Small Business Regulatory Freedom Act
S0254, the “Small Business Regulatory Freedom Act,” would substantially tighten South Carolina’s rulemaking and regulatory review process. It creates a new duty for the Small Business Regulatory Review Committee to review regulations pending reauthorization, evaluate their effects on small business and economic development, and recommend whether they should be retained or removed, with an explicit goal of reducing regulatory requirements by 25 percent. The bill also requires agencies to provide information to the committee on request and gives the House and Senate staff support responsibilities for the committee.
The bill makes major changes to the Administrative Procedures Act. It would bar agencies from promulgating regulations unless they have express statutory authority, require citation to the specific authorizing statute, and allow courts to invalidate regulations adopted without that authority. It also requires agencies to identify two existing regulations for removal whenever they propose a new one, and it changes judicial review so courts interpret agency regulations and statutes de novo rather than deferring to the agency’s interpretation, resolving remaining ambiguity against increased agency authority.
The bill also expands economic-impact analysis requirements for regulations. It requires assessment reports for all regulations submitted for promulgation, mandates public availability of supporting data and methods, standardizes analytic methods, and requires justification for discount rates. For regulations with substantial economic impact, it adds more detailed review by the Office of Revenue and Fiscal Affairs and, for regulations costing $1 million or more over five years, requires a joint resolution approving the regulation. It also requires retrospective assessment when regulations are renewed and ties renewal decisions to actual, not estimated, impacts.
In addition, the bill creates automatic expiration for most administrative regulations on January 1 of the eighth calendar year after their effective date unless they are readopted, with limited extensions available by joint resolution. Existing regulations would be assigned initial expiration dates over a multi-year phase-in period. Several categories are exempt from automatic expiration, including regulations needed to comply with federal law or receive federal funding, certain constitutionally authorized rules, and regulations of agencies directly managed by elected officials. The bill also preserves special treatment for some federal-conformity, banking, tax, emergency, and wildlife regulations.
The overall sentiment reflected by the bill text is strongly pro-deregulation and pro-small-business, with a clear emphasis on reducing regulatory burdens, increasing legislative control over agency rulemaking, and limiting agency discretion. Because there are no committee transcripts or recorded votes provided, there is no documented public debate in the materials, but the bill’s structure suggests likely support from regulatory-reform advocates and likely concern from agencies and stakeholders that rely on broader administrative flexibility. The main points of contention are likely to be the 25 percent reduction mandate, the express-authority requirement, automatic expiration of regulations, the added cost and delay of assessment reports and joint resolutions, and the reduced judicial deference to agency interpretations.
This bill would significantly amend South Carolina’s Administrative Procedures Act and related regulatory-review statutes by imposing stricter limits on agency rulemaking authority, expanding legislative oversight, and creating automatic sunset and reauthorization requirements for most regulations. It would affect state agencies, the Small Business Regulatory Review Committee, the Office of Revenue and Fiscal Affairs, the Legislative Council, and the courts, while also changing the legal standards governing challenges to regulations and agency interpretations. Existing regulations would face periodic readoption and retrospective review, and new regulations would require more extensive economic analysis and, in some cases, affirmative legislative approval.
The bill’s tone is strongly deregulatory and business-friendly, framed around reducing compliance burdens and limiting agency power. In the materials provided, there are no committee transcripts or votes showing direct debate or opposition, so the recorded sentiment is inferred from the bill’s text rather than from legislative discussion. The proposal appears designed to appeal to small-business advocates, fiscal conservatives, and supporters of tighter legislative control over agencies, while likely drawing concern from regulatory agencies and groups that favor more flexible rulemaking.
The most likely areas of contention are the bill’s mandatory 25 percent reduction in regulatory requirements, the requirement that agencies identify two regulations for repeal whenever they add one, and the rule that agencies may only promulgate regulations with express statutory authority. Other likely flashpoints include automatic expiration of regulations, the requirement for extensive cost-benefit and retrospective analyses, the possibility of joint-resolution approval for high-cost regulations, and the elimination of judicial deference to agency interpretations. Agencies, environmental and public-health stakeholders, and other regulated parties may view these provisions as slowing necessary rulemaking, while supporters are likely to argue they prevent overregulation and improve accountability.