59

The present onerous
government
regulations are in
many ways more
oppressive than the
British colonial rule
that sparked the
American Revolution.


25

ment if you want—we’ve had some interesting debate on this sub-
committee.

One of the members is a gentleman by the name of Henry Wax-
man, who I’ve come to admire. I don’t agree with Henry on many
issues, but he is intellectually honest and he is a strong advocate
of his particular point of view.

I like to share the story with him that 1% years ago I was in-
vited to the Governor’s mansion to have breakfast one morning.

I and some of my colleagues ate some of the pineapple at that
particular breakfast. And we became sick as dogs. To this day the
Department of Health has not determined exactly what the bac-
teria was that caused the infection. But I can assure you we were
all sick as dogs.

The interesting thing that I remind Representative Waxman of
is that I became ill in spite of all the Federal regulations and all
the Federal inspectors and all the Federal regulators, if you will.
I become relatively ill over that episode.

I also remind him that I recovered in spite of all of those Federal
regulations. The interesting thing, and I guess the point that I
want to bring this to is this: Ultimately, isn’t it your companies
that are responsible for the quality of the product that you put out,
and if ultimately there is a problem with any of the food or the
poultry or meat products that you're producing, aren't you the ones
that ultimately Pear that responsibi ity no matter what we do in
terms of additional Federal regulations?

Mr. BENEDICT. That’s right. Our name is on the product. We
have 600 families that depend on us for a living. And our aim is
to produce the best quality that we possibly can using the best
technology that is presently available.

My small children eat the meat that comes out of my plant as
well as we. And I sure do not want to produce an unsafe product.
I don’t think all these regulations, sometimes questionable regula-
tions, coming from Washington are going to improve the job that
we want to produce safe meat.

Mr. HELGESON. I just want to underscore that. We also very
much are part of the product that we produce. It goes out under
our company’s brand name, Gold’n Plump. And obviously, if there
are any problems with it we need to stand behind it. And are sub-
ject to whatever it would take to ensure that the meat products are
as safe as possible.

In saying that, I think that we recognize that we're dealing with
a natural product and bacteria is a naturally occurring substance.
So any amount of Federal regulations cannot ban bacteria from oc-
curring in the meat process. What we can do is minimize it through
the production process.

I think it is also responsibility that consumers have to ensure
that they properly handle products all the way from—whether it is
in food service or the restaurants or at home to ensure that the
product is handled properly.

Mr. GUTKNECHT. In terms of the numbers of cases of food
poisonings, botulus, and so forth, can you share with us what per-
centage are actually the responsibility of the processors and how
much is the responsibility of the consumers? Or don’t you have that
information?


COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
WILLIAM F. CLINGER, JR., Pennsylvania, Chairman

BENJAMIN A. GILMAN, New York CARDISS COLLINS, Illinois

DAN BURTON, Indiana HENRY A. WAXMAN, California

J. DENNIS HASTERT, Illinois TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
STEVEN SCHIFF, New Mexico EDOLPHUS TOWNS, New York
ILEANA ROS-LEHTINEN, Florida JOHN M. SPRATT, Jr., South Carolina
WILLIAM H. ZELIFF, JR., New Hampshire © LOUISE McINTOSH SLAUGHTER, New
JOHN M. McHUGH, New York York

STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida GARY A. CONDIT, California

PETER BLUTE, Massachusetts COLLIN C. PETERSON, Minnesota
‘THOMAS M. DAVIS, Virginia KAREN L. THURMAN, Florida

DAVID M. McINTOSH, Indiana CAROLYN B. MALONEY, New York
JON D. FOX, Pennsylvania THOMAS M. BARRETT, Wisconsin
RANDY TATE, Washington GENE TAYLOR, Mississippi

DICK CHRYSLER, Michigan BARBARA-ROSE COLLINS, Michigan
GIL GUTKNECHT, Minnesota ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC

WILLIAM J. MARTINI, New Jersey JAMES P. MORAN, Virginia

JOE SCARBOROUGH, Florida GENE GREEN, Texas

JOHN SHADEGG, Arizona CARRIE P. MEEK, Florida

MICHAEL PATRICK FLANAGAN, Illinois CHAKA FATTAH, Pennsylvania
CHARLES F. BASS, New Hampshire BILL BREWSTER, Oklahoma

STEVE C. LaTOURETTE, Ohio TIM HOLDEN, Pennsylvania
MARSHALL “MARK” SANFORD, South

Carolina BERNARD SANDERS, Vermont
ROBERT L. EHRLICH, JR., Maryland (Independent)
James L. CLARKE, Staff Director
KEVIN SABO, General Counsel
JupirH McCoy, Chief Clerk
Bub Myers, Minority Staff Director

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND

REGULATORY
DAVID M. McINTOSH, Indiana, Chairman
JON D. FOX, Pennsylvania COLLIN C. PETERSON, Minnesota
J. DENNIS HASTERT, Illinois HENRY A. WAXMAN, California
JOHN M. McHUGH, New York JOHN M. SPRATT, Jr., South Carolina
RANDY TATE, Washington LOUISE McINTOSH SLAUGHTER, New
GIL GUTKNECHT, Minnesota York
JOE SCARBOROUGH, Florida PAUL E. KANJORSKI, Pennsylvania
JOHN SHADEGG, Arizona GARY A. CONDIT, California
ROBERT L. EHRLICH, JR., Maryland CARRIE P. MEEK, Florida
EX OFFICIO

WILLIAM F. CLINGER, Jr., Pennsylvania CARDISS COLLINS, Illinois

MiLpREp WEBBER, Staff Director
KAREN BARNES, Professional Staff Member
Davin WHITE, Clerk
BRUCE GWINN, Minority Professional Staff

ap


68

about to begin with, fair lending and all that kind of stuff. That
runs up to another $50,000, $30,000 for the marketing and printing
on the notices and mailing and another $20,000 for costs.

We figure it runs annually about $351,000 to comply with unnec-
essary regulation. Anything that can be done to reduce the burden
of overregulation and reporting will allow the industry to operate
more efficiently and ultimately allow us to provide more and better
services, will be welcomed.

Thank you.

Mr. McINTosH. Thank you, Mr. Zapp. We appreciate all of your
testimony.

I cannot resist after that testimony: who pays for that $351,000?

Mr. Zapp. The cost of goods goes off to the customer. The public
pays the bill.

Mr. MCINTOSH. So you are forced to charge more for the services
you provide?

Mr. Zapp. That is right. If you take that in our organization and
you run that across the country—we’re small potatoes—you’re talk-
ing about a lot of money. A lot of money.

Mr. McIntosu. Exactly, if you multiply it out.

Dr. Larsen, I was curious: You mentioned ALG.

Dr. LARSEN. Yes, sir.

Mr. McINTosH. Could you describe what that substance is and
does for us a little bit?

Dr. LARSEN. Yes, I included in my written testimony here a copy
of the article which appeared in the St. Cloud Times yesterday. It
goes into some detail on it, but basically it is a drug made from
a serum of horses, and it is given to patients who are receiving
transplants; liver, lung, heart, those type of things.

It was started at the University of Minnesota by Dr. John
Najarian who was head of surgery there at the time I was a medi-
cal student, and I graduated 21 years ago. And he has been one
of the real geniuses of transplant surgery around the country.

They gave this ALG to their patients. They also gave it to many
of the transplant centers around: the country.

The university knew what was going on and the FDA knew what
was going on, but nobody questioned. It was essentially a de facto
approved method.

Then when the FDA decided to prosecute this case it was taken
off the market. As the article says, a number of transplant sur-
geons around the country feel that was an immoral thing to do be-
cause it reduces the chance that these people have to survive their
transplant.

If you had a loved one who needed a liver transplant and their
chances are going to be less and you can’t have this drug because
an FDA career-advancing bureaucrat is pushing for control, you
would be mad.

Mr. McINTosH. I would be mad as hell. So you are telling me
that FDA has forced them to take it off the market even though
everyone who is involved with these transplants feels that it helps
improve the rate of survival?

Dr. LARSEN. That’s correct, and you have a copy of the article
which is a summary of what has happened to the ALG program.


79

Mr. McInTOsH. If our next witness could come forward and give
us your name.

Mr. HALL. My name is Tom Hall, I grew up in rural Wisconsin
in a small town. I am very aware of the environmental issues that
face Minnesota, Wisconsin and the whole country. It is very inter-
esting to hear everyone’s testimony. But I did not hear one person
say one thing about its concern for the environment. Everybody—
it’s dollars, dollars, dollars. There is more to life than just dollars.

In fact, I gave Congressman Peterson a printout of what ap-
peared in the New York Times on breast cancer. And it has been
well-known and the New York Times then correctly says in there
that it—this new study seems to indicate that rising rates of breast
cancer are indeed very closely related to the dramatic change in
our environment and that that’s been well known.

It is estimated that 70 to 80 percent of all breast cancers are re-
lated to causes directly from the environment.

Now, I hope I can cover everything quick. I didn’t think we could
testify today, so I will try to yun through a couple of ideas very
quickly.

First of all, I would like to make a positive statement. Since the
Clean Water Act was passed in 1973 the Flambeau River in Wis-
consin has changed from an open sewer, which there were no fish—
it was a beautiful river to canoe on, I understand, but you couldn’t

fish it.

And 20 years later because of new wetland laws, because of the
Clean Water Act and so forth they've cleaned that river up as they
have the Mississippi, and we’ve made some progress.

But in other areas we’re going backwards. I’m not going to start
with the spotted owl or the redheaded woodpecker; I’m going to
start with people, since we have an absolute epidemic of cancer in
this country.

Since 1986 and 1993, breast cancer rates increased 41 percent in
this country; colon and rectal cancer is going off the charts, 20 mil-
lion Americans now have asthma. So we have a lot to do.

When you talk about taking away all these regulations, I have
not heard one person—one Congressman from the Republican and
these converted Democrats say one thing about what we are going
to do. [Laughter.]

What regulations do we have that you’re going to gut the Clean
Water Act; if you’re going to take all the enforcement away from
EPA; if you’re going to take away all this protection, what are you
going to replace it with? I haven’t heard one thing to that effect.

Some 95 percent of the wetlands in the country—and I realize
Minnesota, especially up north here, maybe 50 or 80 percent of the
original wetlands are still there. But nationwide that represents
just 5 percent of our wetlands.

Ninety-seven percent of old growth redwood forests, most of our
old growth forests are gone. And your species, including not just
the spotted owl, the redheaded woodpecker, the pintail, 77 percent
of the American Pintail Duck, just in the Star Tribune yesterday—
several species of turtles, frogs, reptiles, up and down the spectrum
of wildlife, has declined dramatically.

And that is because we—everything is for the buck. When are we
going to stop and look and try to protect ourselves from—you know,


15

Mr. McINTosH. Our next speaker is Mr. Mike Helgeson who is
the CEO of Gold’n Plump Poultry. Thank you for coming, Mr.
Helgeson.

ir. HELGESON. Good afternoon. Thank you for coming to St.
Cloud and presenting this opportunity for us.

My name is Michael Helgeson. I’m with Gold’n Plump Poultry.
We're an integrated broiler producer company with operations in
central Minnesota and western Wisconsin.

We market a variety of high-quality poultry products throughout
the upper Midwest. Currently we employ 1,800 people and have
250 contract growers that help us support an annual sales of $150
million.

Much has been noted already about the need for regulation re-
form. Just to note that current regulations cost our economy about
7.9 percent of our gross national product and is administered by
over 110 agencies.

What this does is it puts the United States at a disadvantage in
terms of international competitiveness and ultimately results in
fewer jobs for American workers.

The export market is a driving engine for growth in the economy,
and this also includes the broiler industry. The broiler industry is
experiencing dramatic increases in growth of exports. In 1985 only
83 percent of our production was exported. This year it is projected
to exceed 12 percent of our total production.

We will be able to maintain this growth in exports if we are able
to remain competitive with other exporting companies. In the last
few years competition has intensified from countries like Brazil,
China, and Thailand which are very efficient producers.

Why is regulatory reform important to maintain our competitive
position in the world markets? The food and agricultural system in
the United States employs 21 million people and generates 16 per-
cent of the Nation’s income. Yet, agricultural policies and regula-
tions of the thirties are burdening our current system.

We need to modernize agricultural policies to achieve market-
based reforms that will allow the sector to prosper and grow into
the next century to take advantage of the opportunities.

Within the next 30 years world population will reach 8 billion
people and demand for food will double. The new trade deal nego-
tiated under general agreement on tariffs and trade, or GATT,
gives agriculture unprecedented growth opportunities. The fish and
agricultural system will allow the United States to benefit from
those opportunities.

In recent years one-fourth of America’s farmland has been idle
in an unsuccessful attempt to raise prices. Instead, they have sig-
naled to foreign producers to increase their production at the ex-
pense of the United States.

As a result, we have steadily given up market share of world
grain trade. Acreage reduction programs should be eliminated and
the Conservation Reserve Program should only apply to land that
is environmental sensitive.

Farmers should have an income safety net where these programs
should be price and production neutral. Income safety programs
should not attempt to determine by Government directive the price
nor the supply oF any commodity. By ending supply management


74

Frankly, I've learned more about it in the last couple of years.
And I hope we can keep you guys in business because I know it
is tough out there and what you don’t need is more Federal bureau-
crats making it even tougher.

Mr. PETERSON. If the gentleman will yield.

Mr. GUTKNECHT. Sure.

Mr. Peterson. When I was in the legislature, I had the honor
of working with this group to make wild rice the State grain of
Minnesota. I got in a lot of trouble with the wheat growers and oth-
ers. But if you go down to the capital you will see that wild rice
is our State grain.

Mr. SKOE. We're not asking—due to the nature of our crop, our
fields are located in flat wet areas. We’re not asking to develop
without Federal jurisdiction over us. We just want it to be one so
we can get through.

It is clear that they don’t really know what they're doing with
us because I’ve been this now for 6 years.

Thank you very an have kind of a history of my last 6 years
I would like to send up.

Mr. McINTOSH. We would be delighted to, receive it. Seeing no
objection, we will make that part of the record.

[The information referred to follows:]


32

compliance officer spots the problem during a compliance audit. This service is
proving to be more and more valuable to our clients as OSHA's authority to fine
employers increases.

Task the chair's indulgence to illustrate how this works, I wishtocitean
interesting example of just what kind of impact OSHA compliance had on an
employer, how this has changed this employer's attitude toward injury prevention
and forced an arbitrary reallocation of valuable resources.

This central Minnesota employer operates a very successful construction
company. His company is successful in part, because it operates very safely.
Even though he employs over 100 construction workers he seldom reports more
than one or two injuries a year. These are usually minor injuries that result in very
little lost work time. Since this employer is self insured for workers’
compensation, both he and his employees fully realize that the money that they do
not spend paying workers' compensation benefits accrues directly to their profits,
This employer has established an active and effective safety program that involves
every level of supervision and management to make sure that every injury that can
be prevented is prevented. He has learned and clearly demonstrated that a safe job
site is a profitable one. Safety is good for business.

Despite a sterling safety record and an active safety effort, a MNOSHA
compliance officer visited one of his jobs without prior notice. During the
inspection the compliance officer found an extension cord whose ground prong
was missing. The compliance officer proposed a penalty of $1000 for this
telatively minor violation of OSHA regulation. OSHA gave the employer no
chance to abate the violation prior to the citation. The employer fought the citation
and saw some reduction in the cost.

The employer quickly realized that the next violation of this nature could result in
a doubling of the fine. He remembered the dozens of extension cords he owned,
and made a decision.

Before this happened, we visited his job sites to consult with his supervisors and
employees on what the best and safest way might be to perform some of the more
dangerous construction tasks. We emphasized procedural safety and worked
together toward making each employee individually responsible for preventing
injuries, This approach wes very successful, as their safety record showed. To


103

Mr. MInKs. Good. Thank you very much.

Mr. McINTOSH. Was there one more?

Mr. Co.Burw. I will be very brief.

Tm Dan Colburn. I’m chairman and CEO of Colburn, Inc. We are
a retail company operating supermarkets and convenience stores,
mostly in Minnesota, one in Iowa and one in Fargo, ND.

I'm here to urge the House Members to support the enactment
of H.R. 1114, which is, as you probably know, the bill that would
allow 16 and 17 year olds to throw cardboard boxes in bailers.

I think it fits well into the theme of what’s been talked about
today, in fact, because it is an environmental issue in that we can
recycle that paper.

For those that don’t know, currently the Department of Labor
has been enforcing a regulation and fining supermarket opera-
tors—fortunately not us yet—for allowing 16 and 17 year olds not
to operate paper bailers, just to throw boxes in.

I would hope that H.R. 1114 would be a candidate for the correc-
tions days on September 12.

Thank you very much.

Mr. McInrosu. Indeed it is. Thank you.

There are two more gentleman here and then I’m afraid we're
going to have to close it out at that point.

Mr. WEBB. I’m Richard Webb and I’m a local union president and
I'm also a government employee.

You talk about unfunded mandates on the private sector, well,
you haven’t worked for the government. You guys are sitting in
Congress writing rules of laws and legislation, putting mandates on
government employees to do, when there’s no funds to do it.

So employees are—we have to do everything you’ve mandated in
the past, plus we have to do everything you’re going to mandate
in the future, and plus we’re downsizing.

So one of these days when you guys sit in your committees, when
you sit in Full House, you have to start taking this into consider-
ation. If youre going to continually cut the size of government, you
are final ly going to have to sit down and look; what is government

loing?

You're all doing a lot of talking; you're all cutting government
employees, but you're not cutting the work that has to be done. You
talk about privatizing. That’s not the answer in all cases. So you're
going to have to look and see, actually sit down and see what is
the mission of government, what do we want to do, what do the
American people want us to provide for them. And I do not see that
coming and I doubt that it is coming.

Mr. McINTosH. You are exactly right. That needs to be our first
question. Let me ask you from your experience: What do you rec-
ommend as ways that we could incorporate suggestions coming
from employees outside of Washington on how to be more effective
with the personnel we have and the resources we have, and how
we could help set some of these priorities?

Mr. Wess. First of all, you should get Washington out of the
loop. Why send something to Washington?

I work at the VA hospital. Say you have problems at the VA Hos-

ital and there is a solution to the problem, and it’s all within the
law or so-so; some of the laws are kind of “iffy” and fishy. Why


39

of the Federal Government without allocating the money to pay for
them.

Adopting and implementing these principles will go a long way
toward easing the burdens of Federal regulations on cities like
ours. We desperately need the relief.

Thank you for your consideration.

Mr. McINTosSH. Thank you, Mayor, and thank you for coming.

[The prepared statement of Mayor Lanning follows:]}


Today, the various incentives built into health care arrangements serve the same
purpose as the Stark prohibition and fraud and abuse laws: to prevent the
overutilization, and therefore higher cost, of services. The laws need to be re-
examined in light of the payment methods and business relationships that are
developing. Specifically Congress should:

« Expand the exception to the self-referral law to include a variety of risk-
sharing arrangements (e.9., capitation and withholds) that create
incentives to discourage overutilization of services.

« Permit physicians to have financial relationships with hospitals and
integrated service networks.

« Suspend implementation of the law until final rules have been written.
‘The Department of Health and Human Services has yet to publish final
regulations for the 1989 law, or even propose regulations for the 1993
expansion—which went into effect on January 1, 1995.

I'd also like to mention a few useless regulations that could easily be eliminated.
Some duplicate other protection mechanisms. Eliminating others would allow
more reasonable approaches to reaching public policy goals.

* Eliminate the requirement that existing facilities such as drinking fountains,
toilets and telephones be moved — sometimes a matter of inches -- or
replaced to comply with the Americans with Disabilities Act.

« Eliminate the Medicaid requirement for physician-written certification of the
necessity for inpatient care, which results in denials of federal matching funds
based on paperwork issues.

© Eliminate the requirement that health providers track shipments of infectious
waste after they leave the hospital until the waste hauler ultimately disposes
of them.

¢ Eliminate a Medicare condition of participation requirement that specifies the
content and requires federal review of an institutional plan for capital
expenditures over $600,000. Federal health planning programs are no
longer functioning and most Medicare capital is paid prospectively.

On the nursing home side, Congress should consider:


35

Mr. McInTosH. Thank you very much, Mr. Volker.

Let us now proceed to questioning with this part of the panel.

My first question for you, Mr. Adams, is: How well did it work
when the county took over administrating the general permit from
the Corps of Engineers? Were their guidelines and materials spe-
cific enough that you could then go ahead and make the determina-
tions?

Mr. ADAMS. Yes, they were very good. They had training sessions
that were set up through our State Board of Water and Soil Re-
sources prior to our administering the program.

Mr. McInTosH. Have those counties done that here in Min-
nesota?

Mr. ADAMS. No. This is a pilot program and there are only a
number of local governments. It is not all counties. I believe there
are some cities involved and some soil and water conservation dis-
tricts.

Mr. McInTosu. Is the corps satisfied? Are they expressing enthu-
siasm about the pilot?

Mr. ApaMs. I think they’re expressing enthusiasm. I think it is
a little early yet to judge how well it is working because it is a rel-
atively new program.

Mr. McINTOSH. Thank you.

Mr. Volker, I was fascinated by your testimony and the dif-
ference in the emphasis there, and have found that employers who
a serious about safety often go in very different directions than

SHA.

One of the questions I wanted to ask you since you seem to be
very close to this area and on top of it on a day-to-day basis, have
you noticed in either the last 6 months or 18 months a change in
emphasis among the OSHA officials who are operating out in the
field, or is it the same type of inspection behavior that you de-
scribed with the extension cord?

Mr. VOLKER. Change comes slowly to any regulatory agency, par-
ticularly OSHA because of the nature of its process these many
years. They are a regulatory enforcement agency.

There is a real separation between consultation and compliance
in this State and elsewhere. The compliance officers are still com-
pliance officers. They are not there to help you; they are there to
enforce the law.

Employers can request help from the folks from consultation, but
they usually have to stand in line for a long time because it is a
very popular program.

Mr. McInTosu. I see. One of the reforms that is being discussed
is to require that the agency offer consultation before they go after
someone on enforcement.

Mr. VOLKER. Right.

Mr. McINTOsH. And a chance to correct the problem which, to my
mind, would really create huge incentives for the agency to focus
in on real problems because they wouldn’t see the potential for
ines.

Obviously, people would go in and change their extension cords
to avoid a large fine, so they’re not going to bother with things like
that unless there are serious problems.


67

the regulations of the Office of the Comptroller of the Currency,
Federal Reserve, the FDIC, the State Banking Commissioner, the
IRS, the Department of Labor, the FCC, and it goes on.

Just training our staff and monitoring their actions becomes a
tremendous task. As well intentioned as many regulations are, and
there are many good needed ones, many are overlapping and con-
fusing as you have heard today.

Some of the most recent ones have tended to micromanage our
business completely, with the effect of reducing the financing of
business in the community to a formula and leaves no room for en-
trepreneurial initiative.

This is rather disturbing to a community banker because that is
our bread and butter. The ability to make decisions to work with
our customers is our survival.

I call your attention to what is happening in our industry. You
are starting to see the disappearance of the middle man real fast.
And that will continue if something isn’t done.

We find ourselves many times having to focus all our efforts on
regulations and the reporting requirements of the transaction to
determine if we can make the loan—to the detriment of being able
to spend the time directly with a customer and really addressing
their needs.

The burden of dealing with the proliferation of the number of
regulations is further exaggerated by having to keep up with the
constant changes to those regulations. It takes a lot of time to edu-
cate your staff as well as having to educate your customers to the
changes.

I personally get about—it will vary in a week, but it is never less
than about 5, sometimes as many as 10 or 12—changes or addi-
tions to the regulations. And those have to be looked at. Sometimes
they are recommendations for changes. We have to figure out how
we're going to be affected—and answer and it takes time.

A few years ago one of my fellow bankers demonstrated the bur-
den of the sheer number of regulations by piling them one on top
of the other. The stack reached the ceiling and halfway up again.

Today a lot of the regulations come in the form of electronic
media, and therefore I am not able to demonstrate to you the
height of the current stack. Regulations now cause us in bankin,
to police our customers, reporting their transactions to the Federal
Government.

We have to keep track of everything for statistical purposes.
Safety and soundness sometimes seem to take a real backseat.

Let me just close by telling you some of the cumulative effects
that we have in our small organization because of this. We esti-
mate that we have to employ an additional six full-time people to
comply with regulations that we find—would be ineffective—are in-
effective. That is 6 out of 180 employees.

The cost of their salaries is $169,000 a year and the space re-

juired to house them, computers and all that kind of stuff, another
$60,000. Programs for compiling the data, research, $22,000; writ-
ing and testing, $20,000 to $30,000; implementing, $25,000. That
is the data Processing part of it.

Then we have to teach our staff, we have to do marketing to the
customers to go out and tell the customers what the heck it is all


104

can’t more control be given locally? Why does everything have to
center around Washington?

The United States does not revolve around Washington, at least
not to most of the people I talk to. You control a lot, you mandate
a lot, you regulate a lot, and a lot of those are needed.

Mr. PETERSON. Mr. Chairman, I would like to say: I think this
is exactly what this committee is trying to do. We are catching holy
hell for trying to do it, from all quarters. ’m just telling you. I
mean, it is not popular because all of these interest groups are in
Washington and they’re on our case.

But I think that’s what we’re trying to do. The way that you re-
duce the workload is you get rid of all of these regulations and bu-
reaucracy that doesn’t do anybody any good. And that is what we’re
trying to do here.

What’s happening is people are just downsizing. I give the Presi-
dent and the Vice President credit for what they’re trying to do
with their commission, you know, trying to reinvent government.
But frankly, there is a lot of fluff in there.

You're right. You guys are getting dumped on. I understand that.
I think that this committee, you know, from the little bit of juris-
diction that we have are trying to do our part. But I’m just telling
you it is not easy.

Mr. Wess. I understand it is not easy, but as the guy with the
environmental concern stated, what are the alternatives. Not only
with how Federal employees are going to deal with it and the citi-
zens of the United States and the services they provide and how
you guys are going to change regulations, but as long as labor is-
sues, health and safety issues—there is a lot of talk coming out:
we're going to cut this, we’re going to gut this, we’re going to do
this, that, and the other thing. But what are the alternatives
across the board?

Everybody is talking about cutting and dismantling. But what is
going to be left? Where are the protections going to be for the work-
er in America? We're going to put businesses in control of mandat-
ing health and safety. Well, that’s fine.

There are a lot of businesses that are committed to that. I will
not take that away from them, but if you set up something in the

rivate sector to do that, who do you think eventually is going to
Rave to control those organizations? It is going to be the businesses
and the corporations that have the most to gain. They’re eventually
going to rise to the top and the worker is going to lose. They al-
ways have, they probably always will.

Mr. McintosH. Let me give you one example that I think may
be a good model in the private sector and that is underwriter lab-
oratories. If you look at any electrical equipment, you see the little
UL tag, that is actually financed by the industry, but it was set up
as an independent body where they couldn’t have the industry tell-
ing them what to do and what results should come out.

People will only pay attention to them as long as they keep a
high standard of safety. That has succeeded fairly well.

One of the things that I’ve tried to think about is are there ways
we could replicate that? I wanted to run two ideas by you as a Fed-
eral employee to see if you think these would work well.


45

Mr. VOLKER. There is a Federal program at the State level here
in Minnesota. I have yet to see the effect of it in other States. We
do not provide services to the other States that Mr. Dear is work-
ing on right now, but we will soon.

