Regulatory Flexibility Act in New Jersey

Author: laurie ehlbeck Date: March 09, 2011

Issue Overview: Small businesses employ the largest percentage of New Jersey's workforce, but the regulatory cost per employee to small firms is approximately 60 percent more than the cost to large firms. In fact, the U.S. Small Business Administration's Office of Advocacy reports that small firms -- with 20 workers or fewer -- spend nearly $7,000 each year, per employee, just to comply with government regulations and mandates. Government overregulation here in New Jersey is a significant barrier to economic growth and good paying jobs.

A package of bills was considered in the Legislature that would revise many rules and regulations that impair New Jersey’s business climate. The bills are based on recommendations from Gov. Chris Christie’s Red Tape Review Group, which said many regulations are redundant or outdated and are meant to streamline burdensome business regulations.
The bills would allow state agencies to change regulations after public comment without scrapping them to start over; extend the time before rules expire from five to 10 years; and give administrative law judges final say in regulatory disputes instead of allowing agency heads to overrule them. The package would also force agencies to determine whether regulations conflict with those of other agencies.
Another pending proposal expands the scope of the New Jersey act dealing with the economic impact of rules on small businesses, requiring a governmental agency to consider the economic impact of a rule or regulation before it is codified. The bill requires an agency to use, when developing rules, the consolidation or simplification of a compliance or reporting requirement for small businesses as an approach to minimize the rule's impact on small business.
Additionally, the bill would establish a process by which a small business that is adversely affected economically or aggrieved by the final agency action to file a petition objecting to the rule.
NFIB Position: NFIB members believe that small business owners deserve a seat at the table when government bureaucrats are developing new regulations. Most small employers do not find out about new regulations until after they take affect. An NFIB study found that 82 percent of small business owners stumble across new rules in their normal course of business. Improving the regulatory process through meaningful small business input will provide New Jersey with a powerful economic development tool that can help regulators and job creators to work together to protect important public policy goals.

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