Regulatory Review Task Force executive summary

8/14/2019 Regulatory Review Task Force executive summary

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2013

RegulatoRyReviewtaskFoRce

executivesummaRyRepoRt

Presented on November 15, 2013


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Executive Summary Report 2013

State of South Carolina Page 2 of 23

TABLE OF CONTENTS

EXECUTIVE SUMMARY .......................................................................................................... 3Why is regulatory review needed in South Carolina? ............................................................ 3How is the Administration responding to South Carolina's need? ......................................... 3

Task Force Members............................................................................................................... 4Task Force Process ................................................................................................................. 5Report Summary ..................................................................................................................... 5Task Force Consensus..6

REGULATORY CONTENT RECOMMENDATIONS ........................................................... 7

Department of Agriculture .......................................................................................................... 7Department of Employment and Workforce............................................................................... 8Department of Health and Environmental Control ..................................................................... 9Department of Health and Human Services .............................................................................. 11Department of Insurance ........................................................................................................... 11

Department of Labor, Licensing and Regulation ...................................................................... 12Department of Natural Resources ............................................................................................. 15Department of Revenue ............................................................................................................ 15Department of Social Services .................................................................................................. 16Department of Transportation ................................................................................................... 16

ADDITIONAL REGULATORY CONTENT RECOMMENDATIONS .............................. 18

REGULATORY PROCESS RECOMMENDATIONS........................................................... 20

LEGISLATIVE PROCESS RECOMMENDATIONS ............................................................ 22

TASK FORCE EXTENSION RECOMMENDATIONS ........................................................ 23


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EXECUTIVE SUMMARY

Governor Nikki Haley established the Regulatory Review Task Force (Task Force) byExecutive Order 2013-2 (see Appendix A) on February 12, 2013, to evaluate South Carolinascurrent regulatory burdens on all sizes and types of businesses in the state and propose

recommendations to relieve those burdens. The Task Force followed a structured process, asoutlined in the Executive Order, which resulted in the creation of a report that consists of twoparts: Task Force Recommendations and a Detailed Appendix containing extensive supportingdetail. The remainder of this Executive Summary describes the Task Force effort in more detailand takeaways that report readers can expect.

DISCLAIMER This report is intended to provide the reader with a strong grounding in the

Task Forces process, its assessment of the regulatory environment, and its recommended path

forward. This report is not intended to be a comprehensive, stand-alone, and final assessment ofevery state regulation and process.

Why is regulatory review needed in South Carolina?Extensive research confirms that burdensome regulations are a problem for South Carolina smallbusinesses. According to the National Federation of Independent Business (NFIB), governmentregulations rank in five of the Top 25 problems for small businesses:

#4Uncertainty over government actions #5Unreasonableness of government actions #16State and local paperwork #20Dealing with tax agencies #25Understanding regulatory environments

Other small business concerns cited by the NFIB regarding government regulations include:

Environmental regulations Cost of government-required equipment/procedures Health and safety regulations

Additional research concludes that many regulations are burdensome for all businesses in SouthCarolina. This is supported by several statistics, some of which include:

South Carolina earned a D for our regulatory review process citing inconsistentlegislative review and lax analytical requirements (Source: NYU School of Law Institutefor Policy Integrity 2010 report).

South Carolina ranks 14thMost Burdensome State for professional licensure (Source:Institute of Justices 2012 License to Work study).

Dozens of moderate-income occupations require an average of $166 in fees and 422hours of education for initial licensure. The Department of Labor, Licensing and Regulation has issued a 2012 report that

identifies regulatory schemes that are more restrictive than necessary to protect thehealth, safety, or welfare of the public.

How is the Administration responding to South Carolinasneed?Governor Haleys Executive Order takes a comprehensive view of state regulations andregulatory processes. It provides for an independent assessment not influenced by regulating


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agencies, legislative committees, or the Governors Office itself. The Task Force kept thatindependent mindset front and center in all of its work.

At the core of the Task Force effort is a series of reports prepared by target state agencies. Thosereports ensure that each agency accomplished its statutory obligation to conduct a five-year

review and promote an inward focus on regulatory review geared towards reducing obstacles toeconomic development.

The second focus of the Task Force effort involves encouragement of the business and regulatedcommunities to participate in the regulatory review process. Being among those primarilyaffected by burdensome regulations and processes, participation of these groups can provide themost direct feedback on problem areas.

Third, it is important to give the general public an opportunity to participate in the regulatoryreview process as well. Regulations and processes that impede economic development affect allcitizens of the state in one way or another. Their input is very important in this overall effort.

Finally, there are a number of efforts currently underway that touch on different parts of theregulatory process. The Small Business Regulatory Review Committee, the Office of theLieutenant Governor, and various groups and associations around the state all touch on differentaspects of the regulatory environment. The efforts and activities of these groups are importantprocess inputs.

The overall Task Force effort assesses all of these disparate inputs and develops a cohesive set ofrecommendations that coordinates the regulatory review process in general.

Task Force Members

The Task Force is composed of ten members, including the Chairman of the Small BusinessRegulatory Review Committee, appointees from the majority and minority leaders of the SouthCarolina Senate and House of Representatives, representatives from different business sectors,and representative from the conservation community. The Task Force Chairman, appointed byGovernor Haley, is responsible for coordinating the overall effort and ensuring that it meets itschedules and objectives.

