59

As Terra and the Sioux City community struggied to comprehend and deal with
thelr loss, agencies from the federal government and the State of lowa arrived on the
scene, Within hours of the accident, EPA, the Department of Natural Resources of the
State of lowa, the U.S. Occupational Safety and Health Administration (OSHA), the
towa Occupational Safety and Health Administration (JOSH), the lowa Fire Marshall,
the Federal Emergency Management Agency (FEMA), the U.S. Coast Guard, and
numerous other state and local emergency response agencies reported to the Port
Neal plant, each with its own separate regulatory mandate.

Goverment activity in and around the Port Neal plant and Sioux City was

._ intense during the first days and weeks following the accident. Ultimately, after mast of
the other agencies dropped out of the picture, two agencies remained. Both of thase
agencies addressed the same subject, safety, and between the two of them Terra faced
parallel and essentially identical regulatory reviews. (My remarks today ignore a wholly
separate EPA investigation of legitimate environmental issues which was concluded
within the firet month or 80 of the explosion and resulted in no enforcement action.)
One of these inspections was conducted by OSHA (a joint activity by federal OSHA and
1OSH), and a separate inspection, covering the same issues, was carried out by EPA

From Terra's perspective, there appeared to be no attempt by the two egencies
to coordinate their activities in order to ease the burden on Terra and its employees.
Throughout the ordeal, there sppeared to be no appreciation by the agencies for the


123

Mr. STRECK. I am Kenneth Streck and I manage the Ida County
Rural Electric Cooperative in Ida Grove, IA. It is a small electric
utility coop serving about 1,200 members. We too come under a lot
of rules and regulations.

I guess I would like to try to simplify some of things that we
have to do. I guess I am speaking to the Federal Government here.
I am not sure you can simplify these things for us, but I hope that
you can help us do that.

We consider ourselves a small business, so we feel entirely there
are too many rules and regulations. But if we must abide by them,
tell us in plain English what the rules say. We do not have a staff
to go through hundreds of pages of rules and regulations so that
we can tell what we are to do to comply.

Most all businesses operate safety, value their employees and do
not intentionally harm the environment. It would be refreshing if
the Office of Compliance would treat the regulated community as
partners in our compliance efforts—and we have heard that this
afternoon.

Also, we are required to do many written plans. It would be very
helpful if we had some draft models of these plans for small busi-
ness to use.

Also, we suggest that maybe an 800 hotline number could be es-
tablished to give us practical correct advice. However, I want to
stress very clearly we want to make that call without fear that our
questions would bring about enforcement activities.

So in closing on this little segment, I would suggest, first, be sure
the regulation is necessary and cost effective. Second, put it in
plain English so we can understand it. Third, provide us some draft
models of the necessary paperwork. Fourth, give us an 800 number
to call for advice and finally, help us comply, not just be an enforce-
ment agency.

I do have copies of this available for you, if you have not got
them, right now.

Mr. McInrosu. Thank you. I appreciate that. We would like that
to become part of the record. Yours is one of the best and most suc-
cinct statement, I think, of the goals we have, and I appreciate
that. Thank you.

Mr. LATHAM. That is the way they are in Ida County.

Mr. McINTOSH. Well done.

Mr. STRECK. The second issue I have got to touch is a little—
something a little different. This is a regulation that is in—already
in the FERC and in the country where we have regulated electric
utility service. We have kind of a monopoly. We are required to
serve everybody but we have territorial protection, especially in the
State of Iowa. However, FERC, the Federal Energy Regulatory
Commission, has decided that it would be good to deregulate the
industry. Not that we have any problem with deregulation of the
industry, but we also have some problems with what the potential
is for small time rural America, the small customer out at the end
of the line. I am going to make my comments very brief here.

In regard to municipals and electric cooperatives. Bonds are sold
by municipals to finance their systems and the revenues collected
from sales of electricity to their customers are pledged to the lender
as security for the money received for the sale of the bonds. In the


25

Ms. PREscoTT. Thank you.

Security National Bank is a $400 million community bank lo-
cated here in Sioux City. We are part of a five-bank holding com-
pany. The other four banks range in size from $25 to $65 million
in asset size. I have chosen to talk to you today about mortgage
lending regulations and I want to make it clear that only because
of the time limitations have I limited my comments to the mort-
gage loan area. There are lots of other areas.

Mortgage lending has become more and more important to the
banking industry. Customers want mortgage loans because of the
tax benefits. As the customers want that product more and more,
regulators pile on more and more disclosures that we have to give
to those customers.

If you come to Security National Bank tomorrow morning and
want to open up a mortgage loan to buy a house, we have to deal
with nine regulations to put the money in your hands. When you
walk in the door, you have to fill out an application. With that ap-
plication, you sign six documents which include seven different

inds of disclosures. When you come to close the loan, you sign 21
documents. That is 49 pieces of paper. There is a lot of good infor-
mation in here and some important information, but the important
things fall through the cracks because there is just too much infor-
mation here. To be perfectly honest, customers think it is a joke
when they come to sign all the documents. And the sad part is, this
joke costs us—we estimate probably three-quarters of a full-time
employee annually to complete.

In addition to the employee time, we cannot afford to produce
these forms in-house. The liability as far as penalties from the reg-
ulatory agencies, bad publicity, loss of customers, is just too great.
So we had to buy software to produce all these forms. The software
company guarantees that they will stay in compliance with the reg-
ulations, although we sought to fill them out properly and get ‘al
the right signatures. That software cost us $42,500 and an addi-
tional $4,500 annually for the upkeep. That is just software. That
does not include PC’s, printers, paper and the rest of the things
that go along with it.

In addition, to show that as we go along, the regulations just
keep getting bigger and bigger, last year, the National Flood Insur-
ance Reform Act was passed. With that regulation, we have some
more burdens. In the past, we have always been required to deter-
mine whether or not property that we take as security interest on
loans is in a flood zone and whether or not customers need to get
flood insurance. Now, we have to fill out a specific document. That
document is so detailed that we need flood maps for each deter-
mination. It has become so expensive. Plus, there is a $350 fine for
each violation. You cannot afford to take the risk. So, again we had
to go to an outside firm that specializes in flood insurance deter-
minations. That costs our customers $12.50 per loan application.
They get nothing more than they ever had in the past, but it costs
us that much to comply with the regulation. And the additional re-
quirement of that regulation is, we have to monitor that loan for
life. Now a mortgage loan could be 30 years in life. We have to
monitor that and determine whether or not changes in the flood
zones puts that customer in a flood zone or takes them out and


149

Mr. McINTosH. Thank you for coming today, Mr. Orwig.

Ms. Hansen.

Ms. HANSEN. Thank you for having this open forum. I am a citi-
zen from Orange City, IA. I am a member of a number of citizen
groups, including the National Peace Corps Association, Return
Peace Corps Volunteers for Environment and Development. I am

resident of the Iowa Division of the United Nations Association.
am active in politics and I produce a newsletter for small non-
profits, volunteer groups and citizen groups.

I am concerned—I am also concerned here that you have not had
a panel of citizen groups represented here, or citizens in general.
Government—I would like to go back to a couple of basics. Govern-
ment regulations exist to serve the interest of the citizens and the
values that we hold. I value my health and safety and the health
and safety of my neighbors. Business values rest with the bottom
ine.

You, as elected Representatives, are here as our—the citizens’
representatives. I do not think citizens would object to simplifica-
tion or stopping abuse by bureaucratic power, but I personally
want to have a safe environment in which to live. Your top priority
should be my safety and my values, not the bottom line of the busi-
nesses which have been testifying here today. I want clean water
to drink, clean rivers and streams. I want a safe workplace for my-
self and for my neighbors. I do not want to pay businesses to follow
environmental or safety regulations. I want you to ensure that our
businesses are responsible to citizen values. I do not want our chil-
dren to have to deal with pollution from today’s companies who are
not being responsible or because you, our representatives, have not
insisted that they be responsible.

Thank you.

Mr. McINTOoSH. Thank you. Thank you for coming.

I do have just one question for both of you. What would you
think of proposals—and I know it is hard to answer without specif-
ics. But if we had a proposal that very genuinely and effectively
gained additional environmental benefits, but used economic incen-
tives and got rid of some of the particular requirements but actu-
ally led to better environmental results, would you say that is a
good idea or bad idea in terms of the direction to Read?

Mr. Orwic. Well, I guess I would have to know the details of it.
I think that—you know, I do not think bureaucracies or regulations
are sacred. I think that the results are important. And I think that
taking care of the environment that we all live in is the paramount
concern. So how it is done is up to you, of course.

Mr. McINTOsH. Ms. Hansen.

Ms. HANSEN. I would agree with that. I do think it is a mistake
to burden taxpayers with huge amounts of incentives to say, for in-
stance, businesses to follow environmental regulations. This is just
another huge burden on taxpayers. I think businesses and individ-
uals should be able to be responsible relative to environment with-
out having to be paid for it.

Mr. McInTosH. Although sometimes you get more flies with
honey than with vinegar. You might want to think about it. One
of the things I want to challenge our party to do is think along
those lines. Is there a way we can have a pro-environmental agen-


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, District of
MARK E. SOUDER, Indiana Columbia
WILLIAM J, MARTINI, New Jersey JAMES P. MORAN, Virginia
JOE SCARBOROUGH, Florida GENE GREEN, Texas
JOHN B, SHADEGG, Arizona CARRIE P. MEEK, Florida
MICHAEL PATRICK FLANAGAN, Illinois CHAKA FATTAH, Pennsylvania
CHARLES F. BASS, New Hampshire BILL BREWSTER, Oklahoma
STEVEN C. LATOURETTE, Ohio TIM HOLDEN, Pennsylvania
MARSHALL “MARK” SANFORD, South

Carolina BERNARD SANDERS, Vermont
ROBERT L. EHRLICH, Jz, Maryland Undependent)

James L. CLARKE, Staff Director
Kevin SABO, General Counsel
dJupirH McCoy, Chief Clerk

Bup MYERS, Minority Staff Director

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

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 B. SHADEGG, Arizona GARY .\. CONDIT, California
ROBERT L. EHRLICH, Jr., Maryland CARRIE P. MEEK, Florida

EX OFFICIO

WILLIAM F. CLINGER, Jr., Pennsylvania CARDISS COLLINS, Illinois
MrpRep WEBBER, Staff Director
KAREN BARNES, Professional Staff Member
Davip Wuire, Clerk
BRUCE GWINN, Minority Professional Staff Member

aD


119

STATEMENTS OF TOM PITTMAN; KEN STRECK; BARB RENFRO;
AND DANIEL COUGILL

Mr. PiTTMAN. Good afternoon. My name is Thomas Pittman and
I am the dairy procurement manager for Wells’ Dairy. I have been
in this capacity at Wells’ Dairy for 2 years and I was previously
employed by the U.S. Department of Agriculture as an auditor in
the Federal Milk Marketing Orders. I did that for 72 years.

The reason why I am here today is, I would like to inform you
of some of the regulatory issues concerning the dairy industry and
the Federal orders. Also, I would like to touch on a few of the pos-
sible ramifications of the additional regulation from the proposed
farm bill that is in the House right now. Because of my work his-
tory, I am fully aware of what is going on with these regulations
and what potential regulations could mean to processors like Wells’

airy.

First, I would like to start off with—the current Federal order
regulations do not allow the processors and the dairy producers an
opportunity to set up pricing contracts. We have a competitor to
the north of us that is not regulated by the Federal orders that do
have pricing contracts for their producers. They have a waiting list
for producers 100 names long, waiting to get on. We at this point
have to follow announced prices by the Federal orders. Wells’ Dairy
does not have an option to be regulated. We have to be regulated
because we do bottle milk. If we do not pay the minimum order to
these producers, the Federal order will come in and force us to by
imposing fines or possibly a prison sentence to any of the individ-
uals involved.

Our idea of the set up of a pricing contract is to—hidden objec-
tive is to hit that average market price for a year for our producers.
Some months that price is going to be lower than the announced
price and sometimes it is going to be higher. When the market ad-
ministrator announces the market price for the month, and if we
would happen to fall below it, we would be forced to pay that. This
is one of the reasons why we are reluctant.

One of the main reasons producers like to have a contract price,
they are getting to the point where their margins are getting so
tight, if they can go to their banker and say here, I have got a con-
tract price for the next 12 to 24 months for my milk. I need this
much cash to make my cash-flow. They can easily obtain their op-
erating loans. Especially with newer producers that want to start
out or expand, they are the guys that are looking for it.

One of the other things I wanted to touch on was the possible
ramifications of the current farm bill. Right now in present form,
this bill would create a lot of chaotic conditions for the industry.
Fortification of milk solids, creating a Class I pool, creating a Class
IV pool, increasing support prices and make allowances and artifi-
cially creating these high fluid milk prices are all examples of in-
creased regulation, and all of these examples are part of the farm

i

Wells’ Dairy would pay over $9 million more in increased ingredi-
ent cost just for the fluid milk portion alone, and we would be
forced to pass this along to the consumers here in this local area.
I do not know if our consumers are willing to pay all of that. To
top it off, our consumers would be forced to pay these higher prices


68

However, when two federal agencies engage in turf battles at a company’s
‘expense, and when they use what is claimad to be overlapping authority to double-
team employers, there Is an unnecessary burden placed upon American business and,
wa submit, our economy as a whole (given the budget appropriations needed to
Support dual regulatory programs). That is Terra’s message to this Subcommittee, and
that is why Terra is thankful for the opportunity to present this testimony.

TERRA‘S PROPOSAL
To correct the problems discussed here today, Terra makes the following
Proposal for the consideration of the Subcommittee:

© Stop EPA from doing ‘safety’ inspections
° Assign the responsibility for safety inspections to OSHA exclusively
. In cases where EPA believes, nevertheless, that there Is a need to revisit
the same ground covered by OSHA, require EPA to obtain the Information
from the existing Inspection record assembied by the other agency
e Create a Regulatory Bill of Rights to protect American business from:
- Unfair public relations manipulation by federal agencies
(irresponsibly damaging the reputation of a company in the press is
8s real a “sanction” as any fine an agency can issue)

12


79

their triazine products because they no longer want to fight the
attles.

Mr. MCINTOSH. But are there substitutes out there with current
technology?

Mr. Davis. There are many new chemistry chemicals out there,
none of which have the same chemistries of the Atrazine products.

Mr. McINTOSH. Thank you. I appreciate that insight.

Tom, do you have any questions?

Mr. LaTHAM. Yes. Let me start off, I guess, in the order the testi-
mony was given.

Mr. Davis, being a small business person myself, and from my
experience, I would just ask you if you would concur that, you
know, one or two regulations you can deal with, but it is kind of
the cumulative effect of all of the regulations, all of the different
bodies, agencies, that you have to deal with that really is choking
small business in this country. I do not know if you want to say
anything more about that, your testimony is pretty clear I think in
that regard.

Mr. Davis. I agree there—I do not want to give the impression
that all regulations are bad because we need to clean up our own
backyard and, I guess, one of the things I am trying to say is we
do that. We work closely with the Agbusiness Association of Iowa,
Agricom and—for example, General Fire and Safety come to our
place and help us with things that we need to stay in compliances.
it takes a lot of time and a lot of money. But we as an industry
are really cleaning up our own backyard and there is so many reg-
ulations today that time-wise, financially, we cannot retain a list
of lawyers and everything to get all this done. It is very difficult.

Mr. LaTHAM. I would ask you—as a small business person, do
you have any attorneys on staff? I mean——

Mr. Davis. No.

Mr. LATHAM [continuing]. We have a comparison here of two ag-
ribusinesses in a sense.

Mr. Davis. No, I do not.

Mr. LaTHAM. Do you have an office of regulatory compliance at
your business?

Mr. Davis. Yes, it is called me and my secretary. [Laughter.]

Mr. LaTHAM. That is the thing that just goes right over a lot of
people’s heads I think in Washington that I have come in contact
with. They do not understand the cumulative effect of this and the
tremendous stifling effect it has on businesses like yours. I have
great empathy for the situation and that is why we are here today.

Mr. Valentine, this is a case that I was somewhat involved with
as far as trying to get information from EPA. I just want to tell
the chairman, I was absolutely outraged as a Member of Congress
to contact an agency that gets its authority and jurisdiction from
Congress, that they would withhold information from a Member of
Congress, that they felt that they had more power, more control,
whatever than the people who are paying and authorizing them to
do their job and also appropriating money for them to do their job.
It simply is wrong. And that is one prime example of an agency
that has absolutely gone—it does many good things but in many
ways is totally out of control and really believes that they have
more power than Congress itself does. And that is one thing. Ap-


15

Mr. McINTosH. I see no objection. I think that would be helpful
to have as a part of that record.

Mr. LaTHAM. I just think it is outrageous what happened to you.
It is simply a case of government gone amuck and quite honestly—
I mean, I go back to—people do not mind paying taxes but when
you have regulators, who because of rules written by someone
sometimes with agendas, that come in and do things like this, this
is a free country and things like this should never happen. I just
appreciate very much your testimony.

Mr. HIGMAN. One point you might appreciate, Mr. Congressman.
It cost us approximately a quarter of a million dollars to fight that
case. Had that money been left in the community, it would have
gone out in terms of salaries, goods and services within the commu-
nity. And if you use the three-time-turnover rule on the commu-
nity, the community was really robbed of $750,000 at that time,
and it is a community of about 1,500 people.

Mr. LaTHam. In your testimony, you say that you believe that the
reason you were singled out for the second charge was just because
you had fought the first one. Those were statements made by peo-
ple from in the Government, or how did you determine that?

Mr. HIGMAN. I was not in reference—I am sorry if I made that
inference to the EPA case. I was at that moment inferring that we
fight all MSHA cases. Maybe fight is not the proper word for it, but
we did take them to court, and we were successful. And in con-
versation with my attorney and with one of the government attor-
neys, Mr. Higman just has a bad attitude and wants to fight on all
these cases and we are going to push forward and fight back.

Mr. LaTHAM. But your testimony is not that the EPA case had
anything to do with the mine case?

Mr. HIGMAN. No, sir.

Mr. LATHAM. OK. Thank you, Mr. Chairman.

Mr. McINTOSH. Thank you, Mr. Latham.

The staff has suggested that we have all the other witnesses tes-
tify and then ask questions in order to make sure we have enough
time to hear from everyone. Let me take a moment to introduce
some of the staff who are with us because they worked very hard
to put this on. Mildred Webber is the staff director for the sub-
committee. Karen Barnes is with the staff and David White. Also,
Bruce Gwinn, who is the staff director for the minority staff. And
helping us keep time is Troy Rue with Congressman Latham’s
staff. I appreciate your help, Troy. He will flash up when we get
close to the 5 minute mark. I will ask people to summarize at that
point so we can hear from everybody.

Our next witness is David Calhoun with Wells’ Blue Bunny
Dairy. Mr. Calhoun.

Mr. CALHOUN. Good morning.

Mr. McINTOSH. Good morning. Thanks for coming.

Mr. CALHOUN. As an employer, we have an obligation to provide
a safe work place. The employer also has the responsibility not to
abuse the environment. The Federal Government a number of
years ago decided that it had a role in these areas as well and
began introducing regulations in an effort to ensure that employers
lived up to these responsibilities.


128

Ms. RENFRO. Good afternoon, Mr. Chairman and distinguished
panel members. Thank you for allowing me this opportunity to
speak today.

To be honest, the issue is not regulatory reform as it applies to
the Individuals With Disabilities Education Act, IDEA, whether or
not the Federal regulations are too excessive, burdensome or
counter-productive. The unvoiced issue is that the student with the
disability is viewed as a burden. Taking the punch out of the Fed-
eral regulations will not reduce the number of students in Sioux
City, in Iowa, in the United States. It will only result in the rever-
sal of quality education for students with disabilities.

Logic tells us that for all students, a solid education is the foun-
dation for successful independent adulthood. For most students,
this process follows a form of a pyramid. A strong educational foun-
dation peaking as adults contributing as independent members of
a community. Too often, students with disabilities operate within
an inverted pyramid. The most minimal of support is given to the
foundation of education resulting in an adulthood of dependency,
under-employment or unemployment. It is only strong implementa-
tion of Federal regulations, as it is now written, that will allow stu-
dents with disabilities to operate within the same pyramid offered
to everyone else. Let us flip that pyramid for these students.

Except for those in this room that are family members of stu-
dents with disabilities, no one else will have to live with the nega-
tive impact of the dilution of IDEA. Where will everyone be 5 years
from now, 10 years from now, 20 years from now? Who will be
there when the outcome of a newly deregulated system mirrors pre-
1974? I do not believe Dr. Madison will be present. But as a parent
of a,child with a disability, I will be there to pick up the pieces.

Let history teach us a lesson. Students with disabilities were not
welcome in schools before IDEA. The same mindset will close the
doors again 22 years later. It was not the kindness of local and
State entities that allowed these students into school with an ap-
propriate education—it was Federal law. The process described in
testimony today is a smoke screen in my belief. Districts want to
hide behind the veil of a burdensome, excessive regulation, but
they need only to look in a mirror. It has nothing to do with their
hands being tied with wasteful spending or constricting Federal de-
mands. This is about valuing all students. Offering equal opportu-
nities for quality education.

History has also amply demonstrated how systems, if not gov-
erned, will neglect and ban the student with the disability. The
trust-me theory hurts the weakest among us, because contrary to
popular rhetoric, to constantly live your life fighting city hall,
whether it be a school district or a State agency, cannot be done
by individuals without the uniformity of Federal regulations. If a
person is worthwhile in Massachusetts, that same person should be
worthwhile in Iowa and every other State. That is only going to
hold true through enforcement and implementation of Federal reg-
ulations nationwide.

The trust-me theory may be all right when speaking about
produce but not about human beings. IDEA and its implementing
regulations are the written guarantees of appropriate education for
students with disabilities. We would not purchase a car without a


134

grees Fahrenheit at the fire itself. These extremes can lead to frost-
bite along with numerous cardiovascular and pulmonary disorders
such as acute circulatory collapse, hypertension, pneumonia and
bronchitis.

Fire fighting involves strenuous physical activity that is made
more burdensome by the fact that the protective clothing and
breathing apparatus a firefighter wears adds 45 to 60 pounds to his
body weight, nevertheless, the fire fighter performs such vital ac-
tivities as carrying heavy hose up flights of steps, fighting water
pressure to keep the hose pointed at the flames, climbing on roof
tops carrying axes to ventilate the burning structure and so forth.

When a fire destroys a residential home or industrial factory, it
represents a work environment that closely resembles at first
glance what firefighters faced several hundred years ago. However,
technology has created a distinct difference in the modern fire envi-
ronment—polyvinylchloride asbestos and polychlorinated bifonals
to name just a select few. These chemical compounds are common-
place ingredients in our environment as components of household
furniture, plastic pipes, wall coverings, automobiles, buses, air-
planes and coverings for electrical and other insulation materials.
Thus, the proliferation of synthetic substances into the marketplace
has added a new dimension to fire fighting. Firefighters are in-
creasingly exposed to known and suspected carcinogenic agents
whether at a residential, hardware store, drug store or dry cleaning
establishment, pesticide warehouse or chemical manufacturing
plant fire. The more than 30,000 hazardous waste sites and the
transportation of such hazardous substances poses new—still more
new and significant health hazards for the firefighters.

This list of potential carcinogenic agents that firefighters can be
exposed to is almost as long as a list of all known or suspected car-
cinogens. Nevertheless, firefighters constantly enter potential toxic
atmospheres without adequate protection for knowledge—or knowl-
edge of the environment. Firefighters like most workers in this
country have little idea about the identity of many of the indus-
trial—of the materials that they are potentially exposed to and the
hazards of such exposures. Nevertheless, firefighters continue to re-
spond to the scene and work immediately to save lives and reduce
property damage without regard to the potential hazards that may
exist. A fire emergency has no controls or occupational safe and
health standards to reduce the effect of toxic chemicals. It is an un-
controllable environment that is fought by firefighters using heavy,
bulky and oftentimes inadequate personnel protective equipment
and clothing.

