Relates to consideration of the potential impacts of a proposed rule on small businesses and local governments; requires additional efforts to notify interested small businesses or local governments and/or organizations representing their interests of proposed rules.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7711
SPONSOR: Stern TITLE OF BILL:
An act to amend the state administrative procedure act, in relation to
consideration of the potential impacts of a proposed rule on small
businesses and local governments
PURPOSE OR GENERAL IDEA OF BILL:
This bill would improve compliance with the requirements of § 202-b of
the State Administrative Procedure Act (SAPA) for active solicitation of
participation in a rulemaking by small businesses and local governments
"in addition to publication in the state register and posting on the
agency's website."
SUMMARY OF PROVISIONS:
Section 1: amends subdivisions 2 and 6 of SAPA § 202-b to strengthen and
facilitate agency compliance with the specific additional requirements
for preparation of a regulatory flexibility analysis (RFA), specifically
those related to involving small businesses and local governments early
in the process of rule development. The amendments to subdivision 2
provide that, when an agency considered alternative approaches that
would minimize the costs or burdens of a rule on small businesses or
local governments which were not incorporated into a proposed rule, it
must set forth its reasons for not doing so. In addition, an RFA must
document the agency's consideration of the actions listed in § 202-b(6)
for soliciting participation in the rulemaking and any reasons for not
doing so.
Subdivision 6 is amended to specify additional outreach methods that may
be used to solicit participation, including publicizing a rule under
development in social media or online sites commonly used by small busi-
nesses or local governments or by conducting webinars on the rule.
Section 2: sets the effective date.
JUSTIFICATION:
The State Administrative Procedure Act (SAPA) sets forth the process for
proposing and adopting state agency rules and regulations. SAPA includes
a requirement modeled on Federal law for an agency, when developing a
proposed rule, to consider whether the proposal may have a dispropor-
tionate or adverse impact on small businesses or local governments,
since they may face difficulties in complying with a "one-size-fits-all"
regulatory approach. Small businesses lack many of the resources avail-
able to larger concerns, while local governments can be constrained by
budgets, fiscal years and legal requirements on setting and changing
their policies.
To address such concerns SAPA § 202-b provides for the preparation of a
"regulatory flexibility analysis" (RFA). The process includes informa-
tion gathering and analysis of how any avoidable impacts on these enti-
ties may be minimized. SAPA § 202-b requires that when a rule is
proposed the agency "shall assure it has actively solicited the partic-
ipation of small businesses and local governments in the rule making
through activities in addition to publication in the state register and
posting on the agency's website" and lists several methods by which the
agency can do so. However, agencies frequently prepare RFAs that do not
comply with this requirement. A few of the many examples that appear in
recent RFAs are:
"Small Business and Local Government Participation: There was no
participation from small businesses or local governments in the drafting
of this rule. However, the Department will duly consider any comments
submitted." (May 3, 2023 State Register. p.30)
"7. Small business and local government participation: The Department
will hold public commenting periods for the proposed regulation as a
part of the rulemaking process which will allow for small businesses and
local government to participate in the rulemaking process.
The Department will assess public comments regarding small businesses
and local governments received in the public commenting period of the
proposed regulation." (December 28, 2022 State Register. p.45)
"7. Small business and local government participation: Upon publication
of the Notice of Proposed Rulemaking, NYSERDA will notify small busi-
nesses and local governments about the regulation and the opportunity
for public comment, as well as publish a general notice of the proposed
rulemaking." (September 14, 2022 State Register. p.31)
"7. Small business and local government participation: Interested
parties, including small businesses and local governments, will be given
an opportunity to review and comment on the amendment once it is
published in the State Register and posted on the Department's website."
(April 20, 2022 State Register. p.8)
Without performing any outreach to small businesses or local govern-
ments, agencies all too often conclude without evidence that a proposed
rule "should not have an adverse impact on an affected person that may
be a small business or local government because the amendment uniformly
affects all affected persons." This bill will clarify the responsibil-
ities of regulators to confirm such a finding through the proactive
outreach to small businesses and local governments required by SAPA.
PRIOR LEGISLATIVE HISTORY:
2023-2024: A.7733 - referred to governmental operations
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
State agencies should not experience any new costs as they are already
required to undertake the actions addressed in the legislation. Local
governments may experience cost reductions to the extent that earlier
involvement in rule development can result in the minimization of the
costs and burdens imposed on them. Similarly, small businesses may expe-
rience lower costs and burdens, resulting in more viable and profitable
operations which will benefit the state.