Mr. PETERSON. But you are aware of what he’s doing?

Mr. VOLKER. Yes, I try to keep up with it.

Mr. PETERSON. But it is not happening in any of your areas?

Mr. VOLKER. Not right here. Th Minnesota—Minnesota has its
own parallel program overseen by the Feds.

Mr. PETERSON. Thank you, Mr. Chairman.

Mr. McINtosH. Thank you, Mr. Peterson.

Mr. PETERSON. I thank all the witnesses for their testimony.

Mr. McINTosH. Maybe one thing to do would be to privatize some
of those functions and having groups like Mr. Volker where there
isn’t a safety record to be concerned about carry on some of the
functions.

Mr. Gutknecht.

Mr. GUTKNECHT. Yes; thank you, Mr. Chairman.

I would first, in response to Mr. Adams: I am familiar with the
flow control problem, but I must say there is more than one side
to this story.

I visited with Chairman Bliley of the Commerce Committee on
several occasions. He has assured me, though, those counties and
those communities who have invested in capital projects, whether
they be waste energy facilities whatever, that their bonds would be
protected.

On the other hand I have to tell you that his perspective is this:
That we should not be in the business of forcing consumers to pay
$75 to get rid of—per ton of waste when market forces may be able
to achieve the same thing for $25 per ton.

That isn’t the official House position, but I think you need to
know there is some honest debate going on.

Mr. ApaMsS. I don’t think that we disagree with that at all. How-
ever, we are in the situation that we’re in. We made those decisions
years ago, and it is essential that something could be done.

Mr. GUTKNECHT. I think those counties and communities have
made that kind of commitment. I think they’re going to be pro-
tected. I do have that assurance from the chairman. But he said
we are not going to be in the business of guaranteeing again, $50

solutions to $20 problems.
Mr. ApAMS. Do you have any idea when that action will be forth-
coming?

Mr. GUTKNECHT. It is my sense that it will happen yet this year.
But I will continue to pursue it. I have a particular interest be-
cause of Olmstead County.

Mr. ApAMs. Thank you.

Mr. GUTKNECHT. Mr. Volker, I want to thank you. Your testi-
mony was excellent. In fact, I think all the testimony has been ex-
cellent. Particularly, I think you did a good job articulating the
problem we have had. We have had assurances from the top people
at OSHA that this was going to happen.

But I must tell you that some of the other people that have testi-
fied from OSHA take a somewhat different view. As a matter of
fact, there is one young lady who testified before us, and I asked


87

slot—out of how many today—to speak on behalf of the environ-
ment.

We were told there would be no open microphone, and as a be-
lated effort to appear as an open hearing, there has been given an
open mic period.

I felt it was necessary that we clarify this. We will be submitting
written testimony, as I told Mr. Peterson’s chief of staff, but I felt
I had to respond to these comments today.

[The prepared statement of Ms. Yingling follows:]


8

be the uniformity of State law with regard to size and weight
which will submit to you.

Mr. McINTOSH. Thank you very much. I appreciate that.

[The prepared statement of Mr. Anderson follows:]


ECONOMIC IMPACT OF REGULATIONS ON
THE 7TH DISTRICT OF MINNESOTA

MONDAY, AUGUST 7, 1995

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
St. Cloud, MN.

The subcommittee met, pursuant to notice, at 1:30 p.m., at the
Stearns County Building, 705 Courthouse Square, St. Cloud, MN,
Hon. David McIntosh (chairman of the subcommittee) presiding.

Present: Representatives McIntosh, Peterson, and Gutknecht.

Staff present: Mildred Webber, staff director; Karen Barnes, pro-
fessional staff member; David White, clerk; and Bruce Gwinn, mi-
nority professional staff.

Mr. McINnTosH. The Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs is convened to
order.

As chairman of this House subcommittee, I would like to wel-
come you to our seventh field hearing. We have already traveled
to Virginia, Maine, Indiana, Pennsylvania, and Florida to hear
what Americans think about our Federal regulatory system.

I would like to thank my two colleagues for conducting this hear-
ing with me today. First, Congressman Collin Peterson, the rank-
ing member of the subcommittee who has invited us to this meet-
ing in St. Cloud. He and I have worked closely on the re; tory
moratorium and riders in the appropriations process to defund un-
necessary regulation. And he has been a person, although we sit
on different sides of the political aisle, who has worked very close],
in making sure this subcommittee’s work product is useful and ef-
fective.

Second, Congressman Gil Gutknecht, a fellow freshman on the
subcommittee and a Minnesotan who represents the Rochester
area, who has been very active in health care and overregulation
in that area.

I’ve also noticed that Minnesota has the greatest influence of any
State on our subcommittee because of their leadership in this area.

The mission of our subcommittee is to cut back on unnecessary
and burdensome and sometimes just stupid regulations. Redtape
and excessive regulations are choking America’s competitiveness,
costing workers their jobs, forcing families to pay more for every-
thing from food to cars, and causing farmers to lose their property.

They even force local taxpayers to pay higher rates when the
local governments have to comply with unfunded Federal man-

@


az

1. The federal government should conduct cost/benefit assessments to determine if
‘the costs of federal regulations are commensurate with the benefits received, if
any.

2. Outdated regulations and regulations that are not cost effective when weighed
against benefits received should be repealed.

3. fnew scientific data is found relative to a regulation, immediate efforts should be
undertaken to update or repeal a standard or rule. Local units of government
should not have to discover these things for themselves as we had to do.

4. Ifanational interest is at stake and a federal mandate is adopted, the federal
government must provide substantial financial support in order to achieve
compliance. There must be an end to unfunded mandates.

5. Congress must provide vigorous oversight of federal agencies imposing
regulations emanating from federal legislation. The rulemaking process must be
brought under control.

6. Local governments need to be involved sooner and more significantly before
regulations are imposed. It should also be noted that regulations which may make
sense in one locale may not in another.

7. ‘The same rules and regulations that apply to other units of government should
apply to the federal government and its agencies.

8. Local units of government should be given the flexibility to spend limited
resources on What they believe to be the greatest problems, We should not be
required to spend precious resources unnecessarily on issues of minor significance
or issues with little benefit while major problems persist.

9. While I generally support the concept of "block grants", the "block grant” of funds
to states is no panacea for local units of government. We have found that state
government is particularly adept at imposing even more strict standards than those
of the federal government without allocating the money to pay for them.

Adopting and implementing these principles would go a long way towards easing the burdens of
federal regulations. We desperately need relief. Thank you for your consideration!

Morrie Lanning
Mayor of Moothead, Minnesota
August 7, 1995

wwi\mll.wpd


73

If the land is agricultural land already, the wetland characteris-
tics that are there will be enhanced by wild rice patties being de-
veloped, and the National Conservation Research Service will re-
tain jurisdiction of these lands.

If the wetland is nonagricultural land, the Corps of Engineers
will have jurisdiction on this land. We do not need two groups
doing wetland mitigations. It is foolishness.

I really don’t have much else to say. I just would like some an-
swers as to why the Fish and Wildlife Service appears to have
more authority at the Federal level than the NCRS does. Thank
you very much.

Mr. McIntosu. Thank you, Mr. Skoe. Mr. Peterson, do you have
any questions?

Mr. PETERSON. I think the Fish and Wildlife Service and some
of their allies are doing a good job of diminishing their clout with
some of the stuff they're doing, so they might take care of them-
selves.

But we are going to resolve this wetlands thing if I have any-
thing to say about it. We passed the clean water bill through the
House. It wasn’t perfect, but it gets at some of these issues. Hope-
fully, we can get something through the Senate.

We are going to do something in the farm bill, and the issue that
you raised. I am going to try to address that in the way that you
said.

I feel in the House that we’ve got the support to do what needs
to be done. Dave Minge and I have been working on proposals to
give the entire process to the National Conservation Resource Serv-
ice. And that’s the direction we would like to head and get these
other agencies out of the situation.

The other thing that I’m trying to do is take the Conservation
Reserve Program and make wetlands a top priority in that pro-
gram, so that if you get a wetland designated, you would be the
first who could bid into the CRP.

Now, a lot of the bureaucrats are against that, too, because they
lose control of the process. But it is the best thing that we can do
I think on a positive basis to try to preserve wetlands.

So we’re aware of the problems. We are fighting a lot of folks
who are sitting in their apartments in New York City and San
Francisco and don’t have a clue as to what they’re doing. It is a
big problem. But I think we’re going to have the clout to do what
needs to be done this time, at least in the House, and hopefully we
can get the Senate to go along.

Mr. McInTosu. Thank you, Mr. Peterson.

Mr. Gutknecht.

Mr. GUTKNECHT. I just thank the gentleman from coming for-
ward. I’m glad we heard a little bit about wild rice, and I hope the
Chair and the staff will get to have at least some wild rice soup
before they go back.

Minnesota, I think, still is the largest producer of wild rice in the
United States—or California——

Mr. SKOE. Minnesota is.

Mr. GUTKNECHT. And the potential for wild rice, particularly if
you are in central and northern Minnesota, is really a tremendous
product.


82

farmers, they want to save endangered species, they want to save
wetlands. They want to do all these things.

But they want it to be reasonable, and they don’t want to be bur-
dened with some of these prices that we’ve heard where people
have to literally completely redo their entire property. They can’t
do any of this; they can’t do any of that.

And I think if we have reasonable regulation, if we all work to-
gether on this, I think we'll get a better solution.

Let me just offer one other observation. Earlier this year we were
invited down to the Natural Museum of Science that is down in—
part of the Smithsonian.

Let me just tell you: Frankly, thousands and thousands of spe-
cies have gone out of existence long before we ever opened a Fed-
eral printing press in Washington, DC. Long before the almighty
dollar even existed there were thousands and thousands ——

Mr. HALL. They’ve lived more dangerously in the last few years.

Mr. GUTKNECHT. That is an opinion. I don’t know if there is any
evidence of fact in that whatsoever.

Mr. HALL. There is irrefutable evidence that species are vanish-
ing at an accelerated rate, at a horrific rate. We will have vermin
and cockroaches left at the current rate. If we keep this deal of the
majority through 1996, I tell you, man, we might as well just——

Mr. GUTKNECHT. Let me give you a couple of things that are
facts. The Federal Government and the State governments control
about 34 percent of the land mass in this country. In California
alone there are over 13 million acres of land where they don’t even
permit human beings to go on.

The idea that we have—that there is no natural habitat left out
there I think is a gross exaggeration. And all you have to do is look
at a map and look at the millions and millions of acres.

In fact, there is one huge area in Washington talking about the
spotted owl where they won’t even let people in to count so they
can find out exactly how many spotted owls there are.

At one time they originally said there were only 500 breeding
pair. Now they’re acknowledging there are at least 5,000. I don’t
know how many spotted owls there are, and I don’t know how
many there were at the turn of the century.

Mr. HALL. Ninety-seven percent of the oldgrowth forests, almost
all the oldgrowth forest is gone. There is, almost no protection of
that type of habitat. And it is very critical habitat for the spotted
owls.

Hundreds of birds and animals—and it is other ecosystems as
well: Those Federal lands are heavily logged. They are clearcutting
a lot of this Federal land. And I understand this new Gorton
amendment that was slipped in on the spending bill allows them
to go in and just clearcut.

And it further removes any control. The Forest Service has been
overcutting for many, many years.

Mr. McINTosH. Let me if I might add my statement to this.

First of all, I do think the gentleman raises a good point that all
of us seem to be mindful of. We do need to come up with alter-
native solutions. And I think all of us who are talking about prob-
lems with regulations have said that it is not that we are


ECONOMIC IMPACT OF REGULATIONS ON THE
TTH DISTRICT OF MINNESOTA

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS

OF THE

COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
FIRST SESSION

AUGUST 7, 1995

Printed for the use of the Committee on Government Reform and Oversight

ee

U.S. GOVERNMENT PRINTING OFFICE
37-771 WASHINGTON : 1997

For sale by the U.S. Government Printing Office
‘Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-054278-2





30

and safety of his employees, comply with the appropriate regula-
tions, and still make a reasonable profit.

He knows from personal, real world experience what many regu-
lators have yet to discover: Injuries are usually a result of an indi-
vidual employee making a decision, either consciously or uncon-
sciously, to put himself or herself in harm’s way.

Repeated studies show that unsafe acts by employees, their co-
workers, supervisors or even management are the root cause of all
workplace injuries. Very seldom are workplace conditions the cause
of the injury. After all, workplace conditions are what OSHA nor-
mally tries to address.

Only recently has OSHA begun to recognize this fact and begun
to formulate regulations to address these issues and these realities.

The proposed Federal OSHA reform bill comes as a breath of
fresh air to the community of safety professionals across the Na-
tion, not just here in Minnesota. If passed in its entirety, it will un-
doubtedly constitute the most significant and logical reform of
OSHA since its inception.

Safety professionals may return to do what they're doing best:
preventing injuries. Employers can concentrate on the business
with minimal interruptions. Maybe even an employee can look for-
ward to a longer, more injury-free working environment as a result
of safer and healthier workplaces.

Linvite any questions.

[The prepared statement of Mr. Volker follows:]


89

The form of risk assessment proposed by Congress and embodied in H.R. 9 tums the
“precautionary principle” on its head. Instead, this proposal would require that once we know that
a chemical is harmful, the federal government must prove exactly how harmful it is before they can
set standards. Also, scientists from affected corporations, with profit-driven motives, would have
to be involved in the process, second-guessing the government's own experts. According the U.S.
Environmental Protection Agency (EPA), the process would require twenty-two additional steps
before necessary protections could be implemented and at every step in the process, affected
‘companies would have increased opportunities to take legal actions to halt or slow implementation
of the proposed standard,

This would actually add to the tax burden against which the American public is crying out. The

EPA alone estimates that it will have to hire nearly 1000 additional bureaucrats and increase their
budget by over $20 million in order to comply with the proposals in H.R. 9, This hardly seems a
recipe for efficiency and effectiveness in government

H.R. 9 also elevates the cost factor to one of primary concem in assessing environmental, health
and safety standards, While it may be quite a simple task to place a dollar figure on the cost to
business of preventing pollution, itis unimaginable that we could actually place a dollar figure on
the cost to society of miscarriages, birth defects, cancer, mental retardation, lung disease, and the
host of other ills that are known to be caused or exacerbated by exposure to the by-products of our
industrial society. It is unimaginable that we could actually place a dollar figure on the extinction
of a species, the destruction of an ecosystem, the diminished quality of the environment for future
generations

Such proposals are unacceptable, they are immoral, and they are unnecessary. As noted above,
federal agencies already perform risk assessment analyses on all new rules and standards, during
which cost is taken into account. Clearly, we have not gone overboard in the protection of our
people and our environment. If we have, how do we account for 100 people dying in Milwaukee in
1993 from drinking water contaminated by polluted runoff? How do we account for the thousands
of people that die and the hundreds of thousands that become seriously ill every year from drinking
contaminated water, according to the Center for Disease Control? How do we account for the ugly
brown and gray haze that envelopes most of our cities? How do we account for the rising
incidence of cancers and diseases of the reproductive organs and rising rates of infertility, which
scientists are now linking to exposure to organochlorines in our environment?

Americans want and demand that their government agencies be lean and efficient; they do not want
them made toothless. The proposals of H.R, 9 would do this, replacing efforts to streamline our
government agencies with an agenda of “paralysis by analysis”

Regulatory moratoriums - The Clean Air Act, the Clean Water Act and countless other laws,
passed with bi-partisan support, signed and re-authorized by Democratic and Republican
presidents alike, and supported by the people of this country, outline the principles, and in some
cases, the specifics, by which federal agencies are to protect the public health and the environment.
It is micro-managing of the worst kind for Congress to place a moratorium on the efforts of those
agencies to comply with those mandates. Poll after poll has documented that the vast majority of
Americans, generally in the range of 80 to 90 percent, think that our environmental laws should be
kept or even strengthened, and that they are willing to pay for this to happen.


84

The River Warren Research Committee cares deeply about the
future of America and the world. The River Warren Research Com-
mittee knows that free people, not government, made America
great. The River Warren Research Committee thinks all but the
most basic government acts do more harm than good. The River
Warren Research Committee assumes the best person to decide
how your money is spent is you.

The River Warren Research Committee is determined to have
truth in government. The River Warren Research Committee be-
lieves truth is best reached through local decisionmaking. The
River Warren Research Committee endorses major cuts in govern-
ment spending and regulation. The River Warren Research Com-
mittee is reality-based, not legality-based.

The River Warren Research Committee recognizes that nature is
not fragile. It is chaotically evolutionary and infinitely adaptable.
The River Warren Research Committee knows that the general
public has been insidiously misled by the flawed, fear-mongering
environmentalist agenda.

The River Warren Research Committee doesn’t endorse trashing
the planet, but is confident Earth is not threatened by some dire
calamity brought on by human industry.

The River Warren Research Committee contends that only big
government can amass the resources necessary to create any seri-
ous threat; keep government small and we'll be fine.

The River Warren Research Committee finds most local and re-
gional environment issues are usually as overblown as global is-
sues, and that real problems are often caused or exacerbated by
government involvement.

The River Warren Research Committee recognizes the natural
way is one of free, self-governing agents actively engaged in the
selfish pursuit of their own private interest, bound only by the uni-
versal constants governing matter and energy.

The River Warren Research Committee believes people are basi-
cally good, kind individuals who, through free association, can take
care of themselves and their little chunk of the world without big
nanny watching over them.

The River Warren Research Committee is a general interest
group in a sea of special interest groups. The River Warren Re-
search Committee promotes the interest of the general public by
constantly asking the question: What is the truth and is govern-
ment involvement really necessary?

I have three copies of our latest report I would like to offer to
the committee. That is all I have.

Mr. McINTOSH. Thank you very much. If my colleagues don’t ob-
ject, we will make a copy of that report part of the record.

(The information referred to can be found in subcommittee files.]

Mr. McIntosu. Any questions for Mr. Wilkinson?

Mr. GUTKNECHT. Mr. Chairman, if I could. ’'ve read some of the
material youve sent out. In fact, it started several years ago when
I was still in the legislature. Can you share with the members of
the committee where the name River Warren came from?

Mr. WILKINSON. Our name, River Warren, is an extinct glacial
meltwater stream that was for some time the only outlet of glacial
Lake Agassiz. Approximately 10,000 to 15,000 years ago we had


12

Our Stearns County engineer stated at a meeting on Tuesday of
this week that they purchased wetlands in a western Minnesota County
for $54,000 to replace, on a two-acres-for-one basis, wetland that is

needed for Stearns County road improvements.

Fuel Tank Removal

Anderson Trucking Service, Inc. removed fuel tanks in all

locations (about a dozen) to meet EPA regulations. No leaky tanks
were found. Our experience with the Minnesota EPA was favorable -
they were practical, reasonable and advisory. However, our

experience with the Illinois EPA was very unpleasant.

Today we are buying 90% of our fuel at filling stations. The
cost of fuel is greater than if we had our own pumps, but because of

trying to satisfy the EPA, we have foregone this benefit,

Spill:

An experience that ATS had in Alaska in the fall of 1992
occurred at Atigun Pass between Prudhoe Bay and Fairbanks. We had a
truck hauling fuel oil to a pumping station in icy conditions. The
truck slid into the ditch going around a corner, the fuel tank tipped
over and a substantial portion of the fuel spilled onto the frozen

ground.

The clean-up effort involved hauling snow and gelled fuel oil to
the disposal site in the winter. The final clean-up was done in the
spring, which involved taking some of the dirt to clean up the soil

which might have been effected.


wy

Strong-arm tactics are
inappropriate to situation

by Alan E. Reider, JD

Special to Ocotan Sumcrus News

A

emplayees la te
herd patients inte examination
rooms for quest nel prohibit

eamployers hon L
Oatside, int a
Cronper with) a sawed-oll shotgun
Holts patients that

‘The Loaper stops

months go by and the government
agents refuse to reveal the basis for
their activities.

‘The acene described above is not of
Bosnia or sume other nation in tur
iil. Instead, it is a scene which has
been repeated in varying {0
several instances di
year by federal and slate agents
against physicians who are under
investigation for fraud in the Uniled
States.

In most cases, the attack is with-
out warning. No one had questioned
the physician's practices before; no
one had advised him that his billing

—————
Alan E. Reider, JD, is an attorney
specializing in health care matters
with the firm Arent Fox Kinter
Plotkin & Kahn, with offices at 1050
Connecticut Ave, NW, Washington,
D.C. 20036-5339. -

Alon E. Reider

was inaccurate; no one had alleged
that the services rendered were un-
necessary.

"Doctors are highly trained pro-
fessionals. ‘They know which serv-
ices are appropriate, and which are
not. They can easily understand the
guidance provided by the Medicare
and Medicaid programs and by pri-
vale insurers about appropriate bill-
ing,” say the guardians for the trust
fund.

Not a laughing matter

What a joke. Look at the internal
disagreement tuday among ophthal-
mologists about the proper practice
parameters for any procedure. And
was the last lime a Medicare
carrier printed anything that was
comprehensible or provided guid-
ance as to what services were appro-



96

Mr. Minks. Thank you, gentleman. I am Bob Minks. I’m with
Minnesota Plant Food and Chemicals Association. We're a trade as-
sociation representing fertilizer and agricultural chemical retail
dealers in the State of Minnesota.

I want to thank you for this open microphone opportunity. Not
being aware of it, I do not have typed comments. I will try to keep
this very brief.

There are three regulations that I would like to make reference
to. The first one is one that has already been made reference to by
Mr. Greg Benedict from the Long Prairie Packing Co. in regards
to a fine he received for not reporting in what was considered a
timely manner.

I would like to suggest to you gentleman, and you may be aware
of this already, Congressman David Minge is trying to develop
some legislation to correct that problem and make it a one-call sys-
tem rather than a multicall system.

The second item that I wish to speak to is the Federal Highway
Administration regulations on drug and alcohol testing for commer-
cial drivers license holders. This regulation has basically been de-
veloped for long-haul over the road truck drivers, but it does affect
the small retail dealer.

Where the problem arises is our members, when they are trans-
porting hazardous materials they need to be involved in the drug
and alcohol testing, and this is in a very short period of time dur-
ing the year.

It is a limited amount of time and a limited number of miles
from home. Most of this hauling is done less than 50 miles and in
many cases less than 15 miles from home. It is done over a 3 to
6-week period during the course of the year. And yet we have to
drug and alcohol these people 12 months of the year through ran-
dom testing.

We would like to suggest that we have some kind of a modified
version of it. I’m not opposed to the drug and alcohol testing, but
some kind of modified version that is more manageable for the sea-
sonal type operation.

a Mr. icINTOSH. Did you have one other thing you wanted to ad-
ress!

Mr. MINKS. Briefly, the Clean Air Act, the air quality permitting
procedures in regards to emissions of dust particles into the air,
the regulation states that it has to be calculated on the potential
to emit which is based on an operation that runs 24 hours a day,
365 days of the year.

And under that guideline our members—many of our members
are pulled into the regulation because, based on that calculation
they are over 25 tons per year when in fact the seasonal business
of moving fertilizer is just a few weeks out of the year, their actual
emissions are only 2 to 3 tons. For the smaller ones it is even less
than that.

I would like to ask that you give some consideration to taking
the actual emissions into consideration and not the potential emis-
sions. We do not move fertilizer products from the plant to the
farm 365 days a year.

Mr. McINTOsH. You would like to be operating 365 days, 24
hours a day, but you don’t?


15

Ofer mic.

Rod Skoe
Clearbrook, MN $6634
218-776-3300

Comments presented 9-7-95

| think that the problem withthe federal laws are: one law can not fit all the situations that will cur concerning
individuals inthis large country.

‘There is always going to be situations thatthe rule makers can not foresee. The rules then become disorminatory
because the exceptions are treated unfairly. Bureaucracies and their rules have no flexibiity to compromise. The
person with the unusual situation is unable to find a place in the regulatory maze. These unusual situations need
exemptions from the law.

| amin such an unusual situation. Our farm was bringing non-agricitural land into an agricultural category. We
completed the mitigations The U.S. Corp of Engineers, required of us to bring this land into an agricultural
classification, This federal agency consider it agricultural land with the mitigation done and complete, and another
federal agency NCRS did not consider it compiying agvicutural land? How can this land be out of compliance with
the federal law that controls agricuitural land aftr itis brought into an agricultural classification?

How I have become a victim of over- regulation and a burdensome bureaucracy:
1, Fall'89 thru Spring of '90: ! went to SCS to get information about howto develop wild rice fields and
remain in compliance with 1985 Food Security Act.
2, March ‘90 Filed minimal effect request.
‘A. The minimal effect determination worksheet was improperly applied and request was therefore
improperly rejected
1. The rejection was made, based on the assumptions, that it any one of the 13
hydrological or biological values were negative the request could be rejected. The
criteria that should have been used i; ifthe average of all 13 values used is
negative the determination could be rejected
3. 3.990: | filed a late-fled "Commenced"
‘A. This request was approved and validated as correct at the county level.
B. U.S, Fish and Wildlife Service concured that the project met the criteria for Prior Commenced,
1. FINS said | had no good reason for filing late.
C. ‘State ASCS committee never considered the reasons behind request.
1. State ASCS committee rejected the request because of “no good reason for latefling*.
D. State ASCS Committee did not understand that we were not patt of the farm program
and therefore not required to file wetland determinations forms
1. We never produced a "commodity’ so 1026 form not fled out.
2. We receive no federal government payments,
3, Commasity production was necessary for non-compliance, Wild Rice was not
considered a commodity until 1994,
4, 66-90; | was informed by SCS I needed U. S. Corp of Engineers permit
‘A. We spent the next 2 years and $20,000 in attomey’s fees, complying with the U.S. Corp of
Engineers permitting requirements. Public notices, comments from all goverment agencies,
‘comments from private individuals, mitigation etc.


36

But the reason I’m asking you that question is if you’ve seen any
change in more recent times; Mr. Dear did tell us that he is chang-
ing the attitude, and he is trying to accomplish all of these things
that we have been pushing them to do.

My experience from talking to people out in the field is that the
message is not getting beyond his office in Washington.

Mr. VOLKER. That’s correct. We are filtered through a State pro-

am here which is one bureaucratic step away from Federal

SHA. Federal OSHA is here in oversight capacity only.

Mr. McINTosu. At this point let’s suspend the questioning and
hear from the mayor's testimony if that is OK with both of my col-
leagues.

Our additional member of this panel is Mayor Morrie Lanning of
Moorhead. Welcome to our proceedings. Let me ask you: Chairman
Clinger of the full committee has asked us to swear in all wit-
nesses. So if you could please rise and raise your right hand.

{Witness sworn.]

Mr. McINTosH. Mayor Lanning, welcome and thank you for com-
ing today.

STATEMENT OF MORRIE LANNING, MAYOR, CITY OF
MOORHEAD, MN

Mayor LANNING. Thank you. First of all, let me apologize for
being late today. I got caught in the worst traffic jam I’ve ever seen
on a rural section of I-94.

Mr. McIntTosu. I wouldn’t expect to see a traffic jam here.

Mayor LANNING. I’ve never seen anything like it in rural Min-
nesota.

Tm Morrie Lanning, mayor of the city of Moorhead, MN. Moor-
head is a city of 33,000 people located in the northwestern border
of Minnesota with North Dakota. We share a twin city status with
Fargo, ND.

