ment only reduced its paperwork by 1 percent in 1996. It's estimated to have done a little better in 1997. It's up to 14.5 percent, but still fails to meet that 20 percent goal over the 2 years.

The Department of Labor didn't meet the 10 percent goal set in either year. It reduced paperwork by 9.5 percent in 1996, but only an estimated 8 percent in 1997.

Now frankly, I don't think the agencies which have failed to meet their current goals set in law by the Paperwork Reduction Act have a lot of credibility in opposing a measure to strengthen that act. Clearly the paperwork burden, nearly one-third of the regulatory burden or $225 billion a year, is still a problem. It needs to be addressed. Frankly these agencies continue to be part of the problem. Our subcommittee held a hearing last week at which several small business owners spoke about their concerns and frustrations over Government paperwork. Teresa Gearhart, who owns a small trucking company with her husband, told us that her company has enough business to grow and create five new jobs in the next year. But they can't create those new jobs because of all the paperwork that would come with them. They simply can't afford the new, increased level of paperwork requirements set by the Federal Government. One of their greatest fears is that they will be fined for an innocent mistake or an oversight. This still happens in spite of the fact that some agencies have instituted policies to waive fines for unintentional violations.

Gary Roberts, the owner of a small company which installs pipelines in Sulfur Springs, IN, told us that he was fined $750 by OSHA last May for not having a hazardous communication program on a particular job site. The inspector was told that the program was in the main office, that it was part of the company's records there, and that all the workers had been trained to follow it. On top of that, one of the workers ran to the office, got the program, and brought it back to the job site during the inspection. But OSHA would not waive the fine.

The consensus among the witnesses was that small business owners genuinely want to comply with regulations but they are overwhelmed by the accompanying paperwork. As my colleague Congressman Kucinich said at the hearing, their biggest concern is not the paperwork requirements they know about, but those of which they don't know.

The legislation we are proposing to address these problems does so four ways. One, it would create a list of all the Federal paperwork requirements for small business. One of the amendments that we will be offering in our markup tonight will require that the list be computerized and put on the internet. Two, would offer small businesses compliance assistance instead of fines on first-time paperwork violations that don't present a threat to public health and safety. Three, would establish a paperwork czar in each agency who would be the point of contact for small businesses on paperwork requirements. Four, it would establish a task force, including representatives from all of the major regulatory agencies to study how to streamline reporting requirements for small business.

Now, I read the testimonies which our witnesses will give today. I want to clear up one thing, perhaps a big myth or apprehension which I believe they have. In the case of a paperwork violation that

presents an imminent threat to public health and safety, our bill does give the agency full discretion to impose a fine as under current law or to give the small businesses 24 hours, rather than 6 months, to fix the violation. Discretion on that point rests with the agency.

In my 3 years as subcommittee chairman, I have come to realize that the more things change, the more they stay the same. In 1995, the subcommittee was engaged in consideration of a bill that would have made us all pause and consider whether the existing regulatory framework and agenda made sense. The bill would have imposed a 6-month moratorium on new regulations. Now, like H.R. 3310, the bill expressly protected the health and safety of the public. It exempted health and safety rules from the moratorium. At that time, the agencies and the public interest groups opposed the bill, claiming that workers would be exposed to dangerous chemicals. They ignored the exception that would protect health and safety in making those claims.

Today, once again, the agencies oppose H.R. 3310, arguing that the bill would expose workers to dangerous conditions. Now the agencies again ignore the exception that would protect health and safety. By the way, I want to thank Representative Kucinich for helping us craft that exception as we drafted the original bill.

That same year in 1995, this subcommittee considered a requirement that all regulations must be reviewed periodically. The agencies opposed that bill because they were afraid that they would be so incompetent that they would allow regulations to terminate by accident or mistake. They ignored the fact that they were in a position to ensure that important programs would not terminate under the bill by simply completing the review requirements. Today the agencies are here again to tell horror stories. Again they have ignored the fact that they remain in a position to prevent these occurrences under the bill. The discretion lies with the agencies. They failed to exercise it. They failed to meet their duties under the law.