The hazards of a firefighter are not always initially obvious. Can-
cer directly related to fire fighting may take several years or dec-
ades to exhibit itself. Reports of excess occupational cancer in fire-
fighters compared to the general public include excess mouth and
throat cancer, excess intestinal and rectal cancer, excess colon can-
cer, excess lung and lymphatic cancer, and excess total cancer and
leukemia deaths. Much of the epidemiological work performed thus
far strongly suggests that cancer is an occupational disease afflict-
ing firefighters.

Infectious diseases has become more—has become a hazard to
firefighters too big to ignore. More firefighters in city governments


74

I would like to see the Federal Government and the EPA fully im-
plement a required—require the risk-based approach. Under Iowa’s
original underground storage tank clean up requirements, we did
a study and 63 of 126 currently leaking sites would have had to
have been cleaned up. Under our new risk-based corrective action
rules which are currently being drafted into final form, we took
those same 126 sites, ran them through the risk-based corrective
action program and came up. with 15 sites that had to be cleaned
up. My question is—and have we not been saying this all along—
the majority of sites presents no threats to the drinking water or
environment.

The bottom line is we are losing our bottom line. It is time that
the bureaucrats start listening to the very people they regulate. We
would be very happy as an industry to work together on issues to
reach a consensual approach to compliance, but we ask not that we
be mandated to do something when there is no scientific data to
back up those requirements.

Please encourage regulators to base decisions on reason and
science and not their personal agenda. Again, I appreciate the op-
portunity to testify today and would be more than happy to answer
any questions you may have.

Thank you.

(The prepared statement of Mr. Marr follows:]


32

a lot of instances where people were being—the agency seemed to
be using it as a way of generating fines by finding minor technical
violations. But what intrigued me was, I had always suspected that
no one really paid attention to these, because in addition to some
very real hazards in the workplace, they required paperwork in the
same area and on the same proportion and seriousness on a lot of
more trivial substances. Dirt, sand and sawdust were some of the
ones that I have seen. And I always wondered, would that mean
that people would just choose to ignore them because they did not
know which were serious and which were not? Your survey seems
to confirm that. But I wanted to check with you if your employees
indicated—the 493 who had not looked at them, if they gave you
any reasons why they had decided not to do that, or chose not to?

Mr. CALHOUN. Well, quite frankly, what generally happens is, we
train our employees in orientations and then in refresher types of
training throughout the course of the year, and when asked—and
we always cover these areas over and over and over again. And
when asked if people knew about MSDS’s and asked if they had
used them, as I indicated, I think that seven said they had and the
majority of the others had forgotten they existed or forgotten where
they were stored.

Mr. McINTOSH. So they were not something that they were that
conscious about?

Mr. CALHOUN. No.

Mr. McINTOsH. Is it your experience that there is indeed some
valuable information in there but it ends up being diluted by a lot
of information that is not of great value to people who are con-
cerned about safety?

Mr. CALHOUN. Well, I think there is an obvious need to have in-
formation available to employees on hazardous chemicals. I think
that the problem comes in is that the definition of hazardous
chemicals is rather gray and as a result, I would agree with you
that it dilutes the importance of some of the other materials.

Mr. McInTosu. I will tell you the most recent example I heard
was yesterday when I was visiting with several doctors in a hos-
pital and one of them reported that a colleague had been cited by
OSHA for failing to have an MSDS on white out that they kept in
their nurses station. So when you start getting those type of haz-
ards on the same plane with very real chemical threats that if they
are not treated correctly could be very life threatening, it is no
wonder people find it difficult to differentiate the risk.

Thank you. I would be interested if you have any more informa-
tion on that survey. That is something that I think I would like to
make use of and let other people know about. If you would not
mind? That would be very helpful to us.

Mr. CALHOUN. Certainly.

Mr. McINTOSH. The other question I have; Mr. Bailey, you men-
tioned legal fees and the costs that were imposed there. Do you
think it would help if the agencies had to live under something we
call the loser pays rule or the English rule that says if they come
in and they challenge you, or they cite you for something but you
prove that you are innocent and have not done anything wrong,
that they had to compensate you for the legal fees spent. Would


103

consideration of the settlements and the complaint and set the matter for
hearing.

Atrial before an Administrative Law Judge (ALJ) Michel Levant was held during
June and July of 1996 and the ALJ issued his initial decision on December 29,
1995, In his initial decision, the ALJ ruled that the pipeline companies were not
prudent in entering into the settlement agreements with Dakota and DOE. In
addition, though it was clearly not within the scope of his assignment, the ALJ
made the finding that because of the changes In the natural gas industry
occasioned by wellhead deregulation and Orders 436 and 636, extraordinary
circumstances existed warranting the modification of Opinion 119. Based upon
this finding, the ALJ modified the pricing of synthetic gas and limited the amount
of synthetic gas to be sold under the Gas Purchase Agreement to the original
design capacity of the synfuels plant.

Finally, despite the fact that FERC has no Jurisdiction with respect to intrastate
pipelines such as the one that runs between the Grest Plains plant and Northem
Border Pipeline, the ALJ established a new transportation rate at approximately
40% of the rate that has been in effect since 1985.

To add insult to Injury, although only prospective relief from and after the date of
a FERC order is available as a result of a complaint pursuant to Section 5 of tha
Natural Gas Act, the ALJ ordered that these changes with respect to price,

+


39

REMARKS BY
CONGRESSMAN ROBERT K. DORNAN
BEFORE THE

_SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES AND REGULATORY AFFAIRS
FIELD HEARING, SIOUX CITY, IOWA
FEBRUARY 8, 1996

eld
Thank you, Mr. Chairman, for holding thes¢ hearings on
government and regulatory reform. I have pressed by your
Gert, dedication, and commitment to making government work on_
behalf of all Americans rather than against their best interests, 1 am
-equgfy impressed with your understanding of the legislative process.
Few freshmen congressmen know the ropes as well as you dg have

enjoyed serving and working with you.

Thope my testimony today is helpful and will fill a niche that might
not otherwise be addressed. One of my primary interests in serving in
new Republican majority has been howd aight best be able to
permanently reform a system that has long been out of control. We all
know the need for fundamental changes to our tax structure. Perhaps we
might get a shot at a flat tax this year rather than next ... and then next
year we might consider getting rid of the IRS altogether, repealing the

1


64

There had been no explosions at these two Terra plants, the one being in
Eastern Oklahoma and the ather in Westem Oklahoma. There had been no chemical
releases at these Terra plants. And the equipment and procedures in use In the two
plants are different from those in use at the Port Neal plant on the day of the explosion,
In short, EPA had no independent cause for these “safety” inspections, The only factor
common to the Port Neal plant and the plants In Oklahoma is the owner: Terra.

In conversations with Terra's counsel, EPA attorneys admitted that the
inspections of Terra’s plants In Oklahoma were being conducted by EPA's national
offica and were being coordinated as part of the press coverage planned for the
release of the agency's report on January 23, 1996. From Terra’s perspective, it also
appears that these EPA Inspections were part of a “turf battle’ between EPA and OSHA
to settle which agency should be doing ‘safety’ inspections.

EPA INTERFERENCE WITH A PRIVATE DISPUTE

In a report issued in July 1995, Terra's blue ribbon panel of outside experts
announced, after months of analysis and careful testing, that a piece of equipment
designed by Mississippi Chemical Company — a nitic acid sparger — was the ultimate
cause of the Port Neal explosion. Mississippi Chemical Company disagrees with Terra,
‘land the two companies are naw engaged in Intensive itigation aver the issue in both
lowa and Mississippi.


148

Mr. VaRNER. I would like to respond to that briefly. That is not
necessarily true. There was a survey that was done—it was legisla-
tively mandated and it was done—it was a customer satisfaction
survey that was completed last fall that was conducted by Drake
University. There was a focus group that was created and I was
on that focus group, along with some business leaders, and the re-
sults of that survey did not reflect what you are saying. As a mat-
ter of fact, that survey reflected that the customer satisfaction with
GSHA for professionalism was fairly high. If you have not read
that——

Mr. LaTHAM. I am just reporting what I am hearing all the time,
day after day.

r. MCINTOSH. We hear similar things I think in most Members
districts.

Any further comments that any of you would like to submit,
please do so for the record. I appreciate you taking your time and
waiting through the hearing and participating. Thank you.

We have two other individuals who have asked to be able to tes-
tify. Tom, I know you have got something at 4:30. If you feel you
have to go, I can handle it.

Mr. LaTHAM. No, we will hold off.

Mr. McIntosu. OK.

Mr. Tim Orwig and Ms. Kathy Hansen. Thank you both. If you
would please rise.

{Witnesses sworn.]

Mr. McIntosu. Thank you. Let the record show both witnesses
answered in the affirmative.

Mr. Orwig, thank you for coming.

STATEMENTS OF TIM ORWIG; AND KATHY HANSEN

Mr. Orwic. Thank you, and I promise I will be under 3 minutes.

My name is Tim Orwig. I am newsletter editor of the Northwest
Iowa Sierra Club. I really want to thank the committee for the op-
portunity to speak.

Regulatory reform is important and there is a need to look at un-
necessary regulations; however, I would ask the committee to re-
consider its approach. None of your invited guests to the hearing
represent citizens groups whose first priority is clean air, clean
water, worker safety, intact ecosystems, safe food, consumer protec-
tion. We need some of these regulations for the public good and un-
fortunately, Congress has seemed to turn a deaf ear to the greater
public good. This Congress has passed or attempted to pass dev-
astating forest salvage laws, circumvention of clean water laws, de-
struction of the Endangered Species Act, opening the Arctic Na-
tional Wildlife Refuge to oil drilling, clear cutting the Tongas Na-
tional Forest, slashing the budgets of EPA and other environmental
agencies, seeking to sell off national parks and monuments, dis-
mantling the National Biological Survey. Congressman Dornan has
even sponsored an amendment that will force the immediate dis-
charge of all Patriotic service men and women who happen to be
HIV positive. How are these legislative initiatives in the public in-
terest? Maybe what we really need are regulations to protect us
from legislators.

Thank you.


35

they are not being made aware of what is important. It is being
blurred in this huge barrage of paper.

Ms. Prescott. Exactly. I mean, I think it is important that we
make those disclosures. It is important for us that they know what
the cost of this loan is going to be up front. I do not have any prob-
lem with that. But when you put all of the extras in there that the
regulations are requiring us to disclose and calculate, they do not
want to know those things. Then they do not understand or they
do not hear the important things that they need to know. You are
exactly right.

Mr. LaTHAM. Thank you, Mr. Chairman.

Mr. McINTosH. My pleasure. Thank you.

Mr. LaTHAM. And I want to thank the witnesses personally for
appearing here.

Mr. McInTosu. I appreciate that. This information will be very
helpful to us in several areas.

Mr. Gutknecht, do you have any questions for our panel?

Mr. GUTKNECHT. No. I want to allow enough time—the only
thing I would say in terms of comments made about our ability to
measure now. We did have at one of our other field hearings a gen-
tleman who actually helped develop the technology for the spec-
trometer which allows us now to measure parts per billion and
soon to be parts per trillion, where we could not measure them be-
fore. I am not sure we are really better off knowing that. But we
did have the gentleman who helped develop that technology. He
sometimes rues the day that he helped work on that.

Mr. MCINTOSH. Well, thank you very much.

Thank you very much for joining us today. And if there are any
additional materials that you think we should be aware of, please
do not hesitate to contact us or let Tom know and he can get them
to our subcommittee. We appreciate greatly your participation.

Mr. HicMan. Thank you for the time.

Mr. CaLHOUN. Thank you.

Mr. BAILEY. Thank you, Tom.

Ms. PREscort. Thank you.

Mr. LatHam. Can we keep the roll of paper here?

Mr. McINTOSH. Yes. Actually, that would be helpful. I think we
should go on the floor and have a colloquy.

Mr. GUTKNECHT. It might make a nice special order.

Mr. McInrosu. Yeah. I think when we get back, we ought to
share this with our colleagues.

Mr. LaTHAM. I think so, too. Look for this on C-SPAN some
night, a special order.

ir. McINTOsH. That is right.

Before we move to our second panel, let me now turn to our col-
league, Mr. Dornan, from California and welcome him to our field
hearing. This is the 11th field hearing we have had outside of
Washington where we are hearing from real people about real
problems our government creates.

Mr. DorNAN. I have one question and then I will skip through
an opening statement that is more generic to the whole country
than specific to what a lot of people are calling the great State of
Towa this week. Have you had any restauranteurs, people who feed
us, as witnesses in the course of your travels?


67

duplicating OSHA's citations, which would be a clear case of double jeopardy.
Because the report is not an enforcement action, there Is no procedure available to
Terra to challenge EPA's conclusions and make EPA prove ils allegations publicly.

‘Therefore, in order to contest and correct EPA's flawed conclusions, on January
29, 1996, Terra issued a challenge to EPA to prove Its findings and conclusions In a
public forum. (A copy of Mr. Joyce's latter containing the challenge is included as an
attachment). To date, EPA has not accepted the challenge, even though EPA's
regional administrator, Mr. Dennis Grams, said to me before the first of the “public
forums* on January 23, 1996, that EPA wouid be willing to meet with Terra and, in
response to a question about whether EPA would be willing to change its report if it Is
shown by Terra to be wrong, Mr. Mark Thomas, EPA's team leader, nodded
affirmatively.

ERRA'S POSITION

By giving this testimony today, Terra is not challenging the legitimate reguistory
Toles of either OSHA or EPA. The health and safety of all workers is vitally important to
our country, and Terra respects the part that OSHA plays In ensuring that the objective
of a safe and healthful workplace is achieved. Likewise, protecting the qualily of the air
we breath, the water we use, and the land that provides our food is a must in today's
world, and EPA's role in providing that protection is obvious.

"1


104

output and transportation be retroactive to May 1, 1893, and ordered that the
pipelines refund to their customers all amounts paid by the customers in excess.
of the limitations established by the ALJ. Presumably, the pipelines would seek
teimbursement for these amounts from Dakota. Dakota has estimated that these
refund obligations would aggregate approximately $276 million annually.

This matter is now before the full FERC. Dakota, DOE and the pipelines filed
exception to the ALJ's dacision with the FERC on January 29, 1996, and the
customer group's excaptions are due on February 20, 1996. A copy of DOE's
exceptions is included with my written testimony for your information. The
FERC In its deliberations is free to adopt the decision of the ALJ, reject his
Gacision or modify it.

it is our hope that the gross errors committed by this ALJ will be obvious to the
FERC and that the FERC will stand by the commitment made to the Great Plains
project in Opinion 119 as the continued operation of that facility is at stake.
Clearly if this commitment Is not honored, it would put a chilling effect on future
privatization efforts of the federal goverment as potential purchasers in a
private sector would be concerned as to whether or not they could rely on

receiving the same regulatory treatment as their federal government



126

It is probable that expenditures for maintenance and reliability will decline.
That a poorer quality service could result, is possible. Who will provide the

maintenance and who receives service first when service is needed?

Many years ago, utilities were not concerned about energy efficiency.
However, in the past ten years it has been a different story. All electric
utilities have been actively working on demand side management, energy
efficient products, conservation, and education of our customers. Energy
efficiency efforts in order to compete will be severely hampered by a
competitive market. Utilities will be interested in peak load management but
off peak demand side management, conservation, and energy efficiency

types of services would decline.

The effects of direct retail access on Municipals and Cooperative Utilities
with regard to stranded investment are tremendous. Bonds are sold by
municipals to finance their systems. The revenues collected from sales of
electricity to their customers are pledged to the lender as security for the
money received from the sale of the bonds. The rural electric cooperatives
have borrowed money through the REA, now RUS, to finance their facilities.
Revenues collected from sales of existing loads is collateral and security to
the United States Government for these loans. In both instances there is
danger of default if municipals or REC’s loose their loads to competition or

someone cherry picking their best loads.


45

Mr. McIntTosH. Thank you very much, Bob. Thank you for join-
ing us today. It is an exciting time for us to be in lowa, as I am
sure everyone is aware, as the Nation begins to focus their atten-
tion here. It is an appropriate occasion for us to be gathering some
information about very real problems from people.

I want to work with you also on this notion of the impact of regu-
lations on families because I think you have a very good point
there. It is often overlooked in the economic data, but there are
real and severe impacts on some regulations on our families and
it would be a good thing for us to focus attention there as well.

Mr. Dornan. Well, the family farm, the family real estate busi-
ness, as I said, the family restaurant. We break them. And unless
you have an army of corporate lawyers—one line I stumbled into
in this Presidential chase, and if I lifted it from somebody, it was
deep in my subconscious. And that is that rich people do not need
a President. They live in gated communities. They drive around in
limousines with tinted windows. If they do not have their own Ca-
nadian Challenger jet or a Gulfstream jet, they wait in a special
lounge and get a five course meal behind curtains in first class.
Usually they are in their own jet. They just do not feel the effect
of downturns in the economy. They do very well in bad times; they
do exceedingly well in good times, and they just do not need a
President. First of all, if you look at Iacocca or Eisner of Disney,
their income, they make 100 or 200 times more than the President
of the United States. So who is the President really for? Middle
class taxpaying Americans, and as Mother Theresa would say, the
truly poor and vulnerable. They need a President. And if that mid-
dle group, the taxpayer, is asked to carry the load of the people
that are vulnerable and have had a couple of tough shots in life,
then they ought to be part of process and asked permission more
instead of just told to ante up the tax dollars and shut up and take
the regulations as they come at them. That is why this is impor-
tant work we are doing, and I just hope the American people un-
derstand that there are 347 days until the next inauguration. That
is my Clinton countdown watch. [Laughter.]

If the Republican party loses control of the House and the Sen-
ate, no matter what your politics are, then just understand that it
was not Hoover’s election that turned control of the Government
over to Democrats and within about 20 years it became the liberal
Democrats. That was 1930, the first election after the crash of Oc-
tober 1929, and 1930 to 1996 is 66 years, and the Republicans had
two 2-year bursts before this last year. So if this is to be a 2-year
burst again, that will mean the Republican party has had three 2-
year operations where you barely gin up a reform program, let
alone a revolution, and that means 60 out of 66 years belong to one
party and they are going to get it again in 1997 and 1998. I hope
the American people understand that they ought to give the loyal
opposition that just took the House back a year ago and the Senate
at least 4 years to try and see if we can turn around this headlong
rush toward financial bankruptcy. And what I have tried to bring
to this campaign—and I think I am having some effect. Everybody
is starting to talk about faith, family and freedom, my battle cry
from day one. I have used it five out of my nine campaigns. That
the moral bankruptcy that we are heading toward—that we are in


87

ardous material program became a secondary part of the investiga-
tion.

I would characterize that investigation as being very profes-
sional, very straight-forward and was done, | believe, in a very ade-
quate manner. The investigator came to our location, came to the
Sioux City Fire Department, came to the headquarters. He in-
spected our operating procedures. He inspected under 1910.120
(Q)—FR 1910.120(Q). He investigated and inspected our written
mask program that we are required to have, mask meaning self
contained breathing apparatus under 1910.134. And at the end of
it, the conclusion—to make a long story short, the conclusion was
he gave us a clean bill of health. This occurred in 1991.

e regulations that govern fire service and other emergency re-
sponse or public safety officials in the area of hazardous materials
was adopted by Congress and officially became part of the statute
in 1989. We had believed at that point in 1991—we were grateful
and thankful that we were at least in compliance at that particular
moment.

The second involvement that we have had with OSHA was a re-
sult of the Terra incident. The portion our hazardous material
team—maybe just to set the stage for you and I will be as brief as
I can here. We were on scene for 11 days down there trying to as-
sist Terras hazardous material technicians and their officials, other
local fire jurisdiction officials, other State resources and agencies
that all played a role in trying to mitigate this terrible tragic event
that occurred on December 13, 1994.

At the conclusion of our involvement there several days later, we
received a call from OSHA that they would like to come up based
on a complaint that was filed by one of our employees. The OSHA
investigator asked to and wanted to interview several of the mem-
bers of our hazardous material team. We provided that exposure
for that individual at that particular time. The initial characteriza-
tion of this individual was, I would again characterize as somewhat
friendly. He did interrogate several members of our hazardous ma-
terial team, and based on that initial investigation, he concluded
at that time—his summarization to us was, we believe that from
everything I have seen and talked to here today, that you probably
acted appropriately, but there may be a couple of paper violations
we will need to look at and try to get to the bottom of.

The individual that filed the complaint against us, the em-
ployee—the member of our department that filed the complaint al-
leged 53 different violations of 1910.120(Q). It was obvious to me
what he had done—or this individual had done—he or she, I am
not sure—went right down paragraph-by-paragraph and basically
said that we violated every portion of that section according to the
regulations.

ur subsequent visits from OSHA in the investigations were
quite confrontational. They were at best antagonistic. The individ-
ual took us to the point where he concluded that under
1910.120(Q)—any of you that know anything about incident com-
mand, I do not care whether you learned it in the military or
whether you learned it from some other source, it is all the same.
The term superior officer is used in the regulations. Superior officer
to us has always been—and I have been in this business for nearly


8

time had received $2,000 with the promise of receiving $24,000 if
this case was successful.

We mounted the best legal defense team we could afford, which
included the hiring of the largest law firm in the United States and
adding to it numerous outside attorneys, research personnel and
investigators. During this time, one of our original attorneys was
hired by the EPA and when confronted about this, her comments
were, I do not understand why the EPA is coming down so hard.
They did not find anything significant, but having spent so much
money developing this case and thinking you have deep pockets,
they must now go for the big bucks to cover their cost.

Second, she said, I cannot afford not to work for the EPA for
what they are offering me. Obviously, the Government pays much
more than the private sector so it can win large amounts in settle-
ments and fines.

After a costly trial, Higman Sand & Gravel was found not guilty
by a Federal jury. Had we lost this case, we were facing fines
amounting to some $50 million and prison terms in excess of 5
years.

My second example is the Mine Safety and Health Administra-
tion, called MSHA. On July 18, 1995, Higman Sand & Gravel was
visited upon by two Federal mine inspectors. These inspections
have taken place semi-annually since MSHA’s inception in the
early 1970's. This mine site has an impeccable record. It has never
had an injury or a lost-time accident. It is operated by an experi-
enced and trained employee who has worked for Higman Sand &
Gravel for 23 years. On that date, your inspector, Lloyd Ferron, is-
sued some 23 citations and orders on alleged violations which he
claims to have found affecting one person. This is the paperwork
that was generated that day, Mr. Congressman.

[Displays paperwork.]

Mr. HIGMAN. That is one copy. It has never had an injury or lost-
time accident and is operated, as I said, by an experienced and
trained employee.

Even though it was explained to Lloyd that we were at that time
under pressure to furnish material for a highway project and need-
ed to continue to produce material, his demand was that he consid-
ered violations were to be fixed immediately, resulting in a plant
shut down. These citations and orders are now on the Federal court
docket for this spring.

Since this plant has been inspected twice annually and kept in
compliance, why then should it be cited for so many infractions?
Guesses have been made by a former Higman attorney now work-
ing for the Government, as well as our staff attorneys, that it is
because the Higman Co. so vigorously and legally fights these in-
justices. And also, because the Government regulators are so vin-
dictive and will retaliate at all cost to protect and elevate their po-
sitions. We therefore reach a point of impasse.

Never once have I had a government regulator, regardless of
agency, visit my place of business to offer help. Instead, they come
with a combative attitude. Can you imagine an IRS agent coming
to your door and saying, may I help you with your taxes? I have
found what I believe to be several errors. As one agent publicly ac-
knowledged, we are under pressure, career path pressure, to come


REGULATORY REFORM

THURSDAY, FEBRUARY 8, 1996

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
Sioux City, IA.

The subcommittee met, pursuant to notice, at 12:04 p.m., in the
ballroom, Sioux City Hilton, 707 Fourth Street, Sioux City, IA,
Hon. David McIntosh (chairman of the subcommittee) presiding.

Present: Representatives McIntosh, and Gutknecht.

Also present: Representatives Latham, and Dornan.

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

Mr. McINnTOosH. The Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs will come to
order,

Welcome to this 11th field hearing. The subcommittee thanks
you for joining us today. We look forward to hearing testimony
from citizens about one of the most important issues facing the
country today, and that is what are we going to do about the prob-
lem of excessive and burdensome regulation? A regulation that
weaves a web of red tape around many of our activities, costs us
in terms of jobs and competitiveness on the world market, ends up
costing consumers in higher prices and ultimately ends up costing
billions of dollars in resources that could be spent for other, more
worthwhile goals.

