Lessons from New Jersey: What Are the Effects of "Administrative Procedures" Regulatory Reform?

Article excerpt

Over the past two decades, the regulatory process in New Jersey has (on the surface) become increasingly complex. State agencies are now required to conduct numerous analyses of their regulations, in the name of greater accountability and transparency. Legislative oversight has been strengthened. Negotiated rulemaking is required in certain circumstances. All of this comes on top of the "notice-and-comment" process that is common to rulemaking in most states and at the federal level.

Have these procedural changes resulted in "better" regulations? Or have they made the regulatory process so cumbersome that agencies have turned to alternative forms of policymaking? Answers to these questions are important for New Jersey lawmakers and agency officials because they could lead to reforms of the state's administrative process. They are important to officials in other states because they can provide guidance about the wisdom of procedural reforms to the regulatory process (particularly in the wake of a new Model States Administrative Procedure Act issued by the National Conference of Commissioners on Uniform State Laws in 2010). Finally, these questions, which have been debated regarding the federal administrative process, have hardly ever been examined at the state level. A better understanding of state rulemaking may facilitate understanding of the federal rulemaking process.

For this article, we examined 1,707 regulations in New Jersey from the time periods of 1998-1999 and 2006-2007. We collected data on a number of variables capturing the administrative process in New Jersey. Those data include the number of comments received from the public, the length of the rule, agency response to comments, and reproposals triggered by substantive changes. We also did a more detailed examination of the impact analyses of the most controversial rules issued in those four years.

We found that agencies are largely immune to the procedural requirements of the regulatory process in New Jersey. Substantive changes to agency proposals as a result of comments are rare. Impact analyses are pro forma at best. Legislative review has not been used by the New Jersey state legislature to invalidate an executive branch regulation since 1996. The volume of rulemaking is largely unchanged over the past decade despite changes in administration and the addition of procedural requirements.

Studies of the Rulemaking Process

The regulatory process has been the subject of much research over the past few decades. This research has appeared in both law reviews and political science journals. Much of the research has focused on the proceduralization of the rulemaking process.

The requirement that agencies follow a notice-and-comment process when engaging in rulemaking can be seen as the oldest of these procedures. Participation by interested parties in rulemaking predates the federal notice-and-comment process adopted in the federal Administrative Procedure Act, passed in 1946. Many states have since adopted their own versions of this law.

At the federal level, many subsequent procedures have been added to the regulatory process. In 1981, President Ronald Reagan issued Executive Order 12291, requiring both that agencies conduct cost-benefit analyses of certain regulations and that the Office of Information and Regulatory Affairs review proposed and final regulations from agencies on behalf of the president prior to their issuance. The Unfunded Mandates Reform Act, passed in 1995, requires consideration of state and local views in regulatory decisions, and the Small Business Regulatory Enforcement Fairness Act requires the Environmental Protection Agency and the Occupational Safety and Health Administration to convene panels of small business representatives to review rules so that they do not unfairly burden small businesses. Many of these procedures have been replicated on the state level, but this varies from state to state. …