The bill would require publicized cost-benefit analyses of regulations. Critics liken it to the federal DOGE effort to cut costs. (Photo by Hal Brown for New Jersey Monitor)
A Senate panel advanced legislation this week that would add new steps for state agencies enacting regulations and would grant immense power to individuals seeking to block the readoption of expiring rules.
The Senate’s state government committee on Monday unanimously approved a bill that would require cost-benefit analyses of all proposed regulations, a proposed move that elicited cheers from the business community and criticism from environmentalists and others.
“This is not a pro-business bill. It’s not an anti-environment bill. This is a good government bill. This is about broadening the process so that as much information is brought to the regulators as possible before a rule is put out there so we have the best possible result,” said Ray Cantor, deputy chief government affairs officer for the New Jersey Business and Industry Association.
The bill would create a 12-member commission staffed mostly by a governor’s cabinet members and task it with reviewing all regulations and certain executive orders issued in the state to see whether their costs outweigh their benefits.
If the panel finds a regulation or executive order would burden state businesses, workers, or local governments, the bill requires it to recommend how the policy ought to be changed or whether it should be repealed.
The commission would be required to hold its public comment process parallel and independent of the process agencies are already required to follow when proposing and enacting new regulations.
Opponents said they fear the bill, called S4373 and sponsored by Senate President Nicholas Scutari (D-Union), does too little to require the commission to consider the benefits of some rules. They cautioned that the cost-benefit analysis might exclude economic losses averted by, for example, stricter flood rules.
“No serious economist would ever evaluate only one side of the ledger, but S4373 forces state agencies to focus on costs rather than benefits,” said Lindsey Kayman, membership chair of the New Jersey Environmental Lobby.
Other critics likened it to the Department of Government Efficiency, a federal cost-cutting program once headed by Elon Musk that made broad federal cuts but failed to produce meaningful savings.
The commission’s recommendations would be non-binding and have no force of law, meaning a governor or administrative agency could ignore them.
The Senate committee’s vote came as regulators weigh two major rules proposals that have drawn opposition from business groups.
One set to be adopted in January would place new requirements on construction in Jersey Shore areas and expand the state’s flood plains, among other things. The other would enshrine in regulation the Department of Labor’s interpretation of a test to measure whether a worker is an independent contractor or an employee entitled to benefits.
The bill advanced Monday would give immense power to a single person to blunt existing regulations that are set to expire, including people who live outside of New Jersey.
Existing law allows state agencies to extend expiring regulations for up to seven years. The bill would require agencies to take public comment on those extensions, and a single comment in opposition would force regulators to restart the rulemaking process anew. That process can take a year or more.
“What we’re going to have is a government that, instead of becoming more efficient, becomes less efficient, becomes less able to enact the mandates that have been set out by this Legislature,” said Peter Chen, a senior policy analyst at New Jersey Policy Perspective.
Chen added that another provision requiring agencies to use the “best available science” could open the door to lawsuits by litigants who disagree on what science is best.
Proponents said the bill could give new means to oppose regulations.
“Unless an impacted entity is going to challenge a rule or regulation, agencies are free to just dismiss comments, not respond, and not be robust about them,” said Nicholas Kikis, vice president of legislative and regulatory affairs at the New Jersey Apartment Association. “So, this really puts more teeth in ensuring the process is followed.”
Under existing law that the bill would not change, the governor can, with the recommendation of one of their cabinet heads, extend expiring regulations indefinitely.
Other changes would allow agencies to make substantial changes to regulations when adopting them if the changes “are a logical outgrowth” of the proposed regulation. Presently, state law requires another period of public comment for proposed regulations that see major changes.
The bill, which has no Assembly companion, would also require state agencies to annually report how quickly they process permit applications, among some other things.
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