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ONE HUNDRED FIFTH CONGRESS

Congress of the United States

DAN SURTON, WOM

CHAMAN
NENIAMIN A GILMAN, NEW YORK
JOCUS MASTERT, UNOIS
CONSTANCE A MORELLA, MARYLANO
CHRISTOPHER SAYS CONNECTICUT
STEVEN SCHIFF NEW MEXICO
CASTOPHEA COX, CALIFORNIA
LA NOS-LENTINEN FLORIDA
OMM MCHUOM, NEW YORK
STENEN MORN, CALFOMA
OWL MICA FLORIDA
THOMAS M DAVIS M, WAO
DAVOM MCINTOSM NOWA
MANCE SOVOER, NOU
JOR SCARBOROUGH, FLORIDA
JON SHADEGG, ARIZONA
STEVEC LATOURETTE OMO
MARSHAL MARK SAMORO. SOUTH CAROLINA
ONE SUNUNU, NEW MAMPSMIRE
PETE SESSIONS, TEXAS
ME PAPPAS, NEW ERSEY
WINCE SNOWBARGER, KANSAS
TOMA, GEOROLA
ROI PORTMAN, OHIO

KEMYA WAIMAN. CALIFORNIA

MAKINO MINORITY MEMOEN
TOM LANTOS, CALIFORNIA
KOB MOE. WEST VIRGINIA
MORROWENS. NEW YORK
EDOUMIS TOWNS NEW YORK
PAU E KORSI, PENNSY VNA
GAYA CONOT. CAUFORM
CAROLYN MALONEY, NEW YORK
THOMAS BARRETT, WISCONO
ELEANOR HOLMES NORTON

house of Representatives

DISTINCT OF COLUNDU
CHACA FATTAN, PENNSYLVANIA
ELLIAM E CUMMINGS, MAAILMO
DENAS KUCNICH. OMO
ROON CEVICH ULINOIS
DANNY K. DAVIS. UNOUS
OF TIERNEY. MASSACHUSETTS

TANER TEXAS
THOMAS H ALLEN. MAINE
MWOLDE FORO, TENNESSEE

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

2157 RAYBURN HOUSE OFFICE BUILDING

WASHINGTON, DC 20515-6143

MOTY (202) 225-5074
MONTY (202) 225 4051

(202) 225 4042

DERWO SANDERS, VERMONT
NOERENDENT

March 5, 1998

Via Hand Delivery
David McIntosh
Chairman
Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs
Committee on Government Reform
B377 Rayburn HOB
Washington, D.C. 20515-6143

Dear Chairman McIntosh:

Pursuant to House rule XI, clause 2G)(1), we are writing to request a separate day of hearings to allow with selected by the minority to testify on the subject of today's hearing, “the Small Business Paperwork Reduction Act Amendments of 1998.”

The minority would like to invite Administration officials from the federal Occupational Safety and Health Administration, Department of Transportation, Food and Drug Administration, Environmental Protection Agency, Securities and Exchange Commission, and other relevant federal agencies.

Before providing their testimony, the Administration will need some time to review the bill which was introduced only two days ago. However, in order to take advantage of the Administration's comments, this hearing should be scheduled before the Subcommittee marks up the legislation.

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ence.

Mr. SESSIONS. Mr. Kucinich, do you have any opening statement?

Mr. KUCINICH. Yes, I do, Mr. Chairman. I know that Chairman McIntosh will be joining us, and I want to thank you for your pres

And I also recognize the presence of Mr. Tierney, our new ranking member. I look forward to working with you on this subcommittee. And I congratulate you. This is an extremely important subcommittee, whose work has tremendous implications for the American people. And I know that you are going to be an outstanding member of the subcommittee in the role

of ranking member. Mr. Chairman, I would like to thank you, and I would like to thank Chairman McIntosh for calling this hearing today on an important topic, the continued reduction of paperwork requirements on small businesses.

Over the past month, we have had the opportunity to work together to prepare truly bipartisan legislation that would help small businesses and Government agencies to continue to streamline their paperwork requirements. This will be a constructive give and take process that will show what Congress can do when they sit down and cooperate on issues important to the jobs and income of the American people.

This hearing takes the process on step forward. And I commend Chairman McIntosh for his foresight. Today, we will be talking about H.R. 3310, the Small Business Paperwork Reduction Act Amendments of 1998. This bill has a dual purpose. First, to help small businesses more easily comply with Federal paperwork requirements. And second, to buildupon the progress that Federal agencies have already made in streamlining and consolidating the paperwork.

Since the passage of the Paperwork Reduction Act of 1995, Federal agencies have launched a number of programs to reduce the paperwork burden of small businesses. In accordance with the Vice President's reinvention of government initiative, agencies have made sincere efforts to streamline their operations and improve their services to the public, while saving tax dollars in the process. We appreciate these efforts, and ask all Federal agencies to move full speed ahead.

Some aspects of the legislation are relatively simple. By mandating a single point of contact in agencies, small businesses will know exactly who to call with paperwork questions. By requiring OMB to publish a list of all paperwork requirements, small business owners will have a central source of information to rely upon.

And having read the written testimonies of Mr. Saas and Mr. Smith, I believe that the bill should be modified to require the OMB to publish paperwork information on the Internet with descriptions in plain English, and the material broken down by industry sector or SIC code.

Other aspects of the legislation are more challenging. This bill would give the heads of Federal agencies the ability to waive the imposition of a fine on small businesses that have first time violations in their paperwork filings.

