S.C. deregulatory overhaul draws growing calls for exemptions

With state elections on the ballot this November, South Carolina lawmakers are scrambling to pass sweeping new health, safety and environmental regulations on industries voters say they want reined in — data centers, home builders, social media companies and more.

But it’s a deregulatory bill — one with strong out-of-state support from national conservative advocacy groups like Americans for Prosperity (AFP) and the American Legislative Exchange Council (ALEC) — that’s getting most of the attention as the legislative session enters its final weeks.

Dubbed “The Small Business Regulatory Freedom Act,” the bill aims to slash existing state regulations by at least 25%, while mandating that agencies eliminate two regulations for every new one they propose going forward.

What’s more, it would sunset every current and future state regulation in the code, forcing agencies to conduct complex cost-benefit studies of each one before asking lawmakers to renew it for another eight years. Those continuous studies would cost taxpayers at least $4.5 million a year, according to the state Revenue and Fiscal Affairs Office.

According to the nonpartisan Mercatus Center, S.C. is the 14th least-regulated state in the country with about 83,000 regulations. In comparison, California tops the Mercatus list with 420,000 regulations and Idaho rounds it out at 31,000.

S.C. supporters describe the bill as an effort to ensure that old and out-of-date regulations are eliminated or modernized as more effective technologies and regulatory strategies are developed.

“Regulations a lot of times can choke those best practices from coming to the fore,” Beaufort Republican Sen. Tom Davis told reporters in January. “This is a way to … make sure the regulations necessary to protect the public are there, but that they’re as minimal as possible to produce the maximum benefit.”

Meanwhile, ALEC representative Alan Jernigan described the rationale in more openly ideological terms last January.

“Free markets operate best without government interference,” he told lawmakers in submitted testimony.

Passed unanimously last year by the S.C. House, GOP leaders pledged to push hard for state Senate adoption in 2026, calling it one of their top priorities for the legislative session.

Nevertheless, the bill appears to be facing major headwinds in the upper chamber, where witnesses at a pair of recent Senate Judiciary subcommittee hearings — including CPAs, engineers, real estate agents, nurse practitioners, airplane and harbor pilots — asked that their industry be exempted from the law.

“I’m concerned about reduced standards,” CPA Ken Whitener, chair of the state Board of Accountancy, told senators. “This blunt approach to cutting red tape could eliminate critical regulations that protect the public and maintain public trust in CPAs.”

He added, “I therefore humbly request consideration for an amendment to this bill to exempt and carve out regulations related to accountancy from the provisions.”

It was the kind of request that committee members have already begun to honor, with Republican Chairman Chip Campsen of Charleston pushing through an amendment to exempt harbor pilots in a 4-3 vote on March 5.

Asked if that wouldn’t just open up the bill to endless amendments, Campsen told his colleagues that careless deregulation could lead to a suspension of operations at the Port of Charleston, which is responsible for about one out of every 10 jobs in the state.

“You want to make a point, or do you want to avoid a catastrophe?” Campsen said. “I want to avoid a catastrophe.”

Charleston Democratic Sen. Ed Sutton, a decorated combat pilot, made a similar point when he successfully moved to carve aviation out of the bill as well.

“In aviation, every regulation is written in blood,” he said. “This is just an area where we don’t play games.”

In an April 9 interview, Sutton told Statehouse Report he supports the goal of cutting outdated and duplicative regulations that hurt small businesses, but thinks the bill’s automatic sunsets and numerical mandates are overly prescriptive.

“If you want greater flexibility, you create rules that allow for flexibility, not rules that mandate rigidity,” he said. “My impression right now is that this is a hammer, when what we need is a scalpel.”

S.C. Small Business Chamber of Commerce President Frank Knapp told Statehouse Report that he, too, supports the objective of reducing unnecessary regulation, noting his work on behalf of the 2005 bill that requires all new state regulations to be vetted by a business panel before enactment.

But he worries that under the numerical targets in the current legislation, agencies could get bogged down in an expensive review process as they constantly reevaluate regulations.

“It’s a good effort and a noble goal,” he said. “I’m just concerned about the implementation if the state agencies don’t have the resources to actually review every regulation every few years.”

Sutton echoed that concern — and when asked if he expected to see further changes as the bill continues to move through the Senate, he didn’t mince words.

“Yeah,” he said. “Significant changes.”