The subcommittee has held field hearings around the country. It
is our goal to get outside of Washington and hear testimony from
real Americans about the effect of government regulations and then
take that information back with us to Washington to help write
legislation to correct those problems.

Now, we have heard a lot of different examples of regulation, and
the more that I hear, the more I realize there are an incredibly
large number of problems that need to be corrected. I am from
Muncie, IN, and we have a large farming community there, and at
one of our early subcommittee hearings a farmer named Kay
Whitehead came and testified about a problem she had. The Indi-
ana Soil and Conservation Service told her that she could only dis-
pose of her manure from her pig farm by spreading it on the fields
but not plowing it in. They were worried about soil erosion and told
her that that was the preferred method. Well, a little while later
EPA came by and told Kay that when she disposed of her ma-

@


150

da that incorporates some of the economic philosophy that the Re-
publicans have articulated. I appreciate your coming today. If you

ave additional things that you would like us to have in the record,
please feel free to get it to us.

Let me ask Gil or Tom if they have anything.

Mr. Latuam. I just want to thank you, Mr. Chairman, for having
the hearing here, and Gil for coming down. I especially want to
thank my staff for working so hard putting this all together here
with the cooperation of the chairman’s staff. So, I just thank you
very much for having this hearing here.

Mr. McINTOSH. Our pleasure. It is a real pleasure to be here in
Towa. Let me tell those of you who sat here through the whole
thing that I appreciate your coming today. This is a very important
record for our subcommittee and it will become part of the overall
record when we move forward with Corrections Day ideas and over-
sight issues that will be coming up. So, I want to thank Tom, you
and your staff for making it possible.

I also want to let everyone know our subcommittee motto prob-
ably ought to be Gil’s statement, $50 solutions for $5 problems. In
fact, it is one from Winston Churchill, that in matters of principle
and honor, we will never, never, never, never back down.

Mr. LaTHAM. That is right.

Mr. McINTOSH. Thank you all for coming. And with that, these
hearings shall be adjourned.

[Whereupon, at 4:35 p.m., the subcommittee was adjourned.)

eo)


42

no less than 16 federal grants in 1994 totaling over $19 million. I was
sent a similar letter from the American Federation of State, County and
Municipal Employees (AFSCME). Even this pro-big government labor
vo eee
union received $150,000. Other letters followed from various
roan
environmental organizations all of whom receive tax dollars.

ese
In each case, and hundreds of others sweet a grant recipient was
- the,
lobbying Congress to continue Far ot flow. Not onc Ee Leved

a letter from a grant recipient begging me to CUT their funding. Mr.

Chai , it is the nature of the federal beast ... this problem isn’t just
Ms
some: he the rule. The only thing left for us to do is to

disconnect the two. We must effectively prohibit grantees from directly
lobbying for the continuation of the grants they receive.

Ofcourse, any time you try to “dry out” an addict you will meet
ise,
with’ fe resistance. All sorts of excuses will be made as to why these
groups ought to be able to lobby for the tax dollars they receive. You may
recall my plan, Mr. Chairman, embodied in my bill HR 1130. This plan
——

takes each of these main objections into consideration. We would not
keep any citizen from rightfully contacting his or her Member of
Congress on any subject. Neither would my bill affect those individuals

who receive federal funds other than awards, grants, or contracts -- for

4


73

On top of those, the test costs themselves will average between
$750 and $1,500, and should any problems—and if you go to a DOT
licensed shop and you have a little bit of a problem—you are al-
ways going to find they have a little bit of an upper hand on the
marketer. You are going to have to correct that before you get out
of the test shop and that is added on top of the expense. Not only
will the average marketer spend these sums to have the test con-
ducted, but he will also have to pay for the travel time, the loss
of sales and other costs which are incurred by the inspections,
when actually the majority of the time it is completely unneces-
sary.

There is an interesting little twist to this scenario. If a marketer
chooses to go to the closest location, it may be well across the State
line. One of the closest test shops or licensed test shops in western
Iowa happens to be in Omaha, but in these cases, the marketer
who crosses the State line becomes an interstate marketer and
under the rules of the DOT, he loses any protection the State of
Towa affords him for staying within the bounds of Iowa as an intra-
state marketer. Once he becomes an interstate marketer, he faces
even more onerous regulation than what he has under the State of
Towa.

The fact that the U.S. DOT has not even responded to our appli-
cation adds insult to injury. It is yet another glaring example of the
bureaucracy’s inability to reasonably work with the very commu-
nity it regulates.

Another example, and the last one I would like to pass along to
you is the issue of underground storage tanks. In 1986, the under-
ground storage tank universe became regulated by the Federal
Government. The Government and the State agencies then deter-
mined that not only the tanks need to be upgraded but the soil has
to be cleaned up to what I would call Adam and Eve standards, or
so clean you could eat the State of Iowa every day for 2 months
and never have any loss of health.

In Iowa, we have cleaned up about 450 to 500 sites. We say that
a little bit loosely, cleaned up. These have been the easy ones. The
average cost per site has been $277,000. The Iowa cleanup program
has budgeted over $300 million for potential clean up costs. And all
of this money is to be spent on the clean up of underground storage
tank contamination, which in most cases poses no threat to the
groundwater.

Just in October and November. Excuse me. An October 1995
study gives a little bit of validation to that claim. That study was
commissioned by the State of California and issued by the Law-
rence Livermore Foundation—and for those of you who have Cali-
fornia ties, that is a fairly liberal, pro-environment California-
based group—and they agreed with what is pretty well common
knowledge in our industry, that three-quarters of the soil which
was cleaned up in California was cleaned up at great expense and
unnecessarily cleaned up. Finally, you have a study from the most
stringently regulated State environmentally which tells what mar-
keters have been saying all along; we are spending too much
money for something on which there is no scientific basis.

The State of Iowa is now beginning to move to risk-based correc-
tive action standards which our industry fully supports. However,


82

larly—and again, we are talking in many cases mom and pop type
operations and many times in small towns. They go to sell the
property and all of a sudden they have to do some test wells, and
the answer to every question is, we have to do more testing. And
every one of those tests costs them—I think you are lower than we
are in Minnesota. I mean, we are talking $1,500 just to do another
test. Have you begun to resolve that problem here in Iowa? That
is sort of a separate—because I have one particular constituent
that is wrestling with this right now.

Mr. Marr. We call that marketability of property or the ability
to market it. It comes back to haunt you in two ways. One, even
though the property may be valueless because it is contaminated,
you cannot—we have been unsuccessful, even through court, in re-
ducing the property tax valuation.

The second, once you have the problem with contamination, it is
basically unmarketable because under RCRA the liability—actu-
ally, it is not RCRA, it is the Superfund. They use the Superfund
statute where the liability goes from owner to owner to owner, or
in this case, a bank which is afraid they would assume a cleanup
in case they foreclosed. Iowa has tried to address that through
their cleanup fund by issuing an insurance policy for what we call
property transfer. Even with that policy, it Ba been a problem to
market your property. Iowa started out with about 31,000 under-
ground storage tanks on about 12 or 13,000 sites. We are down to
about 12,000 underground storage tanks on about 6,000 sites in 10
years. Most of those people went out of business. You go through
many parts of Iowa, small-town Iowa, and you will find abandoned
gas stations. They are a blight.

Mr. GUTKNECHT. And nobody can buy them. They cannot do any-
thing with them.

Mr. Marr. And no one wants them. Even the counties will not
take them back now. They just sit there.

Mr. GUTKNECHT. Mr. Davis, I am becoming—I am not an expert
in fertilizers or herbicides, but Atrazine was brought up. I think it
is a good case because we have a colleague—a former colleague of
mine in the State senate, who is a veterinarian, put on a great
presentation a few weeks ago for me about the toxicity of chemicals
like Atrazine. Are you familiar with how toxic Atrazine really is
when compared to some other chemicals? For example, do you-—

Mr. Davis. Yes, I am. I do not have any material in front of me,
but the old adage I remember was on bacon that Paul Harvey had
on one time, if you ate 454 pounds of bacon every day, in 29 years
you may develop a cyst. Similar things happen. Atrazine is prob-
ably not as contaminant as—I should not use Coca Cola, but I will.
As far as pop or some type of other products that we willingly
consume. One of the problems with agriculture is the misconcep-
tion by the public and that is they think that people out there put-
ting a quart of a product on an acre are contaminating our environ-
ment, which, in fact, we probably take better care of it than any-
body else. When you get into a town the size of Des Moines, the
Drainos and the other solvents people are using, or even the fer-
tilizers that they are putting on their lawns are 10, 20, 100 times
as much as we are using out there on the land. Those are probably
more toxic than anything we are doing.


REGULATORY REFORM

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
SECOND SESSION

FEBRUARY 8, 1996

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

Ee

U.S. GOVERNMENT PRINTING OFFICE
40-720 CC WASHINGTON : 1997

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

ISBN 0-16-055199-4
a



108

neisuek

GtouXxLAND||NTERSTATE(\/ETROPOLITANDLANNING(C()JUNCIL

s0ux ery, 1owa soe
TaLeenoNG (7m) a7e-enee

February 8, 1996

U.S. House of Representatives
Subcommittee
on
National Economic Growth, Natural Resources,
and Regulatory Afi
Sioux City, lowa

Congressman Tom Latham, Committee Members:

The Siouxland Interstate Metro. Planning Council (SIMPCO)
is concerned with unfunded mandates. We are concerned with
federal mandates on state and local governments, business, and
industry. We believe that federal mandates have grown to be too
far to costly and burdensome.

T serve as a member and chair of the lowa Advisory
Commission on Intergovernmental Relations (IACIR). The IACIR
have been studying state and federal mandates on local
government and business for the last two years. The lowa
Legislature has and is addressing several of the recommendations
of the IACIR. Many of the mandates that we have considered are
federal in origin. State agencies implement or enforce many of
these mandates.


181

the kindness of local and state entities that allowed these students into school with an
appropriate education - it was federal law! This process is a smoke screen. Districts want to
hide behind the vail of burdensome, excessive regulations, but they need only 10 look in a
mirror. It has nothing to do with their hands being tied with wasteful spending or constricting
federal demands, this is about valuing all students. Offering equal opportunities for quality
education.

History has also amply demonstrated how the “systems,” if not governed, will neglect and
ban the student with a disability. The “trust me” theory hurts the weakest among us. Because,
contrary to popular rhetoric, to constantly live your life fighting city hall, whether it be a school
district or state agency, cannot be done by individuals without the uniformity of federal
regulations. If a person is worthwhile in massachusetts, then that same person should be
worthwhile in lowa and every other state. That is only going to hold true through the
enforcement and implementation of federal regulations nationwide.

The “trust me” theory may be alright when speaking about produce, but not human
beings. The IDEA and its implementing regulations, are the written guarantees of appropriate
education for students with disabilities. We wouldn't purchase a car without a guarantee. Why
should parents of students with disabilities “trust” local districts to do the right thing?
Especially when then rarely have before.

Who truty is the culprit? The student with a disability or a system not adequately serving
them? The system is magnifying their own burden. The solution should not be to reward non-

compliance with the removal of regulations that now only supply minimal benefit. The emphasis

should be on increasing that benefit by maximizing implementation. Federal regulations set forth

the parameters within which local and state entities have the freedom 10 operate, but they do not




109

My comments address general and specific concerns.

General Concems
1) There should be a moratorium on new federal mandates on state
and local governments, business, and industry.
2) There should be a periodic review of existing mandates.
3) Mandates on state and local governments should have a funding
mechanism.
4) Mandates and rule making processes should include input from
those affected.

The federal Advisory Commission on Intergovernment
Relations (ACIR) recently completed and released a report on
mandates. Their report, The Role of Federal Mandates in
Intergovernmental Relations, contains many accurate observations
and sound recommendations

The ACIR recommends repealing the provisions in several
laws that extend coverage to state and local governments. They
also recommend modifications in other laws to accommodate
budget and administrative constraints on state and local
governments. The also recommend revising other laws to provide
greater flexibility and increase consultation. A summary of the
ACIR recommendation is attached.

+The City of Sioux City and costs of the Safe Drinking Water Act.
Lab costs are approximately $90,000 per year and are growing at
approximately $10,000 per year. The level of expenditure would
be significantly higher if the City of Sioux City had not invested in
their own lab equipment. In addition, the City pays the lowa
Department of Natural Resources a fee of approximately $13,000


30

DECISION WITHOUT IT, THE BANK SHOULD NOT BE PENALIZED FOR NOT FILLING IN ALL
‘THE BLANKS.

OVERALL MORTGAGE LENDING HAS BECOME 80 COMPLICATED THAT BANKS CAN NOT
AFFORD TO DO ALL OF THE DISCLOSURES IN HOUSE. IN ORDER TO REDUCE THE RISK
OF NONCOMPLIANCE MOST ORGANIZATIONS SUBSCRIBE TO AN OUTEIDE VENDOR
WHICH GUARANTEES ITS DISCLOSURES AND CALCULATIONS WILL REMAIN IN

‘SOFTWARE WAS PURCHASED FOR APROXIMATELY $32.600 AND COSTS $4,500

ANNUALLY. IN ADDITION TO THE SOFTWARE CO6TS, WE ESTIMATE THAT IT TAKES:
THREE QUARTERS OF A FULL-TIME EMPLOYEE TO ENSURE COMPLIANCE WITH THE
woeropuees REGULATIONE ALONE, THIS SEEMS EXCESSIVE FOR ONLY ONE


89

even national implications. Subsequent to that, we have gone
through a series of behind-the-scenes negotiations with the OSHA
people and subsequent to, I guess, this meeting or previous to this
meeting, we have reached a tentative agreement with them and
have signed off on everything. I think we ended up admitting to
two minor paper type violations, but all of the operational viola-
tions have been vacated.

The concern we still have is that we still believe—and I still be-
lieve personally that it is the belief of the OSHA staff in this State,
and I think maybe elsewhere, that that is a correct interpretation
of those regulations. If this event does occur somewhere else in this
State, potentially under the same or similar type circumstances,
they would exercise exactly the same judgment. That is a grave
concern to me.

It is absolutely essential from my perspective that the sharing of
resources does not need to be discouraged. It needs to be encour-
aged, especially in times of tight budgets and especially in times
that all of us are currently in. We need people to collectively as-
similate their resources together.

I have put together some thoughts that I think are absolutely
critical to improving the situation as it relates to our experiences,
and maybe they will be beneficial and helpful to someone else in
the future. I think it is absolutely essential that OSHA be changed
from a reactive to a proactive agency in the sense that they need
to work with employers. I am talking now strictly from the perspec-
tive of public safety, They need to work with us proactively. I have
personally made phone calls to them to try to ensure that we are
in compliance. You never get an answer that says you are in com-
pliance. They will say, well, it sounds like you are doing the right
thing but we are not quite sure. We do not really know. We do not
see what you are doing and all sorts of things. We need to have
those types of relationships.

We need to create in my estimation minimum training standards
for OSHA investigators. I have been in this business for 28 years.
Let me tell you something, the first thing I learned in hazardous
material training that I took 6 years ago is there is no such thing
as an expert. And yet, the OSHA investigator that we had, his cre-
dentials, in my estimation anyway, were far lacking and far less
than what my own personnel had. And for that individual to come
in and try to determine what took place on an emergency scene
under emergency conditions to me is just not correct.

We need to rewrite the OSHA regulations pertaining to public
safety agencies now in clear understandable language. They are
vague, they are ambiguous at best, and this should be done with
direct involvement with public agency officials that represent all
the public safety disciplines so that we have some input into the
regulations.

I also believe because I think—and I am going to say this in—
I guess I am very candid in this respect. I think we were victimized
by a process that allows or provides for employees to abuse a privi-
lege or a regulatory agency to try to retaliate against an employer
for whatever the motives might be. I think there needs to be lan-
guage created that would punish those that initiate unfounded
complaints or abuse the current system protections. Employees


84

our perspective—was a completely cooperative corporate citizen
oho vas Erving to get to the bottom of this and take care of the
people who worked for you and to try and make certain this does
not happen again.

Mr. VALENTINE. I encourage you, Congressman, to share a copy
of my testimony with anybod, at EPA. It is pretty hard to refute.
We have got some first! and. witnesses and your own colleague
here, Congressman Latham, as well as Senator Grassley. What I
have said is consistent with my oath—it is the truth. It was, to use
Congressman Latham’s term, an agency out of control—a very ar-
rogant agency.

As far as the regulatory bill of rights, that is not just a rhetorical
device. As I say, I think it is something that you—particularly as
you hear more and more stories, that would be one way for you—
for your committee to redress the balance. And again, I plan to do
what I told the chairman, which is to submit something in the na-
ture of the Bill of Rights of the U.S. Constitution, but for the 1990’s
and for dealings with regulatory agencies. As the chairman said,
the original Bill of Rights had in mind the State, the Government,
not regulatory agencies and in that respect, maybe it is time that
we updated it.

Mr. GUTKNECHT. The founding fathers really had a deep appre-
ciation for the need for checks and balances. I think what you are
indicating here is there really is not a good set of checks and bal-
ances as it relates to some of these agencies. Again, we all want
a clean environment. We all want safe work environments. We all
want safe work places. We all want to live—you know, we all share
the same planet. But on the other hand, I mean, there is some rea-
sonableness here. I do hope, Mr. Chairman, you will write a letter
and get the names of the people involved in it. I would like to have
them, if not here, back in Washington. I would like to hear their
side of the story and I would like to ask them some questions.

Mr. VALENTINE. I would be glad to repeat my points back in
Washington.

Mr. GUTKNECHT. Thank you.

Mr. VALENTINE. One of the most frustrating things was this busi-
ness of no legal action, them simply coming to town, calling a press
conference, reading their conclusions and turning around and going
home. We tried to grab for air, you know, to say wait a minute,
that is not true. But there was no where to grab. They either ought
to have the nerve to stand and, you know, give us an opportunity
to respond or not issue these kinds of reports.

Mr. McINTOSH. I appreciate that. I think this would be an appro-
priate inquiry for us to take this information and put it to EPA and
; ind out what their justification is. Maybe, Tom, you can join us in

at.

Mr. LATHAM. Thank you.

Mr. McINTosH. Well, thank you all.

Mr. DorNnAN. One comment, Mr. Chairman. Up in New Hamp-
shire, less than 2 weeks ago, there was a gathering of a lot of envi-
ronmental groups from New England. There must have been like
eight or nine of them. And the principal sponsor of a Presidential
forum group was the wildlife—New Hampshire Wildlife Associa-
tion. They invited all of the nine candidates and I was the only one


12

After a costly trial procedure, Higman Sand & Gravel was found not
guilty by a federal jury. Had we lost this case we were facing fines
amounting to 50 million dollars and prison terms in excess of 5 years.

My second example is the Mine Safety and Health Administration
called MSHA. On July 18, 1995, Higman Sand and Gravel was visited
upon by 2 federal mine inspectors. These inspections have taken place
semi- annually since MSHAs inception in the early 70’s. This mine site
has an impeccable record. It has never had baving an injury or lost time
accident. It is operated by an experienced aud trained employee who has
worked for Higman Sand & Gravel for 24 years.

On that date your inspector, Lloyd Ferron, issued some 23 citations
and orders on alleged violations which he claims to have found affecting
one person. Even though it was explained to Lloyd that we were at that
time under pressure to furnish material for a highway project and
needed to continue to produce material, his demand was that what he
considered violations were to be fixed immediately, resulting in a plant
shut down. These citations and orders are now on the federal court
docket for this spring. Since this plant has been inspected twice annually
and kept in compliance, why then should it be cited for so many
infractions? Guesses have been made by a former Higman attorney now
working for the government, as well as our staff attorneys, that it is
because the Higman Co. so vigorously and legally fights these injustices.
And also because the government regulators are so vindictive and will
retaliate at all costs to protect and elevate their position. We therefore
reach a point of impasse.

Never once have I had a government regulator, regardless of agency,
visit my place of business to offer help. Instead, they come with a
combative attitude. Can you imagine an IRS agent coming to your door
and saying “May I help you with your taxes, 1 have found what I believe
to be several errors.” As one agent publicly acknowledged “ We are
under pressure, career path pressure, to come up with bigger and more
news worthy cases! “ thus resulting in promotion! When visiting a U.S.
attorney’s office, I read a letter from the justice department
complimenting that office for the number of dollars it had taken in on
fines, penalties and settlements. Why is it, the government system does
not promote its personnel based on a positive helpful attitude.


54

But beyond the waste and inefficiency, we at Terra were also
subjected to some other forms of “regulatory abuse” and that is
what I want to talk about in the rest of my remarks. This particu-
larly came out when EPA decided after 14 months to finally issue
the results of their investigation in a full-dress press conference
called 2 weeks ago here in Sioux City, next door at the Sioux City
Convention Center, with TV lights like we have now and with all
the local media there.

Let me tell you now about this regulatory abuse” and particu-
larly as they announced their conclusions. I have grouped it under
three headings. The first of the headings is a serious denial of due
process to Terra. What EPA decided to do when they announced
the results of this explosion was to basically deny Terra any kind
of notice and opportunity to be heard on these conclusions and to
prevent our questioning them or otherwise scrutinize what they

ad to say.

Let me be real specific. One, they barred us from getting an ad-
vanced copy of their 100-page report. They flat out told us no.

No. 2, they concealed from us the fact that the press conference
had been called. They told us there was going to be a press con-
ference at 5 p.m. and it turned out they had told the local media
it was 3 p.m. They did not want Terra to attend. When we found
out by a Focal reporter accidentally that there was a 3 o’clock con-
ference, we called up and were told that Terra would not be able
to come to a public news conference.

We then turned to our elected representatives. We asked Senator
Grassley to run interference for us and also Congressman Latham
here. And Senator Grassley’s office—and I think Congressman
Latham’s as well—was told that there was quote, an embargo b:
EPA on sharing any information with Terra. That the Senator's of-
fice could have it, but he could not give it or share conclusions with
Terra. When at the last minute Terra did, through Senator Grass-
ley only, get into the press conference, when we tried to ask ques-
tions about the conclusions that were being reached by EPA on
these non-environmental safety issues, we were cut off from ques-
tioning and told that although this was called a “public forum,”
that EPA did not really want to hear from us.

The final twist was, the day before they called this full-dress
press conference, they decided to do a blitz of safety inspections—
again, not environmental but safety—around the country at our
other plants. So while the news conference is going on, Terra had
to send lawyers from my law department to our other plants
around the country in order to respond to these requests for safety
inspections. Now interestingly, when the inspections occurred,
which took all of—a few hours at each of our plants because they
had nothing really to inspect, the EPA inspectors and lawyers told
us that they had no independent basis for doing these inspections,
no safety concerns at any of these plants, that they were simply
doing it because the same company owns all of these plants. They
also knew, because we told them ahead of time, that there was
completely different processes and equipment at these other plants
than the one in Sioux City, and once they got onsite, they quickly
acknowledged that. Finally, they were candid enough, these inspec-
tors, to admit that what was really going on was to support the


96

Mr. BreEvIG. Good afternoon, Mr. Chairman. I also happen to
have the distinct pleasure of having come from Minnesota and now
reside in northwest Iowa. So similar to Congressman Gutknecht.

NIPCO is a wholesale electric generation and transmission coop-
erative serving a 6,500 square mile area in western Iowa. NIPCO
receives a portion of its power supply from a member/owner, Basin
Electric Power Cooperative headquartered in Bismarck, ND. Basin
Electric owns and operates over 3,000 megawatts of generation ca-
pacity for 126 rural electric member systems in eight States includ-
ing Minnesota and Iowa.

The story that I am about to tell you about is a regulatory story
that is still unfolding at this time, which we are really in great
need of your help. The Great Plains Synfuels Plant located in Beu-
lah, ND is the only facility in the world that manufactures pipeline
quality synthetic gas from coal. Great Plains is owned and operated
by Dakota Gasification Co., a wholly owned subsidiary of Basin
Electric. Great Plains was constructed pursuant to a $1.5 billion
loan guarantee issued by the Department of Energy. DOE issued
the loan guarantee based upon FERC Opinion 119 which approved
high-priced gas purchase agreements with Great Plains and the
four pipeline purchasers and allowed the pipelines to pass these
costs on to their customers.