Mark Lutz (Regulatory Review Task Force Chairman)Senator Tom DavisSenate Majority AppointeeSenator Brad HuttoSenate Minority AppointeeRepresentative Eric BedingfieldHouse Majority Appointee

Charles Buddy Young (NFIB Appointee)Dan Dennis (Small Business Regulatory Review Committee Chairman)Dana Beach (Environmental Appointee)Phil Waddell (Chamber Appointee)Nick Odom (South Carolina Manufacturers Alliance Appointee)Patrick Caster (Healthcare Appointee)


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Task Force ProcessThe Task Force employed the following process in conducting its efforts and completing itstasks:

organized and held five full Task Force meetings; arranged the Task Force Members into five groups of two that would each focus on

separate state agencies; reviewed and assessed reports from twenty-two state agencies; solicited and reviewed regulated community and public input submitted electronically; solicited and reviewed regulated community and public input during a series of six Town

Hall meetings across the state;

invited live expert testimony from Lieutenant Governor Glenn McConnell as well asadditional testimony from various regulatory experts from around the state;

conducted ongoing follow-up discussions with various state agencies, industrystakeholders, and regulatory experts; and

reviewed, assessed, organized and reported on the Task Force recommendations and nextstep suggestions.

Report SummaryThe Task Force effort can certainly be described as a very large undertaking. Across the twenty-twostate agencies, it is estimated that there are approximately 3,122 regulations and perhaps hundreds ofadditional processes and procedures that have been developed and adopted. In addition, the regulatedcommunities affected by those regulations, policies, and procedures are widely dispersed across thestate. As such, the Task Force split its recommendations into the following four categories:

Regulatory Content Review & Recommendations Specific regulation modifications werethe primary focus of the Task Force. Through all of the data inputs, the Task Force received awide range of suggestions with varied levels of specificity. The Task Force reviewed andassessed the suggestions and singled out those that it believes should receive the initialattention of the corresponding agencies. Those recommendations appear in this section.However, the Task Force also suggests that the remaining, extensive lists of suggestionsincluded in the Appendices of the report should be part of the ongoing regulatory reviewprocess that we hope each agency will continue.

Regulatory Process Review Throughout the Task Force effort, it became clear to theMembers that a variety of regulatory processes are equally or, perhaps, even more importantthan specific regulation modifications. The first of the two categories of Regulatory ProcessRecommendations appear in this section. These refer to processes that the Task Forcebelieves will streamline the regulatory promulgation process and, thus, lead to further

reductions in regulatory burdens and obstacles.

Legislative Considerations & Recommendations The second category of processes thataffect regulatory burden is that which is associated with the Legislative Process. The TaskForce believes it is important to make recommendations that streamline those processes, bothfor the sake of streamlining the statutory component of the regulatory process and, hopefully,reducing the burden the regulatory process has on the Legislative Agenda.


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Task Force Extension RecommendationsThe final section of the Task Force report focuseson making the Task Force effort live on after delivery of this Final Report. Since this overalleffort is so extensive, the Task Force believes it is prudent to consider this as merely a firststep in an ongoing process. South Carolinas economy will greatly benefit from a continuousprocess of regulatory review and modification. That will allow for even deeper exploration of

all of the current regulations and agency processes and broaden the number of stakeholders,regulated community members, public participants, and legislators that can and shouldparticipate in the process.

Task Force ConsensusThe Task Force members represented a diverse cross-section of the legislative, business, and environ-mental communities. As such, complete concurrence on each recommendation was rare. Often, oneor more members dissented on specific recommendations. However, in aggregate, the Task Forcereport represents a solid consensus of the group.


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REGULATORY CONTENT RECOMMENDATIONS

DEPARTMENT OF AGRICULTURE (SCDA)

1. Consolidate dairy regulations under the Department of Agriculture.One outstanding example of potential regulatory streamlining is the merger of dairy

and cheese regulating procedures. Dairy producers face multiple hurdles innavigating regulatory requirements necessary to run a successful business. The SouthCarolina Department of Health and Environmental Control (DHEC) regulates allGrade A facilities in the state that produce, haul, process, package and distribute milkand milk products. The SCDA regulates cheese. The dual agency division ofregulatory responsibilities serves as a deterrent to new dairy and cheese businessdevelopment in the state. This division is inefficient, costly, and unique to SouthCarolina. Streamline dairy regulations so that the SCDA assumes increasedresponsibility with regards to regulating Grade A milk.

2. Exempt small egg producers from large operator regulations.S.C. Code Ann. 39-39-110 to 39-39-180 (1976) outlines specific restrictions thatapply to all egg manufacturers who sell eggs off of the farm. Those standards includeregulations from washing, sterilizing, grading, sorting, and labeling and are overlyburdensome for small producers. Amend code to contain the following language foran exemption (from VA code of laws):

Producers selling a total of 150 dozen eggs or less per week produced by theirown hens, or eggs purchased from other producers not to exceed 60 dozen perweek, are exempt from this law provided all eggs are of edible quality and ofthe quality as represented.

