CCSNJ Testimony to Red Tape Review Commission on Regulatory Reform
Wednesday, March 03, 2010

MEMORANDUM

TO: Lieutenant Governor Kim Guadagno and Members of the Red Tape Review Commission

FROM: Christina M. Genovese, Director, Government Relations

RE: Reforming the Administrative Rulemaking Process in New Jersey

DATE: March 2, 2010

The Chamber of Commerce Southern New Jersey appreciates the opportunity to comment on reforming the administrative rulemaking process in New Jersey in an effort to make it more transparent, predictable, and fair.

With 125 rulemaking agencies in New Jersey, the Chamber believes strongly that the regulatory process needs to be simplified. The State’s rulemaking process is consistently sited by the business community as being difficult to maneuver and hostile to growth and economic development. Confusion in the regulatory process and how certain rules are established and enacted can be overwhelming and expensive for business, especially small business.

The Chamber recommends making the stakeholder process more accessible and fair. Often times, businesses are frustrated by the rule proposal procedure, which offers regulations for public comment with little or no advance input from stakeholders. Although there is an opportunity for stakeholders to comment and offer suggestions during the 60 day public comment period, these suggestions are rarely enacted. This is because once the regulations are amended, the entire process must start over again. This procedure is not conducive to engaging stakeholders in rulemaking; nor does it allow regulators to be open-minded to the comments and suggestions of the affected parties.

Last legislative session, the Chamber was disappointed that Governor Corzine pocket vetoed S-1793 (Sarlo, Girgenti) / A-832 (Chivukula, Schaer, Love), which would expand the scope of the New Jersey Regulatory Flexibility Act dealing with the impact of rules on small businesses. This bill required state agencies to use the consolidation or simplification of compliance or reporting as an approach to minimize the rule’s impact on small businesses. By giving small businesses the ability to file a petition with state agencies objecting to all or part of a regulation, the true impact of new regulations can be assessed more thoroughly and accurately. The Chamber encourages the Legislature to act on the most recent version of this bill, S-1336 (Sarlo/Van Drew) / A-2129 (Chivukula/McHose) in the near future.

Additionally, the business community finds that agencies adopt internal policies or interpretations of regulations that are often times not effectively communicated to stakeholders. The Chamber believes that there needs to be a formal process in place that advises stakeholders in advance of an internal change in policy or enforcement.

An example of this can be found within the New Jersey Department of Labor & Workforce Development. For decades, the Department has followed the federal practice (and the practice of many neighboring states), which permits rounding of time clock records of employees. Last year, without any advance notice, explanation, or formal regulatory change, the Department abruptly changed its enforcement practice to require that employers keep time records "to the minute," and to prohibit rounding of any kind unless it was to an employee's benefit. This led to a number of businesses and hospitals being sanctioned by the Department for what is an inappropriate interpretation of state labor law and regulations. As such, the Chamber believes there needs to be a formal process put in place to communicate internal policy changes. This will give stakeholders an opportunity to respond and be proactive in dealing with newly adopted internal practices, including advising clients so they have an opportunity to comply with the changed requirement.

With businesses struggling to survive in this economy, it is imperative that state agencies explore alternative regulatory approaches in order to minimize the economic impact of rules and regulations on employers, while still satisfying the regulatory objective. Thank you for the opportunity to offer our recommendations and we look forward to continuing to work with you in the future.