The project sponsors ultimately abandoned the project following
its completion in August 1985. The DOE assumed operation of the
project and eventually secured ownership through foreclosure. At
this point in time, the Reagan administration had determined cer-
tain assets held by the Federal Government would be more appro-
priately held by the private sector. The Great Plains project topped
this list and it was determined that the DOE would put the Great
Plains project up for sale.

The Congress instructed DOE to pursue a buyer committed to
the long-term operation of this project so that it could acquire the
technical, financial and environmental information that caused
DOE to guarantee the loan in the first place, that could continue
to gather the information from this project.

Basin Electric’s bid was selected because it provided the highest
value to the Federal Government. The bid provided DOE with 85
million in up-front cash and called for DOE sharing in the reve-
nues generated by sales from synthetic gas. Based upon the plant
production to date, Basin Electric has saved the Federal Govern-
ment $360 million by elimination of plant taxpayer operating sub-
sidles.

Shortly after Basin however purchased the facility, a dispute
arose between Dakota and the four pipeline companies that pur-
chased the synthetic gas output from the Great Plains plant. These
disputes led Dakota and DOE to file a lawsuit against the pipe-
lines. Rather than take these matters to trial, the parties entered
into a four-party, nearly identical settlement agreement, and be-
cause of these settlements—of the purchase—the gas purchase
agreements, the settlements were subject to FERC approval.

In April 1993, a group of gas distribution companies filed a com-
plaint with the FERC claiming that the prices charged by Dakota
for the synthetic gas exceeded those authorized by FERC Opinion
119. This is the one—this is the 1981 FERC opinion approving the


Hello, my name is Ron Marr and I appreciate the opportunity to be here on behalf of the Iowa
Petroleum Marketers Association and the Petroleum Marketers Association of America. The
Towa Petroleum Marketers Association represents over 1,500 petroleum marketers in the State of
Towa, PMAA, our national organization, represents over 11,000 marketers nationwide. Neatly all
of the businesses represented by IPMA and PMAA are smal] businesses according to the Small
Business Administration's definition of a small business.

Because many of the marketers I represent face regulatory excesses every day, I am here to
present a few of the most troubling issues marketers in lows face with regard to overrogulation. I
commend you, Congressman Lathan, for your efforts in gathering information to help prope the
regulatory reform agenda foroard.

‘The first issue which I would like to discuss is the issue of the Department of Trani sporeaion’®
requirements for yearly testing of small cargo tanks. Until 1995, these tanks were exempted from
federal DOT testing requirements. PMAA issued comments on this issue immediately after the
proposed regulation was issued. Subsequent to that, PMAA sent an application for exemption to
DOT to illustrate why compliance with the new regulations would be especially difficult for
petroleum marketers nationwide.

Although that application for exemption was filed in July, 1995, PMAA has yet to hear response
from DOT - and that is after over 8 Congressional inquiries to DOT on the matter. DOT
implemented the regulation in September of 1995 and yet has the audacity to disregard
legitimate petition for exemption based on good argument But, of course, marketers must now
comply event though no decision has been reached at DOT.

Let me give you the average scenario that a marketer faces with regard to the new DOT
regulation. DOT requires marketers to have thelr tanks inspected yearly for leaks (as if marketers
could not make that determination on their own). In the state of Lowa, there sre 4 or S licensed
testing facilities where marketers can go. If a marketer goes to a testing facility in Iowa, he or she
would have to travel, on average, 150 miles to the testing location. This takes the tank out of
commission for at least one day. Tn many cates, the markoter would have to spend the night while
the tank is inspected.

On top of those costs, the average test costs $750.00 to $1,500.00 just to be conducted. Should
any upgrades need to be made, that too, is added to the marketers expenses. Not only will the
average marketer spend these sums to have the test conducted, but will also have to pay for travel
time, loss of sales and other costs which are incurred by the inspection, when the majority of the
time spent is completely unnecessary.

‘Ifa marketer chooses to go to the closest location, it may well be across state lines. In these


36

Mr. MCINTOSH. We have. We have had a couple.

STATEMENT OF HON. ROBERT DORNAN, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Dornan. In California, whenever I visit one of the res-
taurants in my district, the owner, the proprietor or the manager
will take me to a wall where there are about 10 or more plaques
on the wall, licenses put up, things to conform to. My dad was a
restaurant owner for awhile and it is one of the tightest profit mar-
gins—like some farming, I guess—1, 2, 3 percent. And you can just
break a person so quickly in the first year with over-regulation
when they have put all of their capital into it. And it is usually a
family operation with in-laws and an extended family putting in
some money to invest in a restaurant, and if you break them in the
first year with over-regulation, they will never do it again. They
will never come back in. I think that is why we see family res-
taurants disappearing and franchises spreading where they have
an army of lawyers to handle all of this.

Let me—just by way of letting your audience here at this hear-
ing—to get into the formal record here, just give some opening re-
marks, if I may, Mr. Chairman. Thank you again for holding these
field hearings. I did not know that you ‘already had 11 under your
belt. I have been impressed by your dedication and the commit-
ment to making government work on behalf of all Americans, rath-
er than working against their best interest. And this, of course, ap-
plies to the whole dynamic freshman class which takes a lot of heat
from the dominant media culture. But, I think that those of us who
were reaching a frustration level in the Congress that was causing
a lot of departures and a lot of frustration were relieved to see you
come in. I have said more than one time to you and to Tom and
to Gil in the cloakroom that if ever there was a calvary movie with
a cliche ending of 73 troopers coming up over the ridge with bugles
blowing, that is the way I look at the freshman class of the 104th
Congress.

I am equally impressed with you particularly, Mr. Chairman,
your understanding of the legislative process. Again, this goes
through the whole freshman class, but very few freshman Con-
gressmen know the ropes as well as you do, Mr. Chairman, and I
have certainly enjoyed serving and working with all of the mem-
bers on the panel here.

I hope my own short testimony today is helpful and will just fill
a niche that might not be otherwise addressed to inform anybody
that sees the videotape product of this or that is in the audience
today. One of my primary interests in serving in the new Repub-
lican majority—and I had 6 years in west Los Angeles County and
10 years in Orange County. iam the Congressman for Disneyland.
I represent a Democrat district by 51 percent to 40. A blue collar
district, but Reagan Democrats basically. We do have some farm-
ing, strawberries. There used to be orange groves but they are pret-
ty much gone. But it is basically a bedroom suburban community
for a lot of the surrounding light manufacturing and some aero-
space industry in the area. It is a landlocked district, unlike the
other districts of our friends Mr. Cox and Mr. Rohrabacher who
have upscale beautiful homes overlooking the Pacific. But in that


48

product labels. All hazardous substances have MSDS’s and they
must be available for employee inspection and emergency use. We
even must maintain MSDS’s for a number of years. Two hours of
continuing education are required for commercial applicators each
year or they must retest. Anhydrous ammonia safety training is re-
quired annually for everyone who works with ammonia. The DOT
requirement for drug and alcohol testing of commercial vehicle
drivers requires that we train them on the effects of drugs and al-
cohol. My point again is not that the training is bad. It just takes
too much time and so much money to complete it.

The DOT requires our drivers to have commercial drivers license
and to inspect vehicles before every use of every day in addition to
the annual inspection of our vehicles. We must have physicals for
some of our drivers. All our CDLs must be on drug and alcohol ran-
dom testing programs and we must provide shipping documents
and hazardous material placards for almost all of the pesticides we
sell. Again, all this takes time and money.

Our most costly regulation is still ahead of us. I am talking about
secondary containment of our fertilizer storage. We have already
complied with part of the law and have containment for a rinse pad
and load out at a cost of over $5,000. The law requires licensed en-
gineers to prepare the plans and with construction, the total con-
tainment system completed will cost approximately $100,000.

With our feed business, I have to comply with FDA regulations
requiring drug inventories and usage information. Grain
warehousing requires a considerable amount of paperwork. We
have scale licenses, annual inspections on our feed delivery trucks
and feed assays. I have not even mentioned workmen’s compensa-
tion regulations, water waste management, unemployment laws, li-
censes and all forms of taxes and permits.

It has come to my attention that all of these regulations are not
here just to help us, our business, but possibly to put us out of
business.

I would like you to know that we are very concerned about the
health and well-being of our employees and our community. I ac-
cept some of the regulations that we have knowing full well that
it protects the environment, our people and our communities.

The problem that I have with regulations is the additional cost
to me as a small business owner. Regulations which are passed and
later rescinded still cost me time and money until they are
changed. Clean air and emissions inventory questionnaires are a
good example. I spend hours and hours filling out forms that are
never used. I probably spend at least 6 weeks a year working on
regulations in some form or another.

We are just a small family business trying to compete with major
corporations. We live in Moville, a town of about 1,200 people in
northwest Iowa and are very involved in our community. The fi-
nancial support that we provide to our community is essential in
keeping our small town alive. My concern for the burden of regula-
tions on small businesses is not only the effect on the business but
on my employees and my town. The real problem is that Govern-
ment makes blanket regulations. I would like to continue to help
farmers in my community. Unfortunately, if the Government con-


117

he just came back from Bismarck and he is here to give us the clos-
est update.

Mr. LaTHAM. Use the microphone, if you would.

Mr. Foss. Thank you.

There has been a meeting with the Secretary of Energy and obvi-
ously this problem started with a lawsuit in 1990, and the settle-
ments were entered into 2 years ago. In the real world, of course,
people enter into settlements, the deal is cut and you go on with
your life. Here, of course, we had to submit it to the FERC, the

‘ERC set up a 2-year schedule to decide it. I think the parties have
come to the realization that perhaps a solution that is worked out
with the parties is going to be more timely than waiting for the
FERC to act. The Secretary has suggested that DOE act as coa-
lescing party, if you will, to see if negotiations can get started
again. We have, in fact, scheduled a meeting with the ratepayer
group at the end of the month. So, we are hopeful that a settlement
could bring this situation to a close.

Mr. LATHAM. Thank you.

Mr. BrREvIG. The actual decision is back at FERC right now. So,
FERC is going to have to make a decision based on the rec-
ommendation of the administrative law judge. So we think that is
going to happen sometime in?

Mr. Foss. 1996.

Mr. BREvIG. Yes.

Mr. LaTHaM. I thank you very much.

Don, just very briefly; are we still testing in Iowa for pineapple
herbicides and things in our water systems here?

Mr. MEISNER. Some of those have been turned back because of
the actions in Iowa and Nebraska and your actions. But, we really
do need to put some sense in that because we need clean water.
We are not arguing about that, but there has got to be a limit.

Mr. Laruam. But it is—and we are trying to get some help in the
reauthorization of the Safe Drinking Water Act. We have been
working very hard as far as targeting the rural areas. My town of
168 people, you know, I think next year is going to be expecting
$4,000 or $5,000 to test their wells, I guess. So it is a huge issue
to a small town.

Thank you very much, Mr. Chairman.

Mr. MCINTOSH. You are quite welcome. Was this Pineapple herbi-
cide because of the name Dole being so prevalent in Iowa? [Laugh-
ter.

Mr. LATHAM. Would you like to talk about Dole pineapples for a
while or whatever?

Mr. GUTKNECHT. You better do it before Mr. Dornan comes back.
(Laughter.]

Mr. McIntTosH. Well, thank all of you for joining us. Oh, Mr.
Gutknecht, do you have any questions?

Mr. GUTKNECHT. Just ever so briefly, Mr. Chairman. The more
I hear, the more I am struck with this basic notion. In fact, Con-
gressman Dornan and I were talking as an aside, particularly as
Dr. Madison testified, about a book that is now being circulated en-
titled “It Takes a Village” and how there—there seems to be a
growing attitude—or we are trying to define what the village really
is. I was really struck by your testimony because it reminded me


53

Mr. VALENTINE. Thank you.

Mr. Davis. Happy Valentine’s Day.

Mr. VALENTINE. Well, thank you for that.

As you mentioned, my name is George Valentine and I am the
general counsel of Terra which is headquartered here in Sioux
City. In my remarks today, I want to focus on one particular Fed-
eral agency and that is the U.S. EPA. Time is short and my written
testimony is rather lengthy. I am going to try to get through this
quickly by painting some quick strokes.

Fourteen months ago, my company experienced the worst disas-
ter in its corporate history. We had a massive explosion of our fer-
tilizer plant about 10 miles south of here in Port Neal, IA. There
was a loss of life; there was serious injury and there was major,
major property damage. In the aftermath of that horrible tragedy,
about a dozen or so Federal and State agencies showed up to inves-
tigate.

Over time, two decided to stay for the long haul. One was OSHA,
the Occupational Safety and Health Administration. And OSHA, of
course, focused on their Federal mandate which is safety issues.
And after a big-time investigation lasting about 6 months, OSHA
issued some citations, none of which had anything to do with the
cause of the explosion. Thereafter, we were able to reach a pretty
amicable resolution on safety issues on terms that I think were
quite favorable to Terra.

The other Federal agency that stayed for many, many months at
Port Neal, IA was U.S. EPA. U.S. EPA wore two hats. The first hat
was its traditional role as an environmental regulatory agency and
that took them about 3 or 4 weeks after the explosion at Port Neal
in which they focused on air issues and water and soil. Over time,
they decided that the public safety was being taken care of and
they decided to bring no enforcement action and left town.

They were followed by a whole new set of people from U.S. EPA
who came in and decided to do—the first ever in the history of
EPA—a safety investigation. They decided to utterly duplicate ex-
actly what OSHA was doing over many, many months and involv-
ing many, many personnel on their part. So what Terra had was
two simultaneous and identical investigations involving the same
subject matter, safety. This, of course, meant a lot of inefficiency,
it meant a lot of double teaming, and particularly in the area of
discovery—as lawyers use that word. We had to turn over not just
thousands and thousands of documents to OSHA, we had to turn
around and do it again with EPA. Slightly different requests but
an enormously added burden. Instead of going through site inspec-
tions with a whole raft of people from OSHA, we had to do it also
with EPA. We had to have dozens and dozens of interviews of our
employees on safety issues first with OSHA and then with EPA
and there was no sensitivity to the fact that our employees had
been seriously emotionally scarred by this massive explosion. Es-
sentially, they were shell shocked and yet they were paraded
through interview after interview. So there was a lot of extra bur-
den on our employees; a lot of extra burden on Terra and we think
it was a burden on the U.S. taxpayer who had to foot the bill for
these dozens of regulators who came in covering the same subject
from two different Federal agencies.


138

and suspension of a student with disabilities. Seven of them in the
same school. It was founded for the parents. So, I think we need
to hear the complete story before hopefully any decisions are made
about the regulations of IDEA.

Thank you.

Mr. McInTOsH. Thank you.

Mr. Gutknecht, do you have any questions?

Mr. GUTKNECHT. No. Each one of these stories really should be
pursued individually. The testimony has been very good. We just
do not have time.

Ms. RENFRO. Thank you.

Mr. McInTosu. Thank you all. I appreciate that. Please submit
to the staff your written testimony so we can include that in the
record.

Let me call four more individuals forward. The next person on
the list was Mr. Byron Orton, the Iowa Labor Commissioner. We
will get rebuttal from some of the earlier testimony.

Mr. GUTKNECHT. No, he is a fresh perspective.

Mr. McINnTosu. A fresh perspective. That is right.

The next name, I am having difficulty, so excuse me if I mis-
pronounce it, but Dan Varaur, is it?

Mr. VARNER. Varner.

Mr. McINTOSH. Varner. And Mr. Jim Marshall and Mr. Jerome
Skeers. We have got time for one more, so let us go for—I am going
to Beess: Dr. Sprague.

1. SPRAGUE. I have to write that way to be a doctor.

Mr. McINTOSH. My mom said I should be a doctor because I can-
not write well at all. So, I am sympathetic.

If you would all please rise.

(Witnesses sworn.]

Mr. McIntosu. Thank you. Let the record show each of the wit-
nesses answered in the affirmative.

Mr. Orton, welcome. I appreciate you coming forward to share
your thoughts.

STATEMENTS OF BYRON ORTON, IOWA LABOR COMMIS.
SIONER; DAN VARNER; JEROME SKEERS; AND DR. RON
SPRAGUE

Mr. ORTON. Thank you, Mr. Chairman. I appreciate the oppor-
tunity. Let me initially say I am not here for rebuttal. I am here
for some information that I think perhaps you and other folks
might find informative.

First of all, my entire professional career has been spent in Iowa
State government, totaling 22 years. First as chief administrative
law judge in Iowa, then I served 5 years as Governor Branstadt’s
appointment as Industrial Commissioner administering the work-
ers compensation laws and on September 13, 1995, Governor
Branstadt appointed me as Labor Commissioner.

During that entire 22 years, I have been involved in employment
related issues. I think you will find that during that period of time,
I have gained a degree of respect and trust with both the employer
and the labor communities in this State. I have an immense re-
spect for the employers of this State, likewise, I have an immense
respect for the working people of this State. I would suggest that


49

tinues to control my business with costly regulations, agriculture
will be left to only the big corporations.

Thank you.

Mr. McInTOSH. Thank you very much, Mr. Davis. I appreciate
that. We will come back for a couple of questions.

Our next witness on this panel is Mr. George Valentine who is
the senior vice president, general counsel and corporate secretary
for Terra Industries. I understand that you have been in the news
a lot lately and I appreciate you coming forward and telling us
about the situation with your company.

[The prepared statement of Mr. Davis follows:]


78

One other request for you, which is, you mentioned a bill of
rights. I do not know if you have thought anything in terms of—
you mentioned some general outlines—but specifics on that. Let me
just issue an invitation, if you have got some ideas, if you can get
those to Tom or to me, I would be very interested in that. I have
been thinking on a slightly different line of applying some of the
procedural rights in the first 10 amendments in the Bill of Rights
and the Constitution to the regulatory process because it occurred
to me that as we moved away from a court proceeding to regulatory
oversight proceedings, that we did not carry those procedural pro-
tections. So oftentimes citizens are confronted by their government.
and they are without the protections our founders thought were im-
portant. When a magistrate would come in and you would be
hauled in front of the government for an enforcement proceeding,
you would have those protections in the Bill of Rights. Now under
our regulatory process, we have allowed those to fall by the way-
side. That was the angle that I have been looking at. But, I think
your ideas in terms of the use of the media and some of the more
modern problems would be good to incorporate into this.

Mr. VALENTINE. Yes, I think it is a real good idea for your sub-
committee to think in terms of maybe—as one of the end products
that you come with in your hearings, to think about a regulatory
bill of rights, a statute. There is the Administrative Procedures Act
which has been around for decades but it is mostly a statute that
helps the regulators do certain things rather than the regulated. I
think there is real scope for your subcommittee to do something in
that area. As far as whether I would be willing to draft something
on that, absolutely. I would very much like to and I will submit it
to your committee.

Mr. McINTOSH. Thank you. I appreciate that. I appreciate that
input and that assistance.

One further question for Mr. Davis. Are you familiar with the
pesticide Atrazine? I think there is a whole group of them in the
triazine area.

Mr. Davis. Triazines.

Mr. McInTosn. A farmer in my home district came up to me last
year and said, you know, FDA is thinking of banning these and he
said this would be devastating to him. What have you been hearing
on this, and are there alternatives? What is the situation with
Atrazine?

Mr. Davis. I do not have the material in front of me but a few
years ago they dropped the Atrazine or triazine usage to 2 pounds
active ingredient per acre on all ground. DuPont, I know, for exam-
ple, is disbanning the product X-razine, which is Blade-X and
Atrazine. I believe in the 1999 year it will be completely done. They
are doing that—quite frankly, even DuPont, I think, because they
are tired of fighting all of the regulations. Atrazine was a product
that remained in the soil longer than others. A lot of new chem-
istry has come out now that are not that way. Atrazine is a product
that is very usable if they can control the amounts of it, which I
think is good. I do not know the current status of the government
regulation as far as what they plan to do, whether they plan to
disban Atrazine or not. I know some of the companies are dropping


88

28 years—is a person that has a higher rank. Iowa OSHA inter-
preted that word to mean most qualified. It is the first time ever
that that has ever been—that particular word underneath the reg-
ulations has ever been moved forward. We had a consulting firm
research the data bases of the 31 State OSHA programs, as well
as Federal OSHA, and there has never been an interpretation with
that word under that—or concluded that that was what that word
meant, or ever was the intent of Congress.

With that in place, what they said to us because we responded
to another fire jurisdiction under a mutual aid call—even though
in our mutual aid written agreements under State code 28(E), we
indicate in our mutual aid agreements, which are very generic,
that we will not take command and control of anybody else’s inci-
dent or anybody else’s jurisdiction. Our own operating procedures
preclude us from taking command and control of anybody else’s—
anyone else’s jurisdiction. They indicated to us that because they
felt when we went on scene and when the volunteer fire chief left
the scene without our knowledge—but when he left the scene, who
was the authority having jurisdictional control at that point, that
we had an obligation because we were the most qualified agency
that was on scene at that particular time. And because we were the
most qualified and because in their judgment they felt that we
should have at that point then assumed command and control of
the incident, we would have been the incident commander. Based
on that, the incident commander has various responsibilities under
1910.120(Q). We never assumed command and control. It was
never offered to us; we never accepted it. It was never passed to
us in any form or fashion or shape or any other thing. But that was
the basis for the vast majority of the citations that were issued
against us, or based on that fact. Needless to say, you can imagine
once that word got out in the State of Iowa and the rest of the
country for that matter.

The fire service was founded several hundred years ago in this
country based on the premise that we shared resources during
times of emergency because most departments, including ours, do
not have the resources to mitigate every potential possibility that
we can be confronted with. It is a general practice in the fire serv-
ice in this State and almost every State of this Union, if not all
States in this Union to share resources through mutual aid agree-
ments. This ruling had the potential to totally unravel that. at
they were saying to us is because we had—they felt that we were
the most qualified—and I do not know how they made that deter-
mination because later in the thing they told us we were incom-
petent. (Laughter.]

But irregardless of that, telling us that we were the most quali-
fied, certainly after the fact, was a very interesting, at best to us
anyway, interpretation of the regulations.

There was an outcry, as you an imagine, from the fire service,
all fire service professionals, volunteers, professionals and others
and a combination of departments in this State. I also personally
received several phone calls from professionals throughout the
country that stated to me their concern for this ruling. Even
though it is an Iowa interpretation, because of its uniqueness, it
has a potential to be a precedent-setting ruling and therefore had


43

instance, entitlements. Notwithstanding these preclusions, HR 1130
would apply across the board — no exceptions. No exceptions for

universities. No exceptions for state or local governments, No
exceptions for media or religious entities. ‘ceptrons
defense contractors. a
slippery-slope that ssmgsrtakgaccountability away from Members who
were elected to make smart and informed spending decisions in an

atmosphere of impartiality.

Before I conclude, allow me to take a moment to raise another
regulatory subject that is often overlooked. In 1987, then-President
Ronald Reagan issued an Executive Order requiring all new federal
regulations to undergo scrutiny, prior to being issued, regarding how that

regulation might impact fagpilics, The intent of the Order, actually
written by Gary Bauer of the Family Research Council, was to stop the
vicious confiscatory financi: an immoral cultural attack by the federal
government that was well underway. / against the traditional two-parent
family. Mr. Chairman, I asoaly wae vou ph 5 jittee to look into
reviving this regul: e Anferican family. After all, we
Should not pursue regulatory reform for the singular reason of increasing

Wall Street’s profit margins. We ought to look deeper, into the soul of

s


129

guarantee, why should parents of students with disabilities trust
local school districts to do the same when rarely they have before.

Who truly is the culprit? The student with the disability or a sys-
tem inadequately serving them? The system is magnifying their
own burden. The solution should not be to reward non-compliance
with the removal of regulations that only now supply minimal ben-
efit. The emphasis should be on increasing that benefit by maxi-
mizing implementation. Federal regulations set forth the param-
eters within which State and local entities have the freedom to op-
erate, but not to demean us or devalue a human life.