The more things change, the more things stay the same. The bill does not do a thing to threaten public health and safety. There are exceptions expressly to prevent this. It does nothing to strip the agencies of their enforcement powers other than to limit their authority to impose civil monetary penalties. They still have the other options available to them, including injunction and pursuit of criminal remedies, so that they can pursue problem areas.

Finally, the agencies represented here today oppose the very measure of the bill which mirrors the President's order to them in 1995, to waive fines for small businesses so that they could correct their mistakes. Our bill simply builds on the President's directive and would make it law. Frankly, I think it's an outrage that instead of offering constructive criticism on this bipartisan bill to help small businesses, the agencies have resorted to scare tactics in their testimony.

The statements they will give today are full of misleading statements and frankly untrue characterizations of this bill, which would lead people to believe that this paperwork relief was going to do great harm. None of that is accurate. Either the agencies did not read the bill or they willfully chose to ignore section 2, which

states that in the case that the paperwork violations would present an imminent threat to public health and safety, the agency is given discretion to impose a fine or give the small business 24 hours to correct the violation.

Paperwork violations that result in actual harm are indeed exempt from the bill entirely. Yet, the Department of Justice cites the example of a toddler strangling between the bars of a crib because the manufacturer didn't report problems with the crib to the CPSC. Again, the more things change, the more things stay the same. Under our bill, the Consumer Products Safety Commission would have full authority to issue a fine in that instance. It is irresponsible and totally inaccurate to depict any death as a consequence of this bill. First, our bill has an exemption for violations that cause actual harm. If our bill were the law, the head of the CPSC could impose the same fine on the crib manufacturer that it would today under current law.

Second, this tragedy occurred under current regulations, not under our bill. Frankly, where was the CPSC in looking at the review of the design of those cribs in the first place? There may be a problem, but it's not with our bill.

Finally, the fact that the agencies do not want to lose their ability to assess fines for first-time paperwork violations reveals that they are much like the traffic cop who prefers to write a speeding ticket rather than enforce real protections against criminal activity, frankly, because it's easier to cite people for traffic violations than to fight serious violent crime. The agencies need to redirect their efforts away from issuing fines on small businesses for harmless paperwork violations and toward stopping bad actors whose serious regulatory violations threaten our public health and safety.

I am absolutely floored that the agency representatives here today seem to be saying in their testimony that using every other tool in their arsenal against small business just won't do the job. We need to hit them in the pocketbook. Sure, they can file an injunction against that business, but that does not seem to be enough. Yes, they can do an inspection and warn the small business, but that doesn't seem to be enough. Right, they can prosecute criminally, but that doesn't seem to be enough. No, they have to on top of everything hit them with a civil monetary penalty. I find that incredible.

Members of this subcommittee, our bill would bring some sanity back to the process and go a long way toward helping small businesses deal with excessive paperwork and excessive fines, and truly, once and for all, eliminate "gottcha" from the vocabulary of the Federal agencies. Consistent with and building on President Clinton and Vice President Gore's Reinventing Government Initiative, it is the next step in small business relief.

With that, let me now turn to Ranking Member Tierney.

Mr. TIERNEY. Thank you, Mr. Chairman. Thank you for holding this hearing today. Small and family owned businesses spend a great deal of their resources learning about and complying with applicable laws. Most do work very hard to do so. I am pleased that we are looking at ways to simplify and streamline the resulting paperwork. Mr. Chairman, I also want to thank you for changing the schedule so that the hearing could be held this afternoon and so

that I could attend. It is important because hopefully this hearing is going to allow us to understand whether or not there might be some unintended negative consequences of the bill as proposed, and if there are how we could possibly fix them.

For example, Mr. Chairman, I have some concern with the impact of the legislation on pensions and health plan participants and beneficiaries under the Employee Retirement Income Security Act, otherwise known as ERISA covered plans. By creating a statutory grace period and requiring a waiver of penalties, the existing voluntary compliance incentives which have worked very well to encourage plan administrators to comply with ERISA without imposing large penalties would be eliminated. This could provide an incentive for plan administrators to ignore ERISA's reporting requirements that might put workers' benefits in serious jeopardy.