I appreciate this opportunity to testify on an issue of great con-
cern in my community in many cities throughout the country,
namely the urgent need for Federal regulatory reform.

Federal regulations are a fact of life, and in many cases serve
necessary and useful purposes. However, throughout my 22 years
in elected office I’ve witnessed an every increasing number of com-
plex Federal regulations that are unnecessary, unfunded, un-
founded, and problematic.

Let me briefly identify some examples of problematic Federal
regulations which have effected our community. First, Federal reg-
ulations arising from the Safe Drinking Water Act caused the city
to spend $14.5 million to expand and renovate our water treatment
facility, an expenditure which could have been delayed for possibly
up to 20 years through more intensive water conservation efforts.

Nearly $4 million of the $14.5 million was incurred to meet new
Federal water quality regulations. This expenditure which has had
little if any effect on the quality of Moorhead’s drinking water is
a striking example of a mandate of not producing the desired effect.

Since 100 percent of the cost of these new and renovated facili-
ties was borne by the city, in other words an unfunded mandate,
water rates will soon be nearly doubled from the level of rates prior
to the imposition of these regulations.


48

Along these same lines, appearing in yesterday’s St. Cloud Times
paper was an article about a drug ALG which was started at the

Iniversity of Minnesota by Dr. John Najarian. It appeared cer-
tainly from the article that officials in the FDA and Justice Depart-
ment are more interested in career advancement through regu-
latory enforcement than providing a better environment for pa-
tients and physicians for your family and mine and people in need
of these medications.

It_was particularly interesting that the ALG, which is a drug
used for prevention of rejection in organ transplant is actually
more necessary in children and in blacks because they have slight-
ly different immune systems.

And this ALG has been taken off the market in spite of being
used with the knowledge of both the university and the FDA for
several years. It is unclear which department in government
prompted the recent withdrawal of the medication and why it was
done, but many people have suffered as a result.

Around the country doctors are afraid to speak out against the
FDA. And I feel some intimidation even making these comments
because of possible recrimination against those of us who point out
these things that are going on. And I don’t think that a lot of us
on the street are really aware of the Gestapo tactics that are being
used.

So at a time when our health care delivery is more sophisticated
and more complex than ever, we really do not need inappropriate
government interference in the delivery of this health care.

Thank you.

[The prepared statement of Mr. Larsen follows:]


1984 through 1989, there is no reason to suspect the
‘analysis would be different since we looked at fout
periods with PRO review.

Severity of iliness wos not evaluated during
these periods; however, during the PRO periods
‘admission criteria was specified by the PRO includ-
ing soverity of iliness and intensity of service.” In
addition, the admission sampic is fairly large and
includes the same months of every year which
should minimize the effects of transient variations
in severity of illness.

‘There were nu specific admission eritoria in
1983. Thus it is possible that less severely ill patients
were admitted and the mortality would be higher
when corrected for severity of illness. ‘This remains
1 possibility. Nevertheless lack of change in mortali-
ly with various levels of PRO review suggests that
the comparison to 1983 may be accurate.

More recently the PRO has turned to improving
average caro rather than “driving out substandard
physicians.”* A new approach is especially impor-
tant since our data suggests that there may have
been little benefit to the first nine years of the PRO.
If our data can be confirmed in a mullihospital sam-
ple in Florida, it suggests that a large amount of
money and time were spent with uncertain benefit
to the patient. In addition hospitals have to spend a
substantial sum for employees to deal with the
PRO"

One earlier analysis raised concern regarding
redundant systems in peer review." Our analyei
‘suggests that possibly more careful planning of pect
review activities and tho avoidance of redundant sys
toms should be undertaken before new peer review
activities are implemented.

Conclusion @ If these results can be confirmed in &
larger sample, it would suggest that mandated
Medicare review of hospital inpatients may not
result in significant improvement in patient out-
come, particularly as measured by mortality. New
ystems of quality improvement for Medicare recipi-
ents should be very carefully evaluated before implo-
mentation. In an era of limited resources, Medicare
dollars spent on redundant or low yield systems may
bo better utilized in uther areas of health care
delivery.

References

Jont, TS: Medicare Peer Review Organizations. Quality
‘Annirance in Health Care 1:234-248, 1989

2. Rubenstein, LV; Kahn, KL; Reinisch, BJ, etal: Changes in
Quality of Care for Five Diseases Measured by Implicit
Feview, 1981 to 1986, JAMA 264:1974.1979, 1990,

Rubin, HLA; Rogers, WH Kaho, KL, et al: Watching the
Doctor-Walcher, How Well Do Peer Review Organization
Methods Detect Hospital Care Quality Problems? JAMA
267:2349.2354, 1992.

Kelly, 17; Feldmans, SB, and Rose, JE: Quality Reviow in
Peor Review Or 8 Program, Quality Assurance and
Utilization Review 2:107-110, 1987.

5 Audet, AM. and Scott, H.D: Uniform Clinical Data Set:
Evaluation of Proposed National Database for Medicare’
Quality Review Program, Ann. Intern, Med. 119:1209-1213,
1998,

Florida Utilization Review Aasociation/Fiorida Hospital
‘Aseaciation, U Review, Florida PRO Gets Probation, Orlando,
‘September 9, 1991,

7. PRO Peer Review Organization, Jacksonville, Correepon-
dence, July 16, 1999.

8. PRO Peer Review Organization, Annual Report June 1992+
‘June 1993, Jacksonville, 1993.

Joint Commission on Accreditation of Henltheore Organi-
‘ations, Joint Commiesion on Accreditation of Hospitals
‘Manual, Onkbrook Teerace, JCAHO, 193.

ollie, M.S; Kuhn, EM, and Rimm, AA:

Between Adjusted Hospital Mortality en

Results of Peer Review, Health Services Research 27.765
1903.

11, erzoni, Li; Dao, ; Heeren, ‘T, ota: Using Administrative
ata to Screen Hospital for High Complication Rates, inquiry
31:40-55, 1994.

12. Granatie, T: Now Direction for PRO Program Presents
‘Challenges for Hoopitae, Trustee March: 12-18, 199,

13. Donaldson, M.S. and Lolier, KN: Medicare: Stratogy fo
Quality Assurance Il, Site Visite, Quality Review Bullet
41:78-84, 1991,

M4, Shulkin, DJ; Williame, 1, and Cooper, WH: Coat of

‘Monitoring Medical Care in Pennsylvania, Penn. Med. 94:14-

18, 1991.

Bruce M. Fleegler, M.
Michele Wolk, MSN, MBA
James McCarville, MBA
Sarasota

Dr. Fleegler is in private practice. Ms. Wolk is Director,
Community Health Information Networks, and Mr.
McCarville is Director, Management Engineoring,
Sarasota Memorial Hospital, Sarasota.

J. FLORIDA MA. / March 1996 / Vol. 82, No, 8/208


49

St. Cloud Eye Clinic

plating val Opin Sargery

Perce A Larsen, ADEA,
Seven Rae MID ECS
pts

iphones attra at Bad

August 3, 1995

In recent years the field of medicine has become increasingly
burdened by government regulation. In an attempt to control costs
and monitor quality of care, government programs have been mandated
and funded.

Federally funded peer review by the Peer Review Organization (PRO)
was mandated by federal law in 1983. On the surface this may appear
to be a noble cause, but in actual practice the PRO does not appear
to increase quality of care and places an unneeded regulatory burden
on health care providers. A scholarly article appearing in the
Journal of the Florida Medical Association in March of 1995 reviewed
patient mortality at a 988 bed community hospital prior to the
implementation of the PRO activities and compared this to the
mortality figures after PRO was in place. The results showed no
significant improvement in patient outcome in the regulated
environment.

Our experience in central Minnesota would also suggest the
ineffectiveness and unnecessary nature of PRO review activities. I
am aware of dozens of cases where the PRO in our state has contacted
physicians regarding alleged deficiencies in care provided but on
review of these cases it is the PRO that is misinformed, inadequately
educated, and in fact have gone on record advocating unnecessary pre-
operative testing. In trying to talk with the reviewers at the PRO
we are told that the anonymity of the reviewers must be maintained
for objectivity reasons. The PRO in Minnesota is the Foundation for
Health Care Evaluation located at 2901 Metro Drive, Suite 400
Bloomington, Minnesota 55425, phone number (612) 854-3306 and the
medical director is Thomas Quick, M.D.

I Fah Sercet Sate
we Hhessnal Big
Selon Miesuns S508



78

This illustrates some of the frustrations of the many people who live in areas that have an abundance of wetlands.
Multiple levels of federal control. Agencies that do not agree. Rules that are made by the bureaucrats who have a
‘vested interest in there being more rules written and these rules being written more restrictive.

Counties that have 80% of their pre-settlemient wetlands remaining should have different rules. They have done a
00d job of protecting their environments. They have no places to mitigate their wetland conversions, They
desperately need the economic development that is being resticted. Remember there is not even agreement as to
the benefits that wetlands provide. Maybe gravelly hillsides have more of an impact on groundwater recharge?
Maybe these areas should also have restrictions placed on their economic development?

Economic development in these rural depressed areas is being halted by wetland regulation. If the rue itself is not
daunting enough the process to get through the regulatory process is certainly enough to stop any potential
development irrespective of the value to the community.

| fee! that Wild Rice as a orop and other crops that do not specifically remove all wetland values should be exempt
from the "Swampbuster" law. | think thatthe other wildife and economic benefits they provide more than offset any
wetland degradation. Especially, it when they work in a wetland, they are required to have a U. S. Corp of Engineers
permit. Why have them pass the federal welland test twice? | think thatthe inflexibility that the bureaucracy showed
in dealing with my farm is and example of why an exemption is needed. Bureaucracies know no compromise,

These are some examples of why we need changes. Farmers and others in these areas are becoming the victims of
over regulation and a burdensome bureaucracy.

Tse


88

CLEAN WATER ACTION

TESTIMONY REGARDING REGULATORY REFORM

Submitted to the House Subcommittee on Government Reform and Oversight
Pertaining to the August 7, 1995 hearing in St, Cloud, Minnesota

Prepared by Ginny Yingling
Associate State Director

Background: Clean Water Action is a membership-based, environmental organization dedicated to
the protection of our nation’s water resources. Our organization represents over 80,000 members
in Minnesota and about 750,000 nationwide. We respectfully submit this testimony in opposition
to the regulatory “reforms” currently proposed by the U.S. House of Representatives and the U.S.
Senate.

General Comments Regarding Regulatory Reform

The need for government reform is universally agreed to by the American public, and supported by
Clean Water Action. Examples of government waste and arrogance, while not ubiquitous, are all
too common and must not be ignored. ‘The more efficient and cost effective our federal agencies
operate, the better they will be able to protect our citizens and our environment, However, the
current “reforms” recommended by Congress are tantamount to throwing the baby out with the
bathwater. Clean Water Action opposes any and all so-called “reforms” that amount to eliminating,
or impeding the implementation and enforcement of rules, laws and standards that protect the
health, safety and environment of the people of this nation. In particular, we oppose the current
proposals for risk assessment/cost-benefit analysis, regulatory moratoriums, and budgetary “sneak
attacks” on federal agencies tasked with protecting the public and the environment. Further, we
reject the half-truths and outright falsehoods that have “informed this debate

Risk Assessment / Cost-Benefit Analysis - Most environmental, health, and safety protection
programs embody what might be called the “precautionary principle”. don't take chances with your
health, safety, or the environment on which all life on Earth depends. Govemmental agencies
tasked with protecting the public and the environment have taken the approach that if a chemical is
known to be harmful, we should not be exposed to it except in doses and levels that are known to
be safe. Currently, risk assessment analyses are completed by the responsible federal agencies for
such chemicals prior to the enactment and enforcement of rules or standards. During these
assessments, the agencies also take cost of compliance into account when developing protocols for
achieving the standards. However, cost is not the only or primary factor considered in their
decisions. This is as it should be.

CLEAN WATER ACTION,
Midwest Regional Off cinsepitt Wwe. Es Minncaelis, MN 35414 « 61226233606

418 Fist Avenue, NE w Rochester. MN S80 «S17 SUE Gabe Ave Sc#4128 a Dohth, MN 33802 « 187
TI8N, Broadway #211 Farso, ND S102 hi Ps Lang, MU AN823 w SUTQRRT-LLT

National Office w 1320 1815 St. NW « Wasi 3

2 Q rotons re:



43

Mr. McINTOSH. In the interest of making sure we get to all the
panelists, I have no further questions.

Mr. Peterson.

Mr. PETERSON. Thank you, Mr. Chairman.

I want to thank the mayor for his testimony. He has done a good
job of summarizing what we’re trying ¢ to do, and I think your nine
points—I would have to say that a good portion of those nine points
have been dealt with positively in the House. The problem is they
haven't been dealt with positively with the Senate yet, so you folks
need to visit with your Senators about this.

On this waste water treatment issue, we have visited about this
before. I want to clear this up. Apparently, they picked the time to
do this test when the river was at a low level. isn’t that correct?
They kind of picked a time that was not normal? Is that how we
got into this situation in the first place, or am I wrong about that?

Mayor LANNING. How we got into the situation in the first place
is that our permit had expired and was up for renewal. We felt that
there was not documented evidence to indicate that there was a
problem that we needed to address.

So we asked the State and Federal officials to conduct the nec-
essary tests and study to determine whether or not there was a
problem. What they chose to do is study the problem only down-
stream from our effluent discharge and only during low flow peri-
ods.

We believe that this is very incomplete in terms of analyzing the
problem. We have no idea as to the extent of the ammonia nitrogen
that is coming in to the river upstream from our discharge point.

We have to also consider not only local but other flow conditions
in order to properly determine compliance with this standard.

But this standard, Congressman, is wrong, and we have scientific

roof that it is wrong. And we should not be required to spend
fa large sums of money on a standard that is out of date based on out-
of-date science, as this one is.

Mr. PETERSON. Wasn’t the biggest problem with this on catfish
or something like that? Is that what this was?

Mayor LANNING. Well, the concern was the impact was on fish
population. We have no documented fish kill as a result of—even
during the most severe flow periods.

Mr. PETERSON. They are actually thriving, aren’t they? That’s
what I’ve heard.

Mayor LANNING. They are. People come from other States to fish
the river.

Mr. PETERSON. The chairman and I were just visiting—you
know, we dealt with the city of San Diego problem, on Corrections
Day. Maybe now that we’ve set some precedence on fixing specific
city’s problems, maybe there is a way we can make this for Correc-
tions Day and get you some relief. We'll take it under advisement

ere.

Mayor LANNING. Thank you.

Mr. PETERSON. Mr. Adams, on this wetlands process, is this for
all of Stearns County?

Mr. ADAMS. Yes.

Mr. PETERSON. And is the NRCS or whatever the office is called
out here involved in this as well?


CONTENTS

Hearing held on August 7, 1995 ..
Statement of:
‘Adams, Don, director, Stearns County Environmental Services; David
R, Volker, joss control manager, Berkley Administrators .. 7
Anderson, ‘Harold, president, ‘Anderson Trucking Service; Michael
Helgeson, CEO, Gold’n Plump Poultry; Bruce Gohman, president, W.
hman Construction Co.; and Greg Benedict, vice president and gen-
eral manager, Long Prairie Packing Co, an and id Simple Meats
Lanning, Morrie, mayor, city of Moo:
Larsen, Dr, Peter, F.A.C.S., St. Cloud Eye "Clinic, John “Soihelm, CBO,
St. Mary’ Regional Health Center; and Ed Zapp, president, Zappco,

shoe, Rod, chairman, Minnesota Cultivated Wild Rice Vice Council; Tom
Hall; Forrest Wilkinson; Jenn; Yingling, associate State director, Clean
Water Action; Rose Arnold, Stearns County Board; Bob Minks,
Minnesota Plant Food and Chemicals Association; Dan Colburn, chair-
man and CEO, Colburn, Inc.; Richard Webb; and Drew Wilkenson
Letters, statements, etc., submitted for the record by:
Anderson, Harold, president, Anderson Trucking Service, prepared state-
ment of
Helgeson, Michael, lump Poi aN P pared st ent of
Lanning,’ Morrie, mnayor, city of Moorhead, MN, prepared statement of
Larsen, Dr. Peter, F.A‘CS., St. Cloud Eye Clinic, prepared statement

Minks, Bob, Minnesota Plant Food and Chemicals Association, follow-
up to comments .

Skoe, Rod, chairman, Minnesota Cultivated Wild Rice Vice Council, infor-
mation concerning his experiences ..

Solheim, John, CEO, St. Mary’s Regional Heaith Center, prepared state-
ment of

Volker, David R., loss control manager, Berkley Administrators, prepared
statement of ...

Yingling, Jenny, associate State director, Clean Water Action, prepared
statement of ...

«()



106

Mr. McINTosH. Thank you very much. I appreciate that. That’s
a very good way to end.

Let me mention that there were two people who had submitted
written testimony and there may be others given to the staff. I
would ask unanimous consent that Larry Schultz and James
Woodman’s materials be included in the record and anyone else
who has given written materials to one of the staff members.

Seeing no objection, it shall be done. Also, unanimous consent to
hold open the record for 10 additional days to receive additional
materials from any of the witnesses.

This committee is now adjourned. Thank you all for coming
today, an excellent session. [Applause.]

[Whereupon, at 4:45 p.m., the field hearing was concluded.]

oO


66

Mr. McINTosH. Thank you, Mr. Solheim.

Among other things I would like to send your testimony to three
of the committees who are working on Medicare reform because
your ideas fit in very much with some of the things they’re looking
at in ways of eliminating fraud and abuse, and yet giving flexibility
to the provider to reduce the cost while doing so.

So I appreciate that and we will forward that to those three com-
mittees that are doing that.

Our last witness on this panel is Mr. Ed Zapp who is president,
chairman and CEO of Zappco, Inc., a small multi-bank holding
company.

Mr. Zapp, welcome. We will give you the microphone and let you
proceed.

Mr. Zapp. Thank you, Mr. Chairman.

We are a $250 million asset multibank, small multibank holding
here in the central Minnesota area. And we own and operate the
Zapp National Bank of St. Cloud, First National Bank of Little
Falls, the Melrose State Bank in Melrose, MN.

And in addition to those banks, we operate Zapp Data. It is a
company that does data processing for our banks. And we do proc-
essing for the First National Bank of Buffalo, MN, which we do not
own.

All of the banks have been serving our community for over 100
years. Zapp National itself has been owned and operated by my
family for over 106 years. I tell you this simply to let you know the
long-term commitment that we the community bankers have to the
communities that we serve. This is not unusual in the State of
Minnesota or around the country for that matter.

I myself am a fourth generation banker, and I have served as
president of the Independent Bankers of Minnesota, president of
the Bank Holding Company Association, which has membership in
the following States: Wisconsin, Minnesota, Iowa, South Dakota,
Nebraska and Montana. And I am on a committee for the Inde-
pendent Bankers Association of America. And I am presently on
the board of directors of the executive committee of Shazam, Inc.,
a regional owner-operated electronic transfer facility based in Des
Moines, IA. I have been active in banking for the last 27 years.
Time goes by fast.

Over that period of time, the regulations in our industry have
just been phenomenal. You talk about tremendous growth; it is
something to behold. I remember first when regulation Z came in,
I was a small lending officer in the bank across the street. A cus-
tomer who had been with us for years came in and I asked him
for some information that I now needed to comply with the regula-
tions. He took it as a personal insult to his integrity, and we never
had him for a customer again.

There was nothing I could say that could tell him I wasn’t ques-
tioning his integrity. He moved to another bank in town. I subse-
quently found out he found out that I wasn’t the bad guy I was
supposed to be; I was just trying to comply and do my job. But he
was too embarrassed to come back.

Well, that was small potatoes from what has happened in the en-
suing years. Regulation is important and in order for us to dail;
serve our customers, we have to be aware of and comply with all


52

‘Table L—Mortalty Rates
Time Rertoa Toad oaths
Samuary Moy — Dich ages
1983 5016
1990 en, ‘5808
1991 ory 105090
1902 ors ‘ogo
193 ons so4o

nical denials, docum-ntation review, notiees/eorre-
spondence, opportunity for discussion, pended qual-
ity level 1 cases, intensified review, reconsiderations
‘and rereviews, quality review process, QIP interven-
tion thresholds, analysis of review results, and sane

tions!
‘The unique silu: lion in Florida presented an
opportunity to evaluate mortality in eur 988-bed

community hospital during four periods: prior to the
PRO, during full review hy the PFHC, during the
Jess intense and linvited interim review by Blue
Cross/Blue Shield and during the return to full
review under the new contract with FMQA.
Mortality was evaluated as the number of deaths
per discharges. We chose the months January
through May of each year since this was the extent
of time during 1992 \vhen only limited review was
perforined. Baseline mortality was evaluated from
January through May 1983 prior to the PRO,
Mortality was analyzed during January through
May 1990 and 1991 since these were comparable
periods during which PFHC conducted full peer
review. Mortality was also analyzed January
through May 1993 when full review was again con-
ducted according to the new contract with FMQA.

Statistical analysis @ Slalistical analyses were per-
formed utilizing chi-suare analy:

Results © Mortality 1 tos are summarized in Table
1. From danuary through May 1983, there were
5,476 discharges and 309 wore classified as expira-
tions, This resulted iv a mortality rate of 056.

From January 1 vntit May 31, 1990, there were
6,215 discharges and 336 were classified as expira-
tions. This resulted in a mortality to discharge ratio
of 054.

During the saine five months of 1991 the num-
hor of dlcharges wes 6,168. This period had 318
18 resulting in a mortality to dischargo
1990 and 1991 represent the

ratio of 051." yen
tine period’ which (he PRO was conducting full
PRO review

In the some five months of 1992 there were
6,598 and 326 expirations resulting in n mortality to
tharge ratio of .049. During this time only limited
review war conducted as previously described.

1204/4. FLORIDA M.A. / March 1995 / Vol 82, No.3

“Comparison of Varlous Levels of PRO Involvemen!
‘al.

Tabi

Van Level Mortality Sigaifiance
otkeview of Review Tate (P Valve)
1982.9 1990 None va Full 056 ¥8.054 0.58
1985 +n 1991 None ea Pall 056 052.19
1983 ve 1992 None ve Limited 056 yw.049 0.09
1993 v0 1993 None vs Full, 056 v9 0800.14
1902 va 1990 Limited ve Pull 049 va.054 0.23
1992 va 1991 Limited va Full 049 ye .051 0.70
1992 v0 1993 Limited ve Full 1049 ve.050 0.79

There were no statistically significant differ-
ences (p>.05) in the mortality rates when the period
prior to the PRO (1983) is compared to the period
when the PRO was active and fully reviewing charts,
(1990 and 1991) and also when compared to the full
review (1993) (Table 2). Similarly no significant dif-
ference was found when the limited review (1992)
was comparcd to the time period prior to the PRO
(1983), full r-view by PPHC (1990 and 1991), or the
return Uo ful review by FMQA (1993).

Discussion ® This analysis indicates that in multiple
periods of time mortality was not affected by either
he presence of review, level of roview, or the orgai
zation reviewing by contract with the Health Care
Financing Administration. ‘There are several poten-
tial explanations

A number of g tality assurance endeavors wer:
already in placo ivchuling mandatory continuing
re professionals (including,
ine), unannounced slat:
inspections, and dotailed scheduled inspections by
the Joint Commission on Accreditation of
Healthcare Organizations." Another quality control
measure may have been redundant with regard to
improving patient mortality.

Historically the assessment of quality care was
measured by indicators that looked at adverse
events or the immediate impact of a procedure on
the patient's health. It may be that other more sub-
te measurements of improvement of patient care,
e.g, performance status of patient at discharge or
fone year after procedure, would have shown some
improvement in outcome. Some evaluations have
‘shown that changes in mortality are correlated with
changes in complication or problem ratos, while
other evaluations have shown no correlation."*"
However, given the current emphasis on outcome
analysis, mortality should be an appropriate pare.
meter to evaluate. In addition, given the exten
PRO contracting, complex implementation process,
and high cost, ono would hope to have seen an
improvement in mortality.

Although we did not look at the period from



101

MINNESOTA
PLANT FOOD AND CHEMICALS ASSOCIATION

1821 University Avenue + Room 204 + Saint Paul, Minnesota 55104 + (612) 644-6235 + FAX (612) 644-9348

HAZMAT SPILLS
NOTIFICATION REQUIREMENTS

Background

Under CERCLA (Superfund) and EPCRA (Community Right-to-Know), firms with
releases of hazardous materials and substances are required to call the following
numbers “immediately”:

Local Authorities 9-1-1 ocal number)
State Agencies (800) 422-0798 (for Minnesota)
National Response Center (800) 424-8802 (EPA)

Problem

A committee document has defined “immediately” to mean within 15 minutes.
Accordingly, EPA has established an enforcement policy for EPCRA and CERCLA
setting the following fines for delays in reporting the spills or releases to any or all
three entities (local, state or federal):
<15 minutes = no fine J hour - 2 hours = $ 16,500
15 minutes - 1 hour = $ 8,250 >2hours = $25,000

In a few cases, ag dealers in Minnesota have not called all three (3) numbers in the
15 minute “immediate” time frame resulting in fines of up to $65,000. Note, these
dealers did call the local responders (fire and police) who got the release under
control resulting in no injuries or deaths.

It just doesn’t make sense to penalize firms for trying to meet the requirements of
Jaw and cleanup any spills they may have. In addition, what can a federal agency in
Washington, DC do to control or cleanup a spill in a timely manner?

Solution
Change the laws to increase the reporting time to one hour and change the laws to

allow firms to call only one number (local, state or federal) when reporting a spill.
The entity receiving the call can inform the other two of the incident.


26

Mr. BENEDICT. Everything that I’ve read says that 3 percent of
the operation is the responsibility of food plants and 97 percent are
the responsibility of food service establishments or the people han-
dling and preparing the food.

Mr. GUTKNECHT. Does that square with what you know, Mr.
Helgeson?

Mr. HELGESON. Yeah; that sounds very consistent. Also, the
number of cases of food poisoning is actually declining over the last
5 or 10 years. So we are in fact are offering a safer food supply.

Mr. GUTKNECHT. Our time is up. I thank you very much for join-
ing us today.

Mr. McINtTosH. Thank you all, members of the panel. I will take
it from Mr. Helgeson’s comments that he doesn’t think we can re-
peal the laws of nature. And I think that would be a wise thing
for us to keep in mind as Members of Congress.

Our next panel is several local officials, and as they’re coming
forward to get set up we will proceed to go ahead and have the
name tags.

[Discussion off the record.]}

Mr. McInrosu. If I could have both of you please rise and raise
your right hand.

[Witnesses sworn.]

Mr. McINTOsH. Mayor Lanning apparently is not able to be with
us at this moment. If he is able to come later we will be able to
hear from him.

Our first witness then on this panel will be Don Adams, the di-
rector of the Stearns County Environmental Services.

Mr. Adams, welcome.

STATEMENTS OF DON ADAMS, DIRECTOR, STEARNS COUNTY
ENVIRONMENTAL SERVICES; AND DAVID R. VOLKER, LOSS
CONTROL MANAGER, BERKLEY ADMINISTRATORS

Mr. Apams. Thank you very much. My name is Don Adams. I am
director of the Stearns County Environmental Services Depart-
ment. This is home for me every Tuesday.

One issue that I wish to address with you is the issue of solid
waste flow control. This may deviate somewhat from the other tes-
timony that you are going to be hearing, but this is an issue that
is of importance to not only Stearns County, but I think that you
will find. Olstead County as well shares the concern that we have.