All students need to be able to compete in the global economy.
We cannot afford to send one uneducated or under-educated stu-
dent into the work force. The U.S. economy is a team competing
against economic teams from other nations. The team members are
the graduates of our schools. The weakest team member will im-
pact the entire effort. The success and well-being of the strongest
team member is dependent on the contribution of all others. Edu-
cation is not a charity, it is the future of each of us, of our country.
What is the cost benefit of IDEA? Spend money now on education
for all students, or spend much, much more money later.

How can education be harmful, excessive or counter-productive?
Education is productive. Please do not throw us back into the pre-
depression era. Americans should not be afraid of the harm their
government can do. We truly need a kinder and gentler nation.

10 should judge whether a child is worthy of education? Who
judges a 5-year old’s potential?

In closing, I would like to tell you one more personal story to add
to Dr. Madison’s list. My son is a 16-year-old young man with au-
tism. When he was diagnosed, I was told he would never commu-
nicate meaningfully nor be able to participate in society; in fact, to
institutionalize my son. My son now—with most effort placed on
his own shoulders—does not have an aide in school. He now is in
advanced placement classes. He is on the honor roll educationally
the majority of the time. He was just named to the varsity on the
wrestling team. Here is another success story of appropriate edu-
cation.

Thank you.

Mr. MCINTOSH. Thank you. And thank you for sharing with us
your personal experience. I appreciate that very, very much.

Our fourth witness on this panel is Daniel Cougill. Welcome.

(The prepared statement of Ms. Renfro follows:


113

5. Inability of very small local governments to meet mandate standards and timetables, The
requirements for many federal mandates are based on the assumption that all local governments

ihe nme bee ion ote reo ale but
may make it possible for such governments eventually to comply. ‘Deadlines should be extended
and requirements modified for very small local governments.

6 Lack of coordinated federal policy with no federal agency empowered to waka bindtig
decisions about 2 mandate's requirements, There aré mandates that involve several: federal
‘agencies.:This has resulted in confusion about what the law requires and how state-and local
governments can know when. they are in compliance. In addition to making. state and local
governments aware of mandate requirements, federal agencies should explain the reasons for the
mandate and should assist in taking the actions necessary for implementation. A single federal
‘agency should be designated to coordinate each mandate's Implementation and to make binding
decisions about that mandate.



122

This leads into my next area of concem, The proposed Farm Bill that is in the House of
Representative Rules Committee. This bill, if passed in present form, would create chaotic
conditions for all dairy processors. Fortification of fluid milk by adding milk solids, creating a
Class I pool, creating a Class IV pool, increasing support prices and make allowances, and
creating artificially high fluid milk prices, are all examples of increased government regulation,
And, all of these examples are part of the House Farm Bill!

If the House Farm Bill were to go into effect as it currently stands, Wells’ Dairy would pay over 9
million dollars a year in increased ingredient costs. We would have to pass this extra cost along
to our customers, So in effect, the dairy processors are forced to tax the consumer extra money
for milk that they buy. To top it off, the consumer would be buying milk that is notin its true
natural form. The consumers would be forced to pay higher prices for added solids they have not
expressed any desire for.

At this point, Wells’ Dairy is firmly against any increased government regulations as proposed in
the House Farm Bill, We would like to see a move towards deregulating the dairy industry. I
believe the consumers, the producers, and the processors would all benefit if the dairy industry
were deregulated


127

Without the obligation to serve, deregulation will put the low-income
customer at risk. Customers who are perceived as having a high risk of non-
payment will either not be offered service, or will need to pay a high deposit

before service is available.

The large industrial customer is really pushing for retail wheeling. They
want to be able to negotiate with multiple utilities to obtain the best deal for
themselves. They say they need “special treatment” in order to compete in a
global economy, In some instances they may be right, however, at whose
expense are they expecting “special treatment”? It is going to be at the
expense of the little user, someone who cannot negotiate for their small
loads.

In conclusion, my recommendation would be to keep the pressure on FERC
to proceed slowly, cautiously, and in the long range best interest of all
customers. America is totally dependent on electricity, the wrong decision

today, could affect our country’s future for many years to come.

looting L lcd

Kenneth Streck
Manager


CONTENTS

Hearing held on February 8, 1996 ..
Statement of:
Davis, Craig, Davy’s & Jim’s Feed Store; George Valentine, Terra Indus-
tries, Inc; and Ron Marr, Petroleum Marketers of Iowa ..
Dornan, Hon. Robert, a Representative in Congress from the State of
California .
Hamilton, Bob, Sioux City Fire Department; Dr. Linda Madison, Sioux
City Community School District; Stephen Brevig, Northwest lowa
Power Cooperative; and Don Meisner, Siouxland Interstate Metro Plan-
ning Council

Higman, , Harol igm:
orky Bailey, Jebro; and Ellen Prescott, Security National Bank
Orton, Byron; Iowa Labor Commissioner; Dan Varner; Jerome Sk
and Dr. Ron Sprague ...
Orwig, Tim; and Kathy Hansen
Pate, Paul, Secretary of State, State of lowa
Pittman, Tom; Ken Streck; Barb Renfro; and Daniel Cougill
Letters, statements, etc., submitted for the record by:
Bailey, Cork , Jebro, repared statement of ..
Brevig, Stephen, Northwest Iowa Power Cooperative, prepared statement

Calhoun, David, Wells’ Biue Bunny Dairy, prepared statement of ..
Davis, Craig, Davy’s & Jim’s Feed Store, prepared statement of
Dornan, Hon. Robert, a Representative in Congress from the State of

California, prepared statement of ....
Higman, Harold, Higman Co., prepared statement of
Madison, Dr. Linda, Sioux City Community School District, prepared

statement of
Marr, Ron, Petroleum Marketers of lowa, prepared statement of
Meisner, Don, Siouxland Interstate Metro Planning Council, prepared

statement of
Pittman, Tom, p1
Prescott, Ellen, Security National Bai
Renfro, Barb, prepared statement of
Streck, Ken, prepared statement of
Valentine, George, Terra Industries,

(ID,



145

tested, it did not leak. It was not producing carbon monoxide. The
carbon monoxide was coming from a propane powered forklift in
the business next door. Now, that is not fact, that is what the gas
company thought. They were the most expert people on the scene.
They believed that it was through the ventilation system of the
building that the two businesses shared. I had to tell that employer
that I could not assist him unless he wanted to make a complaint.
I offered, while the employer was on the phone, to call the other
business and that employer said to me, it will not do any good,
they will retaliate.

Now, I am not sure these people were accurate in their assess-
ment of the potential for retaliation. But frequently in my job, I
hear about retaliation against individual employees either by em-
ployers or by others in the community. I realize this is not a com-
mon thing. It is just common for me to hear about it because that
small minority of people that it happens to turn to whoever they
can turn to.

Thank you.

Mr. McINTOosH. Thank you very much. And frankly, if we need
to strengthen the laws where you have more ability to go in and
provide assistance in these situations, I think we should entertain
that as we are looking at reviewing the OSHA law anyway. If the
current rules do not allow you to be effective where you do find real
problems, that is something I think you would find—at least us on
this committee interested in hearing about.

The last person on this group was Dr. Sprague.

Dr. SPRAGUE. Thank you. I have been sitting dry a little while,
so I am a little voice-cracked right now.

I was struck today about how difficult it must be to be a legisla-
tor as I heard all the different ideas that people had. More govern-
ment regulation, less government regulation, help us here, we need
to protect the individual, we need to protect the community and
how difficult these decisions are for everyone involved. I suppose
the only more difficult job around would be our timekeeper who is
trying to control the panel members.

What I have to say in light of some of the issues I heard today
is probably not as in vogue. A year ago at this time, we were in
the middle of a health care debate which now seems to have drifted
to a back burner. But I still think there are parts of health care
policy, or lack of health care policy that need to be addressed to
help patients on the whole. In particular, what I want to speak to
is that as a chiropractor, we see many times when the playing field
for provision of health care is not a level field. Not only us chiro-
practors but many other non-traditional, non-medical physicians.

In times past, the argument has been as medical physicians we
provide better care than the other providers. But truthfully, empiri-
cal data does not state that to be so. If you will evaluate the data
that is out there, non-traditional, non-medical health care provid-
ers in many areas provide what is as efficient, safe, effective care
as do the medical care providers. And not only is it as efficient and
safe, in many, many cases it is more patient satisfying and almost
invariably less costly.

On the other hand, almost as invariably, we find Federal pro-
grams that encourage medical care as opposed to non-traditional


106

Mr. MEISNER. Mr. Chairman, thank you for the invitation allow-
ing me to be here.

lam Don Meisner and I direct SIMPCO which is an organization
of 70 local governments in Iowa, Nebraska and South Dakota. We
are very seriously—very serious about our concerns on mandates to
the local governments. Some of those have been expressed at the
table here earlier by this panel and other panels before you.

I also serve on and am the Chair of the Iowa Advisory Commis-
sion on_Intergovernmental Relations and we have completed 2
years of intensive study of regulations on local governments and
businesses in Iowa. We have many specific examples I can share
with the staff at this time or at a later time.

We, in our studies in Iowa, have made many recommendations
to the Iowa legislature and we are rolling back some of the unnec-
essary mandates such as the underground storage tank issue as
talked about by Mr. Marr earlier. Generally, we have come to some
concerns that we think that we should consider as Federal and
State regulatory agencies. We believe there should be a morato-
rium on new mandates on local governments, businesses and in-
dustry. There should be a periodic review of mandates to make
sure that they are working and the excessives that you have heard
here today are not repeated. Every mandate should have a funding
mechanism. We simply cannot absorb any more mandates at the
Jocal level. The mandate rulemaking process must include those
people who the mandate affects, and it certainly has not in many
cases in the past.

The Federal Advisory Commission on Intergovernmental Rela-
tions has just released a very interesting report on the role of Fed-
eral mandates in intergovernmental relations. I submit that to you.
The summary of that is included in your material today. They
make several specific recommendations repealing provisions in sev-
eral laws that extend coverage to State and local governments, pro-
viding flexibility in others and providing funding in others.

Some specific examples. Under the Safe Drinking Water Act, the
city of Sioux City, for instance, currently spends $90,000 in the
water testing and that is growing at about $10,000 per year. The
level of expenditure by the city of Sioux City would be much higher
than that had they not significantly invested in the laboratory and
equipment. In addition, because of the primacy issue with Iowa De-
partment of Natural Resources from the Environmental Protection
Agency, a fee of $13,000 per year is paid to lowa DNR as another
cost to the local users of water.

The village of Concord, NE, a little smaller, population of 135,
last year spent $2,011.01 on water testing. That was a big issue of
a meeting we had in Nebraska last week. It is a very interesting
issue,

The city of Sloan, IA, south of us, spent $972 in their 1994-1995
budget and $7,000 in the current year budget. That is happening
all over. It is not just Iowa. It is Nebraska, South Dakota and it
is out of hand. Many of these tests are simply not needed from our
opinion.

Another example, the Siouxland Regional Transit System is a
rural transit system that we operate for a private—or a public cor-
poration. We expect to spend $10,000 this year for drug and alcohol


66

Nevertheless, EPA's report goes on to put forth two principal conclusions — first,
that the explosion was caused by & lack of written (as oppased to oral) operating
Procedures, and second, that there was an explosion outside, not Inside, the
Mississippi Chemical nitric acid sparger. Each of these conclusions is flawed.

‘The first conclusion, regarding written operating procedures, amounts to nothing
more than a documentation issue. Terra had in piace all operating procedures
Necessary to safely run its ammonium nitrate plant on December 13, 1994. In essence,
therefore, EPA's allegation is simply a disagreement about how Terra's already existing
procedures should appear on paper.

Regarding EPA's key assumption that there was an explosion outside, not
inside, the nitric acid sparger, Terra is able to prove conclusively that EPA is wrong.
Because of a design defect, an explosion did occur in the nitric acid sparger on
December 13, 1996 and the sparger explosion, in tum, touched off the two much larger
explosions. In doing its Investigation, EPA had a metallurgical analyses performed on
only a small portion of the reconstructed nitric acid sparger, even though all of the
‘sparger pieces were made available to EPA. EPA’s decision to severely limit its
metallurgical examination ted to the error In its analysis.

It is important to understand that the report issued by EPA on January 23, 1896,
is not an enforcament action. Indeed, if it were an enforcement action, It would be

10


52

It Sas come to my attention that all these regulations aren't there to help our
 uness, but to possibly put us out of business.

I would like you to know that we are very concerned about the health and well
being of our employees and our community. I accept some of the regulation that
we have, knowing full well that it protects the environment, our people, and our
communities.

The problem I have with regulation is the additional cost to me as 2 small
agribusiness owner. Regulations which are passed and later rescinded still cost me
time and money until they are changed. Clean air and emission inventory
questionnaires are a good example. I spent hours and hours filling out forms that
were never used. I probably spend about 6 weeks each year working on regulations
in some form or another,

We are just a small family business trying to compete with major corporations. We
live in Moville, a town of 1200 people, in Northwest Iowa are very involved
in the community. The financial support that we provide to our community is
essential in keeping our small town alive. My concem for the burden of
tegulations on small business is not only the effect on the business but on my
employees and my town. The real problem is government makes blanket

i I would like to continue to help farmers in this community,
unfortunately if the government continues to control my business with costly
reg tons, agriculture will be left to the big corporations.

Thank you.

Sincerely,

J. Craig Davis


101

At that point in time, the Reagan Administration nad taken an Inventory of
various government assets to determine which assets held by the federal
government would be more appropriately held by the private sector or otherwise
result In the federal government competing with the private sector, The Great
Plains project topped this list and It was determined that the DOE would put the
Great Plains project up for sale.

‘Seventeen firms expressed an interest In purchasing the Great Plains project
‘and the DOE narrowed the field down to three bidders which included The
Coastal Corporation, Mission Energy, a subsidiary of Southern California Edison
‘and Basin Electric. In considering the various bids, the Congress instructed the
DOE, pursuant to Section 317 of Public Law No, 100-202 to seek a buyer
committed to long-term operation of the project so that the technical, financial
‘and environmental Information that caused DOE to guarantee the loan in the first
place could continue to be gathered from the project.

Ultimately, the Basin Electric bid was selected because it would return the
highest value to the federal government as well as because of Basin Electric's
commitment to the long-lerm operation ef the project. The bid provided DOE
with $85 million In up-front cash and calls for DOE sharing in the revenues
generated by sales of synthetic gas. In pert, Basin Electric was successful In its
bid because, unlike the other two finalists, it agreed to waive taking any
production tax credits associated with the production of synthetic gas thereby

+


26

then notify the customer and require them to get insurance. Our
system is simply not sophisticated enough to deal with something
like that. So again, we had to go to a specialized firm, the same
one that does the determination forms. This costs our customers an
additional $10 per loan. So now, we have customers out there pay-
ing $22.50 more for the same loan they could have gotten 2 years
ago and they have absolutely nothing to show for it except that
now we are complying with the regulation. And, by the way, they
do not like flood insurance. They feel that it is some sort of punish-
ment the bank is visiting on them rather than the Federal Govern-
ment. So while we are trying to provide good customer service, we
are making our customers angry by making them comply with
these regulations.

I realize that there have been bills introduced into Congress to
help relieve some of these regulations. It is important that they be

‘iven their due, Regulation B, getting RESPA away from HUD,

‘ommunity Reinvestment Act, all of those things just add to our
burden. Again, the customer demand is there. The regulatory bur-
den keeps getting heavier and heavier and we are caught in the
middle. The Community Reinvestment Act says give your cus-
tomers what they need, provide the products that they want. Regu-
latory burden makes that more expensive and more difficult for us
to do. We need some relief. We need some room so that we can give
those customers the products that they want. And you are the peo-
ple that can do that by passing some of those bills and making sure
that the OCC and the FDIC lift some of those rules from us.

Thank you.

[The prepared statement of Ms. Prescott follows:]


22

Regulatory Affairs Testimony
February 6, 1996

2) EPA

Legal fees can be more expensive than the fines if you
defend yourself. Complying with all of the laws and
regulations in place today, you are still liable for these
actions taken if chariges occur in the same laws and
regulations in the future.

If you dispose of waste, classified as non-hazardous by
today’s standards in a landfill, under approved regulations,
you will probably be paying legal fees in the future to
protect yourself because the landfill or site you disposed in
has been deemed a Superfund site. You are drawn into the law
suits because you were forth right and registered as required
by laws or regulations, and paid the tariffs and disposal fees
in-lieu of dumping in the shadows.

Example: notice received;
Des Moines Barrel and Drum Site

Environmental Protection Agency Region VII
Administrative Order on Consent for Remova}
Response Activities, CERCLA Docket No. VII-92-F-0017
Dated July 8, 1992

A report was compiled and completed on April 12, 1990 by
Region VII EPA on soil and ground water contamination testing
at this site in Des Moines, IA. The site was found to be
contaminated with high levels of various hazardous w. from
int drume, lead batteries, and numerous other chemicals.
Based upon EPA Findings of Fact, EPA's conclusion of Law,
EPA's Determinations, and Administrative Record for this Site,
EPA ordered all parties to perform certain removal actions ai
the Site on July 9, 1992. The records show there were 137,770
barrels left at the site.

Six months after the EPA testing of the site, the Irving F.
Jensen Company delivered 87 empty barrels to the Des Moines
Barrel and Drum site to dispose of containers used for
materials on a road construction project in the area. The
majority of the barrele were as clean as the day they were
manufactured.



Mr. Chairman, that concludes my prepared remarks, however, if there are any
questions | would be happy to answer them. in addition, here with me is Mark
Foss, General Counsel of Dakota.


34

Mr. CALHOUN. Right.

Mr. LaTHAM. Mr. Bailey, I would just like to ask you about your
experience with Superfund obviously, and the idea of retroactive li-
ability and if you have any feelings as far as that is concerned. The
committee I serve on, Transportation and Infrastructure has some
authority as far as reforming Superfund. Your insights on that
would be very helpful to me.

Mr. BAILEY. I believe companies need a way to protect them-
selves against future liability if they can prove that they have fol-
lowed the letter of the law today.

Mr. LaTHam. I think you are probably well aware there are busi-
nesses—small businesses complying with the law today—commu-
nities in their own dump sites that are complying with the law
today, that some day down the road they can come back and go
after you again, the communities or the businesses, even though at
the time you did it, you were in compliance with the law. To me,
it seems a lot like extortion in a sense.

Mr. BAILEY. No comment.

Mr. LatHaM. Oh. [Laughter.]

Hey, you can feel free to talk to me.

Mr. BalLey. The technologies advance in time and that is really
how we know about some of these hazardous wastes today. Our fa-
thers, grandfathers, great grandfathers, they were trying to do
right, and as we developed advances to determine levels of different
toxics and chemicals and so forth, we found that some of the things
we did in the past were not the right thing to do. But, we do not
know that today.

Mr. LatHaM. But they were legal when you did them.

Mr. BAILEY. They were legal when we did them. But we can go
back 1 year, 10 years—I do not know how far back we can really
go—and be brought into things that were very innocent at the
time.

Mr. LaTHAM. Yeah.

I guess I would like to hear Mr. Higman’s opinion on the loser
pays situation when he spent a quarter of a million dollars fighting
an agency and was found not guilty.

Mr. HIGMAN. Quite frankly, I think it is a good idea, Mr.
Latham.

Mr. LatHAM. I thought maybe you would.

Mr. BaILEy. And we would like that retroactive, too. [Laughter.]

Mr. LATHAM. I guess one thing, Ms. Prescott, all of the regula-
tions that you have to comply with—and you have been focusing
pretty much on mortgage loans. Having some experience in my
background with the CRA and everything else, I mean, what you
are focused on here is just one aspect of the cost of regulatory bur-
den that you share and you pass the cost on to your customers ob-
viously. I think one very interesting statement that you made in
your testimony is how it is very important for the disclosure of very
important facts in the transaction, but because you have got 21
documents and they are signing 49 pieces of paper, the customer
looks at this pile and really does not read anything because it is
too much to comprehend. What is your feeling on that? I mean, I
think we are doing a terrible disservice to your customers because


115

Mr. McINTOSH. What it turned out to be was payments to their
parents under the Social Security Disability portion, the SSI provi-
sions. They were labeled learning disabled, and as a result, their
parents were getting a monthly payment. The teachers then ex-
plained that the kids acted a little bit crazy once in a while, were
certified as learning disabled and the parents were pushing them,
the school to make that certification even when the teachers
thought it was not appropriate. This was shocking to me as you
might imagine. But it was something that the kids were talking
about very freely with visitors to the school.

Ms. MADISON. I have heard about that in other States. We have
seen a little push from parents in that direction, but that is not a
significant problem in Sioux City.

Mr. McINTOSH. That is good. It is a dumb idea for the Govern-
ment to create incentives for parents to want their kids to be learn-
ing disabled.

‘hank you very much for your testimony on this.

Ms. Mapison. You are welcome.

Mr. McInTosH. Mr. Hamilton, I really appreciated your testi-
mony as well and the forthright and candid nature in which you
explained the problem there with OSHA and the way it would have
severe consequences with your ability to work with other depart-
ments. I look forward to making use of your testimony actually in
talking with others about this issue. I think this too might be a
good example where we could send a letter perhaps to the appro-
priate officials, and in this case maybe urge OSHA at the national
level to indicate that that should not be the policy or the interpre-
tation of those types of regulations and perhaps forestall that con-
cern you had that it would become a precedent.

Those were the questions and comments I wanted to make.

Tom, do you have any questions?

Mr. LarHam. Yes, and I understand we are working under a time
constraint here.

Mr. MCINTOSH. Yes, and we still have some people from the open
microphone period that I want to get to.

Mr. LATHAM. Right. I would love to pursue this more.

Mr. Hamilton, I just want to congratulate you on the fabulous job
you not only did with Terra, but I think my other colleagues should
be aware that this is the same fire department that did such a mi-
raculous job with the United flight several years ago here in Sioux
City. It was nationally recognized for not only heroic efforts but
what a fabulous job you did at that time. This is extremely unfortu-
nate as far as I am concerned.

The meat processing plant situation, when did that occur?

Mr. HAMILTON. 1991.

Mr. LaTHAM. 1991. Have you noticed—apparently, you have no-
ticed some change in OSHA since then—their attitude?

Mr. HaMILTON. Well the regulation verbiage has not changed at
all. I believe personally it was due to the circumstances that the
investigation was initiated under. The first one was a non-hostile,
friendly type. We were a different—we were not the target, if you
will, of the investigation. We were merely involved as a part of the
investigation in a broader scope. The second incident we had, Mr.
Latham, was related directly due to an employee complaint alleg-


136

I just wonder if you have seen any opportunities where we could
fine tune it even more in the fire fighting area?

Mr. CouGcILL. Oh, I think there is a lot of things. We could go
on—TI could sit here for hours and talk to you about it. I do not
know. As far as the two in and two out, I was going to touch on
that in my summary here. That is something no one understands,
the two in and two out concept, until it happens to your family and
you have two firefighters go in; they are trapped rescuing your chil-
dren and you have one firefighter to go in and get them. In all like-
lihood, you are going to end up with three dead firefighters and the
dead children. You have got to have enough people to do it. That
standard was called dumb and stupid during Mr. Gingrich’s—one
of his—what is your regulation—getting rid of dumb and stupid
legislation.

Mr. McINTosH. Corrections Day. That was cited as an example.

Mr. CouGILL. Corrections Day. It was called dumb and stupid. I
do not find that dumb and stupid and I kind of take that personal.

Mr. McINTOSH. Let me ask you to indulge us because I probably
was one of the people who thought that way and I have changed
my mind. It is difficult for public officials to admit it when we were
not right about something, but in that case, your colleagues in Indi-
ana convinced me I was not right. We need to learn more. So, I ap-
preciate that.

Mr. CouGILL. Thank you.

Mr. MciIntTosu. I do not have any further questions right now.

Tom, do you have any?

Mr. LATHAM. Just very briefly. I think the dairy section is going
to be revised anyway. I am certainly going to work toward that end
as far as the California standards and things like that.

I guess the only other thing I would say, Ken, you did very well,
very quick on the first half. [Laughter.]

Anyway—

Mr. STRECK. You ought to read the second half.

