SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 2345

STATE OF NEW JERSEY

DATED:  DECEMBER 3, 2018

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 2345.

      This bill revises the “New Jersey Regulatory Flexibility Act” to expand the scope of the law in order to afford regulatory relief to small businesses, which are businesses that employ fewer than 100 full-time employees or have gross annual sales of less than $6 million.

      Specifically, the bill requires an agency, when developing rules, to consolidate or simplify compliance or reporting requirements for small businesses in order to minimize the regulatory burden on small businesses, so long as the public health, safety, or welfare is not endangered.

      An agency that seeks to readopt an expiring rule is required to consider a series of factors, as part of the regulatory flexibility analysis, to ensure that any adverse economic impact on small business is minimized in a manner consistent with the objective(s) of the statutes.  These factors are: (1) the continued need for the rule; (2) the nature of complaints and comments from the public; (3) the complexity of the rule; (4) the extent to which the rule overlaps, duplicates, or conflicts with federal and State rules; and (5) the length of time since the rule has been evaluated and the degree to which technological and economic conditions have changed in the area affected by the rule.  This review is to be conducted by the agency at the time a rule is proposed for readoption (generally every seven years), to ensure that the rule continues to have a minimal impact on small businesses.

      The bill also establishes a process by which a small business that is adversely economically affected or aggrieved by final rule-making action may file a petition with the agency objecting to all or a part of a rule subject to regulatory flexibility analysis.  For cases in which the agency rejects the petition, the process addresses concerns about frivolous appeals without creating unprecedented procedures with respect to the courts.  Specifically, the bill: (1) establishes a petition process as a prerequisite for a court appeal; (2) requires the appeal petition to be filed within 90 days after final rule-making action; (3) creates an optional summary disposition process based on affidavits; (4) sets sanctions for frivolous appeals; and (5) places a restriction on appeals based on compliance with the regulatory flexibility process.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) notes that the bill may result in an indeterminate increase, likely small in amount, in State expenditures by the Appellate Division of the Superior Court through the establishment of a new appeals process; however, the OLS does not have enough information to project the extent to which small businesses will choose to file an appeal.

      The bill may also result in increased State revenue from recoveries of legal and other expenses caused by appeals found to be false or frivolous in nature.