Provides that the secretary of state shall provide oversight over the regulatory processes of state agencies, public authorities, and commissions through the review, analysis, and revision of proposed and existing rules.
TITLE OF BILL: An act to amend the executive law, in relation to regulatory flexibility and review of rules
PURPOSE: This legislation is intended to foster jobs, investment and economic activity by ensuring that the state's regulatory requirements avoid undue deleterious economic effects or overly burdensome impacts upon persons and the economy.
SUMMARY OF PROVISIONS: The bill requires the Secretary of State to provide oversight over the regulatory processes of state agencies, public authorities, and commissions through the review, analysis, and revision of proposed and existing rules in a manner that includes actions such as:
o Ensuring that regulations faithfully execute the laws of the state, without unduly burdening the state's economy and regulated parties and without imposing deleterious costs and requirements on the businesses, local governments, and citizens of this state;
o Conducting an assessment or requiring the assessment of the cumulative impact of rules on the state's policies, programs, and regulations in the areas of energy, economic development, and the environment;
o Conducting an assessment or requiring the assessment of the cumulative impact of the state's environmental policies, programs, and regulations on the state's economic development and on the implementation of state's energy policies, programs, and regulations;
o Issuing or requiring the issuance of a regulatory flexibility analysis and assessment of the economic and technological feasibility of compliance with rules, as well as an evaluation, to the fullest extent possible, of the fiscal impact of rules that impose a mandate;
o Giving preference to the least costly and least burdensome regulatory and paperwork requirements;
o Favoring market-oriented solutions and performance standards over a command-and-control approach to implementing regulations; and
o Convening a negotiated rulemaking, wherein interested parties and the involved agency, public authority, or commission, with the assistance of a neutral facilitator, negotiate to reach consensus on the terms of rules.
Additionally, the legislation would require the Secretary of State to make recommendations for simplifying the rulemaking process, and for the amendment or repeal of any existing rule that may be (1) obsolete, (2) harmful to the economy or job growth in the state, (3) excessive in view of state or federal statutes and regulations, (4) economically and/or technologically infeasible, and/or (5) a threat to the reliability of the energy system.
Furthermore, the bill would require state agencies, public authorities, and commissions, which are the subject of the recommendations of the Secretary of State, to propose regulations or revisions to their rules and policies to incorporate those recommendations.
Section 104 of the Executive Law encourages the Secretary of State to cooperate with state entities on the content of rulemakings.
Executive Order 20 of 1995 established the Governor's Office of Regulatory Reform (GORR), which is an office designed to improve the state's regulatory process. Executive Order 20 was continued by Executive Order 2 of 2011; however, the 2011-2012 Executive Budget proposed the elimination of GORR. This legislation would transfer the core elements of GORR's power's and duties to the Secretary of State.
Executive Order 2 of 2008, also continued by Executive Order 2 of 2011, established a State Energy Planning Board and authorized the creation and implementation of a State Energy Plan Among other provisions, this order provided that State Energy Plan include "assessments of state environmental policies and programs, which impact the state's development and implementation of energy policy and programs".
In addition, Executive Order 25 of 2009 was continued by Executive Order 2 of 2011 and established a Regulatory Review and Reform Program. This initiative is intended to evaluate, reform, or repeal, where necessary, rules and paperwork requirements in order to reduce substantially unnecessary burdens, costs, and inefficiencies to improve the state's economy while maintaining appropriate protections for public health, safety, welfare, and the conduct of business.
Section 3-101 of the New York State Energy Law describes state energy policy as having a comprehensive balance among energy, environmental, and economic development components. Also, publications from the fall of 2010 identified the need for a balanced approach to energy, environmental, and economic development issues, as well as noted the need to reduce the high costs of doing business in the state, to have an improved regulatory environment, and to reduce regulatory burdens.
However, the 2009 State Energy Plan contains an Issue Brief, Environmental Impact, and Regulation of Energy Systems, which fails to accomplish the directive for the conduct of the assessment pursuant to Executive Order 2 of 2008. The Issue Brief does not contain an analysis of the cumulative impact of the layering of DEC's regulations on fuel diversity and energy system reliability but, just includes a recitation of the provisions of existing programs.
Additionally, pursuant to Executive Order 25 of 2009, the evaluation of the New York State Department of Environmental Conservation's (DEC) regulations identified only five regulatory areas for additional amendments, despite numerous public comments of the onerous nature of many DEC regulations. In particular, the DEC identified for additional amendment two regulations that already had expired and were replaced with another regulatory requirement. As a result, the DEC failed to focus on its regulations that have unclear compliance pathways.
Through the State Energy Planning Process and the public comment processes of individual rulemakings, many significant concerns have been expressed about the singular and cumulative impacts that arise from the layering of environmental regulations on the state's electricity producers and correspondingly on the diversity of fuels used to manufacture electricity in a reliable and cost-effective manner. Over the course of the last two years, ten regulatory initiatives were adopted without a cumulative impact evaluation, and seventeen more are pending this year. These regulations, plans, and policies place additional constraints on electric generating units, and the cumulative effect of the layering of all these actions impacts New York's energy policy.