Mr. LaTHAM. I know.

And, Barb, I really appreciate your testimony. We are in a very
difficult situation because—and I honestly believe one of the roles
of the Federal Government is to make sure that some of the re-
sponsibilities when we go back to people with disabilities are not
discriminated against because of race or color or anything else. I
think that is a Federal role. We have a real problem in—I think
you maybe understand. You know, Dr. Madison’s concerned—they
have a real—they are also concerned with their budgets and that
is a real concern to them also. They have got to find a way to pay
for everything. I just, you know, want to work together with you.
I hope everybody can work together to resolve it but, I mean, it is
essential for the opportunities, the success story that she talked
about. Your child is a great example of what can happen with peo-
ple working together. I appreciate that very much.

Mr. McINTOSH. Let me also ask, if you would not mind, Ms.
Renfro—and you do not need to right now. But it would be helpful
to me to have a description of some of the programs that your son
benefited from, because there is a fellow on my staff who is assist-
ing me on the Education Committee as they work on rewriting that
bill. I would like to just make sure that we do not inadvertently


58

live in the Sioux City community. in the shermath of the explosion, we worked with «
Wide array of federal and state agencies who investigated the accident. | am here
today to speak with this. Subcommittee about one of those agencies - the U.S.
Environmental Protection Agency (EPA). in my remarks, | will touch on three themes,
that we at Terra have distilled from our experience with EPA ~ specifically:
bureaucratic overreaching, a lack of due process sefequards and interference with
bftivate disputes. At the end of my remarks, | will make a proposal to this Subcommittee
on how the procass might be reformed.

THE EXPLOSION AT PORT NEAL

AL 6:04 a.m. on December 13, 1984, the entire Sioux City community was
shaken by an explosion at Terra’s Port Neal plamt, which is located approximately 10
miles south of the city. The blast destroyed @ significant portion of the plant, damaged
most of the remaining structures and, most tragically, brought death and serious injury
to a number of Terra employees.

tn the immediate aftermath of the explosion, our first concern was to care for the
injured employees and the families of those killed. Most of us in management spent
that first day of the explosion at area hospitals caring for our employees. Quickly, we
assembled a team to ensure thet each Injured employee and each family of a deceased
employes received whatever assistance they needed.


112

COMMON ISSUES IN FEDERAL MANDATES:

ACIR's review of existing mandates found a number of common issues that ere troubling federal,
state, and local government relations. These issues and ACIR's proposed recommendations to
address them include:

1. Detailed procedural requirements. State and local governments are not given flexibility to
meet national goals in ways that best fit their needs and resources. The imposition of exact
standards or detailed requirements, in many instances, merely increases .costs and delays
achievement of the national goals. The federal role in implementation should be to provide
research and technical advice for those governments that request it, but, in general, state and
local governments should be permitted to comply with a mandate in a manner that best suits
their particular needs and conditions.

2. Lack of federal concern about mandate costs. When the federal government imposes costs
on another government without providing federal funds, the magnitude of costs is often not
considered. If the federal government has no financial obligation, it has little incentive to weigh
costs against benefits or to allow state and local governments to determine the least costly
alternatives for reaching national goals. The federal government should assume some share of
mandate costs as an incentive to restrain the extent of the mandate and to aid in seeking the least
costly alternatives.

3. Federal failure to recognize state and local governments’ public accountability. State
governments often ere treated as just another interest group, as private entities, or as
administrative arms of the federal government, not as sovereign governments with powers
derived from the U.S. Constitution. Local governments, despite the important role they play in
delivering government services, have been given even less consideration. Non-goverumental
advocacy groups’ views have sometimes been given more attention than those of state and local
governments. Federal laws should recognize that state and local governments are led by elected
officials wha must account to the voters for their actions, just as the President and Members of
Congress.

4. Lawsuits by individuals against state and Jocal governments to enforce federal mandates,
Many federal laws permit individuals or organizations to sue state and local governments over
questions of compliance, even though a federal agency is responsible for enforcement. Federal
laws, however, are often written in such broad terms, it is not clear what is required of federal,
state, and local officials. In these circumstances, permitting litigation brought by individuals
subjects state and local governments to budgetary uncertainties and substantial legal costs,
Because the federal agency is not directly involved with the costs and problems of this litigation,
it bas little incentive to propose amendments that would clarify the law's requirements. Only the
federal agency responsible for enforcement ofa law should be permitted ta sue slate and focal
governments,


76

cases, the marketer who crosses those lines then becomes an interstate marketer. DOT has even
more stringent regulations for interstate marketers and marketers who cross state lines face the

loss of Iowa exemptions on certain requirements.

‘The fact that DOT has not even responded to our application adds insult to injury and is another
glaring example of the buresucracy’s inability to reasonably work with the very community it
regulates.

Another example I would like to pass along to you is the issue of underground storage tank clean-
up. In 1986, underground storage tanks became regulated by the federal government. The
government and state agencies then determined that not only did tanks need to be upgraded, but
the soil has to be cleaned up to what I call “Adam and Eve” standards (1.e., so clean, you could
eat the soil regularly without getting sick).

In Iowa, marketers average $277,000 in clean-up costs per site, The state clean-up program has
budgeted over $300 million in potential clean-up costs, All this money spent on clean-up of tanks,
which in most cases pose no threat to groundwater.

An October, 1995 study commissioned by the State of California and issued by the Lawrence
Livermore Foundation (a liberal, pro-environment, California-based group) agreed with common
knowledge - three quarters of the soil which was cleaned at great expense to marketers was.
unnecessary clean-up. Finally, study from the most stringently regulated state (environmentally),
tells us what marketers have known all along — we are spending too much on something for
which there is little scientific basis.

Towa is now beginning to move toward Risk-Based Corrective Action which I fully support.
However, I would like to see the federal government fully implement this approach. Under Iowa's
original requirements, 63 out of 126 leaking tank sites would have to be cleaned up. Under the
new rules, only 15 out of 126 would have to be cleaned up. My question is...haven't we been
‘saying this all along -- the majority of sites present no threat to drinking water.

The bottom line... is we are losing ours. It is time that bureaucrats started listening to the very
people they regulate. We would be happy to work together on issues to reach a consensual
approach ta compliance, but ask that we not be mandated to do something when there is no
scientific data to back up those requirements.

Please encourage regulators to base decisions on reason and science and not their personal
agendas. Again, I appreciate the opportunity to be here today and would be happy to answer any
questions you may have.


28

SITUATIONS THAT MEET THiS CRITERIA AS INTERPRETED BY THE REGULATORY
AGENCIES. MOST CONSUMERS DON'T WANT OR NEED THIS RIGHT. THEY FIND IT
‘CONFUSING AND DON'T UNDERSTAND WHY THEY HAVE TO BE INCONVENIENCED BY
COMING BACK TO THE BANK IN THREE DAYS TO RECEIVE THEIR PROCEEDS. IT TAKES
TIME TO PREPARE THE LOAN DOCUMENTS AND DO THE VERIFICATIONS NEEDED IN A
MORTGAGE TRANSACTION DURING WHICH THE CONSUMER CAN STILL BACK OUT.
THIS REQUIREMENT CAUSES MANY CUSTOMERS TO LEAVE FEELING ANGRY WITH THE
BANK FOR FOLLOWING THE RULES. IT WOULD SEEM MORE REASONABLE TO ALLOW
CUSTOMERS TO WAIVE THIS RIGHT IF THEY DESIRED WITHOUT REGARD TO ANY
EMERGENCY SITUATION.

REAL ESTATE SETTLEMENT PROCEOURES ACT (24 CER 3500),

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) HAS BECOME A NIGHTMARE
FOR THE BANKING INDUSTRY, FIRST iT HAS BECOME A MOVING TARGET HAVING
CHANGED SEVERAL TIMES IN THE PAST TWO YEARS. IT HAS BECOME MORE DIFFICULT
TO COMPLY WITH AS HUD HAS MADE THE REQUIREMENTS MORE COMPLICATED WITH
EACH CHANGE. THERE ARE SEVEN EXEMPTIONS TO THE RESPA REQUIREMENTS. ONE
OF THESE IS BUSINESS-PURPOSE LOANS WHICH THE REG STATES "GENERALLY
PARALLELS REGULATION 2". RATHER THAN LEAVING THIS THE SAME AS REG Z, HUD
ADDED LANGUAGE WHICH SAYS THE EXEMPTION FOR BUSINESS-PURPOSE LOANS:
DOES NOT INCLUDE ANY LOAN TO ONE OR MORE PERSONS ACTING IN AN INDIVIDUAL
CAPACITY TO ACQUIRE, REFINANCE, IMPROVE, OR MAINTAIN ONE- TO FOUR-FAMILY
RESIDENTIAL PROPERTY USED, OR TO BE USED, TO RENT TO OTHER PERSONS. THIS
ADDS ONE MORE TWIST TO THE REQUIREMENTS THAT COULD BE MORE UNIFORM
WITHREGZ.

RESPA DEALS WITH SIX DIFFERENT DISCLOSURE FORMS: SPECIAL INS ORMATION
BOOKLET, GOOD FAITH ESTIMATE, HUD SETTLEMENT STATEMENT, MO!

SERVICING RIGHTS DISCLOSURE, AND THE INITIAL AND ANNUAL ESCROW ACCOUNT
STATEMENTS. ONCE AGAIN RATHER THAN BEING SIMPLY ALL REQUIRED OR NOT, YOU
MUST READ THE DESCRIPTION OF EACH DISCLOSURE TO DETERMINE WHETHER IT
APPLIES TO A FIRST LIEN OR SUBORDINATE LIEN, WHETHER IT APPIES TO OPEN END.
AND/OR CLOSED END MORTGAGE LOANS. THERE ARE ALSO DIFFERENT TIMING
REQUIREMENTS FOR EACH DISCLOSURE. FOR EXAMPLE, THE GOOD FAITH ESTIMATE
WHICH LISTS THE ESTIMATED SETTLEMENT COSTS MUST BE GIVEN WITHIN THREE
DAYS OF THE LOAN APPLICATION. THE MORTGAGE SERVICING RIGHTS DISCLOSURE
WHICH JUST PROVIDES AN ESTIMATE OF WHETHER THE INSTITUTION WILL SERVICE
THE LOAN OR SELL IT MUST BE GIVEN AT THE TIME OF APPLICATION IF IT IS RECEIVED
IN PERSON OR YOU HAVE THE THREE DAYS IF IT IS NOT SUBMITTED IN PERSON, THIS
1S VERY CONFUSING ESPECIALLY WHEN THE GOOD FAITH ESTIMATE INFORMATION
‘WOULD APPEAR MORE IMPORTANT THAN THE 6ERVICING RIGHTS DISCLOSURE.

MOST OF THE DISCLOSURES ARE IMPORTANT AND IT !8 GOOD BUSINESS TO MAKE
SURE THE CUSTOMER IS AWARE OF THE COSTS ASSOCIATED WITH THEIR LOAN,
HOWEVER, THIS REGULATION NEEDS TO BE SIMPLIFIED AND MADE MORE UNIFORM
WITH REGULATION Z. IT SEEMS AFTER SEVERAL ATTEMPTS THAT HUD IS NOT
CAPABLE OF DOING THIS AND THE RESPONSIBLITY FOR RESPA WOULD BE GETTER
HANDLED BY THE FEDERAL RESERVE.

NATIONAL FLOOD INSURANCE REFORMACT,
SECTION 528 REQUIRES THE DEVELOPMENT AND USE OF A STANDARD FORM TO
DETERMINE WHETHER IMPROVED REAL ESTATE !8 INA FLOOD ZONE. BECAUSE OF

‘THE DETAILED INFORMATION ON THIS FORM ANO THE LUBILITY TO THE BANK WE NOW


94

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reac met eee nan atest fein foe
technology, Pn ice bane bene Bache erene

previourly thay were considered mentally disabled. Rett thology bd ret

Promise, and it carries an expensive price tag. ai
sci er ee.

54 Leds at gill adeptod, movided thy sake wine brenda rep
as a
10 a gal a

of the national average per-pupil
student eerved in education. Actual. rine te
Space za funding has remaine: or’ i.



9

up with bigger and more newsworthy cases, thus resulting in pro-
motion. When visiting a U.S. attorney’s office, I read a letter from
the Justice Department complimenting that office on the number
of dollars that it had taken in on fines, penalties and settlements.
Why is it the Government system does not promote its personnel
based on positive helpful attitude?

Even considering the mind-boggling number of rules, regulations
and orders handed down each year by Congress and its regulators,
I feel the problem lies not so much in the rules but in the rulers
who implement them. The Federal regulators have a bottomless
pocket of dollars to work within the judicial system preventing the
challenging of regulations by small business.

The small businessman of today must stay focused on his compa-
ny’s goals in order to survive in a competitive climate. He has nei-
ther the time or expertise or finances to understand the vast regu-
latory system which today is held over his business. For him to
survive, this system must be changed.

In conclusion, Mr. Congressman, America is a great and diverse
society evolving from a mix of which is tried and true. Yet, the sin-
gle key ingredient lacking from the recipe to make her the greatest
ever, is common sense.

Thank you, Mr. Congressman.

(The prepared statement of Mr. Higman follows:]


17

Mr. McIntosH. Thank you. I appreciate you coming forward
today and sharing that information with us. I have got a couple of
questions.

First, Mr. Valentine, did either of the agencies—either OSHA or
EPA come out to your facility before the explosion and talk with
you about safety?

Mr. VALENTINE. Well certainly not EPA. As far as OSHA goes,
Iowa OSHA, they have made inspections in the past. I do not know
how often, but there have been inspections in the past.

Mr. McINTosH. From your testimony, it sounded as if it was a
defective part on the valve that was likely the cause?

Mr. VALENTINE. Yes.

Mr. McInrosu. I take it those inspections did not identify that
as a potential hazard that could lead to that result?

Mr. VALENTINE. No.

Mr. DorNaN. When was that explosion date?

Mr. VALENTINE. It was December 13, 1994. It was unfortunately
the lead story on CNN Headline News that day to the whole of the
country
Mr. McINTosu. It sounds like a genuine tragedy——

Mr. VALENTINE. Yes.

Mr. McINTOsH [continuing]. For the company and for the fami-
lies of the workers involved. The way I was leading with the ques-
tions is, oftentimes even with good inspections it is difficult to find
these, and then you find yourself confronting two agencies duplicat-
ing the effort on safety. Did EPA ever cite to you statutory author-
ity to be inspecting for safety concerns?

Mr. VALENTINE. Well, they had issued some regulations them-
selves—proposed regulations that would allow them to do inspec-
tions in the area of so-called process safety management, PSM,
that were an exact duplication of Federal OSHA’s PSM regulations.
They had not however—in fact, to this day are not final. There is
a real question whether they had the authority to do anything at
all in this area.

Mr. McINTOSH. Because even under a broad interpretation of a
statute, an agency has to point to some statutory authority before
they can regulate in an area.

(r. VALENTINE. There is a so-called general duty clause in the
Clean Air Act which they point to as giving them authority to in-
vestigate safety issues. This is, I should tell you, a pet project of
EPA, Washington EPA. They are looking forward to expanding
their safety jurisdiction. They are frankly engaged in a turf fight
right now with Federal OSHA at the highest levels. And they also
were quite candid when they first came to Port Neal, that they
were using the Terra explosion as a practice case to learn about
safety matters to be able to sort of flesh out this area as part of
their portfolio. I am told that there is a lot of inner-agency rivalry
on this issue. That OSHA and EPA are at odds. One, not two,
ought to have jurisdiction over this area.

Mr. McIntosH. The turf battles are not new to Washington.
They do go on quite a bit. This is a new one to me. I did not realize
there was that struggle there. It is something I think our commit-
tee would be interested in looking into in its oversight capacity. I
appreciate you coming forward.


83

Mr. GUTKNECHT. I am going to get that information and I am
going to make sure I am scientific on this thing. But you are abso-
lutely right, it is not much more toxic than many of the things that
people use and eat every day.

r. Davis. Correct.

Mr. GUTKNECHT. The second point that needs to be made about
farm chemicals is their half-life. 1 am told that the half-life on—
which means that every period of time it breaks down in half of
Atrazine is like 6 weeks. That is something that the farm chemical
companies frankly have not done a very good job of explaining to
the general public, that these chemicals are far less dangerous and
far less toxic than sometimes some of the groups out there purport
them to be. And I think those of us who represent farm States
ought to do a better job of helping to communicate to our city con-
stituents as well that while we do want a clean environment and
we want to make certain that there is, you know, legitimate con-
trols and there is a need for certain regulations, but I think we
have to have some common sense in all of this. Everybody eats and
everybody appreciates the low prices that we have ‘for food in this
country and part of that is because we have the technology and the
chemistry that we do. I agree with you, we need some regulation
but we need some common sense.

Finally, I want to come back to Mr. Valentine because I think we
have had lots—I do not know how many, 100 hours of testimony.
I do not think we have had any more compelling testimony than
yours. In fact, while you were testifying, I leaned over to Congress-
man Dornan and said—when you were talking about the almost
storm troop response that you got from the various groups—that
these groups must have read Patton’s theory on total war because
they seem to, you know, be setting backfires around you so you did
not have a chance to even tell your story. One of the concerns I
would have—I am not an attorney, but it does concern me that in
some respects any defense and/or prosecution or, you know, litiga-
tion that may have well have been hampered or jeopardized by the
activities of the people who were in effect supposedly working for
the public good. Could you comment on that?

Mr. VALENTINE. We are very seriously disturbed at the way EPA
used the media here with this press conference a couple of weeks
ago and issuing press releases left and right in the middle of
what—we have some serious civil litigation going on right here in
Sioux City. I think that it was an entirely improper role for a gov-
ernment agency to play but unfortunately, we have not been able
to think of any redress. As you may know, suing the Government
is a difficult thing. There are, you know, notions of governmental
immunity and such. But, I think they have colored the view of
Terra here in our own hometown. I hope I am wrong about that.

Mr. GUTKNECHT. Well, in any event, I am, with the chairman,
very intrigued by your notion of some form of bill of rights. Frank-
ly, I think—I do hope we will hear from some of the EPA people
who were involved in this investigation. Frankly, I would like to
hear their side of the story. But it does disturb me when Federal
agencies deny information to Members of Congress, or embargo the
information and then use sort of a political campaign of selected
news releases and news conferences against what—at least from


5

I think there is a key thing here about common sense in how we
approach this.

‘wo small towns, Rome and Hillsboro, IA, which are in southeast
Towa, worked with the Federal Government to bring sewage serv-
ices to their small towns, about 60 or 70 homes in that area. Engi-
neers wanted to use several innovative designs, including a 6-inch
sewage pipe which could handle about 150 to 200 homes. Our Iowa
DNR insisted that they use 8-inch pipe which could service 400
homes. Now, if they could have been allowed to use the new-design
standards which other States, including Nebraska, use, these two
small cities could have saved up to $200,000. Now, on a positive
note, DNR has set up a pilot system to explore alternative designs
for 13 communities that are members of the rural water system.
DNR has not agreed to allow towns outside that system, like Rome
and Hillsboro, to use the designs though—and there are over 220
communities in Iowa without sewers that could save substantial
money.

Some have criticized my efforts on the State level for regulatory
reform because they say businesses, if they operate honestly, the
owner would have nothing to fear. I think I have got a pretty good
handle on the fact that I have met with hundreds of honest busi-
ness people in this State who are stalwarts in their community,
and these business owners want clean air. They breathe the same
air as we do. They want clean water because they drink the same
water as we do. They do not want to hurt their employees. Their
children play with other children just like we do in our own com-
munities. They go to the same schools. They attend the same
churches, and in many cases, these owners work alongside their
employees under the same conditions.

‘he bottom line is, what can the Government do to become more
user friendly?

No. 1, they can consult with businesses before administrative
rulemaking.

No. 2, establish a rules review process 5 years or sooner after im-
plemented.

b No. 3, with industry review the Federal rules already on the
ooks.

No. 4—and I think this is a very important one—customer serv-
ice training for the bureaucrats. Let them see how their regulations
affect business. Have them view a part of their job as growing the
economy.

No. 5—and from my perspective as the Secretary of State, I
think it is very important. Our Department of Natural Resources
and our Department of Economic Development have started to
work together to assist new Iowa businesses with environmental
regulatory hurdles. We have also gone to accelerating our permit-
ting process for basic air quality permits and more general permit-
ting. What I would like to see us do here, is please continue to let
the States develop these innovative programs. Do not tie their
hands. Let them be creative and try to get through the process.

No. 6. While I am not an advocate of increasing government pro-
grams, in Iowa, we have two very successful programs that work
with small businesses. The first helps the business fill out air per-
mits. The second works with businesses to cut down their waste


ll

SUMMARY OF RECOMMENDATIONS ON INDIVIDUAL MANDATES

ACIR’s proposed recommendations for individual mandates can be summarized into three
categories.

The Commission finds that the following mandates as they apply to state and local governments
do not have a sufficient national interest to justify intruding on state and local govemment
abilities to control their own affairs. While the Commission does not take issue with the goals of
‘these mandates, it believes that achieving those goals can be left to elected state and local
officials. Thus, ACER recommends repealing the provisions in these laws that extend
coverage to state and local governments.

Fair Labor Standards Act

Family and Medical Leave Act

Occupational Safety and Health Act

Drug and Alcohol Testing of Commercial Drivers

Metric Conversion for Plans and Specifications

Medicaid: Boren Amendment

Required Use of Recycled Crumb Rubber

The Commission finds that the following mandates are necessary because national policy goals
justify their use. However, the federal share of the costs should be increased or the stringent
requirements and deadlines imposed on state and local governments should be relaxed. These
mandates impose substantial costs on state and local governments as a result of requirements that
are unnecessarily burdensome. Thus, ACIR recommends retaining these mandates with
modifications to accormmodate budgetary and administrative constraints on state and local
governments.

The Clean Water Act

Individuals with Disabilities Education Act

Americans with Disabilities Act

‘The Commission finds the following mandates are related to acceptable national policy gosls,
‘but they should be revised to provide greater flexibility in implementation procedures and more
participation by state and local governments in development of mandate policies. Thus, ACIR
recommends revising these mandates to provide greater flexibility and increased
consultation.

The Safe Drinking Water Act

Endangered Species Act

The Clean Air Act

Davis-Bacon Related Acts


81

even though they were not producing anything. We appreciate that
very much. Thank you very much.

Mr. Marr, where is the nearest inspection site here?

Mr. Marr. From here?

Mr. LatuaM. Yes.

Mr. Marr. Probably Omaha or Sioux Falls.

Mr. LatHam. OK. So you would have to go out of State for either
one?

Mr. Marr. I would be going out of State.

Mr. LaTHaM. That would make you an interstate marketer and
so you would come under a whole different level of regulations to
do that. I think from your testimony—and we visited a few weeks
ago also on expressing your concern. But one thing this Congress
has tried to do was fundamentally try to write laws so that the reg-
ulators would take into account cost benefit analysis. That what-
ever was spent that there was at least an equal amount of benefit.
I think this case is a prime example where that is not necessarily
happening. A risk assessment, that we have to know that there is
a danger out there before we spend a great deal of money.

The third thing, and that is the individual property rights which
goes more probably to agriculture and wetlands and things like
that.

I really appreciate all of your testimony. Thank you.

One more thing. I did not welcome Mr. Gutknecht and Mr. Dor-
nan here. It is always a pleasure to have my good colleagues from
Minnesota and California with us.

Mr. McINTosH. Thank you, Mr. Latham. I appreciate that.

Mr. Gutknecht, do you have any questions?

Mr. GUTKNECHT. A couple of questions and comments.

First of all, Mr. Marr, most of the issues that you are talking
about though are related more to the State regulations than Fed-
eral, are you not?

