SOUTH CAROLINA REVENUE AND FISCAL AFFAIRS OFFICE
S
TATEMENT OF ESTIMATED FISCAL IMPACT
WWW.RFA.SC.GOV • (803)734-3793
This fiscal impact statement is produced in compliance with the South Carolina Code of Laws and House and Senate rules. The focus of
the analysis is on governmental expenditure and revenue impacts and may not provide a comprehensive summary of the legislation.
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Fiscal Impact Summary
This bill specifies it is unlawful for an owner of a watercraft of more than seventy horsepower, a
personal watercraft, or a specialty propcraft titled in South Carolina or documented by the United
States Coast Guard (USCG) with a hailing port in South Carolina to allow the operation of the
watercraft without a liability insurance policy with a minimum of $50,000 combined liability
coverage for bodily injury or property damage for any one occurrence. A person in violation of
this requirement is guilty of a misdemeanor and subject to fines.
The Department of Natural Resources (DNR) enforces state and federal laws related to boating
and South Carolina’s waterways. DNR indicates that there would be a nonrecurring cost of
$125,000 in FY 2025-26 to update online systems, forms and train staff for compliance with this
bill. DNR also indicates that there will be recurring costs of $136,000 beginning of FY 2025-26,
in order to hire 2.0 FTEs and maintain their resources as part of increase in workload for the
watercraft title and renewal processing section. Therefore, the expenditure impact to DNR is
expected to be $261,000 in FY 2025-26 and $125,000 annually thereafter. The agency will
request General Fund appropriations for these expenses.
This bill will have no expenditure impact for the Department of Insurance (DOI) as the agency
anticipates that any additional responsibility as a result of this bill will be managed by existing
appropriations and staff. This bill also will result in no expenditure impact for Judicial as Judicial
anticipates that any increase in the number of court cases due to this bill can be managed using
existing staff and appropriations.
This bill may result in a minimal increase in insurance premium tax revenue beginning in FY
2025-26. DOI anticipates that any increase to premiums, and thereby, insurance premium taxes
due to this bill will not be significant.
This bill may result in an increase in court fines and fees due to the newly created misdemeanor.
This bill requires all fines prescribed as a result of operating a watercraft that requires liability
insurance without coverage must be used by DNR for the purpose of a boater training and safety
program.
DNR has indicated that counties process some registration renewals and would need to make
changes as to the information they collect and how it is passed along to DNR. Further, the
Bill Number: S. 0026 Introduced on Januar
y 14, 2025
Subject: Watercraft Liability Insurance
Requestor: Senate Fish, Game, and Forestry
RFA Analyst(s): Vesely
Impact Date: February 10, 2025 - Updated for Additional Agency Response
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agency expects that the counties may be responsible for verifying watercraft insurance. Based on
the responses received from counties, the bill may increase local expenses by varying amounts
depending on current staffing and resources.
This fiscal impact has been updated to include a response from DNR and from counties.
Explanation of Fiscal Impact
Updated for Additional Agency Response on February 10, 2025
Introduced on January 14, 2025
State Expenditure
This bill specifies it is unlawful for an owner of a watercraft of more than seventy horsepower, a
personal watercraft, or a specialty propcraft titled in South Carolina or documented by the USCG
with a hailing port in South Carolina to allow the operation of the watercraft without a liability
insurance policy with a minimum of $50,000 combined liability coverage for bodily injury or
property damage for any one occurrence.
Department of Natural Resources. DNR enforces state and federal laws related to boating and
South Carolina’s waterways. Currently, owners of boats are not required to have insurance.
Owners of boats in South Carolina are required to title and register their boats if they have an
inboard motor and not already documented by the USCG. An owner must also title all outboard
motors with five horsepower or more. This bill would require DNR to train staff and inform
customers on the insurance requirements of this bill. Forms and the DNR website will need to be
updated to take the changes of this bill into account. DNR anticipates a nonrecurring expenditure
impact of $125,000 in FY 2025-26 to make these changes.
