South Dakota Reins in Regulations

Government regulations and costly mandates strangle the economy, limit innovation, and tie the hands of hardworking entrepreneurs. But last week, South Dakota took a major step toward reining in regulations run wild when Governor Larry Rhoden signed a new law that puts powerful checks and balances on the administrative state.

The new law (SB 133) is modeled after the Regulations In Need of Scrutiny (REINS) Act—a reform supported by the Goldwater Institute. The measure requires that any proposed regulation that has compliance or implementation costs over $3 million across two years must receive additional scrutiny and approval from the legislature.

Prior to SB 133, administrative agencies were free to impose costly rules on businesses under the guise of broad statutory mandates. Now, the South Dakota legislature will have a meaningful check on runaway rulemaking, and all rules with a substantial economic impact will be reviewed by the legislature prior to going into effect, restoring accountability and transparency to the rulemaking process.

Under the constitutional principles of democratic accountability and separation of powers, the power to make laws belongs to the people and their elected representatives in the legislature. Yet state agencies routinely usurp the legislative function by effectively legislating through regulation. Unfortunately, this overreach comes at a steep cost.

New regulatory mandates result in compliance costs and economic impacts that are overlooked or ignored by bureaucrats. Entrepreneurs, employees, consumers and businesses all bear these increased costs of complying with red tape and restrictions imposed by regulators without any true democratic accountability. Thankfully, the legislature now has a new tool in SB 133 to help put a stop to agency overreach.

South Dakota’s new law falls within the Goldwater Institute’s broader effort to reform the regulatory state. In addition to supporting our partners’ efforts to pass the REINS Act, the Institute has been working diligently across the country to pass our suite of model reforms focused on beating back bureaucracy: the Permit Freedom Act, the Agency Accountability Act, the Judicial Deference Reform Act, Right to Earn a Living Act, Home-based Business Fairness Act and the Breaking Down Barriers to Work Act.

The Goldwater Institute applauds the tireless work of the South Dakota legislature to turn this great piece of legislation into law, especially its prime sponsors, Senator Sue Peterson and Representative Novstrup. We also congratulate Americans for Prosperity – South Dakota and the Pacific Legal Foundation in their work to secure this victory.