Relates to review of existing rules

Summary of provisions

Bill § 1 amends section 202-d of the State Administrative Procedure Act (SAPA) to update the reference to the Department of Financial Services, which has replaced the former Departments of Banking and Insurance.

Bill §2 amends SAPA section 207(1) to provide that the initial review period for a rule, currently fixed at 5 years for every rule, could be accelerated by the agency so that the impact of new regulatory provisions could be evaluated on a more timely and appropriate schedule. The maximum period for initial review would be after 5 years, A rule that imposes and adverse impact or paperwork or compliance requirements on small businesses, local governments or rural areas, the default peri- od for initial review would be 2 years, but the agency could propose a different initial period for such review and invite comment on its justification.

Bill §3 amends SAPA §207(2) to provide that an agency that publishes its regulatory agenda on its website shall also include the list of rules that must be reviewed in the current year. Any listed rule that originally required the preparation of a regulatory flexibility analysis and/or a rural area flexibility analysis shall be identified and the agency shall provide outreach as appropriate to potentially affected small businesses, local governments and public and private interests in rural areas that the rule is being reviewed. Such outreach may include solicitation of input through online or other electronic means or through the activities listed in SAP A §202-b(6) or §202-bb(7).

Bill §4 adds a new SAPP §207(6) providing that, beginning with the first issue in September, the Secretary of State will publish in the State Register on a weekly basis a delinquent list of agencies that have not commenced a required review of rules for that year.

Bill §5 continues previously-enacted statutory provisions to authorize electronic publication of regulatory agendas for another four years.

Summary of amendments

The bill is amended to (1) require a regulatory agenda to include an email address for contacting the designated agency representative (this provision is currently optional); (2) clarify that if an agency selects an initial review period for a rule impacting small businesses or local governments different that the default period (two years after rule adoption), such period cannot exceed the otherwise-applicable five-year limit; (3) clarify that an agency will be included on the delinquent list if it fails to submit a list of rules that must be reviewed pursu- ant to §207; and (4) make other technical and clarifying changes.

Existing law

The current timeframe for initial review of newly-adopted regulatory provisions is after 5 years. There are currently no requirements in the regulatory agenda process for online posting of 5-year review lists, or for outreach to affected small businesses, local governments, or rural interests to promote their awareness of participation in this process, and agencies that do not comply with SAPA §207 are not publicly identi- fied. In addition, the bill continues present law relating to electronic publication of regulatory agendas for another four years.

Justification

One common complaint about rulemaking is that, once adopted, regulations tend to remain on the books forever without any further review. In order to prevent the rules on its books from becoming stale and outdated, New York State enacted legislation in 1996 to establish a "5-year review" cycle for substantive rules. Agencies are required to list the rules they adopted five years ago, and thereafter to re-review these rules every five years, stating their intentions to modify them or their justification for retaining them unchanged. The public is invited to comment on the continued need for the rules.

Over time, some shortcomings in the SAPA .207 process have become appar- ent. For example, the mandatory timeframe for an initial review of rules that adversely impact small businesses is, in many cases, too untimely. If the costs and burdens of a new rule exceed the agency's estimates, many small businesses may not survive until the rule is initially reviewed five years down the road. This bill recognizes that accelerated review may be appropriate for specific rules and makes provisions for scheduling initial reviews for periods of less than 5 years.

For rules impacting small businesses, local governments or rural enti- ties, the default period for initial review would be after 2 years (which could be varied by the agency with justification), and agencies would be required to engage in outreach efforts to encourage partic- ipation on the review by such affected parties. (similar outreach provisions were added to SAPA §202-d, providing for publication of prospective regulatory agendas, in 2008). The default period would remain 5 years for other rules, but could also be adjusted by the agency

based on the specifics for the rule. This approach will allow New York agencies to commence an initial review in less than 5 years, as is the practice in other states like Florida and Hawaii (2 years) and Massachu- setts (4 years), while ending the requirement for a "one-size-fits-all" schedule.

In recent years there have been indications that agencies don't always pay careful attention to the rule review process. For example, in 2008 the Assembly and Senate Co-Chairs of the Administrative Regulations Review Commission wrote to three agencies concerning deficiencies in their efforts. One agency announced that it was retaining it rules from 2003 - without first soliciting any public comment. A second agency reviewed its rules from 2007, instead of 2003. A third reviewed its 2003 adoptions but failed to review the rules it had originally adopted in 1998, including several highly significant rules. More recently, one agency in 2011 has finally commenced reviews of existing rules that it should have conducted in 2008, 2009 and 2010. The publication of a list of agencies that - after 2/3 of the year has passed - still have not complied with §207 should provide an incentive for such agencies to commence their required reviews.

This bill is needed to make SAPA review process more visible and effec- tive, particularly to those parties that can he significantly banned by the continuation of burdensome rules. The result should be improved attention to ensuring that New York State's businesses and local govern- ments are not held back by yesterday's regulations.

The bill also extends the provisions of SAPA authorizing the publication of a continuously updated online regulatory agenda for another four years. This will enable the State to provide more timely information and effective outreach on rules under development as well as those under review.

Legislative history

New bill.

Local fiscal implications

Savings will ultimately result from more effective efforts to eliminate unneeded regulatory mandates on businesses and local governments in the state.

Effective date

First day of January after becoming law, provided that the provisions of SAPA §202-d are continued only until December 31, 2016.