Just to give you a historical perspective, from the late 1970’s
through the 1980's there was development of a statewide strategy
for solid waste management here in Minnesota.

This strategy delineated processing, waste processing, as higher
on the waste hierarchy than landfilling.

The Minnesota Pollution Control Agency at that time was ac-
tively involved in closing landfills, and counties across the State
complied with their directives and began to close their landfills,
going from several hundred landfills throughout the State to today
just a handful.

During that process, the Tri-county Solid Waste Commission was
developed. This entailed Stearns County, Sherburne County and
Benton County.


22

Mr. ANDERSON. I think we have more likely not gone forward be-
cause of Government regulation, held back on expansion.

Mr. McInTosu. For example, has the inability to put in fuel
tanks; has that kept you from expanding?

Mr. ANDERSON. Yes, to the extent of the cost. It is a higher cost
to buy the fuel.

Mr. McINTosu. Yes; Mr. Helgeson.

Mr. HELGESON. Let me just to add to my comment; we currently
would like to expand, as i mentioned, in our Wisconsin operation.
Under the Poultry Inspection Act, we’ve not operated the plant
without a full staff review of USDA. Yet, at the same time, we’re
being turned down for additional inspectors. Apparently, this is be-
cause of budgetary difficulties within the USDA or the inspection
service.

My point is that if the existing staff resources were better uti-
lized, these people could be made available to the industry.

Mr. McINTOsH. So until they move away from the outdated form
of inspection and on to a more updated form, it is putting con-
straints on your ability to expand?

Mr. HELGESON. Right. And eventually it will be constraints with-
in the whole industry as well.

Mr. McINTosu. Mr. Gohman, did you have anything in that area
that you would like to add?

Mr. GouaN. As I noted in my testimony, we currently have 47
employees and we are very reluctant to seek in excess of 50 people,
so that we get into all those new rules that fit there.

Mr. McINTosH. Yes. That is becoming a reoccurring theme in
some of our field hearings. Thank you all. I appreciate it. Let me
turn now to my colleagues.

Mr. Peterson, do you have any questions?

Mr. PETERSON. Thank you, Mr. Chairman. If I could, I would like
to—first of all, Representative Jeff Bertram is with us today. He
is the chair of the Business Regulation Committee—I don’t know
if I know the exact name of it in the State House but as I under-
stand it, you have submitted some written testimony. So without
objection I would like that to be made part of the record.

Mr. MCINTOSH. Seeing no objection, it will be.

Mr. PETERSON. And I appreciate Representative Bertram being
with us, and his leadership in this area and the State legislature.

As we move ahead, I’m sure we are fone to be working together,
Jeff, more on this. It is not just the Federal Government that has
problems with regulations as you’re aware.

We also, Mr. Chairman, have some testimony here from some
folks from Lenny Lund and Bruce Shore regarding some problems
that they’re having with ASCAP and BMI. And without objection
I would like to make that part of the record as well.

Mr. McInTosSH. Seeing there is no objection, it will be entered
into the record.

Mr. PETERSON. I would also like to acknowledge that we have
some other elected officials with us today. I will probably get in
trouble now if I start trying to name them, but we did have—Leslie
Shoemaker was here. I don’t know if she is still with us.

Senator Joe Bertram was with us earlier. He may have had to
leave. Representative Steve Yords was here. Steve, I appreciate


105

One was to essentially give similar incentives for the employees
to be responsive to the customer, whomever it is they’re helping,
maybe give them a bonus at the end of the year based on evalua-
tions from the public who interacted with them

And the other was to lift some of the regulations, but let them
have the result that they were trying to accomplish and, say, the
Minnesota arm of OSHA would as a whole be rewarded if the num-
ber of safety incidences went down in the State, and figure out
ways of creating goals like that that weren’t paperwork goals, but
actual safety goals and not violation targets, but actual accomplish-
ment of fewer problems in the worksite.

Do you think those two approaches would work in a Federal em-
ployment situation?

Mr. WEBB. I think as far as the health and safety aspects go, we
at St. Cloud VA Medical Center have a pretty good record nation-
ally. We are very low. We always have been.

Mr. McINTosH. But you don’t get rewarded or recognized for that
because you’re lumped in with everybody else, right?

Mr. WEBB. Yes; but there’s no money in the Federal Government
to recognize things like that. Everything is being cut. That’s one of
those niceties, that we never really put a lot of money into it and
now we can’t afford to.

Mr. McINTOSH. Let me actually give you one ray of hope in that,
and people who want to see us make deeper cuts are not happy
about this, but a lot of times you hear about cuts in Washington,
coming out of Washington, when in fact they’re not really cutting.
They’re slowing the rate of growth and decreasing it, so there will
be funds there.

Our challenge will be to use them better. That’s what I’m trying
to search for.

Mr. WEBB. When I went to school they didn’t teach regressional
math, so I didn’t learn. [Laughter.]

Mr. McInrosu. Thank goodness.

Mr. WEBB. I will just leave it there. Thank you.

Mr. McINTOsH. i appreciate your insight, and if you have any
suggestions on specifics or reactions to this, please let us know.

Mr. Wess. Thank you.

Mr. McIntosu. Thank you very much.

We have one more witness. If you could come forward and give
us your name and where you're from.

Mr. WILKENSON. My name is Drew Wilkenson. I live in Rockford.
Iam another founding member of the River Warren Research Com-
mittee.

First, Tm basically here because like Congressman Peterson said,
you're under attack and I want to give you ried support. I also want
to say that I basically agree fe ale what the previous gentleman
said. That is what we need to hear more of because you can’t just
keep cutting spending and expect things to work. You've got to use
the word “repeal.” Repeal, repeal, repeal.

Now, finally, I appreciate what you are espousing to be the prob-
lem in cutting regulation. I just want to say I am 99.999 percent
sure that you will not go far enough. All I can say is damn the tor-
pedoes, full speed ahead.

Thank you.


34

The proposed Federal OSHA reform bill comes as a breath of fresh air to the
community of Safety Professionals across the Nation. If passed in its entirety, it
will undoubtedly constitute the most significant and logical reform of OSHA since
its inception. It may open the door that allows employers to begin to emphasize
injury prevention, not just regulation compliance. It may allow a partnership to be
forged between employers, safety professionals, and regulators. A less adversarial
and more cooperative regulatory climate may result. In the long run, all of us may
benefit:

Safety professionals may return to doing what they are best at; preventing injuries.

Employers can concentrate on the business of business, with minimal interruption
from arbitrary and capricious regulation.

Employees can look forward to longer and more injury free working lives as a
result of safer, healthier work places.

The End,


58

puted ie io the map. Ie subsequently
"nn ara gen on

the works most eminent surgeons les

in tatters. He faces 21 charges,

including illegally marketing a drug

contributed to the death of nine

Among theater charges are hiding and
adverse

reactions from
to ator paents propery and double

‘expense accounts. He could face
an 81-year prison sentence and fines of
$35 million.

‘There is no question Najarian and the
University of Minnesota (where he was
until removed in 1993),

ing,

it was withdrawn, ALG
remained an experimental drug —
never given the proper scientific trials
and never approved by the FDA. All the
While howere i was sl wo waneplant
centers North America and
Europe with FDA and University of
Minnesota knowledge.

Why, after so many years, the FDA ty

finally clamped down is unclear, as is

chief of surgery
aid not follow EDA regulations in sell University
and testing ALG. th

wh is to blame in thismescy tal of ie

‘The real cause ofthe nine deaths attrib-
uted to ALG in the federal lawsuit may be
questionable, said Dr, Arthur Matas, a uni-
versity colleague of Najarian’s.

Given the severe illness of patients
they n
rising, he said.

That ALG was yanked quickly and
not made available provisionally given
its defacto status as an accepted therapy
seems draconian to many doctors. After
unsuccessfully shopping it around to
rug companies, most of whom
it would not be profitable enough the

cisco heart transplant surgeon Dr. J.
Donald Hill, who used ALG and whose
patients have the highest long-term sur-

‘a product in the name of protecting the
public, they have an equal responsibili-
tore re the paben dea
from overprotection.”

fer


76

We dd direct mitigation of dikes- we lost an 18 acre field to wetland mitigation
U.S. Corp took 311 actes of land with no compensation as indirect tigation
1.311 acres of land | own and pay taxes on, but | can not use.
». these acres taken to mitigate land that should have been considered prior
converted
B. U.S. Fish and Wildlife Service comments on ny Co of Engrees peri

5. 62690: Aer discussions with SCS personne fled a second mii eect statemont.
A. We had many meetings with SCS personnel atthe state and federal levels
1. All SCS personnel recognized my effort at mitigating the conversion
2. AllSCS personnel fl | should be eligible for Compliance
6, 5-5.92: Refled second minimal effect statement
‘A. many more meetings at state and federal level
B. Same result: NO decision
1. ASCS peisonnel felt | should be in Compliance.
2, SCS personne! have no way of allowing our farm in compliance with FSA because
restrictive rules have been written by the bureaucracy restricting compliance
1983 | am named Conservation Cooperator of the Year from Clearwater County
23-94 iil no decision. | appealed the wetland determinations.
‘A. This was an attempt to stop the wetland determinations that continued despite uncertainly as to
the wetiand classification
B. Wetiand determinations were being done when the minimal effect determination not complete
9, 5-18-95: met with Mr. Warren Lee, NCRS, Leader National Wetland Team again,
A State NCRS recommended to Mr, Lee that he approve my minimal effect determination
1. State NCRS personnel recognize mitigation that our farm did for the U.S. Corp of
Engineers
2, State NCRS personnel recognize | was frst wild rice farmer through this
ritigatior/compliance process and which path to proceed on was not

known
3, State NCRS personnel give credit effort and attempting to be flexible in
‘order reach a compromise
a. State NCRS felt federal rules should include non-paticipating farmers in
‘conservation planning
40. May'95: | receive verbal approval of minimal etfect from Mr. Warren Lee, NCRS, Leader National
Wetland Team.
1. | was tod, the approval is done iis just a matter of getting the paper work done.
S. Fish and Wildlife Service personnel take a shor trip to my farm and decide

that there were important wetland values lost on my farm.

‘A. FWS decides that these wetland values were more important than al the mitigation that Corp
of Engineers required us to do.

1. FWS did not count al the upland that is currently in wild rice production providing
wildife and wetland benefits on my farm (these benefits are substantiated by
research done atthe University of Minnesota headed by Dr. Dan Sevardsky).

2. FWS ignores all the mitigation the Corp required of our farm
a. the fields | abandoned,

11. June ‘95:



28

Mr. McIntTosH. Thank you very much, Mr. Adams. So there is
a regulatory body that is actually trying to reduce the burden by
putting it in your hands more locally so you can use discretion?

Mr. ApaMsS. Right.

Mr. McINTOSH. I’m impressed with that. That’s good.

Our next witness in this panel is Mr. David Volker who is the
loss control manager with the Berkley Administrators. They are a
third-party administrator of self-funded insurance programs in
Minnesota.

Mr. Volker, thank you for attending today and welcome.

Mr. VOLKER. Thank you for giving me the opportunity. As you
said, my company is the third-party administrator of self-funded
insurance programs here in Minnesota.

We provide services for our clients similar to an insurance com-
pany, but we’re not really an insurance company. We bear none of
the risk of loss as an insurance company normally does.

I am appearing here today at the request of the Minnesota and
National School Board Association. We administer a very success-
ful self-insurance program for Minnesota school board’s trust.

My staff of 13 full-time safety professionals and I also provide
workplace injury prevention consultative services to most of the
cities in the State, many of the largest private health care provid-
ers, a select group of private self-insured employers and about
20,000 other private employers here in the State of Minnesota.

During the past 5 years I guess we've visited at least 10,000 dif-
ferent workplaces around the State helping to prevent workplace
injuries.

Our client’s employees usually—often ask us to help them re-
search, interpret and maybe even apply regulations because we’re
perceived by our clients as an alternative, perhaps a less threaten-
ing source of reliable information about OSHA and OSHA stand-
ards, and how to comply with what they often perceive as onerous
and arbitrary standards.

We sometimes even point out violations of OSHA regulations for
our clients before the OSHA compliance officer shows up and spots
the problem. The service has proven to be more and more valuable
for our clients.

So I would like to ask your indulgence for a moment here to il-
lustrate how this works. I would like to cite an interesting example
of just what kind of impact OSHA compliance had on an employer,
how this has changed this employer’s attitude toward injury pre-
vention and forced an arbitrary reallocation of what I consider to
be pretty valuable resources.

This central Minnesota employer operates a very successful con-
struction company. His company is successful in part because it op-
erates very safely. Even though he employs over 100 construction
workers, he seldom reports serious injuries. The injuries that he
does report are usually minor ones and result in very little lost
time.

Now, since this employer is self-insured for workers’ compensa-
tion, both he and his employees fully realize that the money they
do not spend paying workers’ compensation benefits accrue directly
to their own profits.


94

Mr. McINTOSH. Thank you. I appreciate you submitting the writ-
ten testimony in particular. It is unfortunate that you don’t wish
to discuss the issues.

Mr. Peterson, do you want to respond?

Mr. PETERSON. Yes. I’m not sure how all of this happened. The
first that I heard about this I had my staff call you and invite you
to testify. That is the honest to God truth. The first that I knew
about this. And we did not—the subcommittee staff was setting up
the hearings, not my personal office.

Ms. YINGLING. I find that very interesting. It was my name on
the press release, but I was not the person who contacted your of-
fice to request testifying. It was not my organization that contacted
your office to testify. It was the Sierra Club here in St. Cloud. They
sayenever been contacted since they requested an opportunity to
testify.

Mr. PETERSON. Well, the first that I heard from my St. Cloud of-
fice that somebody was interested and felt like they couldn’t, I said
that I don’t know where that is coming from because I was not
aware that there was any restriction on who could testify.

Now, probably by Friday you would have got the answer. That
is a normal thing that people would say, well, the agenda has been
set. I can see where that would be said, but I apologize. At least
it was not my intention to exclude your group or any group.

Ms. YINGLING. Well, I think just given the precedent that has
been set by this Congress and the hearings on both the Endan-
gered Species Act and the Clean Water Act and the wetland provi-
sions of stacking hearings and preventing people from testifying all
across this country, I think to say that this is——

Mr. McINtosu. Let me remind you that this is an official pro-
ceeding of a congressional body and that you’re under oath.

Ms. YINGLING. Yes, sir. I am.

Mr. McIntosH. Be careful before you make allegations that
aren’t, in fact, the case about stacking hearings and other things.

Ms. YINGLING. Sir, I have heard comments from all sorts of envi-
ronmental organizations who have been refused the opportunity to
testify.

Mr. McINTOSH. We are trying to hear from anybody who would
like to today to testify. And we’re more interested in what you have
to say about the issues on regulations than anything else.

Mr. PETERSON. Than what you have to say about us. [Laughter.]

And I really would like——

Ms. YINGLING. Sir, you don’t want to hear.

{Applause.]

Mr. PETERSON. I would very much appreciate it if you would take
my—our paper that we’ve done on the EPA riders and give us your
take on what you think and get a better understanding of where
we're coming from.

I've met with your group, tried to have some understanding. I
know we have differences of opinion, but again if you feel like you
were excluded, I apologize. It was not something I personally did.
As soon as I heard about it I tried to work something out. We got
back this response that—not from you but from the guy in Chicago
who said that he thought it was a sham and they weren't going to
testify. This is not useful, I’m just telling you.


Before the
House Subcommittee on National Economic Growth,
Natural Resources and Regulatory Affairs
: August 7, 1995
St. Cloud, MN

Good afternoon. My name is Harold E. Anderson. I’m President
of Anderson Trucking Service, Inc. (ATS), headquartered in st.
Cloud, MN. ATS is a family-owned, truckload carrier founded in
1955. Last year, our company operated 525 company trucks, 400
owner-operators and had revenues of $125 million.

I support a moratorium on federal regulations because I want
Congress to take a look at what existing laws and regulations have
done to businesses like mine. I hope you'll be able to stop new
rules long enough to find a way to bring some sanity to the
compliance costs we already face. Here are a few examples of what
I mean.

Many of the government regulation problems that we have
encountered have centered around the EPA,


77

b. the area that was to be cleared that is now a wildlife area
‘©. plus the mutttude of other things required of our farm.
4, they say the thousands of trees | have planted have no value,
2. FWS ignore all the effort NRCS and | have expended trying to reach compliance.
C. They use outdated research and inaccuracies to justly their decision
1. They used a 1983 study when 2 1994 study reaches a different conclusion
D. ay all my cards on the table to try to reach a compromise all could live with, The U.S. Fish
and Wildife service kept drawing cards in order to deny my request. Is this fair?
42. 6-27-95: Minimal effect denied
[A This took 5 years, thousand of dollars, countless hours by me and personnel from several

agencies
13. Clearwater Rie, our farm, filed a final appeal wth NCRS for converting 53 acres of wetland.
‘A. This has been a lengthy and frustrating rp to nowhere.
8. | went to SCS's office asking for help,
C. | was nat told | could nat develop wil rice fields and remain in compliance
14, 7-28-95 CFSA reopened my prior commence decision
‘A, Reason: It should not have been denied because ofthe "no good reason to late file" excuse
15. Currently-- Because of changes in the rules since my process started, neither mitigation nor
replacement are an option to achieve compliance.
‘A. 5 years have passed and still no decision
BB. Until 1995 no federal employee ever tod me that compliance would be impossible to achieve
1. compliance through mitigation or replacement is impossible
C. it my appeal tails our farm will be out of FSA Compliance
. Does the federal government want no input into conservation measures on my farm?
E. Will the federal goverment only impact conservation techniques on farmers in the fm
program.
1. This the program that enables them to force compliance on the farmer?
2. Where did the idea of volunteering go?

The conclusion:

The bureaucracy has made a multitude of restrictive rule determinations conoeming wetlands and The Food Security
‘Act. "Nor-frequenty cropped land" now means land that had grain planted less than 80% of the years between 1981,
‘and 1985, This rule means that land thal did not have a grain crop planted 3 years out of § between 1981 and 1985
fas a different set of rues than land that was tumed black and cropped every year. Why? This land was farmed
‘every year. Remember tis farmer didnt plow their land every year, they were much more conservation minded and
lett their land in hay or pasture, but their land is considered non-trequenty cropped even though they have farmed the
land every year. The dates used to established ths determination, 1981 thru 1985, have in effect made the 1985
FSA retro-actve to 1981. This can not be legal. The bureaucracy has made determinations as to what land can be
mitigated and under what conditions. PC land must be used in non frequently cropped situations for mitigation. This
tule itset elminates most beef and many other farmers in our area from every achieving compliance. The land even
though farmed was not considered as such by the restrictive defnitions that federal agencies use, These restrictive
rules are why mitigation and replacement are not an option for our farm. Is this good? The federal rule makers have

assed as laws by these decisions.


83

antienvironmental or antisafety or antihealth, it is we think there’s
got to be a better way of doing it.

I do think the gentleman has given us a fair and important chal-
lenge to put those proposals forward and would like to see work
done in that area and wants the subcommittee to help facilitate
that over the next 14 years.

But let me caution that the static model doesn’t necessarily mean
there is no hope. I remember reading an article by Keith Snyder
who is an environmental reporter for the New York Times, a very
strong advocate of the environment, who pointed out that in South
America much of what is considered as very precious habitat for
environmental purposes—and Vice President Gore has written
about it in his book—was in fact cleared 400 or 500 years ago by
Indian culture. And it has all grown over and come back, and there
are new environments and ecosystems that have developed there.

There is not a static model for what happens in the world. The
environment is something that is fluid and changes over time. And
what we need to do is take that into account when we develop our
alternative proposals.

But I do appreciate your coming here and testifying today. And
I take seriously your challenge that we do have to put these pro-
posals out there about how we would protect the environment
using a different approach.

Mr. PETERSON. Mr. Chairman, if you would yield.

Mr. McINTosH. Certainly.

Mr. PETERSON. I really do think that we need to start having a
dialog. I have put forward some solutions that I think people ought
to look at.

But I would like you to take a look at this. This is the EPA rider
issue where we just debated on the appropriations bills and our
reasons for what we did.

I gave a copy to the President and Vice President. I would like
you to take that and take a look at it. And I would like your reac-
tion and opinion. I will respond.

I think we need to do more of that. Anybody else who is inter-
ested here I will make available a copy of our analysis. My staff
has that.

We want to try to find solutions that make sense. We are not out
to drain all the wetlands. I wrote a lot of the words in the State
legisature for preserving wetlands. But I did not—we did preserve
by regulating. We put in place a wetlands tax credit. We did some
things to encourage people to maintain wetlands, not go out and
beat them over the head with regulations, and it frankly works a
lot better. That is the direction I’m heading.

Mr. McInTosu. Let me start with the other people who want to
say something.

If you would like to go next, sir.

Mr. WILKINSON. Yes, please.

My name is Forrest Wilkinson. I’m a natural carbon based life
form born in Grand Marais on the shores of Lake Superior pres-
ently residing in Sartell, just north of here on the Mississippi
River. I am also one of the founding members of the River Warren
Research Committee.


5

And, you know, they can take that position if they want, and I
apologize if they felt like we didn’t get to them early enough in the
process, but I do not agree that anybody was excluded from being
involved in this process.

I will agree that we maybe have a different point of view than
some of you folks might have. There are a lot of folks in this coun-
try who think we don’t have enough regulations and think we need
more of them.

I frankly disagree with that, but I wish we could get to a point
where we could be talking about specifics and not all this inflated
political rhetoric that goes on around this issue.

We had a meeting of the coalition, the so-called blue-dog Demo-
crats with the President on Friday where I—we took up this issue
of the EPA riders that have been in the press and some of the
other issues where we think there has been a lot of misinformation
going around.

And we presented to the President an analysis of the 17 riders
that have been controversial. And the President is going to be get-
ting back to us and responding to our point of view to see if we
can come to some understanding on this.

I would say to those in the audience that want to get involved
in this dialog: I will make this available to any of you. My staff,
Mark Browell or Edna Ramson here have these 17 points in that
EPA bill, and I would very much appreciate you looking at it and
getting to a debate on the specific issues.

I frankly am frustrated by the lack of veracity in some of the dia-
log that goes on, on some of these issues. Again, I hope that those
of you who are here who feel like you have been excluded, that you
will remain. I don’t agree with that. Again, I will make these let-
ters available to anybody who wants to see them.

Again, Mr. Chairman, thank you for coming to St. Cloud. We
very much appreciate you taking time out of your busy schedule.
I, like you, look forward to hearing from the ordinary folks of Min-
nesota, what they think about the Federal Government.

Mr. McInTosH. Thank you, Mr. Peterson. Thank you and your
staff for helping make arrangements for this subcommittee hearing
today. It would not have been possible without you and your help.

Mr. Gutknecht.

Mr. GUTKNECHT. Thank you, Mr. Chairman. I will be brief be-
cause I know we've got some excellent people here to testify. I look
forward to their testimony.

We've been having an interesting debate in Washington and I
suspect what you've heard already today is sort of an adjunct to

at.

The debate is really between those who believe, in terms of regu-

lation, that the glass is half empty and those of us who have come
to conclude that the glass of regulation is already filled to overflow-
ing.
And what we have seen and what we hear many times from our
small business people and from our farmers and even from some
of the bigger business people, that the Federal Government has,
over the last 30 or 40 years, begun to propose more and more of
these $50 solutions to $5 problems.


81

They’re all over the place. They glisten all over the—as far as you
can on the horizon.

What we're doing is the 5 percent that didn’t drain them, we're
asking those folks to pick up the entire cost to make up for every-
thing that everybody else did.

ir. HALL. So you’re saying get rid of the rest-———

Mn PETERSON. No, I’m not. Absolutely not. What I’m saying is
that we've all decided as Americans that we want to save the wet-
lands that are left. I want to save them and I think most of them
do, but what we’re saying is let’s pay for it.

it is not fair to go out to my farmer and tell him that because
you're the one who saved this wetland, now we're going to make
you bear the cost all by yourself and the Government is not going
to pay for it. It is not fair.

So us as Americans, we decided this; we need to compensate for
people.

Mr. Haty. OK. I challenge you to bring up a bill that appro-
priates that.

Mr. PETERSON. I’m going to. The CRP has enough money to put
all of the wetlands in it. It does.

Mr. HALL. OK. All right.

Congressman Peterson and McIntosh, I want to see alternatives.
If you’re going to throw the baby out with the bathwater, I want
to see—-

Mr. PETERSON. The CRP is an alternative. What is wrong with
it?

Mr. HALL. I haven’t seen it.

Mr. PETERSON. Well, we’ve got 37 million acres in the CRP. We
only have 5 million acres of wetlands. We clearly can solve the
problem with that amount of acreage.

Mr. McINTosu. Thank you for coming. I appreciate you testifying

lay.

Mr. Gutknecht, did you want to be recognized?

Mr. GUTKNECHT. Sure. I just want to say that I don’t think any-
body is talking about—we hear these terms about gutting these
programs. I don’t think anybody is proposing that. Nik we want is
to bring the pendulum back to center.

Frankly, I go along with what Congressman Peterson said. Most
of what we heard from constituents is where the pendulum has
gone far too far.

Let me give you one of the practical results of that. This is a
scary thing. I had a farmer in my district, in fact, it was a couple
of farmers. They think they’ve discovered a relatively rare type of
butterfly down in southeastern Minnesota.

You know what the other farmers have said? If they find any of
those on their land they’re going to kill them. OK?

Mr. HALL. That is real sad.

Mr. GUTKNECHT. That is sad, and it is a sad testament to the
way they view the regulation and the regulators from the Federal
Government. Because they're saying if they are going to come in
and essentially take over my farm, I don’t want any endangered
species on my land.

Now, if we can change the attitude, if we can change the environ-
ment, if we can bring the pendulum back to center, I think most


92

these tales, it is difficult to trace their origins, However, | contacted Mr. Chuck Kjos of the
Minnesota field office of the USFWS, who also spoke with their Washington, D.C. office. Mr.
Kjos was not familiar with these exact stories, but could confirm that the USFWS has never
required private property owners to construct artificial habitat for endangered species, as this
would not meet the requirements of the Endangered Species Act. He indicated that, instead, the
USFWS works with landowners to set aside habitat areas, where necessary, for protection of the
species while allowing a modified development project to proceed. The numbers bear out Mr
Kjos" argument, In the last ten years, fewer that one-tenth of one percent of all development
projects that conflicted with an endangered species were actually stopped. Not a single project has
‘been stopped in Minnesota. Again, where is the evidence to support the claims of onerous
government regulation? We do not believe they exist.

Conclusion

Clean Water Action chose not to testify at the hearing on August 7, as a form of protest against the
unbalanced testimony being solicited for this hearing and the fact that the relevant legislation had
already been passed, Also, environmental groups were not originally invited to testify (our
invitation was received only after we announced a press conference and only one working day
before the hearing). It is our belief that, were Congress to seek balanced and open testimony from
the public, with adequate advance notice of such hearings and prior to passage of the relevant
legislation, they would find that the American public does not feel that our goverment has gone
too far in protecting its citizens or the environment and that there is no real support for eviscerating
the environmental laws of this land, We further believe that such fair hearings would help to dispel
the erroneous and, in some cases, false stories that are circulating the halls of power regarding the
harsh and arbitrary behavior of federal employees.

