked the official end of the 125th legislative session of the South Carolina General Assembly. During the two-year session, thousands of bills were introduced, but only a small fraction of those bills were ever granted a subcommittee hearing and given a chance to move forward in the legislative process. Despite this, as of May 16th, 237 bills have so far been ratified this session, with 170 bills already being signed into law, 2 bills being signed into law without the Governor’s signature, 3 bills being vetoed by the Governor and overridden by the legislature, 61 bills awaiting the Governor’s signature, and a handful of others moving to conference committees to hammer out the differences between the House and Senate in one final push to make it over the finish line. While the General Assembly may have adjourned Sine Die, lawmakers will return to Columbia in June per the Sine Die resolution to finalize the FY2024-25 budget, take up any gubernatorial vetoes, elect an Associate Justice to the SC Supreme Court, and deal with any remaining outstanding legislation currently in conference committees. All other legislative matters outside of the scope of this year’s Sine Die resolution will have to be refiled next session for the General Assembly to take back up when they return in 2026 and begin the legislative process from the beginning.

In November 2023, South Carolina voters gave Republicans a supermajority in a resounding vote of support for conservative leadership in Columbia. When the General Assembly reconvened in January to kick off the second half of the 125th legislative session, Republicans wasted no time flexing their newfound muscle – passing a handful of partisan bills heralded by conservatives as significant legislative victories. These include the constitutional carry of firearms without a permit, expanded school choice, the ESG Pension Protection Act, and proposing an amendment to the SC Constitution ensuring only registered U.S. citizens can vote in our elections, among others. Of particular interest to our industry as it relates to constitutional carry, South Carolina Law Enforcement Division (SLED) issued critical guidance regarding the new state law. The guidance aims to clarify key aspects of the law to ensure both citizens and law enforcement agencies understand their rights and responsibilities under the new regulations. One notable aspect highlighted in SLED's guidance is that nothing in the new law affects a business’s right to prohibit the carrying of firearms on their premises by posting a "No Concealable Weapons Allowed" placard. This provision underscores the importance of respecting private property rights and the prerogatives of businesses to establish their own policies regarding firearms.

There was also a plethora of other legislative victories that received bipartisan support this session including:

• Unemployment Insurance Tax Relief (H. 3992): the bill provides relief to employers that are delinquent in their unemployment insurance (UI) taxes by allowing them to enter into installment plans with the Department of Employment and Workforce (DEW) to avoid escalation to UI tax rate class twenty, ensuring that they do not fall into a spiral of tax debt by missing or miscalculating one UI tax payment.

• Apprentice Income Tax Credit Increase (S.557): increases the apprentice income tax credit from $1,000 to a maximum of $4,000 per adult apprentice or $6,000 per youth apprentice. The bill also allows employers to claim an additional $1,000 tax credit for up to three years if they hire an individual full-time upon completion of their apprenticeship.

• Abandoned Buildings Tax Credit (S.1021): the bill extends the abandoned buildings revitalization tax credit program to 2035 and increases the maximum credit amount from $500,000 to $700,000 per site to incentivize the redevelopment of abandoned commercial properties across the state.

• Voluntary Paid Family Leave Insurance (H.4832): the bill allows employers to offer a voluntary insurance product for paid family leave as an additional employee benefit.

• me, image and likeness (NIL) (H.4957): this bill would substantially revise the NIL standards for collegiate athletes across the state, allowing state universities to facilitate NIL deals for student athletes.

• Golf club dues tax exemption (H.3880): the bill would prevent admissions tax from being charged or collected on annual or monthly dues paid for a golf club membership.

When the General Assembly returns in June, there are several high-priority bills on the legislature’s agenda that are still playing out in conference committee. Noteworthy bills still in conference committee include:

• The South Carolina Ten-Year Energy Transformation Act (H.5118): the bill aims to address the current and future energy needs of South Carolina by increasing generation capacity through an all-of-the-above approach and through common sense regulatory and permitting reforms to maintain South Carolina’s unprecedented economic growth. With South Carolina being the fastest growing state in the nation based on the latest census data, it is essential that South Carolina has the needed energy infrastructure and production capability in place to meet our growing future energy needs.

