Reining in Regulation with the REINS Act

Small businesses are the backbone of the economy in South Carolina. As of 2024, there were 507,620 small businesses (defined as firms with fewer than 500 employees), making up 99.4% of businesses in the Palmetto State. Because of this outsized role in our quality of life, the government should be very reluctant to interfere with their operations. Similar to the fable of “The Goose that Laid the Golden Egg,” regulations inhibit the productivity of small businesses, stifling the businesses that sustain South Carolina’s economy. Some degree of government regulation is necessary to protect consumers, guard our natural resources, and encourage competition between firms. But overregulation can become harmful, wasting resources and infringing on basic constitutional freedoms. Fortunately, South Carolina legislators have taken up a REINS-style bill that could reduce regulatory costs and encourage more South Carolinians to start or expand small businesses.  

What is the REINS Act?  

Formally known as the Regulations from the Executive in Need of Scrutiny (REINS) Act, REINS was introduced federally since 2009, but Congress has never passed it. The REINS Act would force Congress to review all federal regulations that could have a financial impact of over $100 million on the economy before such regulations are instituted. Palmetto Promise Institute’s Founding Chairman, former Senator Jim DeMint, cosponsored one of the first REINS bills, back in the 112th Congress (2011-2012). 

REINS would strengthen the Congressional Review Act (CRA) passed in 1996. Similar to REINS, CRA allows Congress to review federal regulations that have a large impact, but only after the regulation has gone into effect. 

States with Similar Legislation 

Though the federal government has not passed the REINS Act, states across the country have taken the initiative to adopt legislation similar to REINS. This allows state legislatures to have greater review power over state regulatory activity, which can often be as significant as federal. These states include: 

• Florida 
• Wisconsin  
• Indiana  
• Kansas 
• Kentucky 
• Louisiana  
• Oklahoma  
• Utah  
• North Carolina

REINS legislation can look different in each state. On one hand, with North Carolina’s bill language (passed in 2025), a regulation exceeding $1 million in cost over 5 years must receive approval by a ⅔ supermajority of the General Assembly. Similar to North Carolina, Florida requires legislative ratification if a regulation costs citizens $1 million or more. Finally, the Louisiana statute (passed in 2025) requires an impact of $200,000 per year or $600,000 over three years.

Importance of REINS Legislation 

Whether on the federal or state level, legislation similar to the REINS Act is imperative to restrain regulatory overreach. Regulations can impact both consumers and small businesses. When a new regulation is passed, some business owners hire expensive consultants just to make sure their businesses comply with the new rules. The money spent fulfilling the requirements of this regulation is then reluctantly passed on to the consumer. Businesses that cannot afford a consultant must meet government demands themselves, which wastes valuable time. The MetLife and U.S. Chamber of Commerce Small Business Index for Q4 2024 revealed that 51% of small businesses in the United States find it difficult to grow while meeting regulatory obligations.  

One small business owner, Phillip Freeman, describes the impact of building permit delays from regulations on his business, Murphy’s Naturals, Inc like this:  

“The delays make the expansion no longer a good return on investment. While we saved money by canceling the construction, some contractors missed out on the construction project that would have been good for our local economy,”  

Small businesses are losing business and valuable resources, such as their time and opportunity cost, trying to navigate regulations.  

South Carolina and the REINS Act 

South Carolina already requires legislative review of every regulation proposed by state agencies and legislative committees like the Government Efficiency and Legislative Oversight Committee provide oversight of agencies. This is why organizations like the State Policy Network’s Center for Practical Federalism have ranked us highly when it comes to regulatory review and resisting overreach. Now, state legislators are looking to take it even farther by passing a REINS-style bill. South Carolina is in play for passing similar legislation to the REINS Act through the Small Business Regulatory Act, also known as H.3021 and sponsored by Rep. Jeff Bradley (R-Beaufort County). Here are some highlights of the bill: 

• Small Business Regulatory Review Committee. Creates an advisory committee composed of small business owners with the goal of reducing the state regulatory burden by 25%.  
• Mandatory Cost-Benefit Analysis and Economic Impact Focus. All proposed state regulations must include an assessment report. If the regulation will cost more than $1 million over five years, then a special report must be prepared by the Office of Research and Statistics in the Revenue and Fiscal Affairs Office. 
• “Two-for-One” Rule. Proposed regulations must also include the proposed removal of two other regulations. 
• Express Statutory Authority. Agencies may not craft regulations outside of the specific language of the statute (state law). 
• Automatic Expiration. With some exceptions, regs will expire in the seventh year after they are adopted and the reg process must begin de novo. 
• Expanded Judicial Review. Allows the courts to interpret regulations without deference to an agency’s interpretation. (This is crucial in the wake of the Chevron deference Loper Bright decision [2024].) 

H.3021 passed unanimously in the House in March 2025 and was referred to the Senate Judiciary Committee on March 11, 2025, where it has yet to receive a hearing. (S.254 by Senator Tom Davis is the companion bill in the Senate, which has also not received a hearing.) Palmetto Promise will continue to watch these bills as a new session begins in 2026. South Carolina must prioritize limiting government overreach to ensure businesses can focus on growth, not compliance with pesky bureaucratic meddling. Our neighbors have already acted.

Conclusion 

A REINS Act will help ensure that businesses do not waste time and resources attempting to meet the requirements of regulations. Instead, small businesses can focus on growing their companies and serving their customers. The hundreds of thousands of small businesses in South Carolina and the jobs they provide must be protected, and a REINS bill could be the path to more freedom among businesses and expanding economic prosperity for all. 

The photo for this article is by WLTX.