The federal goverment is large and complex by necessity, dealing as it does with large and
complex problems. When problems emerge, and these are inevitable in all human systems, solving
them may be extremely difficult and time-consuming. We owe it to the American public to try to
find these solutions. What cannot do, must not do, is give in to the temptation to simply walk away
from the complexity and difficulty of these problems, to look for simple solutions where none exist
We urge you, respectfully but in the strongest terms possible, to avoid the temptation of finding, an
“easy” fix that leaves the people and environment of this country at risk. Efforts to streamline,
economize, and coordinate govemment agency efforts would be welcomed by all sides of this
debate. Efforts to back away from thirty years of progress would not

YTNOTI

Following my comments at the open microphone at the hearing, I was asked by Ms. Mildred
Webber of the committee staff to confirm that environmental groups had not been invited to
participate in the hearings of this committee, To the best of my ability, I contacted Sierra Club and
Clean Water Action offices in the states where hearings were held. I spoke with the following,
Sierra Club leaders: Jean Packard, Virginia; Ed Painter, Indiana; Jeff Schmidt and Joe Turner of
Pennsylvania. Each either works in the Sierra Club.office of that state or is in a position to have
received notice of the hearing if one were received. No notice was received in any of these offices
and only Joe Tumer had even heard of the hearing held in Norristown, Pennsylvania, He noted that


60

Mr. McINTosH. Thank you, Dr. Larsen.

Let me take an opportunity to speak now for the record here
what we've said in several other of our hearings. If for any reason
you feel that FDA has—or any other Government agency for any
other of the witnesses has, as a result of them participating today,
taken a tougher or more aggressive stance vis-a-vis their business
or their enterprise, let us know because we are aggressively pursu-
ing examples of that where the agencies have sought to intimidate
people from coming forward.

And frankly, this Congress will not permit that to happen. So the
agencies are on notice that we're going to look into any such allega-
tions of that. And if you or anybody else who has been here today
feels that is happening, please contact us immediately.

Dr. LARSEN. Thank you.

Mr. McINTosu. Thank you for your testimony.

Our next witness is Mr. John Solheim who is the CEO of St.
Mary’s Regional Health Center in Detroit Lakes, MN, which I take
it is where Mr. Peterson hails from.

Welcome and thank you.

Mr. SOLHEIM. Thank you.

Mr. Chairman, members of the subcommittee, my name is John
Solheim. I am the CEO of St. Mary’s Regional Health Center in
Detroit Lakes, an 87-bed hospital with a 100-bed attached long-
term care facility.

I would like to thank you for this opportunity to speak to you
today about some of the overly burdensome Federal regulations
placed upon hospitals and nursing homes these days.

But first, I would like to thank Congressman Collin Peterson and
Congressman Gil Gutknecht and the subcommittee for their legis-
lation that would require a cost benefit analysis of new regulations
and require review and elimination of regulations that have out-
lived their usefulness.

I applaud the entire House of Representatives for its monthly
correction day as a mechanism to speed up the elimination of un-
necessary regulation.

In fact, much of what I will present today also has been identi-
fied by the American Hospital Association as candidates for Correc-
tions Day action.

In Minnesota and across the United States the emphasis these
days is on increased cooperation and collaboration among health
care providers. The goal is to bring the various segments of the
health care system together to improve the quality of care, increase
efficiency, reduce costs, and eliminate duplication.

Congress could help us by modifying the so-called Stark law
which prohibits physicians referrals when the physician has a fi-
nancial relationship with the organization to which he or she is re-
ferring and Medicare fraud and abuse laws which prohibits pay-
ment in exchange for referrals of Medicare and Medicaid patients.

The guiding principle of these laws—to prevent physicians from
inappropriately referring patients for unneeded services based on
the potential for financial gain—remains valid. But these laws
were drafted when health care delivery was dramatically different
from the systems that are evolving todav.


Transplant
patients don’t-
know what
they’re missing
ALG scandal.denies
thousands ‘the drug

many doctors consider
the best, safest

GANNETT NEWS SERVICE

When Philip Bruell had a + kiandy
transplant in 1988, doctors gave him one
of the most successful transplant medi-
cines ever used to keep his body from
rejecting the organ. When he needed it
again last year, the drug had been
banned.

The one he received instead made
him so ill he wound up in the hospital
for two weeks “too sick to even signa
check.”

The victim of a research scandal at
the University of Minnesota, the drug—
Minnesota ALG — was withdrawn three
years ago this month by the federal Food
and Drug Administration after more
than two decades of use.

Inan ely case that has soiled the uni-
versity’s reputation, the illustrious sur-
geon who made ALG a success, John
Najarian, has been charged with a chain
of criminal misdeeds, including selling it
illegally and contributing to the deaths

of nine patients."

But lost amid
the accusations are
the real victims:
thousands of organ
transplant patients
denied a drug
many doctors con-
sider the best and
safest, and whose
substitutes may
cause serious side
effects or, possibly, lower survival rates.

Particularly at risk, they say, are
blacks and children, both of whom have
a tough time getting their bodies to
accept donor organs and for whom ALG
has been shown to increase survival
rates, In addition, at least one doctor
blames a patient death on the drug he
used as an alternative. Some also report
more cancer, but caution that the com-
plexity of transplant therapy makes it
impossible to find a cause,

“Not having this drug around has
been very detrimental — to the point of
death of certain individuals,” said Dr.
Joshua Miller, University of Miami chief
of transplant surgery, who used ALG on
more than 1,000 patients.

Tt was one of his patients who died
from an allergic reaction when a drug
called ATGAM was used after ALG was
withdrawn. Baylor Medical Center sur-
geon Tom Gonwa also may have had a
patient die from a reaction to ATGAM.

Said Miller: “We may never know for
certain, but there are probably a lot of
deaths that will result from using less
effective alternatives.”

One clue is a study in the journal
Transplantation in February showing

John Najarian
FACES CHARGES

Please see ALG, 4A >


18

Mr. McInrosH. Our next witness in this panel is Mr. Bruce
Gohman who is president of Gohman Construction Co.

Mr. GOHMAN. Good afternoon. I would like to thank Chairman
McIntosh, Representative Gutknecht, Representative Peterson for
allowing me to testify here today.

My name is Bruce Gohman and I am president of W. Gohman
Construction Co., located in St. Joseph, MN.

The background of W. Gohman Construction Co., is that we’ve
been in business 45 years doing general building construction and
primarily in commercial, industrial, and institutional building and
remodeling business. Currently, we have 47 employees located on
six construction sites and our base office. Our service area is ap-
proximately a 60-mile radius of St. Cloud.

Today I would like to talk about regulations concerning OSHA,
wetlands regulations and compliance with Government regulations.

On OSHA, our small company, in 1994, had 16 inspections. I be-
lieve that the inspectors are primarily looking for violations, not
necessarily ways to make job sites safer, as during the time that
the OSHA has been in place, we haven’t seen any significant
change in the amount of accidents that have occurred.

Primarily, one of the other concerns that I have is that when
OSHA comes out they presume you to be guilty until you can prove
your innocence. You get a citation, and then you try to fight your
way out of it instead of being the rest of the way; of being innocent
until being proven guilty.

Before we had OSHA we used to have what was called the Indus-
trial Commission, and they used to work with you to try to help
with situations rather than issue citations and generate just pure
revenue.

Our safety record, I feel, has been very good in our company. In
with all those inspections we had last year we had two citations,
both of them considered to be minor. One, $110 for an improper
gasoline can at the College of St. Benedict, which that project had
three inspections. Another one for $110 for a saw guard on a school
project in Melrose, which project had four inspections in 1994.

In 1993, we had two citations, both for paperwork kinds of
things. We were charged with not training employees on right to
know, and not keeping full documentation at every job site.

We contested the citations and they were dismissed by the attor-
ney general after a great deal of documentation was provided. I can
show you the kind of documentation that we have for that.

We've put through a lot of efforts to provide our workers with a
safe and healthy workplace primarily through the use of training
and safety meetings, awards for safe working time. For example,
for every 90 days of work without a loss-time injury we have an
award that is provided. And these vary in order to keep it interest-
ing for our people.

There is more time spent on documentation to prove compliance
than sometimes is actually done on actual worksite safety. We feel
that these need to be corrected so that we can do a better job of
actually making sure that our people are on a more safe condition
rather than worrying about bureaucracy.

Wetlands is the second issue that I would like to speak about.
This causes a great deal of difficulty in the construction industry


47

Mr. McIntosu. Thank you.

Dr. LARSEN. In recent years the field of medicine has been in-
creasingly burdened by government regulation. Unfortunately, this
has pot necessarily resulted in better medical care for you and your

family.

There are so many things to touch on in 5 minutes. I can’t do
what Bill Clinton didn’t do in 100 days. But I will touch on just
a couple of things that tend to be concerns for us in the medical

eld.

Federally funded peer review by the peer review organization
which is abbreviated PRO was mandated by Federal law in 1983.
On the surface this appears to be a noble cause, but in actual prac-
tice the PRO does not appear to increase quality of care and places
an unneeded regulatory burden on health care providers.

A scholarly article which appeared in March of this year in the
Journal of Florida Medical Association reviewed patient mortality
in a large 988 bed community hospital prior to implementation of
PRO activities and compared this to mortality figures after the
PRO was in place.

The results showed no significant improvement in patient out-
come in a regulated environment, and certainly in this cost con-
scious time in which we live it doesn’t seem like that is very good
use of our health care dollars.

Our experience in central Minnesota would suggest the ineffec-
tiveness and unnecessary nature of the PRO activities as well. I am
personally aware of dozens of cases where the PRO in our State
contacted physicians regarding alleged deficiencies in care pro-
vided, but on review it was actually the PRO that was mis-
informed, not up to speed, inadequately educated, and in fact in
some cases they went on record as advocating clearly unnecessary,
costly tests prior to local anesthetic surgery.

In trying to talk to the reviewers at the PRO we were told that
for objectivity reasons their anonymity had to be protected. We
have certified letters from them but there really is no one we can
talk to. The PRO here in Minnesota is located in Bloomington and
the medical director is Thomas Quick. He is a family practitioner
and really is not trained in a lot of specialty matters.

Another thing that has us concerned is the attitude taken by the
U.S. Department of Justice in its increasingly aggressive effort in
trying to combat alleged fraud and abuse in the federally funded
health care programs including Medicare and Medicaid.

While dishonesty in these programs must be addressed, the
present attitude of the Justice Department in many cases is mis-
guided and appears to violate the constitutional rights of many of
the parties under investigation.

At a recent conference I attended, there were numerous in-
stances around the country where armed government agents ar-
rived unannounced at various clinics, seized records, took property,
personal items, and disrupted the delivery of the health care at
that office.

The attorney speaking was a Mr. Allan Reider who is out of
Washington with the Arent Fox law firm. And it seems like it is
more of a “gotcha” game just like Mr. Gutknecht was referring to.


51

SPECIAL ARTICLE

Whither the PRO?

Analysis of the Effectiveness of Three Medicare
Peer Review Organizations in a Florida Hospital

study was
mess of a peer review organization
in a not for profit, 988-

41001), during the year
ducted (1992), and when PRO activitien were again fully
‘expanded (1002).

[AU Medicare hoxpitol discharge, including death,
were included from Januiry through May during 1983,
1900 through 1903. There wae uo intervention.

Patlent mortality as u determinant of PRO effective
nets was evaluated prior '0 the PRO, during a portion of
the years the PFHC held the contract ax the Medicare
PRO, and an identical tim period one year later with I
ted PRO review and ogain the following year when full
revlewe returned, The nuriber of deaths did not change
algnificantly. Mandated per revicues of care fo inpatient
hospital Medicare beneficiaries did not significantly
improve health care as mevaured by mortality.

Fedoraily-funded per review by the Peer Review
Organization (PRO) wa: mnndated by federal law in
1983 at the time the diay nosis related groups form of
reimbursement was instituted. The purpose was to
assure adequate medien! care to Medicare beneficia-
ries." Little information is available to determine the
extent to which the PRO actually influenced care.
Moreover, available information is somewhat
contradictory. Most stuclics look at isolated areas of
care and do nol review overall outeome such as
mortality*

Florida presents a unique opportunity to eval
ate the effectiveness of the PRO. The Professiona!
Foundation for Health Care (PFHC) reviewed all
cases according to its “Scope of Work” from 1983
until May 1991. At that time due to concerns of Ue
Iealth Care Financing Administration (and subsc
‘quent legal action) the contract with the PFHC was
(erminated* Subsequently during 1992 only limite
review was performed by Blue Cross/Blue Shield of
Florida, Ine., until a new contract was awarded (+
Florida Medical Quality Assurance, Inc. (FMQA).”

From January through May 1992 Blue Cros:/
‘Blue Shield conducted only limited reviews of chart:
It was asked to perform this function under provi
sion of law upon closure of the PFHC and until th
government could effect a permanent contract
through the competitive request-for-proposel
process. The Blue Cross/Blue Shield PRO conductet
these activities: Section 1867 (antidumping) caser;
reviews of potential cardiac catheterization facilities,
and beneficiary quality complaint reviews. Also pet~
formed were customer service-related function:
including written and telephone inquiries.”

During the perio! January through May 1999,
the more expanded, full scope of the "XO was
resumed. ‘The contract was awarded on June 21.
1993, to FMQA, an affiliate of Alabama Quali
Assurance Foundation. The Third Scope uf Work:
was then instituted. This included random sample o!
beneficiaries for day outlier, cost outlier, readmis
sion, transfers, intervening care, specialty hospital
optional focused review; other samplings including:
hospital DRG adjust request, preadmit, preproce
dure review, hospital notices, beneficiary complaints,
external referral from HCFA regional offices etc.;
sampling of ambulatory surgery, freestanding car-
diac catheterization facilities; review process of tech.

J.PLORIDA MA. / March 1996 / Vol. #2, No, 9/203


80

re can't just judge everything on the basis of how much money can
e made.

For God’s sakes, that is Government’s role. That is your role in
Washington: to save that small little fragment of wilderness that
is left, to save that small little—Exxon wants to go up in northern
Wisconsin and take the Flambeau River and dig it all out and turn
it all into a huge copper mine.

I mean, if you just let these guys run rampant, it is just—so I
guess I would like to have some comment on that.

Mr. PETERSON. Mr. Chairman, if I could: I do not disagree with
you. And I am not doing this because of the almighty buck, if you
will. There are just a lot of things that are going on out there that
are not doing anything to preserve pintail ducks or any of these
other species. That is what drives my constituents and me crazy.

For example, the Endangered Species Act we're going to have up
for overhaul. I think we all generally support what they’re trying
to accomplish, but they get off on these tangents.

They found a gopher in California or Washington State, and I
don’t know, it has got some kind of name. I saw a picture of it. It
looks exactly like the pocket gofers that I tracked when I was a
kid. It looks exactly the same. Some guy bought a piece of property
in California or wherever and found these gophers on this property
that they said are endangered. Do you know what they made him
do? He had to build concrete tunnels for these gophers and fill
them up three-quarters with dirt and leave a tunnel on the top so
these gophers could run around underneath his property.

In another case they found some snakes. And they made the guy
put carpet, green carpet underneath the ground so these snakes
could crawl around.

Mr. HALL. If that is the last member of that species, don’t you
think that species is worth saving?

Mr. PETERSON. It is not the last member of these species.

Mr. HALL. It must be endangered. It’s close to the last. Can I an-
swer you? I’ve heard those anecdotes, and here is one that is totally
untrue.

Billy Tauzin, one of your converted colleagues—this was on CNN
just a week or so ago—he cited an anecdote of some poor person
in Louisiana that was restricted. That person responded that they
had no problem with the regulatory agencies. They had a beautiful
area. They lived off a swampland. And he turned around and
threatened the person that revealed that, the person who it was his
land, he threatened that person with a lawsuit.

Mr. PETERSON. I don’t want to get into that. I’m saying I saw the
picture of this gopher. I saw the picture of this concrete culvert
that they made this guy put in. It cost him $300,000. It is ridicu-
lous.

We need to get in the Endangered Species Act to an ecosystem
management that makes sense, not forcing some poor landowner to
do something ridiculous that is going to bankrupt him.

And the second thing on this wetlands stuff: You go up in my
country and fly with me in my airplane in the spring, you will see
that 95 percent of the wetlands are drained because there is still
water sitting around where they used to be. You can see them.


13

1 inued) :

The cost of clean-up to Anderson Trucking Service was

$584,000.00.

All of the spilled fuel was contained at the site in the ditch
and did not run off. ‘The wise and practical solution would have been
to set the oil on fire and burn it on site instead of removing it and
putting it in a disposal site. It would have burned clean with no
damage whatsoever. There is no civilization within two-hundred miles

from the spill site.

From 1969 until today, this was the only spill we’ve had by our
operations. We had no insurance coverage for an unusual and
unexpected expense of this magnitude.
mity 0: e :

An area where the federal government could be helpful, one that
I believe could result in benefits to the truck transportation
industry and the consumer is the study and research of the economic
benefits of uniformity of state laws, especially as they pertain to

the movement of overweight and oversize loads.

Today, there are many variations of laws that restrict the
movement of oversize/overweight loads across the U.S.A. The problems

today are several, such as:

. The variety of truck and trailer equipment to meet

requirements of different states.


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yo anon au m soy 2iUTY & aBeLED

jw quauystund ayy eyeudosddeuy
pajau anny oye as0ip 20) uang “sue
‘ywtyd oxox youyeBe pasa Bujoq ose
wn eop29) otf 01 8KQO op [79
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pesned a eg gua pene

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“be Burge 4 usual ae pd

nq [ye #} woneindar yom “no ey

re a Je prom vay sien)

‘na ou wore Puy “umes

Pau yim swuodeas @ Aevnt 4

quawianseua ayy s0yT!9 yey) UO!E

~nppuso otf oy our spud] gaeHD eat)

‘uy uaee oney [ queue ouL
suopeindas powymy

-souyreyy Jo worgeryag » ax sony ou
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sou fain saupyou ques w ay unpRKyd

snap 30

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‘Goan gy9o4 aooym pu uaugeas But
“caopumn axe ox quaryud yo spsooss
Jeoypaus ensues oy ayeuidaulde oy

evuorrod pu esafojdiae Bussey
Shouid suo Buipuaseap uode

Jo} queyinsucs juawasingu.
(Pood w ajnpoype youues nox jo)

‘SMBN AWBOUNS EVINDO


2

dates. Congress is committed to putting a hold on new regulations
and cutting back on unnecessary redtape. We will force the bu-
reaucracies to consider the loss of jobs and other costs and use good
science and protect private property rights when they regulate.

In the elections last November, Minnesotans and Americans ev-
erywhere made it clear they want to change the way business is
done in Washington. So far in the 104th Congress many of my col-
leagues have made this our chief mission.

Today we hold this hearing to hear what the people of Minnesota
want in terms of cutting back on regulation and redtape.

The ideas communicated here today will help inform the regu-
latory debate in Washington and will help this subcommittee for-
mulate further steps in addressing this problem. Particularly, your
suggestions today will help us identify regulations that can be ad-
dressed through Corrections Day.

This is a new process that Speaker Gingrich has instituted where
in the House of Representatives twice a month we will repeal oner-
ous and burdensome regulations. He has appointed both Congress-
man Peterson and me to serve on an advisory committee to imple-
ment this new plan.

Significant regulatory reform is needed to stop the growth of big
government and regulations that have crept up over the last 30
years. Currently, there are 110 different agencies with over
130,000 employees issuing, enforcing, and writing regulations every
day. In 1994 alone there were 64,914 pages of new regulations in
the Federal Register.

Furthermore, the cost of regulations has skyrocketed. The Clin-
ton administration National Performance Review estimated that it
cost us $430 billion per year for Federal regulation. Experts in the
private sector have indicated it could be as much as $600 billion
per year. That is about $6,000 for every household in America.

The burdens of regulation represent a hidden tax on the Amer-
ican middle class. Companies are forced to comply with regulations
and pass along those costs to the consumer. For example, 10 per-
cent of the cost of groceries are due to the regulatory burdens
passed on from the Federal Government.

Sometimes we see regulations that just don’t make any sense. In
our Florida field hearing we heard from a small businessman,
David Hurley, who said that he had stopped the growth in his com-
pany at just below 50 employees because he doesn’t want to be bur-
dened with a whole new set of regulations that come into place
once he gets over 50 employees.

The real losers there are the men and women who could have
jobs with that small business and others like them.

Today I want to hear from a variety of people in this area, small
businessmen who are struggling under these regulations, rep-
resentatives from local government and others who want to testify
in how they see we can cut through a lot of this regulatory redtape.

If the gentleman in the audience will let us proceed—if the gen-
tleman will please take his seat, we will have an open session at
the end of this proceeding in which anyone who wants to, may at
that point, testify. And we will keep order in the meantime so that
everyone has a chance to be heard.


72

Mr. McInTosu. If you could state your name and where you are
from so that we can put that into the record.
Yes, sir.

STATEMENTS OF ROD SKOE, CHAIRMAN, MINNESOTA CUL-
TIVATED WILD RICE VICE COUNCIL; TOM HALL; FORREST
WILKINSON; GINNY YINGLING, ASSOCIATE STATE DIREC-
TOR, CLEAN WATER ACTION; ROSE ARNOLD, CHAIR,
STEARNS COUNTY BOARD; BOB MINKS, MINNESOTA PLANT
FOOD AND CHEMICALS ASSOCIATION; DAN COLBURN,
CHAIRMAN AND CEO, COLBURN, INC.; RICHARD WEBB; AND
DREW WILKENSON

Mr. SKOE. Yes. My name is Rod Skoe. I am chairman of the Min-
nesota Cultivated Wild Rice Vice Council. I am a farmer from rural
northern Clearwater County in Minnesota.

I’m attempting to continue what my father and uncle started 30
years ago which is doing some economic development in Clearwater
County. We started our project—our farm. We were receiving tax
credits.

We recently spent over $20,000 in attorney fees alone for our last
U.S. Corps of Engineers permit.

I spent 6 years now on the wetland regulatory maze. The main
reason this has taken 5 plus years and thousands of dollars is the
Fish and Wildlife Service. The Fish and Wildlife Service wants a
pristine and untouched world. They do not recognize that agricul-
tural lands are fields and not native areas any longer.

The amount of time and money that the agencies have spent on
my 53 acres, they could have bought these 53 acres. For the
amount of time and money I’ve spent, I could have bought them

ack.

The NCRS is supposed to work with agriculture. Why have two
Government agencies doing the same thing? The Fish and Wildlife
Service does not understand agriculture. Why does the Fish and
Wildlife Service have the authority to undo the National Conversa-
tion of Research Service’s work?

I have gone through the Corps of Engineers permitting process
and mitigated all the wetlands that were converted on my farm. I
have worked with the NRCS through the State level to the national
level to achieve a minimal effect statement.

And the Fish and Wildlife Service at a very late date, after they
had commented on the Corps permit, said that there were valuable
wetlands that were converted and my mitigation wasn’t valuable
enough.

Please remember that the county that I live in, Clearwater Coun-
ty, has 80 percent of its presettlement wetlands remaining. It is
not like we’re not in an area that has wildlife and water holding
areas.

These counties need economic development more than they need
duplication of government oversight on wetlands. Specifically, I
would request that wild rice, because of its unusual nature as a
crop—we are not removing the wetland characteristics of the areas
that we farm—should receive an exemption from the Food Security

ct.


27

These counties contracted with the Northern States Power Co.
with a put-or-pay contract to supply refuse. As part of this process,
Stearns County and many other counties in Minnesota passed
what are called designation ordinances to ensure delivery of waste
to those particular facilities.

Up until the Carbone decision, I believe that the solid waste sys-
tem here in Minnesota and many other States was relatively sta-
ble. However, with the Carbone decision, waste designation ordi-
nances that many counties had enacted were deemed to be illegal
for waste that would be leaving the State.

What are the effects of this particular decision? Stearns County,
to coin a phrase from Commissioner Arnold, is in a hemorrhage.
We're bleeding to death. We have a financial crisis that we are fac-
ing. And there are, I believe, a number of different aspects to that.

First of all, since that decision, local governments no longer have
the control over future environmental liability for the waste that
may be leaving their State. With the system that we did have in
place we could assure that our waste was being processed and
treated in the safest manner possible. We can no longer ensure
that.

One of the real concerns that we have is that we are incurring
or may be incurring future environmental liability with no control.

Second, taxpayers are responsible for the contractual obligations
that we have with Northern States Power Co. If we don’t supply
the garbage, we still have to pay.

In addition to those funds, taxpayers are still responsible for
their refuse bills.

What we're asking for is that the House pass legislation that
would be similar to what the Senate passed earlier this year. The
Senate version of the flow control bill would allow those govern-
ment units which had designation ordinances in effect at the time
of the Carbone decision to continue. And we are really sorely in
need of your assistance on that matter.

The second issue, as the local government unit that is respon-
sible for administering the Wetlands Conservation Act here in
Stearns County, we are very sensitive to the regulatory maze that
our constituents must often face in dealing with the wetlands issue.

I would like to point out a program that I believe is working to
help reduce regulatory duplication between State and Federal pro-
grams, and that is the Corps of Engineers General Permit 17 Pro-
gram.

The program designers of this program recognize that the scope
of the regulated activities between the Corps section 404 regulatory
program and the Minnesota Wetland Conversation Act were essen-
tially the same.

Along with granting the authority to Stearns County to admin-
ister that portion of the program, the State also made some funds
available so that we are able to facilitate our constituents passage
through this regulatory maze.

Again, I would like to thank you for this opportunity and cer-
tainly urge your help here, especially on the solid waste flow con-
trol issue.


70

Apparently, these organizations were set up to try and have the
Government figure out what the best and most efficient way to do
things and get rid of fraud? That was the theory behind this in
1983, I understand; is that what they were up to?

Dr. LarsEN. And supposedly to monitor the quality of the care.

Mr. PETERSON. This just operates in the Government’s sector of
the medical system?

Dr. LARSEN. Most of the cases I’ve been associated with are with
Medicare.

Mr. PETERSON. So you don’t have any kind of system within your
professional organizations to do a similar kind of thing, because it
has kind of been pushed out by this Government program, is that
what has happened?

Dr. LARSEN. Well, within every hospital and surgical center there
is a quality review department that monitors quality outcomes, et
cetera. So the Federal program is essentially redundant.

Mr. PETERSON. Yes; duplicating that; right.

Dr. LARSEN. Certainly, Tccording to this article and from my own
personal experience which is supported by speaking with many of
my colleagues, the PRO does not appear to be giving us our mon-
ey’s worth for improvements in care. And I think we could do very
well without it and people would still get treated very well.

Mr. PETERSON. Is that pretty much the feeling throughout the
medical community? That these things—time has passed? Kind of
like the health planning agencies and all these other ideas that
didn’t work?

Dr. LARSEN. As you know, any Government agency—and I am
not expert in governments, but it seems like they try to justify
their existence. You know, you get a different answer from the

Mr. PETERSON. Yes; but within your profession they clearly see
this as redundant? That the existing committees could do a better
job?

Dr. LARSEN. I have not spoken with any of my physician col-
leagues who have shown me one case that they felt the PRO im-
proved the standard of care, the quality of care, for any individual
that they’ve taken care of.

Mr. PETERSON. I think in this new climate we may have a chance
to seriously take a look at this.

You say they haven’t implemented any of these rules, and they
haven’t even proposed regulations. How do you operate if they
haven’t done them and don’t even know what they’re going to be?
Do you just kind of guess?