I would like to stress, and this is a very important point for every member of the committee and the public to be aware of, that this penalty relates only to civil fines, not of a criminal nature. We have made sure to include language that seeks to protect the health and safety of the public.

If the head of an agency discovers a first time paperwork violation that presents an imminent danger to the public health and safety, the business must correct that problem within 24 hours in order to avoid a fine. Even if this is done, the agency has the discretion to impose the fine if the violation is serious.

We have been consulting with Federal agencies and the small business community on these provisions. And everyone agrees that the health and safety of the public is paramount. I fully expect that this provision will go through more revisions in the weeks ahead. I am committed to that process.

Finally, Mr. Chairman, it gives me great pleasure to see two of my fellow Clevelanders in our hearing today. Bill Saas is the president of a blue collar manufacturing company called Taskem, Inc. It provides chemicals to the metal finishing industry. Every day, Bill sees firsthand how Federal paperwork when it is badly planned and unnecessary draws time and energy away from small business operators.

Robert Smith, who is president of Spero-Smith Investment Advisors, Inc., a white collar consulting firm that works with a wide variety of firms.

Both of these small business owners bring a wealth of experience to our deliberations, and I welcome them at this time, and I look forward to hearing their insights.

And I thank you very much, Mr. Chairman. I also want to thank the staff of Congressman McIntosh, and my staff, and the committee staff for the input that they have had in this process. And as this is evolving, that we have the input of agencies, so that we can make a better bill.

Thank you very much.
Mr. SESSIONS. Thank you so much, Mr. Kucinich.

I would like to, if I can, just give a little bit of information that would provide those of you who are here--and by the way, I have got a group of some 11 students from Dallas, TX who were here visiting me in Washington, DC, today. For their background, what I would like to do is let them know that what we are talking about is the Small Business Paperwork_Reduction Act and its amendments, which was introduced on Tuesday by Chairman McIntosh and co-joined by co-sponsors Kucinich, myself, and others.

In particular, what we are going to talk about today is the Paperwork Reduction Act that Congress has been working with OMB, the Office of Management and Budget, on the Paperwork Reduction Act, and a goal that was established to reduce that by 25 percent.

We have received information that shows that the goal for 1996 of a 10 percent reduction was not achieved. But rather, it was at a 2.6 percent reduction. And it is estimated that we reduced that paperwork 1.8 percent in 1997. So obviously, you can see that we have a long way to go, and that is what this hearing is expected to achieve today, to see how we can continue in this process toward reducing paperwork on small businesses by 25 percent.

At this time, I would now like to call up our witnesses. That will include Mr. Gary Roberts, president of Roberts Pipeline, which is a small company which installs pipelines in Sulphur Springs, IN. Second will be William Saas, president of Taskem, Inc., a small chemical processing company in Brooklyn Heights, OH. Victoria Nelson, owner of Jarnel Iron and Forge from Hagerstown, MD. Teresa Gearhart, owner of Mhart Express, Inc., a small trucking company in Hope, IN. And Mr. Robert C. Smith, president of SperoSmith Investment Advisors, Inc., from Cleveland, OH.

I would now like to ask each of these panelists to be sworn. If you would please raise your right hands. And if you would answer in the affirmative, if you agree.

(Witnesses sworn.)

Mr. SESSIONS. If you would please note that each of the witnesses answered in the affirmative.

Each of the testimonies, we are asking that they be 5 minutes. That way, we can get through the panel, and then we will allow each Member to ask questions of each panel member.

I would ask Mr. Gary Roberts, if you would please lead the testimony today. Mr. Roberts.

STATEMENTS OF GARY ROBERTS, PRESIDENT, ROBERTS PIPE

LINE, SULPHUR SPRINGS, IN; WILLIAM SAAS, PRESIDENT, TASKEM, INC., BROOKLYN HEIGHTS, OH; TERESA GEARHART, OWNER, MHART EXPRESS, INC., HOPE, IN; VICTORIA NELSON, OWNER, JARNEL IRON AND FORGE, HAGERSTOWN, MD; AND ROBERT C. SMITH, PRESIDENT, SPERO-SMITH INVESTMENT ADVISORS, INC., CLEVELAND, OH

Mr. ROBERTS. Mr. Chairman and members of the subcommittee, I am here today to address the members of this subcommittee in my role as an American small business owner. My name is Gary Roberts. Along with my father, Leland Roberts, I am a co-owner of Leland Roberts Construction Co. Our business is in Sulphur Springs, IN, a small community of approximately 300 people, which is located in east central Indiana.

Roberts Construction was started 34 years ago by my father. At that time, the number of employees totaled one, my father. Over the years, Roberts Construction has grown. Today it employs approximately 75 employees during the peak construction season. Its main business is water, gas, and sewer line construction.

As a teenager, I worked for my father. Later, I worked with my father in building the company. There is not a job performed today that neither my father nor I have not done. On this very day, my 24 year old son, Jason, is doing the same work as other employees.

As you can tell, Roberts is a small family business. My wife, Teresa, also works full-time with the company. She could, probably better than I, tell you how paperwork affects a small business.

I would like to share with you a problem our company is currently facing. On May 20, 1997, the Indiana Department of Labor, Occupational Safety and Health Administration, inspected our work site in Matthews, IN. Approximately 2 months later, our company received a 12-page document entitled Safety Order and Notification of Penalty. Until then, our company had only been cited by IOSHA on one prior occasion. That citation was later dismissed without payment of any penalty. Roberts Construction has a good record when it comes to employee health and safety. Our Workers'

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