• Judicial Merit Selection Commission Reform (S. 1046): the bill would amend the Judicial Merit Selection Commission (JMSC) to be composed of 13 members and require the JMSC to employ an executive director to perform the day-to-day operations of the Commission. Four members would be appointed by the Speaker of the House, two by the President of the Senate, two by the Chairman of the Senate Judiciary Committee, and five by the Governor. The bill would also specify that a magistrate may serve in a holdover capacity for no more than 14 days from the expiration of their term and the Governor may make a temporary appointment if the Senate has not given advice and consent for a new appointment within 14 days. Additionally, the bill would expand concurrent jurisdiction for magistrates’ court to certain actions with claims not exceeding $25,000. The current limit is $7,500.

• FY2024-25 Budget (H. 5100): the day before Sine Die, the House amended and returned its version of this year’s $13.8 billion state budget to the Senate. The main point of contention between the two proposals revolves around what to do with $600 million in surplus Homestead Exemption (HEX) funds. Some portion of the funds will likely be allocated to various infrastructure improvements and the conferees will need to determine whether to use the remaining surplus HEX funds on either a further reduction in the individual income tax to 6.2% or a one-time property tax rebate for owner-occupied residences. The General Assembly is expected to have a significant amount of new revenue to allocate once the Board of Economic Advisors (BEA) meets on May 20 and conferees will likely meet after the BEA meeting so members of both chambers know exactly how much new money they can allocate for the final FY2024-25 budget.

With 2024 being an election year and all 170 seats being up for grabs in both chambers, some close observers of the Statehouse walk away from this session with a feeling of both political parties being more focused on the bills that failed than those that passed. Medical marijuana, healthcare restructuring, lawsuit reform, Sunday sales, vaccine mandates, permitting reform, raising the minimum wage, tax exemptions for paper goods and certain prepared foods, state-mandated alcohol server training, state-wide preemption of regulating short-term rentals, and hate crimes legislation were among a plethora of issues that did not make it over the finish line this year. Medical marijuana legislation passed the Senate but died in the House. Hate crimes legislation passed the House but died in the Senate. Sunday sales, curbside pickup and the delivery of alcohol, and the Fair Access to Insurance Requirements Act (H. 5066), a priority bill for the SCRLA this session which would have provided critical relief to our industry due to the state’s ongoing liquor liability insurance crisis, all passed the House but died in the Senate. The South Carolina Justice Act (S. 533), another priority bill for the SCRLA this session which would have modernized the way South Carolina’s liability laws work to ensure businesses are only responsible for paying damages equivalent to their share of fault in civil lawsuits, received a favorable report from the Senate Judiciary Committee but ultimately died on the Senate floor. While these priority bills may not have been signed into law this year, we are committed to continuing to work with pro-hospitality members of the General Assembly and fight for such reforms and other critical policies that promote a vibrant and sustainable hospitality industry in South Carolina for years to come.

There is so much more that could be said about this session, but if there is one key takeaway – it would be that elections matter and they do have consequences. The statewide primaries will take place June 11th and the general election is November 5th. The SCRLA has an active Political Action Committee (SCRLA PAC) at the state-level and is governed by a PAC Advisory Committee comprised of members of the SCRLA Board of Directors and SCRLA Chapter Presidents. As a manner of best practice, the SCRLA PAC does not make campaign expenditures to primary campaigns but will be standing ready to support pro-hospitality candidates for the Statehouse who have our industry’s best interest top of mind when making policy decisions critical to our industry. To learn more about the SCRLA PAC and how to get more involved in the political process and make a donation, please visit our website at scrla.org/pac.