3. Exempt small-scale honey producers from large operator regulations.S.C. Code Ann. 39-25-20 (1976) provides an exemption to small-scale honeyproducers that allows producers to forego the SCDA permitting process if they sellno more than 400 gallons of honey and sell directly to the end consumer. TheHoney Exemption, as currently applied, poses an issue for food hub and small-scaledistributors, such as Grow Food Carolina, that work with small-scale honeyproducers. SCDA should adopt an exemption for honey producers based solely onthe amount of honey produced and eliminate the selling only to the end consumer

requirement. This would still uphold the purpose of the exemption by retaining theregulations for larger-scale honey producers while allowing small-scale farmers toforego the permitting requirement but still sell through a local distributor. Amend thelanguage to read:

Beekeepers producing no more than four hundred gallons (4,800 pounds) ofhoney annually and who only sell directly to the end consumer are exemptfrom inspections and regulations requiring honey to be processed, extractedand packaged in an inspected food processing establishment, or from beingrequired to obtain a registration verification certificate (RVC) from theSCDA. However, labels are required on all containers of honey that are soldin South Carolina. Beekeepers shall file for the exemption on forms to beprovided by the SCDA.


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4. Exempt small poultry producers from poultry inspection laws for large scaleoperators.S.C. Code Ann. 47-19-140 (1976) provides criteria for exemptions from the poultryproducts inspection law.

Consider adopting the exemption set forth in S.192 introduced by SenatorVerdin (R-Laurens) in January 2013, with the understanding that it is meant toread:

A BILL TO AMEND SECTION 47-19-140 OF THE 1976 CODE,RELATING TO EXEMPTIONS FROM THE POULTRY PRODUCTSINSPECTION LAW, TO PROVIDE FOR AN EXEMPTION TO THEPROVISIONS IN THIS CHAPTER FOR CERTAIN POULTRYPRODUCERS OR OTHER PERSONS WHO SLAUGHTER OR PROCESSTHE PRODUCTS OF MORE THAN FIVE THOUSAND TURKEYS OR ANEQUIVALENT NUMBER OF POULTRY OF ALL SPECIES IN THECURRENT CALENDAR YEAR, AND TO MAKE TECHNICAL

CORRECTIONS.

5. Correct duplication of regulatory authority over hazardous materials.The recommendations by the SCDA are thoughtful and accurate, but they do not gofar enough. Due to the overlap in regulation and authority over hazardous materialsby both DHEC and the State Fire Marshals Office, the agency recommends that SCCode Ann. 23-39-10 et al. be repealed as an unnecessary layer of legislation.

DEPARTMENT OF EMPLOYMENT AND WORKFORCE (DEW)

1. Unemployment Compensation ProcessDEW should analyze and review the entire premise of unemployment compensation

process management to make it more informative to and business friendly for smallbusinesses. Unlike larger businesses, small business owners typically do not have themeans to employ contractors such as TALX or others to advocate for them inpursuing cases of fraud misfilings, etc. If not properly managed, this can adverselyaffect the experience rate and, ultimately, unemployment tax that must be paid.

2. Rulings with respect to the Status, Liability and Rate ContributionsDEW recommends a new draft of R.47-36, Review of Rulings with Respect to theStatus, Liability, and Rate Contributions of an Employer or Employing Unit besubmitted for the 2014 legislative session to clarify the process, audit procedure, andlanguage regarding the appeals.


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DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL (DHEC)

1. Amend Regulation 61-102,Standards for Licensing Birthing Centers for Deliveriesby Midwives

Amend R.61-102.H(7)(e). The extra width doors required by this regulation are an

economic burden and do not provide any increased safety for the patient.

Amend Regulation 61-102.J (2). The cost associated with 50-foot candle powerlighting is an economic burden and provides no increased safety for the patient.

2. Amend Regulations pursuant to the South Carolina Solid Waste Policy andManagement Act,S.C. Code 44-96-10 through 44-96-470

Amend regulations to provide clarification of the timing of consistencydeterminations and establishing that authority for zoning rests with localgovernments, not DHEC. This will enable businesses to locate solid waste

management support functions more freely and eliminate the need for a permit holderto obtain two separate permits and two separate consistency determinations forinnovative research and development. This recommendation is consistent with whatDHEC also recommended.

3. Repeal R.19-450,Permits for Construction in Navigable WatersThe current scope of the regulation is overly broad. This results in DHEC evaluatingmatters that are more properly addressed by other programs, agencies, and politicalsubdivisions that already have similar authority. This recommendation is consistentwith what DHEC also recommended.

4. Amend R.61-9,Water Pollution Control Permits and Repeal R.72-101 et seq., R.300et seq., and R.405 et seq.

Amend to help reduce unnecessary burdens on permitted businesses and eliminateredundancy in the regulations.

5. Repeal R.61-62.5, Standard No. 5.1,Best Available Control Technology(BACT)/Lowest Achievable Emission Rate (LAER) Applicable to Volatile Organic

Compounds (VOCs)

This standard is more stringent than the federal standard and may not be effective inreducing ambient ozone levels. Recent research seems to demonstrate that NOxreduction far outweighs VOC reductions in reducing ambient levels of ozone, whichcalls into question the efficiency of Standard 5.1 in reducing ambient ozone levels inthe state. Repealing Standard 5.1 will allow industry to implement less costly VOCcontrols. This recommendation is consistent with DHEC recommendations.


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6. Amend R.61-67,Standards for Wastewater Facility ConstructionAmend this regulation to address issues with the wastewater capacity checkbookand pump and haul operations. This will reduce unnecessary burdens on the regu-lated community by ensuring permitting consistency, eliminating the need for

multiple permits for certain projects, and eliminating the need for additionalpaperwork to be submitted by a permit applicant. This recommendation is consistentwith DHEC recommendations.

Additionally, amend current wastewater treatment regulations to provide anexemption for de minimis discharges or prefabricated and commonly used treatmenttechnology. The cost of permitting and reporting associated with the regulations is asignificant economic disadvantage to industry.