Mr. Marr. No. They all have their parentage with Federal regu-
lations, DOT and the EPA. The EPA has an office of underground
storage tanks and those flow back down through the States. So the
States are licensed by the EPA on how they can address under-
ground storage tank cleanup problems. A lot of the Federal DOT
regulations flow through—most States adopt the Federal code of
regulations for DOT and then we will run an exemption through.
This is a case where the Federal superseded the State. The point
is that some of these—and the comment was made on the panel—
I had a member 3 weeks ago get stopped by the Iowa Department
of Transportation. He was inspected for the—if he had a medical
card, proof that he had a medical exam. He had a medical card. He
had gone to his local physician, and that is a requirement for both.
However, it was written on an old form. The old form had date of
exam on it and the new form was date of expiration of the medical
card. That piece of cardboard—the little pocket-size piece of card-
board, the wrong words cost him $70. That is typical of the regula-
tions we fall into.

Mr. GUTKNECHT. A $70 solution to the $5 problem.

Mr. Marr. No, a 2-cent problem.

Mr. GUTKNECHT. We have had the problem up in Minnesota—
and I think we have made some progress—where—and particu-


107

testing of our 59 part-time drivers at about $70—well, exactly
$76.50 per test. We will be expending over $2,500 in administrative
costs in the paperwork, plus the staff time it is taking for trainin;

and implementing of these rules. The testing for these small rural
transit systems clearly is not needed, in our opinion.

We have hundreds of examples like this for you. I could give you
some rather humorous ones of implementation of some of the tests
that are required under the Endangered Species Act in looking for
the American Burrowing Beetle and spending $30,000 in looking
for that thing under one of our public projects. Or the Home Mort-
gage Disclosure Act we are the depository for, or the Flood Insur-
ance Act, or the Storm Water Drainage Permit proposal that would
be an absolute disaster for small communities. I will be glad to
share any of our additional examples with your staff or you.

[The prepared statement of Mr. Meisner follows:]


92

tual funding has remained at or below 12.5 percent. The Federal
Government needs to honor its commitment to fund its mandates,
or eliminate the mandates.

School districts sometimes acquiesce to unreasonable demands
for services because attorney fees from the resulting court tests are
often more expensive than simply providing the service. It would
help if the Federal Government would place restrictions on attor-
ney fees. Administrative law judges are often sympathetic to par-
ents. They do not understand the complexity of providing services
to students with disabilities while maintaining a quality program
for all students. There should be a better, less expensive way of
handling differences.

Special education mandates have caused the Sioux City Commu-
nity School District to spend over $1 million more than it received
in the area of special education, and that was for 1 year alone. The
State will reimburse the district for about $29,000 of that $1 mil-
lion. Where will the remainder of the money come from? Either we
must reduce regular education programming to pay for these spe-
cial education programs or we need to raise local property taxes.
I have provided a sheet detailing the financial impact of special
education in Sioux City.

A few years ago, the visually impaired student I described earlier
would have been educated in the State school at Vinton, IA. In-
stead, today she is a bright, popular student attending regular edu-
cation classes receiving support services for her disabilities. The
IDEA worked for her, but it has not worked for all disabled stu-
dents and it certainly has not worked for the taxpayers of Iowa.

Thank you for giving me this opportunity to speak to you today.

Mr. McINTosH. I appreciate it. hank you very much for raising
this issue. IJ look forward in the questioning period to talking with
you more about it. It is a grave concern for us.

Our next witness on the panel today is Stephen Brevig who is
the general manager of NIPCO, Mr. Brevig, thank you for coming.

[The prepared statement of Ms. Madison follows:]


60

sensitivity of the situation or the emotional state of Terra's employees. One Intense.
agency inspection during this period would have been difficult enough to handie.
Instead, Terra had to deal with:

e ‘Two identical document productions involving thousands and thousands
of pages — one production to OSHA and a second production of the same.
documents to EPA;

© Two Identical and repeated Inspections of its plant — one series of on-site
inspections by OSHA and a second series of essentially kdentical on-site
Inspections by EPA;

e Multiple rounde of interviews of the same Terra employees (many of
‘whom were suffering emotionally) in order to satisfy both OSHA's and
EPA's need for information — i.e., the game Information.

In short, Terra had to deal with two massive, identical and simultaneous regulatory
Investigations, both on safety matters.

OSHA

‘On May 25, 1995, approximately five months after the accident, OSHA issued
citations to Terrs alleging violations of Its process safety management (PSM) standard.
in general, the citations dealt with certain paperwork and documentation matters. None
of the citations were in eny way related to the ultimate cause of the explosion. Terra
disagreed with the citations and thereafter pursued the appropriate procedures to

4


56

equipped to do this. This is not their expertise. It is not their expe-
rience. They are an environmental agency, not a safety agency.

No. 2, and it is consistent with one. OSHA should have exclusive
jurisdiction over safety matters. We do not have two State Depart-
ments, we do not have two Departments of Defense and Lord
knows, we do not need two safety agencies at the Federal level.

Now most importantly, our third proposal is that Congress enact
a regulatory bill of rights for all of us to protect Terra and all other
U.S. citizens from the kind of abuse that we have outlined today.
Specifically, they need to stop the kind of manipulation of the
media the way EPA has done here. I would simply say on that
point that you can hurt a company a whole lot more by damaging
its reputation than you can by a monetary fine.

We also need to prohibit EPA from making substantial charges—
unsubstantiated charges against a private business where there is
no way to challenge. This is the hit and run technique that I re-
ferred to earlier and it is particularly insidious when you do it
against the backdrop of private litigation going on here in Sioux

‘ity.

Finally, you need to stop the kind of bureaucratic arrogance that
bars Terra from attending a press conference on its own plant. An
arrogance that tells a U.S. Senator that there is an embargo on the
Senator sharing information with one of its constituents.

That concludes my remarks. I appreciate the opportunity and I
look forward to questions.

Mr. McINTOSH. Thank you very much, Mr. Valentine. I appre-
ciate your very forceful testimony, and I do have several questions
when we get to that point. I appreciate your recommendation of a
bill of rights for the regulated community. I like that approach
quite a bit.

Our final witness on this panel is Mr. Ron Marr who is with the
Petroleum Marketers of Iowa. I have just visited with several of
your colleagues in Washington. They are having their national con-
ference.

4 Mr. Marr. Correct. We just came back from Washington yester-
lay.

Mr. McINTosu. I got to see everybody on Monday morning. I ap-
preciated that group. Welcome and thank you. Please share with
us our comments.

{The prepared statement of Mr. Valentine follows:]


18

Underground Storage Tank Site

In 1988 we recoived notification of rules pertaining lo Fuch things 2s inline leak detection , overfill protociion,
monthly monitoring, etc. In the process af complying with these rules, a leak was discovered at our site. Last
month, come seven years Later, after numerous studies conducted by consultants end « vemendous amouat of
correspondence regulators, consultants and Wells’ Dairy we have finally begun the process of
cleaning up the leak.

‘There have been no significant changes at this site during this time period. We knew there was free product
ai the site then and we know it stl exis today. Why did it uke seven years to begin clean up?

Hazard Communication Standard .

‘Companies are required to have Material Safety Dats Sheots (MSDS) on hand for every chemical that they
‘use at their facility. A MSDS can range in length anywhere from one page on up. It is not uncommon to
have a 6 page MSDS, We currently have six, three inch binders full of Material Safety Daze Sheets. The
definition of a chemical ranges anywhere from Mercury 0 Windax. Companies 278 required to train each

employee performing plant mail potent
facility, whon they are fixing the plumbing under che sick where the Comet is siored, using a tool in the shop
‘whete the volvent tank is located or working in the ammonia compressor room, According wo the regulation
‘the company should sit down with this individual and ope by one review the MSDS,

A Gistlnction needs to be made berweon chemicals. Which ones are hazardous nnd which ones pose lite if
‘any risk, Should employers contipus to be required to keep notebooks full of MSDS on chemicals as basic as
household oleacers and office mupplics.

Storm Water Discharges

Every year companies, which fall int one of 1 land use classifications, have wo pay an anaval fee of $150 in
lows ws ebew thei Stonn Wete Disebarge Parra, ‘Thove permits had to be obtained in order to comply
‘with the BPA regulations as result of the reauthorization of the Clean Water Act in 1987. To obtain the
permit a company hed to complete an spplication, send in an initial fee of $100 per epplication and run ade in
‘Several local newspapers notifying the public of the companies invent to Let the rain wale that falls on their
Property run into the storm sewer. Initially there was 2 tremendous amount of confision among regulators
about this program and it wae difficult wo get answers to your questions. There is still confusion in Industry
84 10 What is necessary to comply whh this regulation.

Hazardous Waste Disposal

Hazardous waste con be anytbing from the Latex paint Ieft over from a break room painting project to tho
mneTeury recovered from & broken thermometer. Ifa company bus several locations in town and they are
arranging for hazardous wasie pick up this wasie must be picked up at the facility where it was generaied.
For instance, if we have five gallans of waste video jet ink at one facility and a mile down the street we have
another facility with five gallons of waste video jet ink, two separate pick wps must be arranged and two sets
of paperwork must be completed, Revould be toe effiont tte oaapany eoulé uke te hve palons of
‘waste ink co one plant, prepare it for shipment and have the truckiag company make one stop. Curreatty this
cannot be done because the hazardous wane cap ouly be moved fom locaton to location bya bezurdon
‘waste carrier. This requiras the hazerdous waste generatot to pay for two stops by the rucking company and
complete swice ss much psperwork.


AT

chased 49 percent of the business. At that time, we began selling
liquid fertilizers that we purchased from the Lohry brothers who
owned and operated Nutra-Flo Chemical Co. in Sioux City.

In 1974, my brother Rob and I purchased Jim’s share of the com-
pany stock. Both of us graduated from Iowa State University in
Ames. Davy, which is our dad, has since retired and my brother
and I operate the business. Davy’s & Jim’s sells fertilizer, chemi-
cals, feed and seed and we provide custom application services.

We have seven full-time employees and hire five part-time people
for help in the spring. Davy’s & Jim’s operates six different custom
application machines, some of which cost several hundred thousand
dollars each.

Our feed business had decreased each year with the ever-de-
creasing numbers of livestock in this part of the State. Our current
customer base is made up of average sized to small farms. We do
not deal with any quote, wealthy farmers, or those who farm over
2,000 acres. Twenty years ago, 90 percent of our farmers raised
hogs, 60 percent of them fed cattle and all of them, of course, were
raising grain. Today, we are losing livestock farmers by alarming
numbers. I would estimate that no more than 25 percent of our
farmers are raising hogs and less than 10 percent of them are feed-
ing cattle.

Almost all of our fertilizer is custom applied and many of the
chemicals we sell are applied with the fertilizer. Our gross sales for
1995 were over $1.7 million and were somewhat less than in past
years. I would say that Davy’s & Jim’s is small to typical of the
independent, full-service ag business in Iowa.

We started in business—when we started in business there were
little regulations from Federal or State governments. Today, how-
ever, it is a different story. We are required to comply with EPA,
OSHA, DOT, Iowa Department of Agriculture and Land Steward-
ship, the U.S. Department of Agriculture, Food and Drug Adminis-
tration. As we speak, Tier II forms are being filed with the State.
This form lists all the chemicals we have stored in our warehouse,
including the determination of their physical and health hazards if
they are involved in a fire or a spill. An emergency action plan is
required to determine how chemical fires or incidents at our facility
would be handled. All of this needs to be updated and filed annu-
ally with the local fire department, the local Emergency Service
Planning Committee and the State.

The EPA regulates repackaging of bulk pesticides. Annual re-
ports, maintenance and special equipment are all important in the
proper handling of bulk pesticides. Atrazine use restrictions require
careful monitoring of its use, both for our custom applied materials
and for farmer applications. The Worker Protection Standard in-
volves posting of warning signs in fields where certain pesticides
are used and the use of personal protective equipment when han-
dling pesticides. The point I want to make here is that not all regu-
lations are bad; however, they just take up a lot of time.

Training has become a major effort for small agribusinesses. We
must attend or provide training for employees to make them aware
of the hazards associated with pesticides and/or any other hazard-
ous materials they come in contact with while performing their job.
We have to teach them how to read material safety data sheets and


51

‘equired to determine how chemical fires or incidents at our facility would be
aandled. All of this needs to be updated and filed annually with the local fire
department, the Local Emergency ing Committee and the state.

The EPA regulates repackaging of bulk pesticides. Annual reports, maintenance
and special equipment are all important in the proper handling of bulk pesticides.
Atrazine use restrictions require careful monitoring of it's use, both for our custom
pplied materials and for farmer applications. The Worker Protection Standard
fro pouing of warning gon es een Foes eed ad
it when handling pesticides. The point I
bindrretet soyoieacermibar Annabel ruhd Seam eerie et Ot
time.

Training has become « major effort for small agribusinestes We must attend or
provide training for employees to make them aware of the hazards associated with
Pesticides and/or any other hazardous substance they come in contact with while
performing their fob. We have to teach them how to read material safety data
sheets (MSDS) and product labels. All hazardous substances have MSDSs and they
must be available for employee inspection and emergency use. We even must
maintain MSDSs for a number of years. Two hours of continuing education are
required for commercial applicators each year or they must retest. Anhydrous
ammonia safety training is required annually for everyone who works with
ammonia. The DOT t for drug and alcohol testing of commercial

hicle drivers requires that we train them on the effects of drugs and alcohol. My
point again is not that the training is bad it just takes so much time and so much
money to complete it.

The DOT requires our drivers to have commercial drivers licenses and to inspect
vehicles before use every day in addition to an annual inspection of our vehicles.
We must have physicals for some of our drivers, all our CDL holders must be in a
drug and alcoho] random testing program, and we must provide shipping
documents and hazardous materials placards for almost all the pesticides we sell.
All of this takes time and money.

Our most costly regulation stil] is ahead of us. 1am talking about secondary
containment for our fertilizer storage. We have already complied with of the
law and have containment for a rinse pad and load out at a cost of over

The law requires licensed engineers to prepare the p! lane and eich construction the
total contathment system completed will cost approximately §100,000,00.

With our feed business I have to comply with FDA regulations requsing dru
inventories and usage information. G in warehousing requires ¢ considerable
amount of paper werk. ‘We must have ecale eenses, annual inspections on our
feed delivery trucks, and feed assays. I have not even mentioned workmen's comp
regulations, waste water management, unemployment laws, licenses, and all forms
co” xes and permits.


80

parently, they wrote their own authority in their regulations to
come in because they do not by statute have authority to come in
and talk about safety issues. That is OSHA.

Mr. VALENTINE. Even if you believe—you know, if you accept the
legal proposition that somehow they have authority to do this, as
a matter of public policy going forward, they need to be stopped
from doing it. They need to focus on what they were charged to do,
which is to look after the environment of this country, not the safe-
ty issues.

Mr. McINtosH. Mr. Latham, I will share with you the shared
frustration in I think a lot—well, definitely a majority of the Mem-
bers in both the Senate and the House felt that it was for that type
of attitude that we needed to make a reduction in their funding.
That they were going beyond their bounds and not actually suc-
cessfully protecting the environment.

Mr. VALENTINE. Mr. Chairman, let me make one comment. I
think Congressman Latham is absolutely right, the much more typ-
ical victim is a company like the one—the gentleman’s company to
my left here. No, they do not have lawyers on staff to deal with
this sort of thing. They are completely—they are victims and they
have little way to fight back. Now, I think what the Terra experi-
ence shows, even if you are a $2.3 billion company that has a law
department and lots of resources and knows the telephone number
to the Senator Grassleys and the Congressman Lathams, even
those kinds of companies can be victimized by an agency like U.S.

Mr. McINTosn. If you are stalled on your ability to recover from
this and once again begin manufacturing either at that site or an
alternative site, is it not also your workers who end up suffering
if you have difficulty as a company getting back to business and
making sure that safety is fully taken care of?

Mr. VALENTINE. Our workers have suffered an awful lot. We are
on the verge—well, we are in production in part of the plant and
we expect to have the rest of it in production in the next couple
of months. But the last year and a half has been terribly hard on
them, and a lot of this regulatory business with OSHA and EPA
has not made it any easier for them.

Mr. MCINTOSH. Could you have been up and running sooner if
you would have only had to work with OSHA on the safety con-
cerns?

Mr. VALENTINE. I cannot say it slowed down our rebuild, but it
certainly made Terra’s life much harder in many ways.

Mr. LATHAM. How many of your employees were able to keep
working after the explosion? How many did you keep employed?

Mr. VALENTINE. We kept everybody on the payroll. We were out
of operation for a whole year. We kept the entire work force on the
payroll. We have a little over 100 employed at Port Neal. But most
of them are now back at work on the job. There are some who just
are not in the position to do that yet and they are on disability.

Mr. LatHam. I think the chairman of the committee should be
aware of the fact that even though there was nothing being pro-
duced out there, as far as corporate citizens here in the community,
along with doing a tremendous amount for the families that were
affected in this tragedy, that they did employ all of their employees


142

that it is a matter of rank. It is not a matter of rank. It is a matter
of qualifications. As a matter of fact, the incident commander has
to go through some intense schooling in order to become an inci-
dent commander in a hazardous material release situation. it is
two different things. They have to be approached differently. A
member of the city council, for example, could not come to an inci-
dent like that and give Mr. Hamilton orders if the member of the
city council was not qualified to be an incident commander on an
incident, or neither could the mayor or neither could anybody else.
There seems to be an internal conflict within the fire department
of incident command. The standards are very clear on it. The
standards say that incident command will be set up before an inci-
dent takes place, not after or not during an incident. And this is
the communication process that the Disaster Services community
and that the fire departments have to have before these incidents,
and it is very clear. The reason I know this is, I teach those
courses. That is what I do. I teach emergency response at the
awareness level, at the operations level, at the technician level and
I know the subject matter fairly well. And it is important to estab-
lish that incident command before the incident takes place so that
the left hand knows what the right hand is doing and if the fire
department decides to leave that there is an incident commander
there in charge of that situation. That is the way it works.

Duluth, MN, that is the way it is set up. You have got utility em-
ployees that are trained at Level III in incident command that take
over incident command from the fire department up there because
they know more about responding to a utility incident that the fire
department would know. Or sewer incident or something like that.

The lady that was up here before, I think did a very nice job of
saying take caution. Mr. McIntosh, I heard some of the stories. You
know, we talk about rhetoric and we talk about the tooth fairy inci-
dent and we talk about the hole in the bottom of the bucket inci-
dent, all these things. I agree, if those—I mean, if you find out the
whole story, I think you might change your mind on some of those,
on the bloodborne pathogen standard that OSHA may have. There
are some real—there was a lot of testimony on that and a real need
for those type of standards because we have people that have died
because they have been exposed and died horrible deaths.

In Indiana this summer, you had a construction worker that was
killed in an excavation in front of a Supreme Court judge’s house
out in the street this summer.

You have the city of Kokomo that had employees exposed to high
levels of hydrogen sulfide, and if it was not for IOSHA in the State
of Indiana, those employees would still be exposed today. They are
not. They went in and they did the proper air monitoring and they
found out there was an exposure problem there, and those employ-
ees were pulled back and there was some training done. Fortu-
nately, it was before there was an incident that took place or a fa-
tality.

I had some more remarks on some of the other issues. I have not
got time to do that. I do not want to take up all of the time. EPA
does have authority in States where public employees are not cov-
ered by OSHA. And for your information, there are 27 States in


135

need to take progressive steps toward eliminating the risk of these
hazardous. Firefighters and emergency medical responders can be
exposed during motor vehicle accidents in which blood and sharp
surfaces often present—are present, excuse me, by rescuing burn
victims and through the administration of emergency care.

Mr. McInTosH. Mr. Cougill, I hate to do this, but would you
mind summarizing the rest of your written testimony.

Mr. CouGiLL. I will try to.

Mr. McINTOSH. I want to make sure that we get to everybody.
We can put it all in the record for you.

Mr. CouGILL. Firefighters face the possibility of death and injury
every time they respond to an alarm where they provide emergency
assistance to the citizens of this country. While risk may be a part
of the profession, firefighters’ deaths and injuries should not be a
part of the job. Life threatening and health hazardous are numer-
ous for firefighters. The greatest effort should be made to eliminate
such hazards. Since the OSHA legislation was passed in 1970, the
IAFF has had 1383 of our members die in the fine of duty. Count-
less more firefighters have been killed without—would have been
killed without this legislation, and if OSHA requirements were
stronger and universally applied to firefighters, many of those fire-
fighters would be alive today. Any attempt at killing OSHA will
kill this Nation’s firefighters.

Thank you.

Mr. McInTosuH. Thank you very much. I appreciate all of you tes-
tifying. Let me ask you a couple of questions. Actually, Mr. Cougill,
I will start with you.

I think you made a very powerful statement on the hazards that
individuals who take up fire fighting subject themselves to and
take the risks and society owes you a real debt of gratitude for
being willing to do that. The question I would have is—and you in-
dicated you are very satisfied with OSHA and the record there and
want to see that continued. Are there ways that we can make sure
that those regulations are targeted very closely on reducing the
risks. You would not want, for example, the regulations in a manu-
facturing facility to be applied to your job or one in a mining facil-
ity because there would be different risks that you would want to
make sure they were applied to.

Let me say that I, in talking to some of the firefighters in my
district, have actually changed my mind about one OSHA rule, the
four-man rule that you may be familiar with. It appeared to me to
have the unintended consequence that—especially in a small
town—that if you only had three firefighters, you might not go in
an emergency. They said that is not what it is really all about. We
just want to make sure the standards are there that establish what
is safe for us when we do go in and we think that is four people
present. Two in and two out I think is the way they described it
to me. They were very compelling. In fact, I have changed my mind
on that particular regulation. So, I think there is a lot that can be
learned by this in making sure that we look at the purpose, that
it is tailored to achieve its objective. Some of the testimony you
heard earlier was the frustration that it did not seem to really nec-
essarily be aimed at safety in a particular setting on that.


13

Even considering the mind boggling number of rules, regulations and
orders handed down each year by congress and its regulators, I feel the
problem lies not so much in the rules, but in the rulers who implement
them. The Federal regulators have a bottomless pocket of dollars to
work with in the judicial system preventing the challenging of
regulations by small business.

The small business man of today must stay focused on his company’s
goals in order to survive in todays competitive climate. He has neither
the time, expertise or finances to understand the vast regulatory system
which today is held over his business. For him to survive, this system
must be changed.

In conclusion, America is a great and diverse society evolving from a
mix of that which is tried and true. Yet the single key ingredient lacking
from the recipe to make her the greatest ever, is common sense !

Thank you
Respectfully Submitted

Harold Higman Jr.


137

affect programs that are successful as we are trying to solve some
of the problems in that area. I know you think that we should
probably leave it exactly the way it is, but there is a chance it is
going to change. It would be helpful for me to know the good parts
of it that you have experienced.

Ms. RENFRO. If I may comment?

Mr. McINTOSH. Certainly.

Ms. RENFRO. Thank you. I would also ask you to exercise caution
when you look at the regulations, that you are not making deci-
sions based on fear being invoked with isolated, exaggerated sto-
ries. I am a parent of a 16-year-old. I am also here today as a rep-
resentative of an organization, volunteer organization called Chil-
dren First Advocates, a group of parents of students with disabil-
ities——

Mr. LATHAM. What was the name of it?

Ms. RENFRO. Children First Advocates.

Mr. LATHAM. Excuse me.

Ms. RENFRO. That advocate for the rights and responsibilities of
students and their families with special edueation, , my experi-
ence, personally and professionally, is long in this district and actu-
ally across the Nation, as I served on the Autism Society of Ameri-
ca’s board as education chair for 3 years as well. So, it is not just
isolated to Iowa. It is a nationwide problem, but it is not because
of school districts, in my opinion, being asked to perform heroic
tasks for the students. The incidences that Dr. Madison quoted, I
can speak personally in this district, are isolated. She could prob-
ably only tell you one story where there was a child with a one-
to-one aide and a one-to-one teacher. I can guarantee you that is
not the majority in this district.

She also spoke about needing to maximize benefits—when could
they decide about maximum benefits. Under IDEA, as I am sure
you know, it does not allow best or maximum. It only allows mini-
mal benefit. So a parent going in and asking for maximum is not
going to get it.

