South Carolina Looks to Unleash Opportunity for Small Businesses

South Carolina is the latest state looking to limit bureaucratic authority. The state is considering legislation called the Small Business Regulatory Freedom Act that features a series of reforms aimed at returning rule making authority to the legislature and restoring accountability to the voters. The bill has the House last year and currently is awaiting a vote in the Senate Judiciary Subcommittee. The reforms in the bill share similarities with several of the ALEC Essential Policy Solutions for 2026.

The first reform in the bill takes aim at “major rules” with a REINS-style reform. REINS is shorthand for Regulations from the Executive in Need of Scrutiny. In the proposed South Carolina legislation, this provision would require that rules with an estimated economic impact of at least $1 million over five years be approved by the General Assembly before it can take effect. This gives lawmakers an understanding of the purpose and costs before the rule is implemented.

Several states have passed similar reforms which align with the ALEC Targeted Legislative Review Act. The model requires a Legislative Economic Analysis Unit to conduct cost-benefit analysis of proposed rules. When those rules are deemed “major rules,” they must receive approval from the legislature. ALEC has recognized Policy Champions from Kansas, North Carolina, Utah and Oklahoma for their success in bringing this reform to their jurisdictions.

This bill also introduces a regulatory reduction mechanism which requires two regulations to be reviewed for removal for every one added. In line with an Executive Order signed by President Trump last year, this forces the government to prioritize necessity and efficiency when considering additional regulatory actions. The ALEC Model Act to Establish a Cap on Government Red Tape mirrors this section and recognizes that while new regulatory requirements may become necessary, duplicative and overly burdensome regulations will remain unchecked on the books.

The proposed legislation in South Carolina also includes a continual sunset review process. Too often, outdated regulations remain on the books past their utility without review. This reform would put an end to this practice and require periodic reviews of existing rules. The ALEC Regulatory Sunset Act seeks to accomplish the same goal. The model policy requires rules and regulations to automatically sunset every five years unless they are amended or reapproved by legislature. This ensures that the rules that are in effect remain effective and not unnecessarily burdensome.

Finally, the Small Business Regulatory Freedom Act includes provisions that prohibit courts from deferring to agency interpretations of statutes or rules. This allows South Carolina courts to make an independent judgement on the scope and authority given to an agency. Currently, 19 states, including Indiana and Missouri, have implemented reforms like the ALEC Judicial Deference Reform Act that restores the balance of power between the executive and judiciary branches.