It is my understanding that you have worked closely with Representative Kucinich in drafting H.R. 3310. This cooperative effort has led to significant improvements in the bill. A number of serious concerns have still arisen about the provisions that limit agencies from assessing civil penalties for paperwork violations under certain circumstances such as consumer fraud, illegal immigration, and food safety protection. Mr. Chairman, efforts to streamline reporting must not undermine existing safeguards that protect the American people from safety, health, and environmental hazards. Hopefully these hearings here today will help us determine whether or not that is truly a danger.

As you are aware, paperwork violations include a variety of actions, such as providing information to third parties and the public. When a manufacturer does not provide warnings on how to use its product, this is a paperwork violation. When an employer fails to provide warnings to its employees about the proper way to handle hazardous materials, this is a paperwork violation. When a brokerage firm provides false information about the market, this is also a paperwork violation. When a landlord fails to tell his tenants that there is dangerous lead-based paint in the apartment, that is a paperwork violation. With all that said, the importance of accurately reported information from small businesses is evident.

Since the introduction of H.R. 3310, 2 weeks ago, some of the concerns about the bill have been brought to our attention. We hope that they will be addressed before we move forward. For example, we have learned that the bill may create a disincentive to comply by removing agency discretion from the process. You indicated in your opening remarks that that is not the case. I am hoping we can explore that today with these witnesses.

The bill may require the agency to provide actual serious harm or an imminent and substantial threat before it can assess penalties and violations that are corrected within 6 months of the date they are reported. Hopefully today we will explore the wisdom of that particular action and its impact.

The bill prohibits agencies from assessing penalties for violations that are corrected within 6 months, even if they pose a threat to the environment, the integrity of financial markets or pension plans. The bill could increase the burdens on small businesses because it would likely force agencies to conduct more onsite inspec

tions, or at least that's one prospect that is likely to be raised today and we should explore that to its completion.

These possible unintentional negative consequences must be addressed. Therefore, Mr. Kucinich and I are offering an amendment and hope that that will in fact improve the bill and be considered by the rest of the committee.

Rather than rescind agency discretion, the amendment that we'll propose would require agencies to establish policies for reducing and eliminating civil penalties for first-time violators. It requires that the agency take into account the nature and seriousness of the violation, whether the small business made a good faith effort to comply with the law and rectify the violation, the small business's prior compliance history, whether the violation allowed the small business to obtain an economic advantage over its competitors, and other relevant factors.

The nature and seriousness of any violation includes whether it was technical, inadvertent, criminal, or caused serious harm to the health and safety of the public, consumer, worker, investor or pension protections or the environment. The amendment would provide relief to small businesses in appropriate circumstances, but would not have any of the serious problems which might have been identified in the current language. Furthermore, it will actually reduce the burden on small businesses because it should not encourage agencies to increase the number of inspections that are currently being performed.

Mr. Chairman, I look forward to hearing from the witnesses who have joined us here today. Hopefully they can shed some light on what the agency policies currently are in place to address first-time paperwork violations. As you may know, 2 years ago the Small Business Regulatory Enforcement Fairness Act, also known as SBREFA, was enacted into law. That bill provided some relief for small business violations and it's time now to learn how successful those changes have been. More importantly, the witnesses will be able to share their concerns about H.R. 3310 and hopefully recommend changes that would address those concerns so that we could have a bill that is satisfactory to everyone. I look forward to their testimony. Thank you.

Mr. MCINTOSH. Thank you, Mr. Tierney. Let me now ask if any of the other Members have opening statements they would like to make?

Mr. KUCINICH. Mr. Chairman.

Mr. MCINTOSH. Mr. Kucinich.

Mr. KUCINICH. I do. Thank you very much, Mr. Chairman, Mr. Tierney, members of the subcommittee and citizens. Back home I take a bipartisan approach toward the work that I do. I try to do the same thing here in the Congress. I would like to begin by saying that this bill has been a work in progress. I have been very grateful to have a chance to work with Mr. McIntosh. His staff and my staff have worked very closely together as we have been developing this bill. Along the way, we have had input from various agencies which I am very grateful for. As with any piece of legislation, as you move along the way, you discern that there are ways in which you can strengthen legislation. I appreciate the presence of the agencies today and their suggestions as to how to make that