South Carolina has abolished judicial deference to state agencies, becoming only the second state in the nation to require judges to interpret laws independently rather than defer to unelected bureaucrats. Gov. Henry McMaster signed H. 3021, known as the Small Business Regulatory Freedom Act, which the Goldwater Institute announced eliminates the practice of courts rubber-stamping agency interpretations. The reform ensures the legal playing field is no longer stacked against everyday citizens when they challenge government agencies in court.
Under the new law, judges must now apply a "de novo standard," meaning they interpret statutes independently without giving weight to how agencies read the law. Beyond ending judicial deference, H. 3021 implements fiscal guardrails by requiring regulatory changes costing $1 million or more over five years to be approved by both the Senate and House of Representatives through joint resolution. The law also subjects all agency regulations to formal review every five to eight years. Arizona became the first state to abolish judicial deference in 2018, making South Carolina part of what the report describes as a growing multi-state movement.
According to Candace Carroll, Director of Public Affairs for Americans for Prosperity-South Carolina, "The Small Business Regulatory Freedom Act represents one of the most meaningful government accountability reforms South Carolina has enacted in years." The report states that the legislation brings greater transparency and legislative oversight to the rulemaking process, helping ensure government accountability to the people. The Goldwater Institute notes that the bill includes reforms based on its policies and was sponsored by state Rep. Jeff Bradley.
The reform addresses a decades-long problem where courts routinely rubber-stamped state agency interpretations of the law, the report explains. Under the old system, bureaucrats could effectively legislate through regulation without meaningful accountability to voters, violating the Constitution's separation of powers principle that lawmaking authority belongs to elected representatives. Before H. 3021's passage, South Carolinians bore the cost of excessive regulation and red tape—small business owners were forced to either absorb regulatory costs or pass them on to consumers, while employees faced the burden of meeting arbitrary regulatory standards that hindered productivity and innovation. The new de novo standard levels the playing field, giving citizens what the report calls "a fighting chance to receive justice when a government agency violates their rights."
The law represents what the Goldwater Institute frames as a return to constitutional principles, with the fiscal guardrails creating a stronger environment for entrepreneurs and small businesses to succeed. The institute credits multiple partner organizations for championing the effort, including Americans for Prosperity-SC, Pacific Legal Foundation, the Cicero Institute, Palmetto Promise Institute, ALEC, Americans for Tax Reform, and South Carolinian entrepreneurs who made their voices heard. With South Carolina joining Arizona, the reform signals momentum toward reclaiming legislative authority from unelected regulators—and restoring the balance of power the Framers intended.