Small-business bill may have landslide effect, says opponent

TRENTON – The Senate Budget Committee approved S1336, a bill expanding the scope of the N.J. Regulatory Flexibility Act to accommodate small businesses.

The measure, sponsored by state Sens. Paul Sarlo, (D-36), of Wood-Ridge, and Jeff Van Drew, (D-1), of Cape May, requires state agencies to develop streamlined compliance reporting for small businesses. It defines small businesses as those employing fewer than 100 full-time employees or having gross annual sales of less than $6 million.

It allows for a process by which small businesses “adversely affected economically” or “aggrieved by final rule-making action” may file a petition with the agency, objecting to all or part of a rule subject to regulatory flexibility analysis. Petitioners can seek judicial review of a determination on the petition to the Appellate Division of the Superior Court.

Bill Wolfe, director of N.J. Public Employees for Environmental Responsibility, said this could open up a rule challenge bonanza that could inch-by-inch erode the regulatory protections, especially in environmentally sensitive areas.

The bill will have a “significant impact on how rules are currently adopted and enforced,” Wolfe said, persuading state Sen. Linda Greenstein, (D-14), of Plainsboro, to abstain from a committee vote. “It alters the grounds for judicial review significantly,” he said.

Wolfe surmised that “one small error for one particular business enterprise could take down a (state regulation),” and warned that the bill could also cause “federal compliance issues.” He also complained that the bill was fast-tracked through the Assembly without stakeholder input.

Sarlo said cases where one “bad apple out there” could “exploit” the provisions of the bill is no reason to hold it up.

“It’s probably the most pro-small business-owner bill (in the Legislature),” he said in reply to Wolfe’s concerns.

Wolfe responded that a recent State Commission of Investigation report called for increased regulation of crime-riddled industries like garbage and recycling collection. “We have to maintain a regulatory presence,” he told the panel. “I urge you to reconsider.”

Van Drew said the lack of regulatory flexibility gives “lawyered-up” big businesses an unfair edge over small enterprises. “I sit in my Senate office and meet with business people, for real, all the time,” he said, and hears stories about the costs of “duplicative and extremely onerous” regulations on small business. “There are so many costs involved.”

“The real big dogs,” he said, “are lawyered-up and (able) to deal with these issues.” He said the intent of the bill is to “not be so punitive to the average business person.”

The measure passed, 12-0-1, with Greenstein abstaining. Small-business bill may have landslide effect, says opponent