7. Amend R.61-l07.19,Solid Waste Landfills and Structural FillAmend this regulation to streamline the permitting process, remove zoningconsistency determinations, and allow mining and recycling of wastes within anoperation area as a permit modification/standard practice. This recommendation isconsistent with DHEC recommendations.

8. Repeal R.61-107.279,Solid Waste Management: Used OilThe requirement for used oil marketers to obtain a permit from the state was in excessof federal requirements. Eliminating this requirement will reduce the administrativeburden on businesses. This recommendation is consistent with DHECrecommendations.

9. Repeal R.72-101 through 72-108,Erosion and Sediment Reduction and StormwaterManagement Regulations

Repealing this regulation will eliminate confusion as well as reduce the administra-tive burden for the regulated community. Repeal of 72-101 through 72-108 should befollowed by revising Reg. 61-9 (Water Pollution Control Permits) to eliminateduplicative regulatory requirements for the control of stormwater runoff duringconstruction activities. This recommendation is consistent with DHECrecommendations.

10.R.72-300 through 72-316. Erosion and Sediment Reduction and StormwaterManagement Regulations and amend R. 61-9, Water Pollution Control PermitsRepeal R.72-300 through 72-316 and amend R.61-9 to incorporate requirements forpost-construction stormwater management and establish a minimum acreage thres-hold for regulatory requirements, thereby reducing the administrative burden for theregulated community. This recommendation is consistent with DHEC recommenda-tions.


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11.Repeal R.72-405 through 72-445, Standards for Stormwater Management andSediment Reductionand amend R. 61-9, Water Pollution Control Permits

Repeal regulation 72-405 through 72-445 and amend Reg. 61-9 to incorporate themost recently updated technical requirements for post-construction stormwater

management. This will allow for improved efficiency and a reduction in theadministrative burden for businesses. This recommendation is consistent with DHECrecommendations.

12.Land Use RegulationsThe Task Force recommends that DHEC conduct a complete review of land useregulations. This review should focus on development of stormwater regulations andplans, NPDES General Permits, buffers, and other rules that apply to these types ofsituations. Specifically,

Recommend regulations be amended to limit the use of NPDES GeneralPermit opt-out clause for builders building on less than ten contiguous lots.

Also modify the NPDES 45-foot buffer from sensitive water bodies.(3.2.4(C) (I) (b))

Revise silt fence requirement for home builders to revert to prior enforcementstandards rather than the new, Department of Transportation standardrequirements.

DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)

Review Process Improvement/Claims Processing

HHS should review current processes for completing and submitting Edit Correc-tion Forms (ECFs). HHS is hoping to eliminate ECFs by year-end and isreviewing other forms mentioned by commenters, including the Medicaid/hospice

forms.

HHS should review the process associated with obtaining referrals for therapyservices. This process appears to require an overly burdensome back and forthapproval mechanism that could be simplified.

DEPARTMENT OF INSURANCE

The Task Force received comments that are SC Code-related, rather than regulation-related, and could be considered outside of the scope of the Task Force effort. However,the Task Force recommends that the Department further review them and considerworking with the General Assembly to address the following changes:

1. Eliminate Small Employer Reinsurance Program.Repeal S.C. Code 38-71-1410. This is no longer necessary. Risk assuming carrierstake on the full risk of their small group enrollees and are not participating in SERP.

2. Eliminate The South Carolina Health Insurance Pool.Repeal S.C. Code 38-74-10. Due to the creation of Federally-Facilitated Exchangesput into place with the Affordable Care Act, SCHIP is no longer necessary.


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3. Expand the coverage area for wind and hail protection.Amend S.C. Code 38-75-460, Residual Market/Property and Casualty The WindPool. By expanding the wind and hail coverage area, greater regulatory stability canbe provided. This will give more businesses the opportunity to have the necessarycoverage.

4. Streamline Dispute process.Amend S.C. Code 38-90-160, Captives-Arbitration of Insurance Disputes. Thischange would provide an economic benefit to the captive insurance industry byproviding a mechanism for dispute resolution that is simpler and more cost effectivethan the court system.

DEPARTMENT OF LABOR, LICENSING AND REGULATION (LLR)

1. Strengthen LLR Directors Review CapabilityS.C. Code 40-1-70 is part of the enabling legislation for LLR. Part 9 of that sectionsays "The powers and duties of regulatory boards include, but are not limited

topromulgating regulations which have been submitted to the director, at leastthirty days in advance of filing with Legislative Council as required by Section 1-12-30." The Task Force recommends that a Part 10 be added, with verbiage that reads"the director shall review each submitted regulation for approval or rejection based onwhether or not the regulation exceeds statutory authority."

2. Repeal Standards for Residential Builders CommissionRepeal S.C. Code 40-59-20(7), 40-59-220(D), 40-59-240(B), and S.C. Code Reg. 106-1. This will eliminate the licensure requirement for specialty contractors andthe limitation to 3 specialty registrations at a time.

A statutory amendment to include a separate licensing category for HVAC installersand repairers, plumbers, and electricians is also recommended.

