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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 1-23-117 SO AS TO PROVIDE FLEXIBILITY IN THE PROMULGATION OF REGULATIONS THAT ADVERSELY IMPACT SMALL BUSINESSES, TO DEFINE "SMALL BUSINESS", TO REQUIRE EXAMINATION OF REGULATORY ALTERNATIVES, TO PROVIDE FOR REVIEW OF AN AGENCY DECISION IN THIS CONNECTION, TO REQUIRE REVIEW OF AGENCY REGULATIONS IN THE CONTEXT OF PROMOTING FLEXIBILITY IN PROMULGATING REGULATIONS THAT ADVERSELY IMPACT SMALL BUSINESSES, AND TO PROVIDE FOR EMERGENCY REGULATIONS; TO AMEND SECTION 1-23-10, RELATING TO DEFINITIONS IN CONNECTION WITH THE PROMULGATION OF REGULATIONS, SO AS TO INCLUDE "SMALL BUSINESSES" AND A REFERENCE TO SECTION 1-23-117; AND TO AMEND SECTION 1-23-120, AS AMENDED, RELATING TO GENERAL ASSEMBLY REVIEW OF REGULATIONS, SO AS TO REQUIRE AN AGENCY SUBMITTING A REGULATION FOR REVIEW TO ALSO SUBMIT THE DOCUMENTS AN AGENCY IS REQUIRED TO PREPARE PURSUANT TO THIS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that:
(1) a vibrant and growing small business sector is critical to creating jobs in a dynamic economy;
(2) small businesses bear a disproportionate share of regulatory costs and burdens;
(3) fundamental changes needed in the regulatory and enforcement culture of state agencies to make them more responsive to small business can be made without compromising the statutory missions of the agencies;
(4) when adopting regulations to protect the health, safety, and economic welfare of this State, state agencies shall seek to achieve statutory goals as effectively and efficiently as possible without imposing unnecessary burdens on small employers;
(5) uniform regulatory and reporting requirements impose unnecessary and disproportionately burdensome demands, including legal, accounting, and consulting costs, upon small businesses with limited resources;
(6) the failure to recognize differences in the scale and resources of regulated businesses adversely affects competition in the marketplace, discourages innovation, and restricts improvements in productivity;
(7) unnecessary regulations create entry barriers in many industries and discourage potential entrepreneurs from introducing beneficial products and processes;
(8) the practice of treating all regulated businesses as equivalent leads to inefficient use of regulatory agency resources, enforcement problems, and actions inconsistent with the legislative intent of health, safety, environmental, and economic welfare legislation;
(9) alternative regulatory approaches that do not conflict with the stated objective of applicable statutes are available to minimize the significant economic impact of rules on small businesses; and
(10) the process by which state regulations are developed and adopted must be reformed to require agencies to solicit the ideas and comments of small businesses, to examine the impact of proposed and existing rules on these businesses, and to review the continued need for existing rules.
SECTION 2. Article 1, Chapter 23, Title 1 of the 1976 Code is amended by adding:
"Section 1-23-117. (A) This act may be cited as the 'Small Business Regulatory Flexibility Act of 2003'.
(B) As used in this section 'small business' means a commercial retail service, or industry entity, including its affiliates, that:
(1) is independently owned and operated; and
(2) employs fewer than one hundred fulltime employees or has gross annual sales of less than five million dollars.
(C)(1) Before an agency submits to the General Assembly for review a regulation that may have an adverse impact on small businesses, the agency shall prepare:
(a) an economic impact statement that includes the following:
(i) an identification and estimate of the number of small businesses subject to the proposed regulation;
(ii) the projected reporting, recordkeeping, and other administrative costs required for compliance with the proposed regulation, including the type of professional skills necessary for preparation of the report or record;
(iii) a statement of the probable effect on impacted small businesses; and
(iv) a description of less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation;
(b) a regulatory flexibility analysis in which the agency, where consistent with health, safety, and environmental and economic welfare, shall consider utilizing regulatory methods that accomplish the objectives of applicable statutes while minimizing adverse impact on small businesses. The agency shall consider, without limitation, each of the following methods of reducing the impact of the proposed regulation on small businesses:
(i) establishment of less stringent compliance or reporting requirements for small businesses;
(ii) establishment of less stringent schedules or deadlines for compliance or reporting requirements for small businesses;
(iii) consolidation or simplification of compliance or reporting requirements for small businesses;
(iv) establishment of performance standards for small businesses to replace design or operational standards required in the proposed regulation; and
(v) exemption of small businesses from all or a part of the requirements contained in the proposed regulation.
(2) Before an agency prepares the economic impact statement and the regulatory flexibility analysis, required by subsection (C)(1)(a) and (b) respectively, on a regulation that may have an adverse impact on small businesses, the agency shall notify the Division of Research and Statistical Services in the State Budget and Control Board of its intent to submit the regulation. The division shall advise and assist agencies in complying with the provisions of this section.
(D) A small business that is adversely affected or aggrieved by final agency action in connection with a regulation subject to this section is entitled to judicial review of agency compliance with the requirements of this section. A small business may seek that review during the period beginning on the date of final agency action and ending one year later.
(E)(1) Within four years of the effective date of this section, each agency shall review all agency regulations existing at the time of the effective date to determine whether to continue the regulations without change or amend or rescind them to minimize economic impact of the regulations on small businesses in a manner consistent with the stated objective of applicable statutes. If the head of the agency determines that completion of the review of existing regulations is not feasible by the established date, the agency shall publish in the State Register a statement certifying that determination. The agency may extend the completion date by one year at a time for a total of not more than five years.
(2) Regulations which take effect on or after the effective date of this section must be reviewed within five years of the publication of the final regulation in the State Register and every five years after that to ensure that they minimize economic impact on small businesses in a manner consistent with the stated objectives of applicable statutes.
(3) In reviewing regulations to minimize their economic impact on small businesses, the agency shall consider the:
(a) continued need for the regulation;
(b) nature of complaints or comments received concerning the regulation from the public;
(c) complexity of the regulation;
(d) extent to which the regulation overlaps, duplicates, or conflicts with other federal, state, and local governmental regulations; and
(e) length of time since the regulation has been evaluated or the degree to which technology, economic conditions, or other factors have changed in the area affected by the regulation.
(F) An agency may promulgate an emergency regulation pursuant to Section 1-23-130, notwithstanding that the regulation
otherwise would be subject to this section."
SECTION 3. Section 1-23-10(7) of the 1976 Code, as added by Act 507 of 1992, is amended to read:
"(7) 'Substantial economic impact' means a financial impact upon:
(a) commercial enterprises;
(b) retail businesses;
(c) service businesses;
(d) industry;
(e) small businesses, as defined in Section 1-23-117;
(e)(f) consumers of a product or service; or
(f)(g) taxpayers."
SECTION 4. Section 1-23-120(B) of the 1976 Code, as last amended by Act 231 of 2002, is further amended by adding appropriately numbered items at the end to read:
"( ) a copy of the economic impact statement as provided for in Section 1-23-117(C)(1)(a).
( ) a copy of the regulatory flexibility analysis, as provided for in Section 1-23-117(C)(1)(b)."
SECTION 5. This act takes effect upon approval by the Governor.
This web page was last updated on Thursday, June 25, 2009 at 9:46 A.M.