Additionally, both initial titling and subsequent annual renewal processes will need to be
changed to determine if a specific watercraft is required to carry insurance and record
information. DNR has indicated that changing the initial title processes will not be difficult, but
the multiple ways watercraft are renewed annually, as well as the current lack of insurance
records and the lack of information on horsepower to determine insurance requirements on
already titled watercraft does increase the workload of the agency. DNR has indicated that these
aspects of the bill would increase expenses by $136,000 beginning in FY 2025-26.
Of this amount, $116,000 is for the salary and fringe benefits of hiring 2.0 additional Admin
Spec II FTEs, and $20,000 for equipment costs related to these FTEs. In total, the bill is expected
to increase expenses by $261,000 in FY 2025-26 for recurring and nonrecurring expenses and
$125,000 thereafter. The agency will request General Fund appropriations for these expenses.
However, DNR has also expressed that as the number of watercraft that would be required to
have insurance as a result of this bill is unknown, and the workload necessary to obtain
information on USCG-documented vessels is undetermined, so there may be additional costs.
DNR has also indicated that while the renewal processes can be modified to collect and record
insurance information as stipulated in this bill, if DNR is required to verify proof of insurance,
they indicated that they will need to contract an outside vendor to provide this service.
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Department of Insurance. DOI anticipates that the additional responsibilities as a result of this
bill will be managed by existing appropriations and staff. Therefore, there will be no expenditure
impact to the agency.
Judicial. This bill creates a misdemeanor related to boat insurance and establishes fines. The fine
for the first and second offenses range from $50 to $500. The penalty for the third and
subsequent offenses includes a fine and imprisonment up to one year. Judicial reports that
implementation of this bill may increase caseloads in circuit court. While the increase in the
number of course cases due to this bill is unknown, Judicial anticipates that any increase in
caseload can be managed using existing staff and appropriations. Therefore, this bill will result in
no expenditure impact for Judicial.
State Revenue
This bill provides that a person in violation of the specified liability for watercraft is guilty of a
misdemeanor and subject to fines.
DOI currently collects taxes on insurance premiums written on the liability policies of watercraft
that are currently voluntary. The cost of insurance varies on policy limit, type of boat, location of
boat, driver history, and other factors. In addition to these risk characteristics determining policy
costs, DOI has also expressed that the impact of this bill on the price of insurance is
undetermined. While this bill will likely increase the total value of premiums of watercraft
liability policies collected and therefore increase revenue, DOI has expressed that $50,000 in
liability insurance without any other required coverages, such as uninsured boater or permissive
use, is relatively low coverage and should be obtained with relatively low premiums. Therefore,
DOI anticipates the amount of insurance premium tax revenue that may be generated beginning
in FY 2025-26 as a result of this bill will be positive, but not significant.
This bill may result in an increase in court fines and fees due to the newly created misdemeanor.
This bill requires all fines prescribed as a result of operating a watercraft that requires liability
insurance without coverage must be used by DNR for the purpose of a boater training and safety
program.
Local Expenditure
DNR has indicated that counties process some registration renewals, and they would need to
make changes as to the information they collect and how it is passed along to DNR.
Additionally, the agency indicates that the counties may be responsible for verifying watercraft
insurance.
We have contacted the 46 counties for additional information regarding the potential impact.
Chesterfield County has reported that the county auditor’s office would need to hire additional
staff to meet the requirements imposed by this bill and estimates that the total compensation
costs of these staff members would be $59,000, not including furniture or equipment supplies for
additional personnel. Florence County has indicated that this would create additional workload
for county auditor staff. Verifying watercraft insurance would increase the workload for county
__________________________________
Frank A. Rainwater, Executive Director
DISCLAIMER: THIS FISCAL IMPACT STATEMENT REPRESENTS THE OPINION AND INTERPRETATION OF THE
AGENCY OFFICIAL WHO APPROVED AND SIGNED THIS DOCUMENT. IT IS PROVIDED AS INFORMATION TO
THE GENERAL ASSEMBLY AND IS NOT TO BE CONSIDERED AS AN EXPRESSION OF LEGISLATIVE INTENT.
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staff and generate an expenditure impact to counties. Overall, the local expenditure impact is
likely to vary by location depending on current staff and resources.
Local Revenue
N/A