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The House voted 69 to 43 to provide the loan if the PGA Tour event can't immediately find a replacement for telecommunications company Verizon, which will depart as title sponsor after this year's tournament. The loan would come from the state's insurance reserve fund.
Rep. Richard Chalk, R-Hilton Head, and Rep. Bill Herbkersman, R-Bluffton, voted to keep the provision.
"It's investing money in the tournament," Chalk said. "I'm hoping we'll find a sponsor and won't have to use it."
Rep. Nikki Haley, a Lexington Republican and candidate for governor, led an effort to remove the loan from the state's $5 billion budget.
"In a budget year like this, they raided the insurance trust fund -- a fund that's meant to protect consumers after hurricanes and natural disasters -- to lend money to a golf tournament. That is so far removed from what our taxpayers want," Haley said.
Democrats and Republicans argued the tournament, in its 42nd year, supports hundreds of jobs and pumps tens of millions of dollars into the state through spectators' spending. According to a Clemson study, more than 70 percent of the spectators live outside Beaufort County.
"This is a proven moneymaker for the state of South Carolina," Chalk said.
Herbkersman said the vote was about showing South Carolina's commitment.
The proposal would allow the S.C. Department of Parks, Recreation & Tourism to enter a loan agreement "on behalf of the state with Beaufort County."
The money would be paid back, along with any lost interest on earnings, from Beaufort County's local accommodations taxes, the proposal states.
Details of the loan would be worked out between the S.C. parks department, the state treasurer and Beaufort County, officials have said.
The state Treasurer's Office would approve the terms and conditions of the loan and ensure it is repaid within five years.
Attempts to reach tournament director Steve Wilmot on Wednesday were unsuccessful.
This year's tournament will be held April 12-18 at Harbour Town Golf Links.