EFFECTIVE DATE:
This act shall take effect on the one hundred twentieth day after it
shall have become a law. Effective immediately, the addition, amendment
and/or repeal of any rule or regulation necessary for the implementation
of this act on its effective date are authorized to be made and
completed on or before such effective date.
STATE OF NEW YORK
________________________________________________________________________
7711
2025-2026 Regular Sessions
IN ASSEMBLY
April 8, 2025
___________
Introduced by M. of A. STERN -- read once and referred to the Committee
on Governmental Operations
AN ACT to amend the state administrative procedure act, in relation to
consideration of the potential impacts of a proposed rule on small
businesses and local governments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivisions 2 and 6 of section 202-b of the state adminis-
2 trative procedure act, as amended by chapter 611 of the laws of 1996,
3 paragraphs (e) and (f) of subdivision 2 as relettered by chapter 16 of
4 the laws of 2020, the opening paragraph and paragraph (b) of subdivision
5 6 as amended by chapter 577 of the laws of 2019, are amended to read as
6 follows:
7 2. In proposing a rule for adoption or in adopting a rule on an emer-
8 gency basis, the agency shall issue a regulatory flexibility analysis
9 regarding the rule being proposed for adoption or the emergency rule
10 being adopted. A copy of such analysis and any finding, and reasons for
11 such finding, pursuant to subdivision three of this section, shall be
12 submitted to the governor, the temporary president of the senate, the
13 speaker of the assembly[, the office of business permits and regulatory
14 assistance] and the administrative regulations review commission at the
15 time such analysis is submitted to the secretary of state for publica-
16 tion and, upon written request, a copy shall be sent to any other
17 person. Each regulatory flexibility analysis shall contain:
18 (a) a description of the types and an estimate of the number of small
19 businesses and local governments to which the rule will apply;
20 (b) a description of (i) the reporting, recordkeeping and other
21 compliance requirements of the rule, and (ii) the kinds of professional
22 services that a small business or local government is likely to need in
23 order to comply with such requirements;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04350-01-5
A. 7711 2
1 (c) an estimate of the initial capital costs and an estimate of the
2 annual cost of complying with the rule, with an indication of any likely
3 variation in such costs for small businesses or local governments of
4 different types and of differing sizes;
5 (d) an assessment of the economic and technological feasibility of
6 compliance with such rule by small businesses and local governments;
7 (e) an indication of how the rule is designed to minimize any compli-
8 ance requirements or any adverse economic impact of such rule on small
9 businesses and local governments, including information regarding wheth-
10 er the approaches suggested in subdivision one of this section or other
11 similar approaches were considered and were incorporated into the rule,
12 or the reason or reasons why any such approaches were considered but
13 were not incorporated into the rule; and
14 (f) a statement indicating how the agency has complied with subdivi-
15 sion six of this section other than publication in the state register
16 and posting on the agency's website or with any other measures the agen-
17 cy is required by law to undertake, and listing or describing the
18 following actions taken or explaining why such action was deemed to be
19 infeasible or unnecessary: (i) any publication or publicization of
20 notices or alerts to small businesses or local governments regarding the
21 rule; (ii) any efforts to directly notify interested small businesses or
22 local governments and/or organizations representing their interests;
23 (iii) any special open conferences or webinars concerning the proposed
24 rule that were conducted for small businesses and local governments
25 affected by the rule; or (iv) any modification to agency procedural
26 rules or other actions undertaken to facilitate the receipt of informa-
27 tion and concerns regarding the rule from affected small businesses or
28 local governments.
29 6. When any rule is proposed for which a regulatory flexibility analy-
30 sis is required, the agency shall assure that it has actively solicited
31 the participation of small businesses and local governments in the rule
32 making through activities in addition to publication in the state regis-
33 ter and posting on the agency's website, such as:
34 (a) the publication of a general notice for the proposed rule making
35 in publications likely to be obtained by small businesses and local
36 governments of the types affected by the proposed rule, and/or publici-
37 zation of the intended rule making by means of any social media site or
38 online resource commonly used by small businesses or local governments
39 affected by the rule;
40 (b) the direct notification of interested small businesses and local
41 governments affected by the proposed rule or organizations representing
42 the interests of such entities;
43 (c) the conduct of special open conferences or webinars concerning the
44 proposed rule for small businesses and local governments affected by the
45 rule; and
46 (d) the adoption or modification of agency procedural rules to reduce
47 the cost or complexity of participation in the rule making by small
48 businesses and local governments.
49 § 2. This act shall take effect on the one hundred twentieth day after
50 it shall have become a law. Effective immediately, the addition, amend-
51 ment and/or repeal of any rule or regulation necessary for the implemen-
52 tation of this act on its effective date are authorized to be
53 made and completed on or before such effective date.