Mr. SOLHEIM. Again, you incorporate legal counsel that seems to
always have the answer for some of these proposed things. And you
limit your arrangements that you can do in the creativeness that
the market drives and puts together to actually integrates.

So you really guess. You have sometimes cases that come out
that attorney generals have prosecuted or something like that that
sets some formats to follow, but it varies from State to State.

So it really limits the creativeness that can go on of two individ-
uals, physicians, in hospitals that want to collaborate. So it is real-
ly a guessing game.

Mr. PETERSON. What if you guess wrong?


y

et

Testimony of John Solheim, CEO, St. Mary's Regional Health
Center In Detroit Lakes, before the Government Reform and
Oversight Subcommittee on National Economic Growth, Natural
Resources and Regulatory Affalrs. Rep. David Mcintosh (R-IN)
chair.

1:30 p.m., August 7, 1995, the Board Room of the Stearns County
Administrative Center, 705 Courthouse Square, St Cloud, Minnesota.

Mr. Chairman and members of the subcommittee, my name is John Solheim. |
am the CEO of St. Mary's Regional Health Center in Detroit Lakes, an 87-bed
hospital with a 100-bed attached long-term care facility.

1 would like to thank you for this opportunity to speak to you today about some
of the overly burdensome federal regulations placed upon hospitals and nursing
homes these days. But first, | would like to thank Congressmen Collin Peterson
and Gil Gutknecht and the subcommittee for their work on legislation that would
Tequire a cost-benefit analysis of new regulations and require review and
elimination of regulations that have outlived their usefulness. And | applaud the
entire House of Representatives for its monthly “Corrections Day” as a
mechanism to speed up elimination of unnecessary regulations. In fact, much of
what I will present today has also been identified by the American Hospital
Association as candidates for Corrections Day action.

In Minnesota and across the United States, the emphasis these days is on
increased cooperation and collaboration among health care providers. The goal
is to bring the various segments of the health care system together to improve
the quality of care, increase efficiency, reduce costs and eliminate duplication.

Congress could help us by modifying the so-called “Stark” law, which prohibits
physician referrals when the physician has a financial relationship with the
organization to which he or she is referring, and the Medicare fraud and abuse
Jaws, which prohibit payment in exchange for referrals of Medicare and Medicaid
patients.

The guiding principle of these laws — to prevent physicians from inappropriately
referring patients for unneeded services based on the potential for financial gain
— remains valid. But these laws were drafted when health care delivery was
dramatically different from the systems that are evolving today. They stand in
the way of hospitals, physicians and other providers working together to
coordinate care, because any truly coordinated system involves a variety of
teferral and financial arrangements.


20

In 1990, OSHA published voluntary ergonomic guidelines for the
meatpacking industry, seeking to minimize the incidents of CTD’s.

Also being considered is USDA’s Pathogen Reduction Hazard
Analysis Critical Control Point’s proposed rule. Unfortunately, this
latter rule proposes time and temperature requirements for slaugh-
ter processing facilities that are known to aggravate CTD’s.

But OSHA is not the only culprit in illogical regulatory strate-
gies. One case in point illustrates our frustration in dealing with
another Government agency.

On Saturday, June 22, 1991, near midnight, our plant in south
St. Paul had a control valve, a new control valve, malfunction in
our ammonia refrigeration system. This ammonia is the same am-
monia used by farmers for fertilization of fields all over this coun-
try. Nevertheless, the release of ammonia was enough for about
1,000 pounds, which triggered notification to the National Re-
sponse Center which we did on Monday morning, June 23, 1991.

More immediately, on Saturday night we notified the south St.
Paul Police Department and the south St. Paul Fire Department,
which in turn notified the State Emergency Response Commission.
We also followed up with a written response on July 5.

We did not try to conceal this release. We believe we notified ev-
eryone necessary in a timely manner. There was no loss of life or
limb; no injuries of any kind. We replaced the malfunctioning valve
and thought everything was fine.

On October 21, 1993, over 2 years later, I received, by certified
mail, an administrative complaint from the Environmental Protec-
tion Agency charging us under section 109 of the Comprehensive
Environmental Response Compensation and Liability Act, section
325 of the Emergency Planning and Community Right to Know

ct.

We were being charged not for failure to notify, because we did
notify everyone on the next business day at 8:20 a.m., but because
that was not good enough for being charged with failure to notify
immediately the National Response Center. This, in spite of the
fact that the police department, the fire department and the State
emergency response center all had immediate knowledge and suc-
cessfully dealt with the problem.

The amount of the fine was $75,000. We could not believe it. So
we compounded the problem; we hired an attorney. [Laughter.]

Well, the result was hundreds of hours and thousands of dollars
later we finally reached an agreement on March 3, 1995, and put
an end to this situation that served no useful purpose. With regard
to HASAP, we currently spend $1.5 million a day inspecting meat
and poultry products.

In addition to the regulatory demands already placed upon the
meat and poultry industry, USDA’s Pathogen Reduction, as a pro-
posed rule, by the Food and Safety Inspection Services own admis-
sion will result in an additional $73.5 million in cost to the indus-
try.
Unfortunately, many experts feel that the agency’s estimate of
HASAP cost requirements to implement the proposal are underesti-
mated, probably significantly.

In conclusion, I think we must prioritize our regulatory re-
sources, provide flexibility, use modern risk-assessment and man-


37

Second example, at exactly the same time as Moorhead was faced
with enormous costs to comply with Federal water quality regula-
tions which we have documented do not increase water quality in
any appreciable or necessary way, another Federal agency, the U.S.
Army Corps of Engineers, is allowed to discharge large quantities
of poor water without having to meet any standards, causing Moor-
head’s water treatment costs to significantly increase.

Third example, in 1983, at the direction of and with financial as-
sistance with Federal and State agencies, Moorhead constructed
and opened a state-of-the-art innovative technology waste water
treatment facility at a cost of over $27 million.

Now, at the direction of Federal agencies, in order to comply with
new and ever changing Federal regulations, Moorhead, with no fi-
nancial assistance, has been required to construct a $2 million
sludge storage facility which by all accounts will not achieve any
significant environmental benefit.

ermore, the city is threatened with the application of am-
monia/nitrogen standards that would require the expenditure of an-
other $12 million to achieve compliance, and that too would double
waste water rates.

Added to the problem is the fact that if we had proceeded with
compliance, Moorhead would have spent $12 million to meet the
ammonia/nitrogen standard and would still be in violation of simi-
lar but not equal standards imposed by the State of North Dakota.

What is really the crowning blow about this unfunded Federal
mandate of regulation is that technical experts have told us that
no water quality improvement will be achieved by our compliance.

What is even more disturbing is that we have learned that the
Federal regulation being imposed is based on outdated science, and
that several cities and States throughout the country have been
granted relief from this regulation. Why not Moorhead? Why not
simply update this Federal regulation?

Fourth example, increasingly, we have found that Federal regu-
lations open the door to frivolous litigation that ends up being very
time consuming and costly for local units of government. As a re-
cent example, well-intended ADA regulations have resulted in liti-
gation that defies common sense or was unnecessary in order to re-
solve issues.

Another ADA compliance problem is the fact that visually im-
paired people object to wheelchair accessible curb cuts which make
it very difficult for visually impaired people to walk the street.
Here is a case where compliance could prompt litigation. Compli-
ance.

Fifth example, public housing preference rules require that 9 of
every 10 available units be filled by persons with preferences. With
regard to elderly/disabled housing, most preference applicants are
disabled significantly under the age of 62. This policy does not
allow for local flexibility in meeting community needs, and is lit-
erally forcing seniors out of this housing option.

The final example I want to cite is Federal regulations governing
mass transit require that all new and rehabilitated buses be wheel-
chair accessible at the cost of approximately $20,000 per bus. In an
area with adverse winter climate 9 out of 12 months, these wheel-


57

ae
{ALG twice as effective as ATGAM in pre
$enting eary rejection of donor ney.
tA serious rejection episode is considered
survival.
pet ALG back. But the reasons may be
jinay fear reprisal by the FDA.

“to compromise long-term

t ‘Oddly, there has been little clamor to

einderstandable: Few patients know

about it, and many doctors who used it

2: “Patients don’t have access to this
§ ‘No doctor would ever say,

eres hs gent dug but gre drugs needed

you, ” said Lisa Kory, head of TRIO,
Siransplant Recipients International
D.C. A for-

ner transplant coordinator, Kory saw
complications in patients after the

Yor 21 years, and so accepted did it

that many likely did not closely

ions regarding its use.

me experts estimate it was used in

‘two-thirds of kidney transplant patients,
{as well asin heart and liver patients

& “Tknow for a fact there are

Swho would like to complain abgut its

loss but don’t for fear they, too, will be
investigated,” said Dr. Arthur Caplan,
medical ethicist at the University of

“immoral” the

Pennsylvania, who terms
sudden removal of ALG.

But interviews with more than a
dozen of the nation’s top transplant doc-
tors and other experts reveal that eve
three years after its withdrawal, many
centers are still ‘to fll he ga ep
left by ALG in the complicated brew of
by transplant patients.

“What service has been done the pub-
lic?” asks Dr. Phillip Halloran, medical
director of the division of nephrology at
the University of Alberta, who used
ALG in hundreds of patients over a

years.
“More harm has been done by with-

ely drawing this drug than permitting its
withdrawal has left

‘use to continue. The
opp that costinany Deore dea
‘Minnesota antilymphocyte

serum made from the blood hoses

often credited with providing the break-

through that made Kidney transplanta.
tion mainstream and put the bril-

liant Minnesota surgegn Najarian, who


23

your being here. Joe Opats was with us earlier. He apparently had
to leave. Rose Arnold, county commissioner, is with us. And Dave
Price, senator from this area; glad to have you with us today.

Are there any other representatives?

Im sorry, Representative Ken O’Tremba from the Long Prairie
area. We have one of your constituents up here. We’re glad to have
you with us today.

And Roxanne Daggett, representative from Prasee, MN, is here
with her husband Dave Daggett from the Daggett Truck Line. I
used to be their CPA and I used to have lots of trucking clients,
so I know about the problems that you have been having with the
Federal regulations. I appreciate you being here today, Roxanne.

We had earlier Chuck Winkleman from the city and also the vice
president of the city council, Jerry Donalon. They had some meet-
ings with the airport authority. They're trying to get some things
worked to get the airport expanded, so we excused them for this
afternoon. Harold and I are interested in what they're doing out
there at the airport, right Harold?

Are there any other elected officials that I missed?

[No response.]}

Mr. PETERSON. We very much appreciate their involvement in
this hearing.

Both for Mr. Benedict and Mr. Helgeson, following up a little bit
on the chairman’s conversation with you, I just wanted you to be
aware that I’ve had Mr. Taylor and Mr. Dear in my office to talk
to them about the OSHA and HASAP regulations.

One of the things we found out when we had a hearing in Wash-
ington was that when Mr. Dear from OSHA was in testifying that
he basically said that he had not been in consultation with the
USDA about this issue, which I think points out part of the prob-
lem that we’re having with this. That we've got different agencies
going in different directions and not talking to each other. But he
assured us that would not happen in the future.

In any event, we've had a discussion about this, on the
ergonomics issues and, also as you know, the mega reg has kind
of been put into a different category and they’re going to include
the industry.

So I think we’ve made some real progress on both of those issues.
And I think this committee deserves some recognition for being a
prime moving force behind that whole situation and getting those
things brought to the forefront and getting some resolution some
problems that could have caused us a lot of trouble, I think, had
we not been on top of them.

We very much appreciate you coming here and being with us
today. We are happy to be able to report that we've made some
progress in the area that you are concerned about.

Mr. Anderson, I guess I wasn’t aware of the situation. I mean I
was aware of the Highway 23 safety problem, but I frankly had not
thou ht about this situation, I guess was not aware of this 50-foot

robiem.
» Have you been in touch with the folks at the National Highway
Traffic Safety Administration about this?
Mr. ANDERSON. Just the local——


90

‘There is no real support for regulatory moratoriums, outside the business communities with a
vested, monetary interest, but there are compelling reasons to oppose such moratoria. Every day,
science is leaming more about the harm we inflict on ourselves and our environment when we alter
the chemical balance of our air, water and land. Our government agencies should be free to act on
this new knowledge, unhampered by Congressional micro-management and interference by monied
interests.

Budgetary “sneak attacks” - The House EPA Appropriations bill, passed in July, was nothing,
more than a back-door attack on a federal agency tasked to protect the public health and the
environment. While adding even more responsibilities to these federal agencies through legislation
such as H.R. 9, Congress in the Appropriations bill slashes the funds available to meet even
‘current responsibilities. For example, additional research and staff will be needed at the EPA to
comply with the requirements imposed by proposed risk assessment / cost-benefit analysis process.
However, the Appropriations bill specifically cuts EPA research dollars. This bill also limits
highly successful programs that allow towns and cities to protect our drinking water and to treat
‘our waste water For example, Minnesota still has over 105 sewage treatment systems that, during
times of heavy rainfall, overflow and pour raw sewage into our surface waters. The House
Appropriations bill would cut funding to small cities secking to address this situation through
infrastructure improvements. The bill also eliminates funding for low-interest loans for safe
drinking water infrastructure. This is insupportable

Specific Co Regar ny During the August 7, 1995 Hea
‘As has so often happened in this debate over reforming government, apocryphal tales of the
bureacracy out of control have taken on a life of their own. Yet when these tales are tracked down
to their sources, they very often are found to be exaggerated at best, or entirely false at worst. I
‘would like to respond to some of the comments made at the August 7 hearing in St. Cloud that
appear to fall into this category

Mr. Gregg Benedict, of Long Prairie Packing Company, cited an example of how two agencies
may have conflicting regulations. The example he used was that the Occupational Safety and
Health Agency (OSHA) requires restaurant employees to wear steel mesh gloves while cutting,
carrots, but the the Minnesota Department of Health (MDH) considers this a health violation, The
MDH confirms that this would be a health violation, but Mr. Roy Miner of the Minnesota OSHA
office informed me that they have no such requirements for cutting carrots. In fact, he observed
that the only requirements they have regarding the use of knives in restaurants is that they be sharp
and, when not in use, they be contained in a block or sheath. Hardly the onerous and burdensome
government some would have us fear. However, where there are conflicts between regulations,
Congress should mandate a review of the regulations and a resolution to the conflict that is worked
out by the responsible agencies.

Mayor Morrie Lanning of Moorhead, Minnesota described the difficulties his city has had meeting
Safe Drinking Water Act and Clean Water Act requirements. In particular, he described how
Moorhead had opened a “state of the art” waste water treatment system, only to be told that they
must now add a $12 million ammonia nitrate system. However, when I contacted Mr. Marvin
Hora of the Minnesota Pollution Control Agency (MPCA) Water Quality Division, he explained
that a state grant program had paid 90 percent of the cost of Moorhead’s waste water treatment


44

Mr. ADAMS. No; we're talking about the State wetlands project.

Mr. PETERSON. That was my question: So you are not including
the Federal wetlands?

Mr. Apams. We're only administering the core program that
would affect three acres or less.

Mr. PETERSON. So we still haven’t gotten to one situation?

Mr. Apams. Things like Swamp Buster, no, those are not admin-
istered.

Mr. PETERSON. Do you think it is feasible that we can ever get
to some point where one agency—where people that want to deal
with wetlands only had to go one place?

Mr. Apams. I think on that issue the State of Minnesota is cor-
rectly studying the whole wetlands regulatory program. I believe it
is the Department of Natural Resources that has a committee and
has had a committee for the past couple of years. I think that
they’re going to get there.

I guess from my standpoint we’re finding that people have a very
difficult time with the bureaucracy. As you stated there are many,
many agencies that are involved in wetlands. It would be nice to
have a focal point.

Mr. PETERSON. We're at the Federal level. One thing we’re trying
to do, Dave Minge and I and others, is to try to, at the Federal
level, get to one agency making the determination. I don’t know if
we're going to get there or not. There is an awful lot of resistance
and an awful lot of misinformation being put out by different
groups, but we’re going to do.

Under this mitigation situation, this may be out of your purview,
but just wondered if you were aware: I’ve heard that people in the
Twin Cities were mitigating wetlands in Becker County. Appar-
ently, there is no rule against that. I was told. So you have to put
two acres back for every acre that you pave over or whatever.
They’ve been coming way out-of-state and getting the mitigation.

Is that kind of thing going on in Stearns County that you're
aware of? Are they coming up out of the cities and mitigating in
this county? Are you mitigating in other areas?

Mr. VOLKER. We did under the interim program. Under the per-
manent rules, the State program can’t do that any longer. It would
be right here in Stearns County. But that is true. Stearns County
has a site, I believe, near Big Stone where we are doing that.
Under the interim rules that is permissible.

Mr. PETERSON. Mr. Chairman, if I could just break the rule here
for 1 second. I had a long discussion with Mr. Dear from OSHA.
Do you operate in other States?

Mr. VOLKER. Yes, we do.

Mr. PETERSON. He told me—and the chairman kind of alluded to
this—he has a systematic program to change the mentality of
OSHA from a compliance to a more on what you're talking about.
He says he has done it in five or six offices. I think one he men-
tioned was New Jersey and whatever. And it is going to take 1%
years or 2 years for him to get it done because he can only do so
many at a time. He says he literally has to go out there himself
and lay the hammer down to get things to change.

Is this going on? Do you know about this?


85

the last glacial intrusion. The Des Moines lobe did reach all the
way to Des Moines and in its recession it backed up—it did not ac-
tually back up but melted and deposited great amounts of sediment
and soil over the region.

It also deposited huge amounts of water as it receded. It backed
up over a glacial moraine that is presently over the Dakotas and
Manitoba and created one of the largest freshwater lakes ever re-

orted.
p It is named after Mr. Agassiz, a French geologist who first came
up with the glacial theories.

This lake—the level of glacial Lake Agassiz rose as the water
built up behind the glacier as it melted. The normal lay of the land
would have had that glacial lake drained to the north through
Hudson’s Bay, but the large ice mass in effect damned it up.

As the water level rose it eventually breached a glacial moraine
at present day Brown’s Valley, and the glacial River Warren was
spawned. We would see water flowing in excess of the amounts of
the Amazon, and it carved a trench some 3 miles wide in spots,
some 600 feet deep through this glacial fill.

It flowed from present day Brown’s Valley to Mankato, it took a
dogleg left, a 90-degree left to present day St. Paul where it took
a dogleg to the right, and flowed south to present day Cape
Girardeau, over approximately Commerce Gap. Downstream of
that, known as the Lower Mississippi, is in essence flowing over
the remains of the trench.

As the ice continued to recede, it opened up what is called the
Nelsons River. The Lake Agassiz drained away and it left behind
a massive trench in which at the bottom you will find the Min-
nesota River and the Mississippi River.

This glacial trench of which I spoke is massive. It is huge. And
it dominates the landscape. And it greatly impacts the characteris-
tics of the underfit streams that flow in the bottom of it now.

So what we see in the region of the Minnesota River, we see a
sluggish, slow meandering river, highly susceptible to flooding and
sedimentation due to its natural characteristics on the bottom of
this trench.

Primarily due to the large size of the Minnesota drainage basin,
the rainwaters fall on this flat glacial terrain, and have to eventu-
ally fall those 200 feet into the bottom of the River Warren trench.
And in the process it releases great amounts of energy which is re-
leased in erosion of these highly glacial soils. And all of these tribu-
tary streams falling into the River Warren channel are eroding as
they have been doing for some 10,000 years now and this can be
tracked.

Hence, the River Warren, and that is our namesake. The River
Warren Research Committee has chosen that as their namesake
because of a 4-year study put on by the State of Minnesota and
some Federal agencies.

In essence, the only way they could come up with the conclusions
they have was, in essence, to ignore the glacial River Warren and
its impact on these water basins.

Mr. McINtosu. Thank you. I appreciate that.

[Applause.]


62

revisited and revised so that these rules that were once useful do
not stand as a barrier to progress toward higher quality, low cost
effective care.

Thank you.

[The prepared statement of Mr. Solheim follows:]


86

Mr. GUTKNECHT. Mr. Chairman, I asked him that question so
you can better understand this area. Literally, all of northern Min-
nesota and much of Manitoba were one giant lake at one time.
They were drained by this powerful river that they have named
River Warren.

Mr. WILKINSON. Correct.

Mr. GUTKNECHT. And if you ever fly over the bluffs or spent some
time in the bluff area of my district down along the Mississippi
River, it helps to explain why you see this sort of carved-out area.
It was a giant and powerful river.

Mr. WILKINSON. Massive. Absolutely monstrous. And it started
relatively quickly and ended relatively quickly and left a dynamic
bluffline of which Mr. Gutknecht spoke of, most of which is in high-
ly erodible terrain.

Mr. GUTKNECHT. When all of this happened, it had profound eco-
logical consequences.

Mr. WILKINSON. Massive, and some believe that this is truly the
father of waters. Everyone believes that the Mississippi is.

Mr. McInrosu. Thank you both. I appreciate that enormously.

Mr. WILKINSON. Thank you. Have a nice day.

Mr. McINTosu. Thank you.

Our next witness on the open microphone, if you could give us
your name and tell us where you are from.

Ms. YINGLING. Sure. My name is Ginny Yingling. I’m the State
director of Clean Water Action. We chose not to testify today even
though we did receive an invitation at the 11th hour Friday after
we issued a press release about this hearing because we had been
told—or at least one environmental group had been told—that no
environmentalist would be allowed to testify.

The only reason I am coming forward now—I had no intention
of legitimizing this hearing—except I have to respond to some of
the comments that were made, both in the press conference before
this hearing, and during this hearing about why environmentalists
were not speaking, and I want to set the record straight on how
this happened.

A little over a week ago one environmental group in this State
received an invitation to attend the hearing and the letter specifi-
cally said there would only be testimony from business people.

en a person from that group contacted Congressman Peter-
son’s office they were told that they would not be allo-ved to testify,
that the speakers had already been selected. They said that they
might get Back to her; they never did.

We issued a press release on Thursday and immediately on Fri-
day morning, we were contacted by Congressman Peterson’s office
with an offer to testify, which we refused because we felt it was not
a sincere offer. It was only because we had threatened to expose
the fact that these hearings were not going to be fair.

This open microphone clearly is a last-minute thing. It is not on
the program for today. There has not been an effort to make these
hearings fair; witness the fact that we had no idea that there was
a hearing to be held down in Rochester.

So I wanted to refute the statements that were made in the press
conference before this, that we were told we would be allowed to
have a panel; we were not. We were told we would be allowed one


31

OSHA REFORM -- A SAFETY PROFESSIONALS PERSPECTIVE
by
David R. Volker

1am David R, Volker, Loss Control Manager of Berkley Administrators.
My company is a third party administrator of self funded insurance programs here
in Minnesota. We also have similar operations in several other states. We perform
services for our clients similar to an insurance company by handling claims,
performing payroll audits and providing loss control services, but we bear none of
the risk of loss as an insurance company usually does. We administer self funded
insurance programs for a wide variety of employers.

I am appearing here today at the request of the Minnesota and National School
Boards Association. A very successful self funded workers' compensation
program that we have administered for the Minnesota School Boards Association
since 1979 has almost every school district in the state as a member. In the past
16 years, our safety and loss control services, along with responsible and
competent claims handling that we provide to our client school districts have led
to a lower than average rate of employee injury and illness than would be expected
nationally. Injuries, when they did happen, resulted in lower cost claims,

My staff of 13 full time safety professionals and I also provide workplace injury
prevention consultative services to most of the Municipalities in the state, many of
the largest private health care providers, and a select group of private self insured
employers. Through a contract with the Minnesota Assigned Risk Plan for
Workers Compensation we provide consultative loss control services to our largest
group of clients; over 20,000 small and medium sized businesses all across
Minnesota. During the past 5 years we have visited over 10,000 work places
statewide to help our client employers prevent injuries and illnesses among their
employees.

It is not by coincidence that our client employers often ask us to help them
research, interpret and apply OSHA regulations. We are perceived by our clients
as an alternative, less threatening source of reliable information about OSHA and
how to comply with what they often perceive are onerous and arbitrary standards.
‘We sometimes act as a buffer between the OSHA compliance officer and our
client to the benefit of both the employer and the employee. In some cases, we
can point out violations of OSHA regulation for our clients before an OSHA


7

of St. Cloud, Anderson Trucking Service operates a large mainte-
nance facility. This is on Highway 23 which is two lanes at the
present time. Further plans in the area call for Highway 23 to be
widened into a four-lane highway.

We have asked that in the widening process, in addition to turn
lanes being installed, that the widening process would include a
median separation. A width of no jess than 80 feet is needed be-
tween the lanes so that a truck would have room to stop before
crossing over to the other lane. This is a safety factor and a key
safety factor.

Our property is on a township road which leads up to this inter-
section. The present plan of a 50-foot median separation would
cause our trucks to extend into the other traffic lane when crossing
from one lane to another.

This situation is caused by the limitations imposed by the EPA
because a small portion of the land that we would be willing to give
up is considered a wetland. The highway department is prohibited
by the EPA from doing this.

Millions of dollars will probably be spent on this portion of high-
way. Yet, when it is finished it still will not accommodate trucks
entering or crossing in a safety manner. It is time to consider the

serious economic effect that this can have in terms of safety
efficiency. The existing laws of today are not flexible enough
to accommodate practical solutions to even minor problems.

Future four-lane development of Highway 23 is now planned to
go through the towns of Rockville and Cold Springs instead around
the towns, due to EPA restrictions regarding the use of farmlands
in the countryside.

The following comments are from a local Minnesota D.O.T engi-
neer. One, wetland regulations could be more sensitive to safety is-
sues. Small changes in median widths have higher impacts on safe-
ty than the marginal benefit of wetland reduction. Agencies request
guardrails instead of allowing safe roadway slopes in some cases.
This is only marginally beneficial to wetlands but a bigger safety
sacrifice.

Wetland regulations should clearly differentiate between pre-
viously disturbed and undisturbed wetlands. Additional impacts
caused by the projects on the existing roads are usually small
strips and should not be challenged to the extent that draining and
filling of undisturbed wetlands are.

Historic regulations apply to a State and Federal regulation that
don’t apply to private and nonstate/federally funded projects. The
public spends tons of money to preserve an insignificant portion of
the total resource while if a landowner has kept land containing a
resource, it could be destroyed at will. The system is very inconsist-
ent.

Our Stearns County engineer stated at a meeting last Tuesday
that they purchased wetlands in western Minnesota for $54,000 to
replace wetlands that was needed for Stearns County road im-
provements.

Mr. McINtosu. Mr. Anderson, if you could go ahead and summa-
rize your testimony, we will put the full document into the record.

Mr. ANDERSON. OK. I’ll get the item on fuel tank removal, which
will be part of that and which is a problem. And one item would


46

her specifically what she thought the American people expected
from OSHA. Her answer was that she thought the American people
wanted more efficient and effective regulation.

In my view that was an attitude—that wasn’t the answer I want-
ed to hear. I suggested I think what the American people wanted
was more reasonable regulation.

What we seen and heard so much of from small employers par-
ticularly is this game of “gotcha” that is being played. It is not
about making the workplace all that much safer; it is about almost
filling—getting more scalps up on the wall or more fines being lev-
ied.

We are going to continue to press this one. I think there is a gen-
eral feeling in the Congress that the pendulum has gone too far
and it has to come back to the center for the benefit of the small
business people in particular.

