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Singleton, Diegnan & Lagana Bill to Limit Regulations, Help Small Businesses Compete Gains Panel Approval

Legislation sponsored by Assembly Democrats Troy Singleton, Patrick Diegnan and Joseph Lagana to make New Jersey more hospitable to small businesses by increasing regulatory flexibility was advanced by an Assembly panel on Thursday.

“Unnecessary regulation is a huge barrier to success for current small business owners and prospective entrepreneurs across New Jersey,” said Singleton (D-Burlington). “This legislation will maintain standards to protect the health, safety and welfare of New Jersey residents while also helping small business owners put more of their time and energy into increasing profits, not dealing with paperwork.”

The bill (A-4334) would amend the “New Jersey Regulatory Flexibility Act” to require state agencies to simplify certain requirements for businesses with fewer than 100 full-time employees or less than $6 million in annual sales. The legislation would require agencies to consider the following when readopting an expiring rule in order to minimize any adverse economic impact on small businesses:

  • The continued need for the rule;
  • The nature of complaints or comments received from the public concerning the rule;
  • The complexity of the rule;
  • The extent to which the rule overlaps, duplicates, or conflicts with other federal and state rules; and
  • The length of time since the rule has been evaluated or the degree to which technology, economic conditions or other factors have changed in the area affected by the rule.

“New Jersey’s small businesses constitute a critical part of our economy and are fundamental when it comes to job creation,” said Diegnan (D-Middlesex). “Taking away some of the burden imposed on them by uniform regulatory and reporting requirements can help them better allocate their limited resources and be more competitive.”

“Unfortunately, the legal, accounting and consulting costs of meeting certain regulations make it harder for small business owners to compete with the big chains,” said Lagana (D-Bergen/Passaic). “To improve our small business climate, we must acknowledge this and work to level the playing field.”

Under the legislation, a small business that experiences a negative economic impact due to state regulations may file a petition objecting to the rule in question. The bill would: (1) establish a petition process as a prerequisite for a court appeal; (2) require the appeal petition to be filed within 90 days after final rule-making action; (3) create an optional summary disposition process based on affidavits; (4) set sanctions for frivolous appeals; and (5) place a restriction on appeals based on compliance with the regulatory flexibility process.

Enacted in 1986, the “New Jersey Regulatory Flexibility Act” aims to minimize any adverse economic impact of proposed rules on small businesses. The law encourages state agencies to consider how regulations regarding compliance or reporting requirements or timetables may affect small businesses; the bill, however, would require such consideration whenever an agency renews a rule.

The bill was advanced by the Assembly Commerce and Economic Development Committee.