The state must focus its attention on the cumulative impacts that the layering of regulatory initiatives causes the electricity industry and other sectors in the state, most importantly the increased cost of and potentially decreased reliable supply of energy for the state's businesses and residents. An important lesson to be learned from the current state economic environment is that state and local governments depend on the tax revenues and jobs created by the private sector. When private industry suffers, the corresponding impact to counties, towns, and schools also is felt through reduced programs, jobs, and services.
A "cumulative impact" evaluation of the layering of regulatory requirements is essential, because the power sector and many other industries in New York are driven by long-term capital planning cycles in excess of ten year horizons. In many cases, the return on investment is calculated over a twenty year or longer period of time. The layering of regulations and/or legislative requirements on top of each other, without the requirement of understanding the full cumulative effects, creates tremendous uncertainty, prevents necessary investment, and makes New York a less desirable investment environment than other states. New York State's businesses and residents must be able to rely on the state to ensure that environmental requirements do not impede a reliable and affordable energy system that can continue to meet their energy needs in a balanced and cost-effective manner.
The 2010 Comprehensive Reliability Plan (CRP), completed by the New York Independent System Operator (NYISO), assessed new environmental regulatory programs for their potential impacts on reliability. These regulatory initiatives, which are being promulgated by both state and federal environmental regulatory agencies, cumulatively will require considerable investment by the owners of New York's existing thermal power plants in order to comply with these new regulatory requirements, if promulgated as currently proposed. The magnitude of
the combined investments required to comply with the four evaluated initiatives alone could lead to multiple unplanned plant retirements.
Furthermore, on October 26, 2010, the North American Electric Reliability Corporation (NERC) released the results of its examination of the possible impacts of four potential U.S. Environmental Protection Agency (EPA) regulations in a special assessment, Potential Resource Adequacy Impacts of U.S. Environmental Regulations. The results of this assessment showed a significant potential impact to reliability, should the four EPA rules be implemented as proposed.
Both the NYISO's CRP and the NERC's assessment of EPA's regulations indicate the need for the state's rulemaking processes to consider comprehensively the cumulative impact of regulations. This cumulative impact evaluation should be a central component of the regulatory impact analyses that form the basis for state rulemakings.
LEGISLATIVE HISTORY: S.3943 (2011-2012)
FISCAL IMPLICATIONS: The provisions of this legislation are consistent with existing requirements for rulemakings and the provisions of Executive Orders and should be able to be accomplished within existing appropriations.
EFFECTIVE DATE: This bill would take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 1108--A 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sens. MAZIARZ, BONACIC, GRIFFO, SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the executive law, in relation to regulatory flexibility and review of rules THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 104 of the executive law is amended to read as follows: S 104. Departmental cooperation ON RULEMAKING, INCREASING REGULATORY FLEXIBILITY AND REDUCING REGULATORY BURDENS. 