Finally, I would like to say to the mayor I’m glad you made it
through the traffic jam because I think the nine points that you il-
lustrated, the nine recommendations or principles, really do Jay the
cornerstones for the kind of regulatory reform that we're talking
about.

Just to pursue what Congressman Peterson said: I think we’re
moving ahead at relatively quick speed by Washington standards
in the House on some of those things. It is moving although little
more slowly in the Senate. If you can put a little pressure on our
two U.S. Senators from Minnesota we would appreciate that.

But we thank you for coming and we thank you for your testi-
mony today.

Mr. McIntosu. Thank you all for coming. I appreciate it. And we
will include any other written remarks you would like to submit
into the official record for today’s proceeding.

Thanks very much.

Let’s move on now to our third and final full panel for the hear-
ing, and then as soon as this is over we will open it up to an open
microphone session for anyone else who would like to make com-
ments within the allotted time.

As the panelists come forward, our next panel is several people
who have been dealing with health care delivery services. And we
will discuss some of the problems that regulations cause in making
our health care even more expensive.

Gentleman, if I could ask all of you to please rise and raise your
right hand.

[Witnesses sworn.]

Mr. McINTosH. Our first witness is Dr. Peter Larsen with the St.
Cloud Eye Clinic.

Dr. Larsen, thank you and welcome.

STATEMENTS OF DR, PETER LARSEN, F.A.C.S., ST. CLOUD EYE
CLINIC; JOHN SOLHEIM, CEO, ST. MARYS REGIONAL
HEALTH CENTER; AND ED ZAPP, PRESIDENT, ZAPPCO, INC.

Dr. LaRSEN. Thank you very much. I know the hour is getting
late and I will try to keep this brief.

I certainly appreciate your remarks at dinner and I certainly ap-
preciate people in Washington speaking our language. Thank you
so much.


6

So I think the work of this subcommittee is extremely important
as it relates to small business people, as it relates to farmers, and
ultimately as it relates to our ability to compete in the world mar-
ketplace.

So I am glad that the subcommittee, two of the most important
people on the subcommittee are here today. I think the testimony
will be excellent. I look forward to hearing it, and I say let the de-
bate begin.

Mr. McINTosH. Thank you very much, Mr. Gutknecht. I appre-
ciate you coming today and tomorrow we're going to be having
hearings over in Rochester, in your district. We look forward to
those as well.

Let me call forward the first panel. If you could take a seat here
in front. Karen, on the subcommittee staff, has put out nameplates
so we will know who you are.

And while they’re doing that, if I could ask the people in the
back row—apparently there is an overflow crowd of people who
would like to come in and hear the proceeding—to make as much
room as possible, if the back row of chairs could move forward as
far as possible, I think we can create some standing room behind
you for additional people to take part in the proceeding. Thank you
very much.

Before we start with introductions of our first panel, Chairman
Clinger, who is the chairman of the full committee, has requested
that we swear in all of the witnesses before our hearings.

If I could ask all of you to please rise and raise your right hands.

[Witnesses sworn.]

Mr. McINTosu. Our first witness is Mr. Harold Anderson who is
president of Anderson Trucking Service.

Thank you for coming today, Mr. Anderson. Please proceed.

I would ask if your written testimony goes over 5 minutes to
summarize and then we can put the full thing into the record.

STATEMENTS OF HAROLD ANDERSON, PRESIDENT, ANDER-
SON TRUCKING SERVICE; MICHAEL HELGESON, CEO,
GOLD’N PLUMP POULTRY; BRUCE GOHMAN, PRESIDENT, W.
GOHMAN CONSTRUCTION CO.; AND GREG BENEDICT, VICE
PRESIDENT AND GENERAL MANAGER, LONG PRAIRIE PACK-
ING CO. AND SIMPLE MEATS

Mr. ANDERSON. Good afternoon. My name is Harold Anderson.
Tm president of Anderson Trucking Service, ATS, headquartered in
St. sioud, MN. ATS is a family owned truckload carrier founded
in 1955.

Last year our company operated 525 company trucks, 400 owner-
operators. We have over 200 administrative support personnel and
we had revues of $125 million.

I appreciate the opportunity to appear this afternoon regarding
the burdens of Federal Government regulation on small business.

Many of the Government regulations problem we have encoun-
tered have centered around the EPA. When it comes to highway
planning and development, EPA should be advisory and not con-
trolling. Here are a few examples of what I mean.

The local Highway 23 project is one that we have that is of eco-
nomics and safety as it relates to ATS and the public. Just west


40

Mr. Chair, Members of the Sub-Committee and Friends:

Lam Morrie Lanning, Mayor of the City of Moorhead, Minnesota. Moorhead is a city of 33,000
located in Northwestern Minnesota on the border with the state of North Dakota and shares a
twin city status with Fargo, North Dakota.

J appreciate this opportunity to testify on an issue of great concern to my community and many
cities throughout the country, namely the urgent need for federal regulatory reform. Federal
regulations are a fact of life and in many cases serve necessary and useful purposes. However,
throughout my 22 years in elected office, I have witnessed ever increasing numbers of complex
federal regulations that are unnecessary, unfunded, unfounded and problematic.

Let me briefly identify some examples of problematic federal regulations which have affected

Moorhead:

1

wwt\mil. wpd

Federal regulations arising from the Safe Drinking Water Act caused the City to
spend $14.5 million dollars to expand and renovate our water treatment facility,
an expenditure which could have been delayed for possibly up to 20 years through
more intensive water conservation efforts. Nearly $4 million dollars of the $14.5
million was incurred to meet new federal water quality regulations. This
expenditure which has had little if any effect on the quality of Moorhead's
drinking water, is a striking example of a mandate not producing the desired
effect. Since 100% of the cost of these new and renovated facilities was borne by
the City, in other words an unfunded mandate, water rates will soon be doubled
from the level of rates prior to the imposition of these federal regulations.

At exactly the same time as Moorhead is faced with enormous costs to comply
with federal water quality regulations, which we have documented do not increase
water quality in any appreciable or necessary way, another federal agency, the
United States Army Corps of Engineers is allowed to discharge large quantities of
poor quality water without having to meet any standards, causing Moorhead's
water treatment costs to significantly increase.

In 1983, at the direction of and with financial assistance from federal and state
agencies, Moorhead constructed and opened a state-of-the-art "innovative
technology" wastewater treatment facility at a total cost of over $27 million
dollars. Now, at the direction of federal agencies, in order to comply with new
and ever changing federal regulations, Moorhead with no financial assistance has
been required to construct a $2 million dollar sludge storage facility, which by all
accounts will not achieve any significant environmental benefit. Furthermore, the
City is threatened with the application of ammonia/nitrogen standards that would
require the expenditure of another $12 million dollars to achieve compliance and


19

because the rules are always changing, and we never know what
we can and what we can’t do. It is just a very difficult situation.

Also, the geography of our area is such that we have a large
number of wetlands. And it is very difficult for people with an over-
abundance of wetlands to understand why the importance and
value of those wetlands and to work with that.

And basically, what has been done in the past, even though we
have a large number of wetlands in our area, it is that we have
been required to create two units of—for example, two acres of wet-
lands for every acre of—from dry land for every acre of wetland
that would be required to facilitate some kind of a project.

Mr. McINnTOsH. Go ahead and summarize if you would like.

Mr. GOHMAN. The only other thing that I have here is talking
about Government compliance. In our small business of just 40-
something employees, we just did a calculation for the last year
that our office staff spent about 1,384 hours to keep up with the
regulations and the rules and so on, particularly because there is
a lot of duplication of efforts for one agency to another.

And to conclude, I would just like to say that after spending over
30 years in the business it seems that we spend far too much time
trying to document compliance of various rules and regulations
than actually going out and doing our business.

I would like to thank you for the opportunity to be here.

Mr. McINTOSH. Thank you very much for your testimony.

Our final witness on this panel is Mr. Greg Benedict who is the
general manager of Long Prairie Packing Co.

Mr. Benedict, welcome and thank you.

Mr. BENEDICT. Good afternoon. My name is Greg Benedict, and
I’m am vice president and general manager of Long Prairie Pack-
ing and Simple Meats in Long Prairie and south St. Paul, MN, and
Yankton, SD.

We're part of a family owned business, that was started in 1946,
which currently employs over 600 people, processing over 500,000
head of cattle per year.

I appreciate the opportunity to testify today about the impact of
regulations on our company and on the meat industry. I think ordi-
nary citizens share your view that regulatory agencies have gone
astray and that regulations no longer include the common sense
that most of us bring to bear to deal with real problems in our ev-
eryday lives.

My company’s experience quantifies some of the regulatory costs
on a smaller scale. For over 10 years, until 1990, I handled all of
the regulatory affairs myself as well as all safety and personnel
matters.

With increased Government regulations over the past couple of
years, although we have not increased sales or volume, we have
had to add three more people to deal with more and more laws and
regulations.

One problem we deal with is conflict between Government agen-
cies. One conflict that arises between USDA and OSHA are pend-
ing proposals that have major consequences for my company. The
meat packing industry ranks among the highest of all industries in
the incidence of cumulative trauma disorders or CTD’s.


14

Uniformity of State Laws (continued)
2. The extra miles of travel necessary to go around

restrictive states

3. The excessive time delay to obtain permits due to

the fact that every state has its own permit section.

Numerous other examples can be furnished upon request.

There ie a tremendous amount of money that can be saved by
uniformity of laws pertaining to size and weight movement. Shippers
have told us that the ocean costs from Europe to east coast ports are
less than trucking from the Midwest. These excess costs would be

significantly reduced with uniform regulation by the various states.

States not willing to participate in uniformity should have

their allotment of federal funds reduced.

Thank you for the opportunity to present our information,


3

We do want to hear from all sides in this debate so that we can
take a record back to Congress on what problems there are in the
regulatory process.

I will ask everyone who participates to keep their testimony to
5 minutes so that we will have time to hear people at the end of
the process, and so that everyone will have a chance to get their
views into the record.

Any additional statements or written papers that you would like
to be made part of the record can be submitted, and we will include
them as part of the official record.

Before we start on our first panel, let me turn to Mr. Peterson.
Would you like to make an opening statement?

Mr. PETERSON. Thank you, Mr. Chairman. Good afternoon, ev-
erybody. I’m glad you’re here with us today as we continue our ef-
fort to overhaul the system of Federal regulations and hopefully to
make government better and smarter for all of us.

I want to thank you, Mr. Chairman, especially for bringing the
subcommittee to Minnesota’s Seventh District.

As the chairman has indicated, we have traveled to a lot of other
parts of the country, and we are going to spend the next couple of
days here in Minnesota.

You and I, Mr. Chairman, have been working together on this
subject since this new Congress convened back in January, and as
we have traveled around the country we have heard a consistent
theme: make government smaller; make government work more ef-
ficiently, and get rid of intrusive and expensive regulation that
makes no common sense.

That is a tall order, and the more I get into this the more I real-
ize what a tall order it is. But I think because of the commitment
this subcommittee and our working together on these goals that we
are making some progress, and I’m hopeful that eventually we will
change the mentality of the process.

During the first 7 months of the 104th Congress we, I think, had
an extraordinary record in this subcommittee where our jurisdic-
tion is concerned.

Regulatory reform, because of the chairman, has been at the top
of our agenda from the outset. And despite considerable resistance
from the entrenched bureaucracy in Washington, the House has
passed legislation that just might get us all going in the right di-
rection, provided that we can get the Senate focused as much as
we've been on these issues.

In January this subcommittee got right to work on this subject
and by the end of February we passed a moratorium on regulations
to give us kind of a timeout so we could examine what we're doing
and see if there is a way we can do things better.

We also passed cost-benefit analysis and risk-assessment legisla-
tion, Regulatory Flexibility Act, and a number of different propos-
als, including the Regulatory Sunset Act, which we just passed, I
think, what, a few weeks ago, 3 weeks ago, which is going to re-
quire that these agencies are going to have to justify these regula-
tions or they’re going to sunset.

A lot of you may not know, but we have 204 volumes of Federal
regulations. And if you sat down to read these regulations 40 hours


69

ALG was withdrawn from the market or at various centers around
the country in 1993. It has been off for 2 years now.

Mr. McIntosu. I really appreciate you bringing that forward. We
just had Dr. Kessler before our subcommittee along with another
subcommittee on the issue of breast implants. His scare tactics
caused numerous women to forego treating breast cancer surgery.
It looks like we’re going to have to get him back. This is amazing
to me.

Thank you for bringing that forward. We will look into that be-
cause anytime somebody’s life is at stake I think we’ve got a re-
sponsibility to make sure that we’re not making stupid decisions.

One other quick question and then I will turn it over to my col-
leagues. On the question of fraud, one of the issues that we have
been looking at—either for Dr. Larsen or Mr. Solheim—is to em-
power patients to let them have the ability or an incentive to gain
an economic benefit if they identify fraud in the Medicare system.
You can apply that more broadly to some of the other Government.
finance systems as well.

Do you think that would work better as, say, a replacement
maybe, for the Stark Act prohibitions or other things? Do you think
that approach will actually help us reduce any type of abuse or
fraud in the system and create more pressure to reduce the costs?

Mr. SoLHEIM. I think anything other than the Stark bill will
help, and I think having the consumers—which they do now—have
incentives to look at the bill, that is important. The industry wants
regulation for severe product abuse, but overburdensome to achieve
that 10 or 5 percent of the problem is—overcompensates for the
issue and limits the meaningful things that could go on the market
that largely benefit the consumer in the longrun.

So anything but the Stark bill I think would be an improvement
from the hospital provider side. I don’t know how the doctor feels.

Mr. McINTosH. I will tell you the patients think there is a lot
of it going on. Whenever you mention this—we all have town meet-
ings in particular in this issue—and people say: Well, let me tell
you about this. This can be one way where you can say, well, now
you have something to do about this.

Dr. Larsen.

Dr. LARSEN. Yes; that would be a good program if it also carried
with it the accountability of whoever is making the accusation so
it doesn’t foster unnecessary accusation.

No system is perfect, but it seems like maybe the market system
is still advantageous in giving up goods and services in many ways.

Mr. McIntosH. Thank you all. I appreciate that. Mr. Peterson,
do you have any questions?

Mr. PETERSON. Thank you, Mr. Chairman.

I want to thank the panel for bringing some good issues of testi-
mony before us. I will try to be brief in case there are any other
folks who want to testify.

Dr. Larsen, on the physician review organizations, our group of
coalition democrats had a presentation by most of the health care
people in this country a couple of weeks ago with regards to some
ideas they have for reforming Medicare, trying to inject some more
competition as a way to try to control costs, which seems to make
a lot of sense.


24

1 Mr. PETERSON. Just local. So they may not be aware of this prob-
lem.

I can suggest, if you’re interested, that we would very much like
to work with you on this in our office here in St. Cloud and try to
bring this concern forward. I think it is a very valid concern.

We very much want to do something about the Highway 23 situ-
ation, but we don’t want to spend a whole bunch of money and
then find out that we’ve got a situation where we haven’t really
solved all of the problem.

Mr. ANDERSON. Call your office?

Mr. Peterson. Yes. If you would contact my office here in town,
we will work with you and get that to the appropriate folks because
I think that is a real valid concern.

Mr. Gohman, I was struck by that 47 employees. The minute I
saw that I thought, ah ha, here is another person who is trying to
stay a small business.

That is one of the problems, you know. We've had this kind of
attitude that, well, we can have all these regulations because we’re
going to take the little guys out of it and therefore it is OK some-
how or other. But what we do is we create these clip effects that
have all kinds of other unintended consequences. That is really not
the way to address the issue.

I think we need to get to the bottomline fundamental change
which the chairman and lare working on. We appreciate you being
with us today. My time is up. Thank you all for good testimony.

Mr. McIntosn. Thank you, Mr. Peterson. We appreciate that.

Mr. Gutknecht, do you have any questions?

Mr. GUTKNECHT. Well, I don’t want to let Mr. Anderson get away
too quickly. He may not remember me, but I was in the State legis-
lature and I remember 11 years ago we came to St. Cloud and had
a hearing and talked about worker's comp reform.

You testified then. I congratulate you for what’s happened I
guess in the State legislature this year. And I hope as it relates
to regulatory reform that you will not be so long-suffering.

But I really want to get to the meat and poultry. I do want to
congratulate, Representative Peterson because I think as it relates
to the USDA and the farm bill and HASAP, the rewrite of HASAP,
I think he has become one of the leading articulators of the prob-
lems in the meat and poultry industry.

The chairman alluded to briefly, and I would like to put a point
to it, a problem that we have. One of the presidents of one of the
largest pizza companies in the United States, pizza stores, told us
a story early in the session.

He was told by the Department of Health that if they cut carrots
in the restaurants that they would have—I’m sorry—they were told
by OSHA that if they cut carrots in their restaurants they had to
wear steel mesh gloves.

They were told by the Department of Health that if they wore
steel mesh gloves that would be a violation of health standards. So
he was really caught between a rock and a hard spot. If they wore
the gloves they were in violation of one department. If they didn’t
wear the gloves they were in violation of the other.

The point I wanted to make—and we’ve had some interesting
discussions, and this isn’t so much a question, but you can com-


10

Highway 23 Project:

A local EPA problem that we have had is that of economics and
safety as it relates to ATS and the public. Just west of St. Cloud,
Anderson Trucking Service operates a large maintenance facility.

Thie is on Highway 23 which is two lanes at the present time. Future
plans in the area call for Highway 23 to be widened into a four-lane
highway. We have asked that in the widening process, in addition to
turn lanes being installed, that the widening process would include a
median separation. A width of no lees than eighty feet ie needed
between the lanas co that a truck would have room to stop before
entering in the opposite direction. Thie is a key safety factor.
Our property is on a township road which leads up to this
intersection, The present plan of a fifty-foot median separation
would cause our trucks to extend into the traffic lane when crossing

from one lane to another.

This situation is caused by the limitations imposed by the EPA.
Because a small portion of the land that we would willingly give up
is considered a wetland, the Highway Department is prohibited by the

EPA from doing this.

Millions of dollars will probably be spent on thie portion of
Highway 23 and yet when finished it will still not accommodate the
trucks entering or crossing in a safe manner. It is time to consider
the very serious economic impact that this can have in terms of
safety and efficiency. The existing laws of today are not flexible
enough in order to accommodate practical solutions to even minor

problems.


29

He has learned, as clearly demonstrated, that a safe job site is
a profitable job site because safety is good for business.

Despite a sterling safety record and an active safety effort, a
MNOSHA compliance officer visited one of his job sites without
prior notice not long ago. During the inspection the compliance offi-
cer found an extension cord whose ground prong was missing and
there was one other minor violation.

The compliance officer proposed a penalty of $2,500 for these two
violations.

OSHA gave the employer no chance to abate the violation prior
to citation. The employer fought the citation, saw some reduction
in his cost.

The employer quickly realized the next violation of this nature
could result in a doubling of the fine. That is the way the repeat
violations work. He remembered the dozens of extension cords that
he owned, and he made a decision. Before I tell you what that deci-
sion was, let me give you some background on this thing.

Before this happened, we visited his job sites to consult with his
supervisors and employees on what were the best and safest ways
to perform some of the more dangerous construction tasks. We em-
phasized procedural safety and worked toward making each em-
ployee individually responsible for his or her own safety.

This approach is very successful, as their safety records showed.
To reinforce this approach, the employer established and main-
tained a meaningful monetary incentive program for his employees
with good safety records.

Regulatory compliance was definitely a secondary issue. We en-
couraged this course of action because it had the backing of both
management and employees, but most importantly it worked. It
prevented injuries.

Our client has recently asked us to radically change our empha-
sis during our visits. He now wants us to inspect his job sites pri-
marily to make sure that no OSHA violations can be found. Those
that we do find, he wants us to inform him of immediately, by fax
if possible.

Now, while he is still concerned about preventing injuries, he re-
alizes that OSHA poses a larger monetary liability to his business
than does the cost of workplace injuries to his employees.

In other words, he sees OSHA compliance as a significant threat
to his corporate health and well-being.

His safety record bears him out. He has paid out more to OSHA
in the past 12 months in one fine than he has paid out in injury-
related costs during the same period. The OSHA fines that could
result from another minor infraction could wipe out the profit mar-
gin on a construction job valued at $1 million.

This is not an isolated incident, Mr. Chairman. We see that the
net purpose of OSHA compliance to date is usually not injury pre-
vention. Instead, it has become compliance for the sake of compli-
ance alone. Under the current interpretation of OSHA, there is reg-
ulatory compliance without any real connection to the true purpose
of workplace safety regulations which is injury prevention.

Clearly, there must be a remedy to this situation that will allow
this employer and others like him to continue to protect the health


- 98

MINNESOTA
PLANT FOOD AND CHEMICALS ASSOCIATION

1821 University Avenue + Room 204 + Saint Paul, Minnesota $5104 + (612) 644-6235 + FAX (612) 644-9348

August 11, 1995

Chairman David Mcintosh
Subcommittee on National Economic Growth, Natural Resources & Regulatory
Affairs

8377 Rayburn H.0.B

Washington, D.C. 20505

Representative Mcintosh,

Thank you for the opportunity to testify at the hearing held in St. Cloud, MN on
August 7, 1995.

As a follow-up to my comments | wish to submit the following

1. Operating permits under the Clean Air Act Amendments of 1990.
The retail fertilizer dealers are asking for relief from calculating emissions
based on potential to emit. Instead calculations should be based on actual
emissions. As background, additional information is included detailing the
problem the retail fertilizer industry has with the regulation. In addition,
based on fertilizer tonnage data from the Minnesota Department of
Agriculture, the average tonnage per year for the 550 retail fertilizer plants
in Minnesota is 2609 tons, approximately one third the size of the group
Minnesota Plant Food and Chemicals Association (MPFCA) surveyed.

2. Alcohol Testing.
The retail fertilizer dealers are asking for relief from requiring seasonally
employed people be included in random alcohol testing. In a pilot study
completed by the Department of Transportation, it was found less then one
percent of drivers exceeded the alcohol threshold levels. Additional
background information about the industries concems and a suggested
alternative are included on separate page.

3. HAZMAT Spills notification.
The retail fertilizer dealers are asking for a change to a one call system
and a one hour time frame in the notification system currently in place
under CERCLA (Superfund).


91

system and at the time it was being planned, had advised the city to construct it to easily
accomodate the systems needed to meet pending ammonia standards. The city chose to ignore this
advice and now finds itself facing a very expensive and nearly impossible upgrade to their existing,
system, According to Mr. Hora, had the city followed the MPCs advice, the addition of the
ammonia system would cost approximately one-sixth of what the city now must pay. Mr. Hora
also noted that the ammonia standards were set by the EPA to protect fisheries, that no towns or
cities on the Red River have been exempted from meeting them, and that Fargo -- directly across
the river from Moorhead ~- has had no trouble complying with the standards. .

Mayor Lanning also complained about a $14.5 million expansion and upgrade of their drinking
‘water treatment system, T contacted the Minnesota Department of Health and spoke to Mr. Dick
Clark who noted that this expansion was required to meet the growing demand that has resulted
from population increases in the Moorhead area and that the only real “upgrade” to the system was
a $1 million ozonation system added reduce disinfection by-products such as halogenated organics.

A wild rice grower who testified at the open microphone complained that the US Fish and Wildlife
Service (USFWS) has too much control over wetland development on agricultural land and argued
that only the Department of Agriculture should have this task. However, the USFWS has only an
advisory capacity to the Army Corps of Engineers on Section 404 permits. While the USFWS
may work with the landowner to develop permit conditions that protect the wetlands while allowing,
agricultural activities, the final approval lies with the Corps. Given the devastating floods that
have wrecked havoc on the Midwest over the last five years, and given that all reliable sources
within the federal and state governments and scientific community affirm that these floods were
‘exacerbated by the loss of nearly 60 percent of our wetlands in this area, itis entirely appropriate
that federal agencies are cautious regarding any additional drainage or development of the
remaining wetland areas

Ms, Harold Anderson, of Anderson Trucking Service, also complained about wetland protections.
He described how the EPA had held up the expansion of Highway 23 near St. Cloud because a
“small portion of the land involved” was classified as wetlands. Mr. Anderson had hoped that the
road would be widened to allow for a tum lane for the trucks entering and leaving his property and
stated that this was needed for safety considerations, However, when I contacted the Minnesota
Department of Transportation (MnDOT) public information office, they informed me that the
Highway 23 project was proceeding on schedule. I spoke directly with Dave Solsrud, the MnDOT
pre-design engineer in the St. Cloud office and he explained that the EPA review did not slow down
the project at all, He further noted that while safer designs are always possible, MnDOT
recognizes the importance of wetland protection and, having weighed all the various factors,
determined that the entire 4.5 mile segment in that portion of the project would not be widened.

Mr. Solsrud did not feel that this was an unsafe situation, given the levels of traffic on this portion
of Highway 23

Finally, during his closing remarks, Congressman Peterson described how government regulation
has run amok, citing two “stories” he has heard about endangered species. He did not provide
specifics on the species, simply refering to them as “some gopher in California or Washington
state” and some kind of snake, but told of ridiculous requirements imposed on unfortunate
landowners by the USFWS. He claimed that one landowner had to spend $300,000 building,
cconerete tunnels for the gophers and that another landowner had to lay out green carpets for the
snakes, The Endangered Species Act, in particular, has been the target of outrageous and false
claims and that appears to be what Congressman Peterson has heard, Without the specifics of


uN

Comments froma local MN D.O,T, Engineer

1. Wetland regulations could be more sensitive to safety

issues.

- Small changes in median widths have higher impacts
on safety than the marginal benefit of wetland

reduction.

~ Agencies request guardrail instead of allowing safe
roadway slopes in some cases. Only marginally

beneficial to wetlands but bigger safety sacrifice.

2. Wetland regulations should clearly differentiate between
previously diaturbed vs. undisturbed wetlands. additional
impacts caused by projects on existing roads are usually
small strips and shouldn‘t be challenged to the extent

that draining or filling undisturbed wetlands is.

3. Historic regulations apply to state and federal projects.
Regulations don’t apply to private and non-state/federally
funded projects. Public spends tons of money to preserve/
avoid an insignificant portion of the total resources,
while, if a landowner had kept land containing a resource,
it could (and many are) be destroyed at will. The system

ia very inconsistent.


97

Mr. Minks. Well, if we could make it work that would be nice,
yes, but it is not logical and not practical.

Gentleman, again, thank you very much.

Mr. McINTosH. Thank you.

Mr. MINKS. Would you like these written comments to be for-
warded to you?

Mr. McINTosu. If you have some additional written ones, I would
ask unanimous consent the record be held open for 10 days.

Mr. Minxs. OK. Should I direct it to you, Mr. McIntosh?

Mr. McINTosu. Yes. To the full subcommittee at my attention.
One of the staff can give you the mailing address.

[The information referred to follows:]


102

MINNESOTA
PLANT FOOD AND CHEMICALS ASSOCIATION

1821 University Avenue » Room 204 + Saint Paul, Minnesota $5104 + (612) 644-6235 » FAX (612) 644-9348

AIR QUALITY PERMITS
POTENTIAL TO EMIT STANDARD

Background

Under the federal Clean Air Act Amendments of 1990, facilities with air emissions
are required to obtain operating permits if they meet certain thresholds. These
thresholds are determined by the potential to emit or taking maximum output and
multiplying it by 24 hours a day for 365 days a year.