3. Amend Modular Housing StandardAmend S.C. Code 23-43-90 and add an additional section. The current regulationsrequire duplicative and unnecessary reviews of house plans by LLR. The currentprocess for plan approval for a modular home is for the manufacturer to design (orcontract with someone to design) a house. The house plan then goes to a third partyinspection agency for a licensed engineer or architect to review. The inspectionagency also inspects the house as it is built in the factory. After a detailed review bya licensed professional at the inspection agency, LLR requires that a copy of the planbe sent to them for a staffer to review before they will issue final approval. This

redundancy un-necessarily delays the start of construction and provides no additionalvalue derived from the delay. One of the benefits of modular construction is theshorter time frame which comes from the factory building process, and it isfrustrating to manufacturers and homebuyers when LLR takes a few days or up to afew weeks to do a plan review that is not needed.


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4. Amend Contractors Licensing Board StandardsAmend S.C. Code 40-11-30: Raise the requirement for licensure from $5,000 to$15,000. This will more accurately reflect the level of cost in todays market.

This statute has not been revised since 1998.

Amend S.C. Code 40-11-240(B)(4). Remove the requirement for an entity toprovide the Agency a reference from a bank or other financial institution in order toqualify for licensure. This regulation also requires a detailed statement of the entitys

current financial condition. A bank reference is not necessary to determine financialhealth of an entity.

5. Amend Board of Physical Therapy Standards

S.C. Code 40-45-270 provides a very limited exemption for physical therapystudents, physical therapy assistant students, physical therapists, or physical therapyassistants who are employed by the federal government and licensed out-of-stateeducators to practice in South Carolina without a South Carolina license. Other

situations exist in which out-of-state licensed physical therapists need to travel toSouth Carolina and practice for a limited time period. Such professionals should nothave to go through the process of obtaining a license in South Carolina. The Agencyrecommends amendment of the statute to permit a physical therapist that is licensedin another jurisdiction of the United States or credentialed in another country topractice in South Carolina if that person is providing physical therapy to individualswith an athletic team or organization or a performing arts company temporarilypracticing, competing, or performing in the State for no more than sixty days in ayear. Further, the Agency recommends amending the statute to permit a physicaltherapist to practice who is licensed in another jurisdiction of the United States andwho enters this state to provide physical therapy during a declared local, state, or

natural disaster or emergency, but for no longer than sixty days. The Board mayextend the time period in its discretion.

6. Amend Manufactured Housing Board R.79-2Amend R.79-2 to combine multiple licenses. There are currently nine classificationsfor licenses regulated by the Board: manufacturer, retail dealer, retail salesperson,retail multi-lot salesperson, apprentice salesperson, show permit/temporary, installer,repairer and contractor. Many of these classifications contain similar or identicalcharacteristics and represent essentially the same type of activity. Combining orbundling multiple classifications into fewer licenses would simplify the licensureprocess for small business operators. Examples reflective of the dual licensure heldby some licensees would include combining contractor with retail salesperson ormulti-lot salesperson or combining installer with retail salesperson.

7. Repeal Board of Funeral Service StandardsRepeal S.C. Code 40-19-265(C). The Agency made no recommendation regardingthe funeral service statutes or regulations but noted a number of public commentssupporting the repeal of the permitting requirement for retail sales outlets.


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Repeal S.C. Code 40-19-20(19); S.C. Code 40-19-20(12); S.C. Code 40-19-290;and S.C. Code 40-19-265(C). These regulations define what constitutes a retailsales outlet as it pertains to funeral merchandise, the process one must be follow toreceive a permit to operate such an outlet, the criteria one must meet in order toreceive a permit, and how financial transactions of such an outlet must be carried out.

The Board has used and interpreted these regulations in a manner that appears notrelated to public safety as much as it might be construed as economic protectionism.The repeal of these regulations should ease the burden for small businesses orindividuals that wish to make or sell low budget funeral merchandise.

8. Amend the Board of Cosmetology Amend S.C. Code 40-13-20(1) to remove a rental booth from the definition of

salon found in the code.

There is no booth renter license clearly outlined within the Cosmetology

Practice Act. The Board of Cosmetology has interpreted the definition of a salon,

a building or any place, or part of a place or building including, but not limited toa rental booth, in which cosmetology is performed, to require a booth renter to

be licensed separately as a salon, essentially a salon within a salon. Again, thebooth renters license is in addition to the cosmetology, nail, or estheticianslicense held by the booth renter. The Board itself has recognized that this personis more properly referred to as an independent contractor. The Task Forcerecommends that the salon owner be responsible for ensuring that any boothrenter has the proper professional license to practice before renting the space.Beyond that, the booth renter should be responsible for making sure that he/shehas the proper business and tax licenses required by local and state authorities tooperate as an independent contractor. The Board should not have regulatory

authority that extends beyond the scope of the actual performance of professionalduties of cosmetologists, estheticians, or nail technicians.

Amend S.C. Code Reg 35-23(A) and update LLR software to allow for carryoverof continuing education hours earned in one license period for a maximum of 2additional licensing periods.

Carrying credits to the next renewal cycle is efficient because it is cost effectivefor the licensee and time effective for the businesses employing them. A licenseeshould not lose credits that were paid for because the hours are not permitted tocarry over into the next renewal cycle.

Amend S.C. Code 40-13-250 to permit a licensee who achieves exemptionstatus to avoid proving the status at every renewal period and require that thelicensee seek exemption status as soon as the licensee becomes eligible ratherthan waiting until the next renewal cycle.

Repeal S.C. Code Reg. 35-10(H)(1). Schools operate independently of the Boardand should be able to change their rules without Board approval.


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Repeal S.C. Code 35-20(G)(1), which currently requires that the uniform andattire of a licensee assisting a customer be clean and appropriate at all times.This is more appropriately addressed in the workplace between the employer andemployee and, ultimately, by the consumer themselves.

