Requires State agencies, when developing and proposing rules, to utilize approaches that will accomplish objectives of statutory law while minimizing adverse economic impact on municipalities.

A4661

ASSEMBLY, No. 4661

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 10, 2026

Sponsored by:

Assemblywoman� AURA K. DUNN

District 25 (Morris and Passaic)

SYNOPSIS

���� Requires State agencies, when developing and
proposing rules, to utilize approaches that will accomplish objectives of
statutory law while minimizing adverse economic impact on municipalities.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning State mandates on municipalities and
amending P.L.2001, c.342.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 13 of P.L.2001,
c.342 (C.52:14B-25) is amended to read as follows:

���� 13.� a.�� For the purposes of
this section:

���� "State mandate"
means a program, service or activity that is to be performed or implemented by
a local unit for or on behalf of its residents, which results in an added net
cost to the local unit, and which is mandated in any statute enacted by the
Legislature either prior to or after the effective date of
[
this act
]

P.L.2001,
c.342
.� A "state mandated program" shall not include the
following:� any activity pertaining to a statute carrying criminal penalties;
any mandate required by or arising from a court order or judgment; any program
or service which is provided at local option under permissive State laws,
rules, regulations or orders; any program which is required by private, special
or local laws pursuant to Article IV, Section VII, paragraphs 8 and 10 of the
State Constitution; any program required by or arising from an executive order
of the Governor in exercising emergency powers granted by law; or any program
mandated by federal law, rule, regulation or order.

����
[
"Small municipality"
shall mean a municipality that has a limited population or geographic area
according to criteria promulgated by the Director of the Division of Local
Government Services in the Department of Community Affairs.
]

���� b.��� In developing and
proposing a rule for adoption, the agency involved shall utilize approaches
which will accomplish the objectives of applicable statutes while minimizing
any adverse economic impact of the proposed rule on
[
small
]
municipalities. Consistent with
the objectives of applicable statutes, the agency shall utilize such approaches
as:

���� (1)�� The establishment of
differing compliance or reporting requirements or timetables that take into
account the resources available to
[
small
]

municipalities;

���� (2)�� The use of performance
rather than design standards; and

���� (3)�� An exemption from
coverage by the rule, or by any part thereof, for
[
small
]
municipalities so long as the
public health, safety, or general welfare is not endangered, or if an exemption
is not a possibility, the use of alternative methods of implementing the
requirements of the rule.

���� c.���� In proposing a rule for
adoption, the agency involved shall issue a State mandate flexibility analysis
regarding the rule, which shall be included in the notice of a proposed rule as
required by subsection (a) of section 4 of P.L.1968, c.410 (C.52:14B-4).� Each
State mandate flexibility analysis shall contain:

���� (1)�� An estimate of the
number of
[
small
]

municipalities to which the proposed rule will apply;

���� (2)�� A description of the
reporting, record-keeping and other compliance requirements being proposed for
adoption, and the kinds of professional services that a
[
small
]
municipality
is likely to need in order to comply with the requirements;

���� (3)�� An estimate of the
annual cost to a
[
small
]
municipality
of complying with the rule; and

���� (4)�� An indication of how the
rule, as proposed for adoption, is designed to minimize any adverse economic
impact of the proposed rule on
[
small
]

municipalities.

���� d.��� This section shall not
apply to any proposed rule which the agency finds would not impose reporting,
record-keeping, or other compliance requirements on
[
small
]
municipalities.� The agency's
finding and an indication of the basis for its finding shall be included in the
notice of a proposed rule as required by subsection (a) of section 4 of
P.L.1968, c.410 (C.52:14B-4).

���� e.���� In order to avoid
duplicative action, an agency may consider a series of closely related rules as
one rule for the purposes of complying with the requirements of this section.

���� f.���� In complying with the
provisions of this section, an agency may provide either a quantifiable or
numerical description of the effects of a proposed rule or more general
descriptive statements, if quantification is not practicable or reliable.

(cf: P.L.2001, c.342, s.13)

���� 2.��� This act shall take
effect immediately.

STATEMENT

���� This bill would require State
agencies, when developing and proposing a rule for adoption, to utilize
approaches that will accomplish the objectives of statutory law while
minimizing any adverse economic impact of the proposed rule on municipalities.

���� Current law, enacted as part
of P.L.2001, c.342 (the last of a series of "mandate relief" bills
enacted during the 1990�s and the early 2000�s that provided relief from State
mandates on municipalities, counties, and boards of education) requires State
agencies, when developing and proposing a rule for adoption, to utilize
approaches that will accomplish the objectives of statutory law while
minimizing any adverse economic impact of the proposed rule on small
municipalities.

���� This bill would amend
P.L.2001, c.342 to remove the adjective "small" from the law so that
the requirements of the statute would apply to the development and adoption of
rules that would affect
all
municipalities.

���� The sponsor believes that,
given the recent enactment of statutory law restricting the
school district, county, and municipal property tax
levy cap from 4% to 2.0%, municipal budgets will be hard-pressed to fund the
implementation of any State mandate that requires the expenditure of local
funds, and the provisions of this bill will require State government to more
carefully consider the effect of a proposed rule on local budgets, and to
utilize
approaches or methods that will accomplish the objectives of statutory law and
at the same time, minimize any adverse economic impact of the proposed rule on
municipalities.