The operating air permits in most states are being phased in over a period of two
years on the basis of a firm’s Standard Industrial Classification (SIC) code. Most
agricultural firms have SIC codes of 51xx. These firms have until December 15,
1995 to file permits and pay the annual fee.

Problem

Surveying ten fertilizer dealerships around Minnesota, the average output per hour is
24.9 tons, with a total annual tonnage sold of 7200 tons. An EPA study concluded
the average emissions released from a fertilizer plant is .6 lbs of emissions per ton of
fertilizer sold.

Based on the average output above, the actual emissions per year is 2.16 tons.
Using the federal threshold of potential to emit emissions become 65.44 tons.

As one can easily see, the emissions calculated under potential to emit is 30 times
the actual amount released during the year.

Solution

When determining if an operating air quality permit is required, allow seasonal firms
to use the actual amount released instead of the potential to emit.

The concept of potential to emit does not fit agriculture. There are only so many
acres of land to farm. Thus, only so many tons of fertilizer will be sold during the
year. Why should firms be required to obtain permits for emissions they will never
produce during the year?


* Eliminate the need to do the Minimum Data Set (MDS) for some residents. It
currently has to be generated for everyone admitted to a nursing home
regardless of length of stay. This is an unnecessary amount documentation
which uses valuable nursing staff time

« Eliminate routine assessment of a resident's condition and require
assessments only when their is a change in health status. This also
represents a duplication of documentation that is not necessary and again is
a misuse of professional nursing staff time.

« Eliminate the perpetual surveillance of nursing homes that have a
demonstrated track record of complying with standards and providing quality
care. Give facilities that have proven themselves a longer interval between
compliance surveys.

Not all regulation is without value. But it is important that as the health care
environment evolves, old rules and regulations be revisited and revised so that
these rules, which were once useful, do not stand as a barrier to progress toward
higher quality, more cost-effective care.

Thank you again for your time this afternoon and your interest in this issue. And
thank you again to Congressmen Gutknecht and Peterson for their continued
support.


71

Mr. SOLHEIM. Then that’s—you guess wrong and you end up
being fined retroactively if they ever get the rules out. Organiza-
tions are limited by setting up these systems. Some go ahead and
do it to the best of their knowledge at that time and take that in-
herent risk.

Mr. PETERSON. How do the attorneys dare to advise you? If
they’re wrong wouldn’t they be liable?

Mr. SOLHEIM. They always have a contingent clause at the bot-
tom saying: This is based on our opinion at the time that these——

Mr. PETERSON. I'll give you some advice if you want some.

Mr. SOLHEIM. Right. You know, but they go around the rest of
the country and look at organizations, and they kind of guess. It
is a guessing game.

But it really paralyzes local communities from doing what is
right, to integrate care for the future which the market will draw.

Mr. PETERSON. I am familiar with the IRS. We didn’t have the
regulations half the time either when we were trying to operate.

Mr. Zapp, I think you’re aware that we are moving in the House
for some pretty decent regulatory relief legislation for banks. And
we're hopeful we’re going to get rid of a lot of these regulations
that you have been talking about.

Mr. Zapp. They really are needed. I applaud those efforts.

Mr. PETERSON. And I think all of us are onboard and are going
to do what we can do to get rid of a lot of that.

Thank you, Mr. Chairman.

Mr. McINTosu. Thank you, Mr. Peterson.

Mr. Gutknecht, do you have any questions?

Mr. GUTKNECHT. Mr. Chairman, I don’t have any additional
questions.

I just want to thank the witnesses and thank you for your excel-
lent testimony.

Mr. McIntosu. Thank you all for coming.

By the way, Mr. Solheim, I noticed you had mentioned one thing
on nursing homes about decreasing the amount of inspection for
those with a proven track record and focusing the effort on ones
where there are problems.

That seems to me to move in exactly the right direction, both in
creating incentives for them to be in the good list, not the bad list,
and then targeting your resources where there are real problems.
Thank you for that in particular.

Thank you all for coming today. I appreciate it greatly.

Dr. Larsen, let me talk to you later about this ALG issue.

At this point I would like to invite the gentleman who requested
some time at the beginning of the hearing to perhaps be the first
witness in the open forum. If you want to come forward.

Then anyone else who would like to participate, please come for-
ward and perhaps form a line down the center aisle for us, if you
don’t mind. That might be the easiest way for us to do that.

(Pause.]

Mr. McInTosH. What I propose we do is ask everyone to keep
their remarks to 3 to 5 minutes, whatever you need. Then we will
ask questions. If I could at this point ask everybody who wants to
testify to please rise and raise your right hand.

[Witnesses sworn.]


16

and giving farmers planting flexibility, by investing resources in re-
search and market development, we can prosper in the world mar-
ket.

In addition, the red meat and poultry industries are already the
most heavily regulated food industries in the country. The passage
of the Pathogen Reduction Act recently proposed by the Food Safe-
ty and Inspection Service or FSIS in an attempt to address food
safety concerns would add yet another layer of burdensome regula-
tions.

Gold’n Plump fully supports the need to move the current inspec-
tion system to a science-based system that incorporate hazard anal-
ysis, control points or principles to assure the safest food supply
possible.

It would be far more effective to reallocate limited inspection re-
sources from both labor-intensive activities to focus on activities
having a direct bearing on public health.

The proposal as presently drafted not only reaffirms the tradi-
tional inspector’s role while adding redundant regulations and ac-
tivities to the system. There is already a limited supply of meat/
poultry inspectors.

Recently, Gold’n Plump Poultry was denied a request for addi-
tional inspectors to staff our night shift for April 1996. This could
have a serious impact on our $45 million expansion program under-
way, and I cannot operate without inspectors.

T would like to thank you for this opportunity to address the reg-
ulatory issues. I look forward to working with you to create a regu-
latory environment which protects workers and consumers while
assuring American producers the opportunity to compete in inter-
national markets.

Thank you.

Mr. McINTosH. Thank you. Thank you for coming today.

[The prepared statement of Mr. Helgeson follows:]}


99

Whenever a release of a hazardous material occurs the firm owning the
material must report by telephone to three agencies immediately (within 15
minutes). The most important concern of the retail fertilizer dealer is to
prevent an incident from causing additional harm to the public and
environment. This will often take more then the 15 minutes allowed to make
the calls. Additional background information is included.

‘Thank you for this opportunity to express these concerns and share possible
solutions with the Subcommittee

Sincerely,

GO
FL U0 h
Bob Minks

Regulatory Compliance Manager

cc. Representative Collin Peterson
Representative Gil Gutknecht
Representative David Minge


21

agement techniques that are science based, add cost-benefit analy-
sis to the equation, and enhance risk education for and communica-
tion with the public.

Overregulation assumes the worst. Partnership and sensible reg-
ulations will provide the opportunities for producing the best. I
hope my comments will help you convince your colleagues for the
overall need for this balance.

Thank you for your consideration.
oi McINTosH. Thank you very much, Mr. Benedict. I appreciate

at.

Now we will take questions from the panel members. David, if
you could be religious in keeping us to 5 minutes, we will make
sure we have time for everybody.

My first question would be for either Mr. Benedict or Mr.
Helgeson. You talked with us a little bit about the USDA regula-
tions that have been kicking around under HACCAP and the in-
spection service. I was interested to note that you felt that that
might impose requirements that would actually make it more likely
that you had repeated motion, trauma, as a result of that that
OSHA and the Labor Department is trying to regulate with its
ergonomics rule.

Is that something where you could see yourself being put into a
bind, where one agency tells you to move in one direction and then
the other in the opposite?

Mr. BENEDICT. Absolutely. I think that OSHA’s ergonomic re-

uirements that we change some of the jobs and change some of
the positions on people so that they do not develop cumulative
trauma disorders is fine with industry. In fact, it is good for our
industry.

But then USDA comes along and has the time and temperature
requirement on beef carcasses, for example, that makes it more dif-
ficult for people to operate on the animals, and in turn causes mus-
cle soreness and these cumulative trauma disorder.

Mr. McInTosu. Yes; Mr. Helgeson.

Mr. HELGESON. Let me just add an example to that: USDA re-
quires certain comfortable temperatures for meat processing, typi-
cally under 50 degrees. In some cases with their new Pathogen Re-
duction Act, it requires temperatures down to 40, 30, and 40.

Well, the colder temperatures do aggravate the cumulative trau-
ma syndrome. So it does create a conflict in terms of trying to
maintain good safety as well as worker safety.

Mr. McINTOSH. So you could conceivably, if both of those regula-
tions went forward as they’re being discussed, find yourself in the
position where you’ve got conflicting and therefore impossible-to-
comply with requirements?

Mr. HELGESON. Yes, that’s correct.

Mr. McINTOosH. Well, we’ve seen that in several areas.

Let me just ask one general question for each of the panelists:
Have you ever, because of the regulatory burdens, reached a situa-
tion where you have decided either to reduce the level of employ-
ment or get out of a certain level of business or maybe not go
forward in an area where you had anticipated you would? If so,
describe that briefly for us.

Mr. Anderson.


50

St. Cloud Eye Clinic

Paes A Laren MD EACS
Stevens W The, MD PACS,
Dipleantes deriva Board a pbhalnlogy

‘The U.S. Department of Justice has been increasingly aggressive in
trying to combat alleged fraud and abuse in the federally-funded
health care programs including Medicare and Medicaid. While
dishonesty in these programs must be addressed, the present attitude
of the Justice Department in many cases is misguided and also
violates the Constitutional rights of the parties under
investigation, Numerous instances around the country have occurred
where armed government agents arrive unannounced at a clinic and
seize records, property, personal items, and disrupt the delivery of
health care. Mr. Allan Reider with the law firm of Arent, Fox,
Kinter, Plotkin, and Kahn in Washington D.C. has numerous cases of
this type of government activity. Mr. Reider can be reached at the
Arent, Fox Law Firm at 1050 Connecticut Avenue Northwest, Washington
D.C. 20036-5339, phone (202) 857-6000.

At a time when health care delivery is more sophisticated and complex
than ever we do not need inappropriate government interference in the
delivery of this health care and we must examine the cost
effectiveness of present wasteful government activities.

Peter A, Larsen, M.D., F.A.C.S.

205 Noms 40h Steet Soite D
Nontisiw Professional Building
Se Cll, Minnesnca 56508



95

Ms. YINGLING. Well I simply wanted to clarify because of the
comments that were made about us today that I felt I had to de-
fend where we had come from on this whole thing.

Thank you. -

Mr. McINTosH. And we do look forward to your written testi-
mony on the issues.

Ms. YINGLING. You will receive it.

Mr. McINtosH. Thank you.

Mr. GUTKNECHT. Mr. Chairman, there was a gentleman and lady
who had sent some information and some questions about ASCAP
and how it relates to small business people. I think I can answer
some of their concerns.

It relates to-—well, the use of music that has been recorded and
is covered by ASCAP. We have in our group now, in the new Con-
gress, new Member from California who has, among other things,
16 gold records to his name. His name is Sonny Bono.

And the Speaker and I think the chair of the Commerce Commit-
tee have given him the responsibility of coming up with a solution
to that problem.

There are many small businesses that have the problem of hav-
ing radios playing in their businesses and other music that is avail-
able. And I know that they've been assaulted by some folk from
ASCAP and others, and we’re trying to come up with a solution.

We don’t have one yet, but I will tell you that Mr. Bono is par-
ticularly sympathetic to your concerns and I think we’re going to
have a solution to that hopefully by the end of the year.

Voice. They took $20,000 out of his checking account, including
his wife’s teacher’s retirement and Social Security money.

Mr. McInTosH. You may have to come testify. How could they
take money out of your checking account?

I don’t know if we have enough time, because we have to get
going, but did the Government take it out of your checking ac-
count?

Voice. It was by the bank to be held by the attorneys——

Mr. McIntosu. I have people from my office here. We'll get in-
volved with this and see if we can help you with it.

Voice. This guys last year they were going to provide—where we
could sales and c ards and socialization. And it is being taken away
from us.

Mr. McIntosu. Thank you.

Were there other individuals who wanted to testify?

Ms. ARNOLD. I don’t think I need to be sworn in for this. ’'m Rose
Arnold, chair of the Stearns County Board. I simply want to thank
you for holding your hearings here in Stearns County, the most
wonderful county in Minnesota.

I hope that you like your new building here and found the accom-
modations working well.

Mr. McInrosu. It has been excellent.

Ms. ARNOLD. This is the first time, I believe, that this room has
been filled to overflowing, and I hope I don’t see this at one of our
board meetings. [Laughter.]

Mr. McInrosu. Thank you very much.

Yes, sir. Did you want to testify?


33

reinforce this approach, the employer established and maintained a meaningful
monetary incentive program for his employees with good safety records,
Regulatory compliance was definitely a secondary issue. We encouraged this
course of action because it had the backing of both management and employees.
Most importantly, it really worked to prevent injuries.

Our client has recently asked us to change our emphasis during our visits. He now
‘wants us to inspect his job sites primarily to make sure that there are no OSHA
violations to be found. Those that we do find he wants to be informed of
immediately so that he can correct them without delay.

While he is still concerned about preventing injuries he realizes that OSHA poses
a larger monetary liability to his business than do the cost of work place injuries to
his employees. In other words, he sees OSHA compliance as a significant threat
to his corporate health and well being. His safety record bears him out. He has
paid out more to OSHA in the past 20 months in one fine than he has paid out in
injury related costs during the same period. The OSHA fines that could result from
a minor infraction could wipe out the profit margin on a construction job valued at
a million dollars.

We observe that this is not an isolated incident. The net purpose of OSHA
compliance today is usually not injury prevention. Instead, it has become
compliance for the sake of compliance alone. Under the current interpretation of
OSHA there is regulatory compliance without any real connection to the real
purpose of workplace safety regulations, injury prevention.

Clearly, there must be a remedy to this situation that will allow this employer and
others like him to continue protect the health and safety of his employees, comply
with appropriate regulations, and still make a reasonable profit. He knows from
personal, real world experience what many regulators have yet to discover;
injuries are usually the result of an individual employee making a decision,
either consciously or unconsciously, to put him or herself into harm's way.
Repeated studies show that unsafe acts by employees, their coworkers, supervisors
or management are the root cause of almost all workplace injuries. Very seldom
are workplace conditions the cause of an injury. Only recently has OSHA begun to
recognize this fact and begun to formulate regulations to address its realities.


17

oe

I would like to welcome Representative McIntosh and Represenative Peterson to St. Cloud and
‘compliment you for your leadership on regulatory reform.

My name is Michael Helgeson, C.E. 0. of Gold'n Plump Poultry. Gold’n Plump is an integrated
broiler company with operations in Central Minnesota and Westem Wisconsin. We market a high
quality branded chicken products thoughout the upper Midwest. We currently have 1,800
employees and 250 contract growers with an annual sales volume of $150 million.

Regulatory reform is needed to improve our intemational competitiveness which translates into
more jobs and higher productivity. The benefits of regulation are becoming fewer while the costs
are accelerating, The Clinton Administration recently estimated the cost of federal regulations to
‘be $430 billion per year - or about 7.9 percent of our nation’s Gross National Product, Federal
regulations are issued now by {10 different agencies.

The export market is the engine driving economic growth for many U.S. industries, including the
broiler industry, The broiler industry experienced dramatic increases in exports. In 1985, only 3
percent of broiler production was exported, This year its projected to be more than 12 percent,
and should continue to grow assuming U.S. poultry products remain price-competitive with other
poultry exporting countries. However, competition is intensifying from countries like Brazil and
Thailand which are very effecient producers

‘Which leads me to my next point, American agriculture. The food and agricultural system in the
United States employs 21 million people and generates 16 percent of the nation’s income. Yet,
agricultural policies and regulations of the 1930's are burdening our current system. We need to
modernize agricultural policies to achieve market based reforms that will allow the sector to
prosper and grow into the next century to take advantage of the opportunities. Within the next
30 years, world population will reach 8 billion people, demand for food will double. The new
trade deal, negotiated under the General Agreement on Tariffis and Trade (GATT) gives
agriculture unprecedented growth opportunities. However, in recent years one forth of America’s
farmland has been idled in an unsuccessful attempt to raise prices; instead they have signaled to
foreign producers to increase their production at the expense of the United States. As result we
have steadily given up market share of world grain trade. Acreage reduction programs should be
eliminated and the Conservation Reserve Program should apply only to land that is environmental
sensitive, By ending supply management and giving farmers planting flexibility, by investing
resources in research and market development, we can compete and prosper in the world market.


61

They stand in the way of hospitals, physicians, and other provid-
ers working together to coordinate care because any truly coordi-
nated system involves a variety of referral and financial arrange-
ments.

Today, the various incentives built into the health care arrange-
ments serve the same purpose as the Stark prohibition and fraud
and abuse laws: To prevent the overutilization and therefore higher
cost of services. The laws need to be reexamined in light of the pay-
ment methods and business relationships that are developing.

Specifically, Congress should expand the exemption to the self-
referral law to include a variety of risk-sharing agreements like
capitation and withholds that create incentives to discourage over-
utilization of services.

Second, permit physicians to have financial relationships with
hospitals and integrated service networks.

ird, suspend implementation of the law until final rules have
been written. The Department of Health and Human Services has
yet to publish final regulations for the 1989 law, or even propose
regulations for the 1993 expansion which went into effect January
I would also like to mention a few useless regulations that could
easily be eliminated. Some duplicate other protection mechanism.
Eliminating others would allow more reasonable approaches to
reaching public policy goals.

First, eliminate the requirement that existing facilities such as
drinking fountains, toilets, and telephones be moved, sometimes as
a matter of inches or replaced, to comply with the ADA act.

For a small facility like St. Mary’s this means needed money for
capital equipment to improve patient care has to be diverted.

Second, eliminate the requirement that health care providers
track shipments of infectious waste after they leave the hospital
until the waste hauler ultimately disposes of them. If these haulers
keep the records why should the hospital hold onto them for sev-
eral years.

Third, eliminate a Medicare condition of participation require-
ment that specifies the content and requires Federal review of an
institutional plan for capital expenditures over $600,000. Federal
health planning programs are no longer functioning and most Med-
icare capital is paid prospectively.

On the nursing home side, Congress should consider eliminating
the need for a minimum data sheet for some residents. It currently
has to be generated for everyone admitted to a nursing home, re-
gardless of length of stay. This is unnecessary documentation
which uses valuable nursing time.

Second, eliminate the routine assessment of the resident’s condi-
tion which needs to be done every 90 days and only require assess-
ment when there is a change in health status. This diverts needed
time for patient care to needless paperwork.

Third, eliminate perpetual surveillance of nursing homes that
have demonstrated a track record of complying with standards and
providing quality care. Give facilities that have proven themselves
a longer interval between compliance survey.

Not all regulation is without value. But it is important that as
the health care environment evolves all rules and regulations be


4

a week, it would take you 8 years to read all of the Federal regula-
tions.

And if you look at these, you will find out a lot of them are out
of date. A lot of them conflict with each other. And frankly, a lot
of these regulations I don’t think anybody realizes that they are
there. We just, frankly, have too much in this area.

The Sunset Act, I think, should be one of the ways we can start
to take a look at what is on the books and see if there is a way
we can start to eliminate some of these regulations.

At the same time, I think, requiring that we have a cost benefit
analysis and risk assessment is going to make sure that we have
a more sensible approach to some of these regulatory issues. Quite
often it seems like we get regulations that put an awful lot of bur-
den on people and get very little extra incremental value in terms
of environment or health and safety.

Frankly, the bureaucracy in Washington seems to get more hung
up on whether you follow the process and whether you fill the
forms out than whether you accomplish anything. And that’s,
frankly, a lot of what we're trying to change here with this sub-
committee.

We have worked well together. I will have to say that in the
House we’ve had a good bipartisan support on just about all, I
think, of the legislation that we’ve passed. We've had anywhere
from 50 to over 100 Democrats on some of these bills supporting
the work that was done.

And part of the reason that has happened is that the chairman
and others have been willing to listen to our views. And like every-
thing in this world, these bills aren’t exactly what I would like, but
a lot of our concerns were addressed. And we feel like if we can
keep this process moving, then in the end we're going to be able
to accomplish something that is useful.

I think one of the most hopeful reasons is because the chairman
himself is committed to using this subcommittee for oversight over
Federal regulatory affairs.

I have to tell you, I serve on the Agriculture Committee and get
involved in other issues. This is not the most fun thing in the
world. In my judgment there is nothing more boring than going to
hearings on Federal regulations.

But the chairman actually likes this, and it is great that he is
in this position because he, I think, is committed to doing oversight
and changing this process. Frankly, that is what it is going to take.
It is not goin, to—we’ ‘re not going to be able to turn this around
overnight, and we’re going to have to keep the pressure on.

Last, I would just like to say that—and anybody can see this if
they want—we made available to people, I think, 2 or 3 weeks ago
that we were going to be having these hearings.

I would not agree that anybody has been excluded. When we
heard that folks from the environmental community were inter-
ested in testifying and felt like they couldn’t, we sent them a letter.
I believe it was last Wednesday when we first heard about this. I
sent them another letter on Friday, and you can see these letters
if you want.

They told us that they thought that this hearing was a sham,
was a dog and pony show, and that they were not going to testify.


93

there was little information and that he never did find out when or wnere it was being held. 1 also
spoke to the following Clean Water Action staff: John Kabler, Virginia; Marie Kulick, Washington
DC, Nancy Manulkin, Florida, None of these staff people had received notification of the hearings
held in their states.

Given that only one environmental group in Minnesota, the Sierra Club, apparently received an
invitation to the hearing in St. Cloud (but not the hearings in St. Paul or Rochester, Minnesota) and
were initially told they could not testify, and given that the only people invited to testify were local
businessmen, I stand by my statement at the hearing that the proceedings were stacked to provide
the testimony sought by the committee. I further stand by our organization's decision not to
formally testify at the hearing as a protest of this undemocratic process


38

chair lifts are not usable by many. Wheelchair users can’t get to
the bus stop through the snow.

Local discretion would result in more cost effective and efficient
service delivery.

I could go on with examples of unnecessary, unfunded, un-
founded and problematic Federal regulations. But you can see why
local officials are frustrated and upset. We are experiencing the
double whammy of reduced and eliminated Federal funding on the
one hand while Federal regulations are driving up our costs on the
other hand.

What should be done about this situation? Let me suggest-—

Mr. McIntTosH. Go ahead and summarize, Mayor Lanning, and
we can put the remainder of your testimony into the record.

Mayor LANNING. What I conclude here is nine principles that I
think need to be put in place by the Federal Government in order
to improve the situation for the imposition of regulations that af-
fect local governments.

Mr. McInTosu. I will tell you what, Mayor Lanning, I will use
my questioning time to ask you to read those nine principles for us.

Mayor LANNING. Thank you.

First, the Federal Government should conduct cost benefit as-
sessments to determine if the cost of Federal regulations are com-
mensurate with the benefits received, if any.

Second, outdated regulations and regulations that are not cost ef-
fective when weighed against the benefits received should be re-
pealed.

Third, if new scientific data is found relative to a regulation, im-
mediate efforts should be undertaken to update or repeal a stand-
ard or rule. Local units of government should not have to discover
these things for themselves as we had to do.

Fourth, if a national interest is at stake and a Federal mandate
is adopted, the Federal Government must provide substantial fi-
nancial support in order to achieve compliance. There must be an
end to unfunded mandates.

Fifth, Congress must provide vigorous oversight of Federal agen-
cies imposing regulations emanating from Federal legislation. The
rulemaking process must be brought under control.

Sixth, local governments need to be involved sooner and more
significantly before regulations are imposed. It should also be noted
that regulations which may make sense in one locale may not in
another.

Seventh, the same rules and regulations that apply to other units
of government should apply to the Federal Government and its
agencies. Why not?

Eighth, local units of government should be given the flexibility
to spend limited resources on what they believe to be the greatest
problems. We should not be required to spend precious resources
unnecessarily on issues of minor significance or issues with little
benefit while major problems persist.

And finally, While I generally support the concept of block
grants, the block grant of funds for States is no panacea for local
units of government. We have found that State government is par-
ticularly adept at imposing even more strict standards than those


100

MINNESOTA
PLANT FOOD AND CHEMICALS ASSOCIATION

1821 University Avenue + Room 204 + Saint Paul, Minnesota $5104 + (612) 644.6235 » FAX (612) 644.9348

ALCOHOL TESTING
Background
This regulation, will effect most retail fertilizer dealers January 1, 1996, (most of them
have less then 50 CDL drivers). The regulation calls for testing to be completed
immediately before, during or immediately after a sensitive activity. The DOT calls for
testing to be completed randomly each quarter.

The problem
Retail fertilizer dealers are dependent on many seasonally employed people. These people
work from six to twelve weeks of each year and much of this time is spent doing non
sensitive activities. In addition, when they are involved in sensitive activities, much of this
is done after what is considered “normal business hours” for most collection / testing sites.
Therefore random alcohol testing cannot be completed as is currently required, The
alternative would be for each firm to have their own technician and equipment to complete
the testing. However, this would be cost prohibitive for most of these firms because of the
limited size of the operations and the limited number of employees they have

Solution
Firms who utilize seasonal personal need to be allowed to utilize supervisory persons,
trained in the identification of alcohol abuse symptoms, to prevent a suspected alcohol
abuse individual from performing sensitive activities. This could be done without the
random testing requirement. This would be in addition to what is all ready taking place in
the industry through the firms insurance carrier. Many insurance companies will not allow a
firm to employ a person, as a driver of any licensed vehicle, who has a DWI on their
record.


41

double wastewater rates, Added to the problem is the fact that if we had
proceeded with compliance, Moorhead would have spent $12 million dollars to
meet the ammonia/nitrogen standard and still be in violation of similar but not
equal standards imposed by the State of North Dakota. What really is the
crowning blow about this unfounded federal regulation is that technical experts
have told us that no water quality improvement will be achieved by our
compliance. What is even more disturbing is that we have learned the federal
regulation being imposed is based upon outdated science and that several cities
and states throughout the country have been granted relief from this regulation.
Why not Moorhead, why not simply update this federal regulation?

Increasingly, we have found that federal regulations open the door to frivolous
litigation that ends up being very time consuming and costly for local units of
government. As a recent example, well-intended ADA regulations have resulted
in litigation that defies common sense or was unnecessary in order to resolve
issues. Another ADA compliance problem is the fact that visually impaired
people object to wheelchair accessible curb cuts which make it very difficult for
visually impaired people to walk the street. Here is a case where compliance
could prompt litigation

Public housing preference rules require that 9 of every 10 available units be filled
by persons with preferences. With regard to elderly/disabled housing, most
preference applicants are disabled, significantly under the age of 62. This policy
does not allow for local flexibility in meeting community needs and is literally
forcing senior citizens out of this housing option.

Federal regulations governing mass transit require that all new and rehabilitated
buses be wheelchair accessible, at a cost of approximately $20,000 per bus. In an
area with adverse winter climate 9 out of 12 months, these wheelchair lifts are not
usable by many. Wheelchair users can't get to the bus stop through the snow.
Local discretion would result in more cost effective and efficient service delivery.

I could go on with examples of unnecessary, unfunded, unfounded or problematic federal
regulations, but you can see why local officials are frustrated and upset. We are experiencing
the double whammy of reduced and eliminated federal funding on the one hand, while federal
regulations are driving up our costs on the other hand.

‘What should be done about this situation? Let me suggest some principles which should guide
the federal/local relationship relative to regulations.

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