South Carolina’s small businesses, the very engine of the Palmetto State’s prosperity, are being unnecessarily constrained by an ever-expanding web of regulations. That’s why the Goldwater Institute has joined a coalition of free-market groups in supporting the Small Business Regulatory Freedom Act (HB 3021), a crucial step toward cutting red tape, reducing regulatory burdens, liberating South Carolina’s entrepreneurial spirit, and fostering genuine economic growth. The law offers a vital pathway forward as a fundamental reform that champions transparency, accountability, and a return to sound governance by curtailing excessive judicial deference to the Administrative State.
For too long, South Carolina’s entrepreneurs – the backbone of the state’s local economies – have been forced to navigate a labyrinth of rules that stifle innovation, hinder job creation, and disproportionately impact their bottom lines. Imagine the frustration of a beloved local bookstore grappling with obscure signage requirements, or a burgeoning tech startup bogged down by convoluted permitting processes. These are not abstract problems, they are the daily realities faced by the very businesses that inject life and vibrancy into our communities. With over 136,000 restrictions on the books, South Carolina’s regulatory code has become a major burden for economic advancement.
The most efficient and prosperous economy is one where individuals are empowered to pursue their ventures with minimal interference by government bureaucracy. But in South Carolina, the current regulatory landscape lacks the crucial elements of transparency and accountability. Businesses often face a moving target, struggling to decipher complex rules and the wide discretionary power wielded by agencies in their interpretation of rules and laws. This uncertainty has acted as a significant barrier to growth and investment, preventing our small businesses from reaching their full potential.
The Small Business Regulatory Freedom Act directly addresses these challenges, paving the way for a more level playing field. This vital legislation will establish a Small Business Regulatory Review Committee to examine and recommend eliminating existing regulations. The “Two-for-One” Rule will require agencies to remove two regulations for every new one, fostering continuous review. Furthermore, the act empowers small businesses to challenge questionable regulations in court, ensuring accountability. To enhance transparency, new regulations will undergo retrospective reviews, and outdated ones will have automatic expiration dates and periodic reviews. Critically, the act clarifies that courts should not defer to agency interpretations, upholding the separation of powers and the will of the people.
The act’s commitment to ending judicial deference to agency interpretations is a cornerstone of sound governance. By ensuring that courts interpret the law based on its original legislative intent, rather than simply rubber-stamping agency interpretations, policymakers can restore a vital balance of power and ensure that regulations are grounded in the rule of law, not bureaucratic discretion. This predictability and clarity are essential for fostering a stable and attractive environment for investment and entrepreneurship. Thanks to reforms pioneered by the Goldwater Institute, Arizona was the first state to abolish its state-level deference rule in 2018 by adopting a statute that entitles people to a fair and unbiased hearing before a judge when challenging a bureaucracy’s decisions. Numerous other states have followed suit.
The Small Business Regulatory Freedom Act is not about deregulation for its own sake. It’s about smart regulation – rules that are necessary, clearly defined, and impose the least possible burden on economic activity. By strengthening legislative oversight and requiring any rule with a significant economic impact to undergo legislative review, HB 3021 prioritizes transparency and accountability while still allowing the Executive Branch to act in times of emergency.
The broad coalition of businesses and community leaders across South Carolina who support HB 3021 recognize its immense potential to unleash the state’s entrepreneurial spirit. This is a win for Main Street, a win for job creation, and a win for the entire state. The passage of this landmark legislation would send a clear message that South Carolina is committed to fostering a thriving business environment where innovation can flourish and small businesses can reach their full potential.
The Small Business Regulatory Freedom Act’s thus far unanimous support is a testament to the unwavering commitment of state legislators to fostering a thriving business environment in South Carolina. Passage of this legislation will empower our small businesses to focus on what they do best: create jobs, drive innovation, and serve their communities.
While HB 3021 has made advanced in the legislature, it has not yet crossed the finish line. The time for action is now. We urge the South Carolina Legislature to recognize the critical need for this common-sense regulatory reform and swiftly pass the Small Business Regulatory Freedom Act.
Jen Springman is the Coalitions Manager at the Goldwater Institute.