DEPARTMENT OF NATURAL RESOURCESReduce excessive regulation of the commercial fishing industry.

Repeal or amend state regulations that exceed federal guidelines, standards or processesto bring state regulation into line with the existing federal regulations. Also repeal oramend any state regulations that exceed federal standards and are not specificallyestablished in state statute. This will simplify the regulatory environment for commercialfishing in the state and assist those businesses in being more compliant with thoseregulations.

DEPARTMENT OF REVENUE (DOR)The current method of operation for DOR is based on a reactionary response to

legislation. The DOR reacts to new tax regulations and legislation passed by localpolitical subdivisions by creating the necessary forms and instructions for collectingthose taxes and distributing those forms to tax payers. While it is advantageous to haveDOR collect all of the sales and use taxes for the state and the many local taxingauthorities, it is quite confusing for small businesses. The local political subdivisionsfrequently enact deadlines, exemptions, and discounts that are inconsistent with statesales and use tax regulations. This can be particularly confusing to small businesses whooperate in multiple local political subdivisions. The Task Force recommends thefollowing to help minimize this confusion and simplify the task of reporting and payingsales and use taxes:

Amend regulations or pass new legislation to require that all sales and use taxesenacted by any local political subdivision must commence and terminate on datesthat are identical to deadlines used for state sales and use taxes.

Amend regulations or pass new legislation to require that all sales and use taxesenacted by any local political subdivision must provide the same exemption anddiscounts as state sales and use taxes.

Review sales and use tax regulations to create a level playing field for all retailerswho sell to private, non-profit schools. Current regulations exempt out-of-stateretailers from use tax, while in-state retailers are subject to sales tax. Remove theexemption for out-of-state retailers who sell to private, non-profit schools.

Review sales and use tax regulations to provide equal and consistent outcomes forin-state and out-of-state contractors. Base sales and use tax on standard finished

products. The goal should be to prevent inconsistencies in treatment for variousraw materials used in fabrication of identical end products. This will ensure amore equitable outcome resulting in the same tax being paid by both in-state andout-of-state contractors.

Develop a process that will engage small business owners and other stakeholdersin a process to create a more business-friendly method for designing and filingmonthly sales tax return forms (ST-23 and ST-389). Particular areas that should


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be addressed are complexity of forms, requirement to submit multiple forms forbranch offices of the same business, and ability to complete forms online.

DEPARTMENT OF SOCIAL SERVICES (DSS)CHILD CARE DIVISION

Child Care Facility Inspections:

Amend S.C. Code 63-13-80 to remove references requiring DHEC and the StateFire Marshal to perform health and fire inspections of child care facilities. DSSfire marshals assumed these inspection duties in 2008. The regulation should beamended to reflect the manner in which these inspections are currently performed.

Amend the regulation that requires providing businesses with two working daysnotice of initial and renewal licensing visits to five working days notice. Thiswill allow for a more reasonable time window for small businesses to complywith inspections.

Amend the sections of regulations that require that five hours of training be inspecified topic areas.

Amend regulations that relate to blood borne pathogen training. Currentregulations require annual training to maintain certification. This time frame isunnecessarily short. The requirement should be changed to complete retrainingevery 2 years.

DEPARTMENT OF TRANSPORTATION (DOT)During its Regulatory Review Reporting process, DOT received thirteen (13) commentsabout perceived problems with its encroachment permit process. The encroachmentpermitting process provides for a detailed engineering review and analysis of a request toperform work within DOT highway rights of way. The review and analysis is necessaryto ensure safe operation of the states transportation facilities and protect the publicsinfrastructure investment. Comments included the following: burdensome application

required; length of time for response; length of permit time until expiration; lack ofappeals process; requirement for support letters; inconsistency between county DOToffices around the State in handling encroachment permits; formal versus informalprocesses; inconsistency of approvals for encroachment permits based on employeeinterpretation of Access and Roadside Management Standards (ARMS); requirement ofperformance bonds for encroachment permits; restrictive maintenance policy withinencroachment permit; unnecessary levels of review; and lack of administrative orregulatory review of the ARMS manual.

DOT describes a relatively robust internal committee whereby it believes it haspreviously addressed these issues. However, the fact that those comments were still

rendered and the Task Force received additional, similar comments indicates that manyissues still exist.

The Task Force recommends that further, more detailed analyses of these issues beaddressed by a committee. Issues to be addressed should include:

Requirement that the ARMS manual be open to input from the public (includingbuilders and contractors) and subject to administrative and regulatory review.

Improvement in the timeliness of the encroachment permitting process.


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Modify the Performance Bond requirements to eliminate duplication with countybonds and reduce the amount required.


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ADDITIONAL REGULATORY CONTENT RECOMMENDATIONS

The following additional regulatory recommendations achieved less agreement amongthe Task Force members and are listed separately. While the majority is still in favor ofrecommending them for further exploration, along with the above recommendations, the

greater level of dissent among the members should be noted.

DHEC-OCRM RecommendationsThe South Carolina Coastal Management Program Document (CMPD) sets forth

requirements for South Carolinas coastal management program (CMP) for thecoastal zone, an area defined as Beaufort, Berkeley, Charleston, Colleton,Dorchester, Georgetown, Horry, and Jasper Counties. Statutory authority for theCMPD resides in the Zone Management Act, S.C. Code 48-39-80 et seq. TheGeneral Assembly first approved the CMPD in 1979, and DHEC refined theDocument in 1993. DHEC also published an excerpt document in 1995.

