Senate Passes Package of Business-Friendly Regulatory Reforms

The New York State Senate this week passed a package of legislation to make it less expensive and more efficient to do business in New York. The measures include those that reverse a costly regulatory change that is driving up health care expenses for some employers and employees, require the state to pay businesses in a timely manner, as well as review and reduce outdated regulations that negatively affect New York businesses.

Reducing Health Care Expenses 

A bill (S7104) sponsored by Senator James L. Seward (R-C-I, Oneonta) helps businesses facing significantly higher health care costs as a result of state regulations that took effect earlier this year by redefining what constitutes a “small group employer”. 

Senate Insurance Committee Chairman Seward said, “The federal Affordable Care Act created various unintended consequences that both businesses and consumers continue to run up against. My legislation would help clear up one of those costly regulatory hurdles for mid-sized employers and help them continue to offer affordable health insurance benefits to their workers.”

A small business has historically been defined in New York as an employer with 50 or fewer employees, but the federal Affordable Care Act (ACA) defined “small group” employers as those having 100 or fewer employees. Since New York took the required action to conform its definition of small business with the ACA’s larger number, businesses with 51-100 employees have experienced substantial increases in health care premiums or subscriber costs; higher deductibles and co-pays; fewer available policy choices from insurance carriers or health plans; and narrower in- and out-of-network provider panels. 

This measure would prevent these problems from affecting these businesses by reverting the definition of “small group” in New York’s insurance law back to 1-50 employees. While federal legislation has been enacted allowing states to make such a change in implementing the ACA, each state individually must do so. Only New York, California, Colorado, and Vermont have not yet adopted the change. 

Requiring The State to Promptly Pay Businesses 

  The Senate today gave final passage to legislation (S6387B), sponsored by Senator Jack Martins (R-C-I, Mineola), that would require state agencies to pay small businesses within 15 days of receipt of an invoice and would allow state agencies one year to implement these changes to their prompt payment system.

Senator Martins said, “The state should pay its bills like everyone else. Small businesses can’t grow and develop if they are not timely paid for the goods and services they provide; making them wait months to get paid causes them serious harm and undercuts all the effort we’ve put into economic development over the last several years. This is a commonsense reform that will help small businesses all across the state.”

Reforming the Regulatory Process 

Legislation (S401A) sponsored by Senator Patrick Gallivan (R-C-I, Elma) would establish a Task Force for the Review of the State Administrative Procedure Act (SAPA) to help reduce the state’s regulatory burden on businesses. The Task Force would conduct a comprehensive review of SAPA by examining, evaluating, and making recommendations improving the efficiency of the rulemaking process, as well as ensuring the establishment of consistent, uniform rules.

Another bill (S406A) sponsored by Senator Gallivan helps regulated businesses by reducing duplicative rules and keeps them up-to-date. It would broaden considerations required during the state’s review of existing administrative rules and during the creation of new rules. This measure would also amend SAPA to require a five-year review of all existing agency rules – not just the rules promulgated since 1997, as in currently required. As part of the five-year review, this legislation requires an agency to provide additional information regarding the need for a rule. 

Senator Gallivan said, “Rules and regulations are important in protecting public welfare, but they should not be arbitrary or overly burdensome. Over time, regulations can become outdated because of new technology or changing industry standards. This legislation will not only help cut the reams of red tape that hamper small and large business alike, it allows for a consistent and comprehensive review of rules and regulations so that we can reform or eliminate costly, duplicative or out of date requirements.”

A bill (S4033) sponsored by Senator Terrence Murphy (R-C-I, Yorktown) would provide a way for outside parties like businesses to seek a delay in the effective date of proposed agency rules if a flaw is discovered that could negatively impact them. As long as two-thirds of the Administrative Regulations Review Commission approves, a delay of 90 days would give parties a chance to discuss alternatives and correct matters. 

Another measure (S4328A) also sponsored by Senator Murphy would establish the Small Business Negotiated Rule Making Act of 2016 to create negotiated rulemaking in order to provide additional opportunities for small businesses and the public to directly participate in the development of proposed agency regulations. 

Senator Murphy said, “The passage of these bills sends a clear signal that my colleagues in the Senate recognize the need for serious regulatory reform for our state. The burden placed on the business community by the layers of bureaucracy needs to significantly reduced if we are going to elevate New York to the prominence it once held as an economic juggernaut.” 

The bills have been sent to the Assembly, except (S6387B), which will be sent to the Governor.