1. IT IS DECLARED TO BE THE POLICY OF THIS STATE TO PROTECT AND ENCOURAGE JOBS, INVESTMENT AND ECONOMIC ACTIVITY AND TO PROMOTE THE PUBLIC HEALTH, SAFETY AND WELFARE BY ADMINISTERING ALL REGULATORY REQUIREMENTS IMPOSED BY THE STATE IN A FAIR AND REASONABLE MANNER DESIGNED TO AVOID UNDUE DELETERIOUS ECONOMIC EFFECTS OR OVERLY BURDENSOME IMPACTS OF RULES UPON PERSONS AND THE ECON- OMY. 2. The secretary of state may advise with the several departments, boards, bureaus, officers, authorities, commissions and other agencies of the state which are authorized by statute to issue codes, rules or regulations, to the end that the same may, so far as possible, be uniform in style and form, be properly numbered and captioned and be free from matter which is obsolete. 3. THE SECRETARY OF STATE SHALL PROVIDE OVERSIGHT OVER THE REGULATORY PROCESSES OF STATE AGENCIES, PUBLIC AUTHORITIES, AND COMMISSIONS THROUGH THE REVIEW, ANALYSIS, AND REVISION OF PROPOSED AND EXISTING RULES IN A MANNER THAT INCLUDES, BUT IS NOT LIMITED TO, THE FOLLOWING ACTIONS: A. ENSURING THAT REGULATIONS FAITHFULLY EXECUTE THE LAWS OF THE STATE WITHOUT UNDULY BURDENING THE STATE'S ECONOMY AND REGULATED PARTIES ANDEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02260-03-3 S. 1108--A 2
WITHOUT IMPOSING DELETERIOUS COSTS AND REQUIREMENTS ON THE BUSINESSES, LOCAL GOVERNMENTS AND CITIZENS OF THIS STATE; B. CONDUCTING AN ASSESSMENT OR REQUIRING THE ASSESSMENT OF THE CUMULA- TIVE IMPACT OF RULES ON THE STATE'S POLICIES, PROGRAMS AND REGULATIONS IN THE AREAS OF ENERGY, ECONOMIC DEVELOPMENT, AND THE ENVIRONMENT; C. CONDUCTING AN ASSESSMENT OR REQUIRING THE ASSESSMENT OF THE CUMULA- TIVE IMPACT OF THE STATE'S ENVIRONMENTAL POLICIES, PROGRAMS, AND REGU- LATIONS ON THE STATE'S ECONOMIC DEVELOPMENT AND ON THE IMPLEMENTATION OF THE STATE'S ENERGY POLICIES, PROGRAMS AND REGULATIONS; D. REQUIRING THE PREPARATION OF A COST-BENEFIT ANALYSIS, A RISK ASSESSMENT, AND AN ANALYSIS OF THE EFFECT OF RULES ON THE CREATION AND RETENTION OF JOBS IN THE STATE; E. ISSUING OR REQUIRING THE ISSUANCE OF A REGULATORY FLEXIBILITY ANAL- YSIS AND ASSESSMENT OF THE ECONOMIC AND TECHNOLOGICAL FEASIBILITY OF COMPLIANCE WITH RULES, AS WELL AS AN EVALUATION TO THE FULLEST EXTENT POSSIBLE OF THE FISCAL IMPACT OF RULES THAT IMPOSE A MANDATE; F. PRESCRIBING METHODOLOGIES OR REQUIREMENTS THAT ALLOW REGULATED PARTIES FLEXIBILITY AND THAT ENCOURAGE INNOVATION IN MEETING THE LEGIS- LATIVE OR ADMINISTRATIVE REQUIREMENTS AND OBJECTIVES UNDERLYING RULES; G. GIVING PREFERENCE TO THE LEAST COSTLY AND LEAST BURDENSOME REGULA- TORY AND PAPERWORK REQUIREMENTS NEEDED TO ACCOMPLISH THE LEGISLATIVE AND ADMINISTRATIVE OBJECTIVES UNDERLYING THE RULES; H. FAVORING MARKET-ORIENTED SOLUTIONS AND PERFORMANCE STANDARDS OVER A COMMAND-AND-CONTROL APPROACH TO IMPLEMENTING REGULATIONS; AND I. CONVENING A NEGOTIATED RULEMAKING, WHEREIN INTERESTED PARTIES AND THE INVOLVED AGENCY, PUBLIC AUTHORITY, OR COMMISSION, WITH THE ASSIST- ANCE OF A NEUTRAL FACILITATOR, NEGOTIATE TO REACH CONSENSUS ON THE TERMS OF RULES. 4. THE SECRETARY OF STATE ANNUALLY SHALL PUBLISH ON ITS WEBSITE AND SUBMIT TO THE GOVERNOR, THE DIRECTOR OF STATE OPERATIONS, THE DIRECTOR OF THE DIVISION OF THE BUDGET, INVOLVED STATE AGENCIES, PUBLIC AUTHORI- TIES, AND/OR COMMISSIONS, THE SPEAKER OF THE ASSEMBLY, THE MINORITY LEADER OF THE ASSEMBLY, THE TEMPORARY PRESIDENT OF THE SENATE, THE MINORITY LEADER OF THE SENATE, THE CHAIR OF THE ASSEMBLY OVERSIGHT, ANALYSIS AND INVESTIGATIONS COMMITTEE, THE RANKING MEMBER OF THE ASSEM- BLY OVERSIGHT, ANALYSIS AND INVESTIGATIONS COMMITTEE, THE CHAIR OF THE SENATE INVESTIGATIONS AND GOVERNMENT OPERATIONS COMMITTEE, AND THE RANK- ING MINORITY MEMBER OF THE SENATE INVESTIGATIONS AND GOVERNMENT OPER- ATIONS COMMITTEE A REPORT WITH RECOMMENDATIONS, REGARDING: A. THE AMENDMENT OR REPEAL OF ANY EXISTING RULE WHICH MAY BE (I) OBSO- LETE, (II) HARMFUL TO THE ECONOMY OR JOB GROWTH IN THE STATE, (III) EXCESSIVE IN VIEW OF STATE OR FEDERAL STATUTES AND REGULATIONS, (IV) ECONOMICALLY AND/OR TECHNOLOGICALLY INFEASIBLE, AND/OR (V) A THREAT TO THE RELIABILITY OF THE ENERGY SYSTEM; AND B. THE SIMPLIFICATION OF REGULATIONS AND THE REGULATORY PROCESSES. 5. EACH STATE AGENCY, PUBLIC AUTHORITY, OR COMMISSION, WHICH IS THE SUBJECT OF THE ANNUAL REPORT REQUIRED BY SUBDIVISION FOUR OF THIS SECTION, SHALL PROPOSE REGULATIONS OR REVISIONS TO ITS RULES AND POLI- CIES TO INCORPORATE THE FINDINGS AND RECOMMENDATIONS OF THE REPORT REQUIRED BY SUCH SUBDIVISION. S 2. This act shall take effect immediately.