The CMP is currently not efficient because it requires certification of all projects,regardless of size. This is true even for projects that are exempt from an applicationsubmittal under other DHEC regulations. For example, a construction project with adisturbed area of 10 square feet is automatically covered under the South CarolinaGeneral Construction Permit (CGP) for stormwater discharges. However, the CMPregards this as permit coverage and, therefore, requires a submittal to obtain coastalzone consistency.

The program is also inefficient in areas of the eight coastal counties that are notproximate to the coast. For example, the most inland areas of Horry County are 40miles from the coast and 38 miles to the nearest tidal water. However, these areas are

still subject to the same standard as areas near Myrtle Beach.

The Task Force recommends streamlining the Document to better allow the regulatedcommunity to understand and comply with requirements of the OCRM. Thefollowing should be considered:

Develop a long term funding mechanism to purchase isolated and other typesof freshwater and saltwater wetlands.

Revise the Coastal Zone Consistency program to allow for automaticcertification of certain small projects.i. Limit the geographic area of the coastal counties subject to the CMP.

ii. Reformat the Coastal Zone document to allow for proper regulatorycitations (i.e. 61-XX).

iii. Remove from the document all inventories and narratives that areinformative only or that are covered under other regulation.

iv. Revise the excerpt document to reflect only those portions of theprogram document approved by the legislature.

v. Modify the definition of isolated freshwater wetlands from one acre or lessto isolated freshwater wetlands of five acres or more.

vi. Limit DHEC-OCRM jurisdiction from the critical line seaward.


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vii. Ensure that Section R.72-307C (5) (g) (which states, For activities in theeight coastal counties, additional water quality requirements may beimposed to comply with the SC Coastal Council Stormwater ManagementGuidelines. If conflicting requirements exist for activities in the eightcoastal counties, the SC Coastal Council guidelines will apply) does not

provide for guidelines that exceed the guidelines for the other 38 counties.The other 38 counties also have wetland, rivers, lakes, etc. Please notethat some of these 38 counties also have slope and grade changes, whichin turn give their stormwater velocity.

Department of Employment and Workforce (DEW)

Amend the Illegal Immigration Reform ActAmend S.C. Code 41-8-20(c) to allow small employers without Internet access to enterinto an agreement with DEW to permit the Department to enroll the employer in E-Verifyand to conduct employment verification of new hires. This will ease the process bywhich small businesses that do not operate from a physical address can be compliant with

E-Verify requirements.

Public Service Commission (PSC)

Address third party leasing of alternative energy sources.The PSC should give consideration to amending the Electric Utility regulations to allowthird party leasing of alternative energy sources and remove the limit on "netmetering." The discussions and negotiations now underway in various committees andsubcommittees in the General Assembly are a step in the right direction regarding thesepotential providers. This refers primarily to wind and solar energy equipment but couldapply to any future alternative sources of energy as they became practical andeconomically viable. By allowing third party leasing, we can potentially create an

entirely new source of jobs and economic development in South Carolina.


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REGULATORY PROCESS RECOMMENDATIONS

1. Encourage Regulation SunsettingThe Task Force considered broad regulatory sunsetting suggestions and legislationthat have been discussed in the General Assembly. Some Task Force members would

support legislation that requires full sunsetting of every state regulation every 5 years,however that did not receive majority support .

Many Task Force members recommend strengthening SC Code 1-23-120(J). Thisstatute requires for all regulatory agencies to submit a complete regulatory reviewsimilar to the one that participating agencies completed and submitted for inclusion inthis Task Force report, to the South Carolina Code Commissioner every five years. Itwas reported that prior to this years regulatory reviewpursuant to Governor HaleysExecutive Order 2013-02, the majority of regulatory agencies have not conductedthese required reviews since the inception of statute.

The Task Force recommends that actions be taken to ensure the following: require the Code Commissioner to review every regulatory report submitted

pursuant to SC Code 1-23-120(J);

allow the Code Commissioner to set follow-up actions pursuant to the agencyreports; and

create a sanction mechanism, or request the Governor to issue a standingExecutive Order, to further ensure that each agency continue its five-yearreview process as required under the statute.

2. Increase Visibility of Proposed RegulationsToo often, the Task Force heard that many small businesses were not aware of

impending regulatory changes. In addition to publishing proposed regulations in theState Register, each agency should ensure that its proposed regulations also appear onits website. Some agencies already comply with this suggestion. The Task Forcealso suggests the following:

processes to ensure agency websites offer easy searches for proposedregulations;

sign-up processes whereby regulated communities can automatically benotified of relevant regulations; and

if economically feasible, a cross-agency database whereby regulatedcommunities can sign up in one place and receive updates on proposedregulations from multiple agencies at once.

3. Increase Permit/License Application VisibilityFor pending permit/license applications, each agency should offer online statusupdates for application processing. Some agencies already offer this; however, thiscapability should be in place statewide.


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4. Eliminate Duplicate Permit/License RequirementsIt was suggested to the Task Force that there are a considerable number of examplesof duplicate permit or license requirements that exist in the state. There are caseswhere multiple state agencies require similar permits/licenses, overlapping federalstandards apply, or where third party professionals are required to certify. For

example, manufactured housing plan reviews are still required even though they mayhave already been approved by an architect. It is recommended that each agencycontinue its regulatory review to identify duplicative permit/license requirements orestablish a mechanism by which the regulatory community can report duplicativerequirements that can then be addressed.

5. Automate All Permit and License ApplicationsSome agencies have paper submission forms for their permit/license applications,some have online forms, and some have a mix. Where budgeting allows, each agencyshould fully automate its permit/license application and review process, e.g. DHEC isexploring such a model at present. This will enhance the usability of each website

and enhance the ability for the regulated communities to follow the review processfor their applications (see #3 above).

6. Increase Frequency of State Register PublicationCurrently, publication of proposed regulations in the State Register occurs on amonthly basis and requires several weeks advance submission by each agency. Giventodays electronic capabilities, the Legislative Council should incorporate electronicversions of the State Register so agencies can streamline their proposed regulationsubmissions and regulated communities can have more frequent updates. Forexample, the Legislative Council should publish the State Register daily in electronicformat and monthly in a hard copy compilation.

7. Strengthen the Small Business Regulatory Review Committee (SBRRC)Raise the profile of the SBRCC ongoing work to help foster better interactionbetween state agencies and the Committee for the benefit of small businesses and theeconomy of the state. The Task Force agrees with the SBRRC in recommending thefollowing:

For issues related to Regulatory Review of proposed or existing regulations, astate agency must respond to a SBRRC inquiry/request within 30 day fromreceipt of the inquiry/request.

As the Committee can ask agencies to examine existing regulations, it canalso request an Economic Impact Statement on any active proposed regulation

from the time that the regulation is proposed, regardless of the publichearing date, until such time as the request is withdrawn.

Consider changing the term Committee to a more proactive name that betterconveys the idea of the permanence with which the Committee exists. Somesuggestions are the Small Business Regulatory Review Commission andtheSmall Business Regulatory Review Board.


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LEGISLATIVE PROCESS RECOMMENDATIONS

1. Reduce Agency Regulatory OverreachA key component of reducing the regulatory obstacles to economic development inSouth Carolina is to ensure that regulations do not exceed statutory authority. At

present, the Office of the Lieutenant Governor has begun a process for comparingeach promulgated regulation with its enabling statutes. That process is designed toidentify regulations which exceed those statutory requirements and return them to thepromulgating agencies for review and revision. The Task Force applauds the work bythe Lieutenant Governor and his staff and suggests further review of that process. Itshould be determined whether that work should remain in the Office of the LieutenantGovernor or, instead, transferred to another committee or group and what lessons canbe learned from that effort to date.

An option for accomplishing the regulation/statute comparison can also be expandingthe role of the Legislative Council, as follows:

Potentially carry these duties out under the authority of SC Code Ann. 2-11-50, which states that the Legislative Council shall make preliminary studiesand recommendations upon proposed legislation. However this occurs whenso requested by committees or members of the General Assembly.

Potentially carry these duties out under the authority of SC Code Ann. 2-11-60, which states that the Legislative Council shall organize and superviseoperation of research, reference and drafting divisions.

If the above 2 citations do not provide appropriate authority for the LegislativeCouncil to take on these duties, this initiative would require a new statutoryprovision.

2. Require Up/Down Votes in the General AssemblyAt present, promulgated regulations that do not receive and Up/Down vote in theGeneral Assembly are automatically deemed approved. It has been reported to theTask Force, and the Task Force agrees, that a process should be put in place by whichevery promulgated regulation receives an Up/Down vote. Task Force Member

Representative Eric Bedingfield has pending legislation in the House (H.3128) whichsuggests a fix for this situation. The Task Force agrees that a resolution is requiredand H.3128 is a reasonable approach that should be encouraged in the GeneralAssembly.

3. Compare with Federal RegulationsAnother example of regulatory overreach that impedes economic development is stateregulations that exceed federal authority. Where appropriate protections exist, theTask Force recommends that the state work to ensure that no S.C. regulation is morestringent than applicable federal authority, unless specific circumstances areidentified to the General Assembly which may prompt other action.


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TASK FORCE EXTENSION RECOMMENDATIONS

To maximize the goals and objectives of Executive Order 2013-2, a series of actionsshould be undertaken to build upon this initial Task Force effort:

explicitly continue the Regulatory Review process; develop a promotional effort to educate the regulated communities on the exis-

tence of the program and encourage wider participation;

monitor the implementation of the initial Task Force recommendations; review the effectiveness of the regulatory changes suggested by the Task Force; identify best practices among other states that are conducting similar programs;

and

highlight other impediments to economic development beyond regulatory bur-dens, such as tax policy, infrastructure, education, etc.

To accomplish the above actions, a number of options could be considered and vetted:

renew the charter of the current Task Force; transform the current Task Force into an SC Regulatory Compliance & Oversight

Commission (RCOC);

empanel a standing committee or Task Force for ongoing regulatory reviews andrecommendations;

broaden the scope of the SBRRC; expand the role of the Lieutenant Governors office in the Regulatory Review

process;

create a Permit Central that would house all current and promulgated regula-tions. This would allow for continuous monitoring of potential regulatory overlapand identifying streamlining opportunities;

create a business forum, both in person and online, for continuous collaborationand sharing of ideas to promote awareness and identify recurring regulatoryissues; and

create a neutral board, functioning like a small claims court, that would reviewregulated community concerns and advocate for resolution in the correspondingstate agencies.


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Per the requirements of Section 1-11-425 of theSouth Carolina Code of Laws, a total of 10 copies ofthis public document were printed by Apexgraphixat a cost of $119.45 or $11.94 per copy.

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