The other caution that I would ask you to exercise is that she
talked about the irony of how an IEP, an individual education pro-
gram, is individual. That is true. But it is individually funded. In
the State of Iowa, each student is weighted individually for fund-
ing, and that IEP is not decided by a parent who walks in and
makes grand demands. The parent is just one person on that team.
The majority of the team members are educators making the deci-
sion on what that individual student needs. So the hidden cost that
she spoke of, like needing to lower class size, I do not see happen-
ing in this district. In fact, the Sioux City Teacher Association, one
of their—during contract negotiations, one of their demands were
smaller class sizes. They are not getting it lowered because of stu-
dents with disabilities, in my experience.

And last, the ALJs that she spoke of that were sympathetic to
parents. Administrative law judges are appointed by the Director
of Education for the State of Towa, Most of them too are educators.
I have yet to see one be sympathetic to one side or the other. They
follow finding of fact and conclusion of law. What I think may have
being been ‘spoke to is, recently seven due processes against this
district were brought forth for the same reason, illegal expulsion


55

extra drama of the press conference up here in Sioux City. That is
what those other inspections were about.

The second form of regulatory abuse—Using a fundamental tech-
nique that insulates EPA from any kind of challenge either at the
time of the press conference or even at a later date such as right
now. How do they do that? Well, they do it by announcing at their
press conference that they are going to bring no enforcement action
against Terra for anything. Now, do not consider that a gift be-
cause if they had, they knew that they could be blown out of court
on what in a criminal context would be called double jeopardy, i.e.,
OSHA, the real safety agency, had already fully litigated this issue
and basically the U.S. Government cannot come at you twice on the
same subject matter. So what they did by not having an enforce-
ment action and not giving Terra a means to challenge anything
in this report and in these conclusions that they were sharing with
the Sioux City media in their press conference is, they were free
to do a hit and run. They could announce conclusions, not defend
them and have their cake and eat it too.

Now, it so happened that we strongly disagreed with their con-
clusions. I will not bore you with details, other than to say that we
have got pieces of metal that eminent scientists, metallurgists and
forensic engineers will tell you shows exactly how our plant ex-
ploded. EPA does not want to look at those pieces of metal. We
were forced—to have any kind of redress from EPA, we were forced
to issue a public challenge a week ago through the local media
where we wrote a letter to Carol Browner, the head of EPA, chal-
lenging EPA to have their experts and our experts meet and then
share it with the media. Let the chips fall where they may. Say
whatever EPA’s experts want. They have declined—thus far de-
clined to respond to that challenge of a week ago.

The third and last element of my regulatory abuse point is im-
proper interference in a private dispute. It is no secret that Terra
is locked in some very intense litigation with a company we believe
that negligently designed the piece of equipment that I referred to.
That company’s name is Mississippi Chemical. Now there is no
question that EPA was fully aware of this litigation. Nonetheless,
at their press conference the other week, they acknowledged pub-
licly that, No. 1, they declined at any time to talk to Terra’s experts
about what happened out at Port Neal. But the second part of their
admission at this press conference—and this is the amazing one—
was that they admitted publicly that they made Mississippi Chemi-
cal one of the consultants for their analysis. So what you had was
a case of the Government choosing up sides in a private dispute.
It was no coincidence that after the press conference ended by EPA
that Mississippi Chemical promptly issued a press release con-
gratulating itself on being vindicated by EPA. This is not with-
standing the fact that a couple of weeks ago they paid the incred-
ible sum of $18 million to our employees who brought suit on the
same legal theory that Terra was suing Mississippi Chemical on.

Where does all of this lead us? Terra has some specific proposals
to deal with this double teaming by EPA on safety issues and also
the due process concerns that I have mentioned. No. 1, Congress
should stop EPA from doing safety inspections. They are not really


2

nure—and she had quite a large pork-producing facility—she had
to plow it in because they were worried about the runoff. Now, Kay
testified she did not care which rule she followed, but she realized
no matter what she did, she would be violating one of the two
agencies’ regulations. She did confide that her neighbors much pre-
ferred that she plow the manure in.

That type of confusion caused by Federal regulations is but one
example of many where average citizens are trying to do their best,
trying to protect the environment, protect health and safety, but
the morass of conflicting and confusing and often burdensome regu-
lations make it nearly impossible for them to do a good job and yet
comply with all of those regulations.

s I say, we are delighted to be here today in Iowa to hear this.
This is the first of two hearings. Tomorrow, we will be over in Des
Moines for additional hearings. I want to take a moment to thank
my colleague, Tom Latham, who is one of the stars in our freshman
class. Tom and I were talking about the problems with regulations
and he invited us to come out here and have a hearing in his dis-
trict. He said, I hear a lot of the same things, David, and you
should hear firsthand some of the experiences we have in Iowa. So,
if I might, I am going to ask unanimous consent that Tom be able
to join our committee today.

We have one more member of the committee who is going to be
here and join us. It is Representative Gil Gutknecht from Min-
nesota. He is driving down today and is apparently a little bit de-
layed. So we will have him join us as soon as he arrives here.

Tom, do you have any opening statement?

Mr. LaTHam. Yes. I want to thank you, Congressman McIntosh
for bringing your subcommittee to Sioux City to the Fifth Congres-
sional District. This is a subject that is near and dear to my heart.

One of the major reasons that I ran for Congress, as a small
business person, was because of some of the regulations that have
hindered growth and job opportunities in small business. We had
a case—we are 2 miles outside of a town of 168 people and we had
to spend about 80 hours and about $12,000 trying to determine
how much dust blew out of a wagon when you unloaded soybeans,
even though that dust blew right back into the field that it came
from. And this wagon, supposedly, had to be unloading 24 hours a
day, 365 days a year. We have got to inject some common sense
into the whole regulatory system. When we look at business today
that pays about $500 billion to the Federal Treasury in taxes but
spends about $650 billion a year complying with regulations, I
think it has gone out of control in many areas. We all understand
the need for regulations, for common-sense regulations. But, I
think we all believe that things have gone too far and we have to
swing the pendulum back.

I just want to thank you for bringing the committee here and
look forward—I think in addition to Gil Gutknecht from Minnesota,
I understand Bob Dornan is also going to be in later on. That will
liven things up, too, when Bob is here.

Mr. McINTOSH. That is right.

Mr. LATHAM. I want to thank you for being here.

Mr. McINTOSH. Thank you very much, Tom. Thank you and your
staff for helping us set this up.


72

Mr. Marr. Thank you.

Good afternoon. My name is Ron Marr and I appreciate this op-
portunity to be here on behalf of the Petroleum Marketers of Iowa
and the Petroleum Marketers Association of America. Our mem-
bers comprise about—we have about 1,500 members in the Petro-
leum Marketers of Iowa. They are independent petroleum market-
ers. They are not major oil. They are probably major oil’s best cus-
tomers. Our national association represents about 11,000 petro-
leum marketers nationwide. Nearly all these businesses rep-
resented by our two associations are small businesses using SBA
guidelines.

Because many of the marketers I represent face regulatory ex-
cesses every day, I would like to present you two of our most trou-
bling issues in regard to over-regulation. Our industry, like the two
to the right of me, face the same bureaucratic nightmares. I would
like to focus on two, one that is happening today and one that has
been going on for a decade. I would also like to commend Congress-
man Latham for your efforts in Iowa to help propel the regulatory
reform agenda forward.

The first issue which I would like to discuss is the issue of the
U.S. Department of Transportation’s regulation for yearly testing of
small cargo tanks. We commonly call them in our industry tank
wagons. These tank wagons are used primarily in rural, low popu-
lation regions of the country and until September 1995 these small
tanks were exempt from the Federal DOT testing requirements. At
that time when the regulations first came—were promulgated, the
Petroleum Marketers of Iowa and the Petroleum Marketers of
America submitted comments on this issue immediately before they
were implemented and subsequent to that, the PMAA in conjunc-
tion with our association sent RSPA, an agency of DOT, an applica-
tion for exemption to illustrate why compliance with these new reg-
ulations would be especially difficult for petroleum marketers na-
tionwide.

Although that application for exemption was filed in July 1995,
we have yet to hear any response from the DOT, and that is after
eight congressional inquiries to the DOT on that matter of where
the petition stands. DOT went ahead and implemented the regula-
tion in September 1995, and yet has the audacity to disregard a le-
gitimate petition for exemption based on good argument and a
precedent. But, of course, the bottom line is our marketers must
now comply with these new rules even though no action has been
taken by the U.S. DOT.

I would like to give you a little bit of an average scenario of what
happens to a member in the country with regard to these new reg-
ulations. The DOT requires marketers to have their tank wagons
inspected yearly for leaks. That is a little bit like you could not tell
if a glass of water was not already leaking on the ground. In the
State of Iowa, we are aware of only four or five licensed testing fa-
cilities that can perform that test. And if a marketer goes to a test-
ing facility in Iowa, he has probably got an average drive of about
150 miles. That takes the tank wagon out of commission for at
least a day. In many cases, the marketer would have to spend the
night or put an employee up for overnight expenses.


Pi

WRITTEN TESTIMONY
COMMITTEE
FEBRUARY 8, 1996

SUBJECT: OVERREGULATION OF THE BANKING INDUSTRY.
GIVEN BY: ELLEN PRESCOTT

VICE PRESIDENT & GENERAL AUDITOR
‘SECURITY NATIONAL BANK OF SIOUX CITY IOWA
" MORTOAGE LENDING

MORTGAGE LENDING HAS BECOME IMPORTANT TO THE AMERICAN CONSUMER:
BECAUSE OF THE TAX ADVANTAGES. IT INCLUDES SUCH PRODUCTS AS HOME
PURCHASES, SECOND MORTGAGES, AND OPEN END HOME EQUITY LINES WHICH
COULD BE FIXED OR VARIABLE RATE. THE DISCLOSURE REQUIREMENTS ARE
DIFFERENT FOR EACH MORTGAGE LOAN PRODUCT. FOR EXAMPLE, ON A FIXED RATE

MARKET FORCE |
RECEIVE A COPY OF 81X DOCUMENTS AT APPLICATION AND 21 DOCUMENTS AT
CLOSING. THIS ADDS UP TO 49 PIECES OF PAPER FOR A SINGLE BORROWER FOR
EACH HOME PURCHASE OR REFINANCED LOAN. THE VOLUME OF THESE
DISCLOSURES TENDS TO HIDE THE IMPORTANT FACTS AND DISCOURAGES
CONSUMERS FROM READING ANY OF THEM. SOME SPECIFIC EXAMPLES OF OVER:
DISCLOSURE AND OVER BURDENSOME RULES ARE AS FOLLOWS:

REGULATION Z_(12 CFR 226)

SECTIONS 12 CFR 228.5(dX12)(xi) ANO 12 CFR 226.18(b)(2){vili) OF REGULATION Z
REQUIRE A HISTORICAL EXAMPLE OF RATE AND PAYMENT CHANGES BASED ON INDEX
VALUES ron Ck MOST RECENT 15 YEARS FOR VARIABLE RATE OPEN END AND

cl MORTGAGE ‘THE INDEXES MUST 8E UPDATED EACH YEAR WHICH
MEANS PROGRAMMING TIME AND THROWING ‘OUT OLD DISCLOSURES AND
PRINTING ONES, INFORMATION IS NOT

THE LAST 15 YEARS DO NOT IN ANY WAY PREDICT FUTURE MOVEMENT ESPECIALLY

WHEN RATES 16 YEARS AGO WERE 9 OR 10 PERCENT HIGHER THAN TODAY'S MARKET.

AS PART OF THESE SAME DISCLOSURES BANKS ARE ALREADY SHOWING THE

MAXIMUM RATE AND PAYMENT AMOUNT FOR A310,000 LOW ORIGINATED ATA
bryos

‘THIS LOAN PRODUCT 15 BEST FOR THEM. ABEUMING THE WORST CASE CASE SCENARIO.

oN ee eID A ASN TRANSACTION Y INSTITUTIONS TO.
GIVE CONSUMERS THE RIGHT TO RESCIND A LOAN TRANSACTION WHERE A SECURITY

CHARGE THE CONSUMER
INTEREST. CONSUMERS ARE NOT ALLOWED TO WAIVE THEIR RIGHT TO RESCIND:
EXCEPT IN A BONA FIDE PERSONAL FINANCIAL EMERGENCY. THERE ARG VERY FEW


10

PTerrare: Indie tc, Peston Cer eave Orie

oa her ero

January 29, 1996

BY TELECOPIER AND FIRSTCLASS MAIL
Ms. Carol Browner Mr, Dennis Grams
Administrator Regional Administrator, Region 7
United States Environmental United States Environmental

Protection Agency . Protection Agency
401 M Street, S.W. 726 Minnesota Avenue
Washington, DC 20460 Kaneas City, Kansas 66101

Dear Ms. Browner and Mr. Grams:

On January 23rd your agency Issued a report, which | believe was the first of Its kind by
EPA, about the cause of the explosion at Terra’s nitrogen fertilizer plant In Port Neal, lowa.
itis @ report about an event that occurred almost fourteen months ago. Given EPA's lack
of authority for such a foray Into safety issues, tt cannot be the basis of an enforcement
action. Absent a directly related enforcement ection, there are no procedures available to
Terra to challenge the report and make EPA prove its findings and conclusions In = public
forum, At the end of this letter, | have a proposal, which If you believe in the accuracy of
EPA's report and EPA's abllity to defend it, you should be more than willing to accept.

What Is perhaps most shocking about the report is the serious ethical talnt in its
Preparation. As you may know, Teira’s experts are convinced that the cause of the
cxmiesion was the negigent design ofa plece of equipment caled & “sparger. This piece
of equipment was designed by Mississipp! Chemical Corporation (MCC) and it Is the
‘subject of substantial ongoing litigation between MCC and Terre. In his public comments
‘on January 23rd, EPA spokeaman Mark Thomas admitied that, while declining fo consult
with Terra's experts, one of the consultants for the report (although not named in the
report) Is MCC — the very company Terra has engaged in litigation. Ironically, MCC,
despite its role as an EPA congukant, has cast serious doubt on EPA's conclusion by
recently agreeing to pay $18 million to Terra employees injured in the explosion and the
familie of deceased employees to setie « sul brought against them (MCC) based on
‘erra’s findings.

In addkion to our substantive differences, there are some basic due process lesues to be

It was only through the work of Senator Grassley that Terra was ultimately able to be
present at EPA's press conference about Terra’s Port Neal explosion and to get an
dance copy of the EPA report (elpel only two hours before the press conference began).


146

medical care, such as the availability not only by access but eco-
nomic incentives to seek the non-traditional care. The one that
comes to mind most for us as chiropractors would be Medicare for
instance.

In my office right down the street—and incidentally, right now,
we are working with a management company to have a medical
doctor come into our office. For the exact same services, my office
is not reimbursed and their office is reimbursed. The things that
I do are at a certain fee schedule. The exact same thing is done
in the medical office and they are reimbursed at a much higher
scale. It really does not make a whole lot of sense to do that sort
of thing. I think that is the sort of thing that is being addressed
now by many health care analysts. I will be submitting today a
document produced by the Cato Institute of Washington, DC, that
says such things.

Another example that really has been difficult for many non-tra-
ditional health care providers is the establishment of the ERISA
plans which allow private industry to come in and set up laws that
will bypass State regulation, particularly State insurance equality
acts. I understand the concept behind it but it just—again, it is the
same kind of plan that makes difficult access and economic dis-
incentives for people who do not seek the traditional medical care.

Thank you.

Mr. McIntosu. Thank you. I appreciate that testimony. Let me
just note that when you hear from people on the other side of that
ERISA question, if we had to do 50 plans, we just could not deal.
with it. You have got those competing pressures on that.

Dr. SPRAGUE. Just like today.

Mr. McINTOSH. Yes, exactly.

The staff is urging me not to have a lot of questions. I do have
one though. Just so I understand the incident command structure,
is there a problem with the regulation in the way they specify the
command when it butts up against either a policy or an agreement
of the different firefighters that they will not take command in
somebody else’s jurisdictions? And is there a protocol for pre-
empting that? That seemed to be the issue where they were butting
up against each other.

Mr. VARNER. It goes deeper than that and maybe I will share
that with you. Yeah, this has to be planned ahead of time with
shared services. For example, my region in Ottumwa has the
southeast Iowa hazmat response team. Their area of responsibility
is seven counties. Now, they sit down with the local emergency
planning committee and they talk about if an incident happens in
Davis County, if an incident happens——

Mr. McINTOSH. So they plan out all of the contingencies.

Mr. VaRNER. Sure. Now, your volunteer fire departments are not
going to be qualified in most cases—probably all cases, to respond
to a chemical incident. First of all, they do not have the level of
training and they cannot afford it to be quite frank.

Second of all, they do not have the level of protection. When you
go into an incident like that, you have got to be at Level A, and
that is the Three Mile Island moon suits. And the two in and two
out there is very important and we teach only that.


63

Thereafter, Senator Grassley and Congressman Latham intervened with EPA on
Terra's behalf. While for several days EPA told Terra’s elected raprasentatives thet the
report was under an "embargo’ and therefore could not be shared with Terra, Senator
Grassley was ultimately able to obtain for Terra an advance copy (albeit only two hours
prlor to the press conference) and Terra was at the last minute admitted to the EPA
press conference.

Despite the best efforts of Senator Grassley and Congreseman Latham,
however, they were unable fo thwart entirely EPA's efforts to block meanirigful
response by Terra. Not only was the two hour lead time insufficient for Terra (or
anyone else) to fully digest a 100-plus page report, EPA also made it clear in other
‘ways that it did not encourage close scrutiny of its analysis. For example, at the 5:00
p.m. “public forum’ on January 23, 1996, EPA invited questions from the public at the
end of the Agency's presentation. When Terra officials started to ask questions, EPA
abruptly ended the forum and told Terra that it was not part of the “public.”

EPA'S INSPECTIONS Of OTHER TERRA PLANTS ONE DAY EARLIER

On January 22, 1996, the day before the EPA press conference and as a
prelude to the public release of its report, EPA attempted to do “safety” inspections at
two of Terra’s other plants outside of lowa. According to EPA, these were to be the first
such "safety’ inspections done by the agency (other than the Port Neal investigation
itsetf).


20

Mr. BaILey. Thank you, Congressman.

Mr. LatHaM. Did you expect me to object to that or something?
{Laughter.]

Mr. McInTosH. No. I knew you had a lot of common sense.
(Laughter.]

Mr. BaILey. After hearing Harold’s testimony, it reminded me of
a line comedians use, never follow animal acts or children. This is
not as tough as Harold’s was. My conversation here will deal pri-
marily with the EPA.

Companies can follow the letter of the law and be proved inno-
cent like Harold and the legal fees can far exceed any fines. Those
are hard to recoup. Also, if you dispose of waste classified as non-
hazardous by today’s standards in a landfill or under any approved
regulations today, you will still probably be paying legal fees in the
future to protect yourself against this landfill site when it does be-
come a Superfund site. You will be drawn into lawsuits because
you were forthright, because you registered as required by the law
today. You paid tariffs, disposal fees, did everything up front in-
stead of going in the back alley and dumping it in the shadows
somewhere. The people that are trying to do things right are really
the ones that are probably suffering the most today.

A direct case. The EPA completed a survey of soil and ground
water on April 12, 1990, at a site called the Des Moines Barrel and
Drum and they concluded because of various hazardous waste with
paint drums, lead batteries and so forth that the site was now con-
taminated highly and would be classified a Superfund site and
went into remedial action at the site officially on July 9, 1992. The
records show that there was 137,770 drums left at this site. Going
back, this report was April 12, 1990.

Six months after the EPA testing, one of our construction compa-
nies delivered 87 empty barrels to this Des Moines Barrel and
Drum site to dispose of containers that were used in the road con-
struction business around Des Moines. The majority of these drums
were just as clean as the day they were manufactured. The major-
ity of these drums had a silicone product inside the drum that was
actually inside a plastic liner in the barrel. When the silicone was
put into the joints of the new pavement, it would empty the drum
and you simply had a little plastic bag left that was disposed of.
A few of the other drums were white cure, which is a resin that
the manufacturer says is not hazardous. It is sprayed on new pave-
ment, kind of as protection for new pavement. It eventually wears
off with the traffic. These drums, as I said earlier, were disposed
of 6 months after the initial cleanup site report was issued by the
EPA. That has made no difference to date.

This file is just the attorney letters back and forth.

[Displays file.]

Mr. BAILEY. The company has paid $10,500 to a group that is
part of a larger contaminator group that is suing other people that
had record of receipt into this landfill site. We have also paid over
$8,700 in legal fees in-house just to try to bring this to a resolve.

Time/effort management, who knows. We had to bring in employ-
ees out of Des Moines that were at the drum site to ask them what
happened. Besides this $19,000, there is probably another $20 or
$30,000 in direct labor costs, not to mention management time.


37

area, there are a lot of similarities in income level to the entire
State of Iowa.

We all know that we need a fundamental change to our tax
structure. Perhaps we are going to get a shot at a flat tax this year.
I do not know where to squeeze it in with only 6 months of activity
and 13 appropriations bills to pass, given that we will take off, I
guess, some part of August and will adjourn around the first week
in October to have 1 month of campaigning. But maybe with a lit-
tle luck, we might get a shot at it. Then next year seriously con-
sider under our great chairman of the Ways and Means Committee,
Bill Archer, who is about the best tax expert I think in the city.
Even our Speaker would concede this. He replaced George Bush in
1970 in the Houston seat and Bush had been given a seat on Ways
and Means as a freshman, which was unheard of in those days,
and he did not even have a primary—or a general challenge on his
first go around. So Bush really got a 4-year run on Ways and
Means, lost to Lloyd Bentsen, who has now gone back to farming
in Texas. And 26 years ago, a very young man named Bill Archer
got that seat and for the last year he has been chairman of Ways
and Means, and he convinced me 3 years ago that the flat tax
would only be a resting spot—a plateau, he calls it—on the way to
a consumerism tax where the States would go back to our original
Federal system. They would collect the revenue and they would
send it to the central government and not have the central govern-
ment dangling grants back at the States as though it was wonder-
ful to return the States own taxpayers’ money to them. And by
doing it that way, a consumerism tax, we could totally shut down
the IRS, repeal the 16th amendment and return this country to a
true Federal system which it is not anymore.

Other systemic reforms do not always get the same kind of atten-
tion as big tax held defense issues. Even so, they are just as impor-
tant. For instance, something the chairman and I have worked
on—and the freshmen are great on it—is lobbying reform. It is a
huge issue affecting the very nature of how things get done in
Washington. I was very pleased to see during that first 1995 ses-
sion, that with your help, Mr. Chairman, my provision to prohibit
certain lobbying groups from receiving tax dollars finally made it
into law. Those of us who know how our government works know
the importance of that single small step.

Another reform which is yet to occur is a counterpart. Govern-
ment oversight and regulatory review are desperately needed in
the area of Federal grants. Thirty billion dollars every year is
poured into direct grants going to various entities and organiza-
tions, and yet, there is very little, if any, accountability in the sys-
tem. Mr. Chairman, you have been a leader in attempting to re-
form this problem. And while various procedural strategies arose
last year, I must say that I appreciate your support for my zero tol-
erance approach. This approach is very simple to understand. A
long-standing law has held that no tax dollars can be used to lobby
any level of government or influence any legislation. In other
words, take a group, XYZ, they get a grant of $100,000 to provide
Head Start in the community is prohibited from spending $1 of
that money on lobbying Congress. What is not widely known, and
certainly is not completely understood by most taxpayers, is that


57

STATEMENT BY TERRA INDUSTRIES INC. IN SUPPORT OF THE NEED FOR
FEDERAL REGULATORY REFORM

THE UNITED STATES OF AMERICA
HOUSE OF REPRESENTATIVES
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL
RESOURCES, AND REGULATORY AFFAIRS OF THE COMMITTEE ON
GOVERNMENT REFORM AND OVERSIGHT

‘SIOUX CITY, IOWA
FEBRUARY 8, 1996

HEARINGS ON FEDERAL REGULATORY REFORM

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

Terra Is pleased to present testimony on federal regulatory reform. We thank
the Chairman, the. Subcommittee, and particularly Congressman Latham for giving us
this opportunity.

My name is George Valentine and | am senior vice president, general counsel,
and corporate secretary of Terra Industries Inc. For those unfamiliar with Terra, it is
‘one of our country's largest producers and marketers of fertilizer, agricuttural
chemicals, seed, and related products for the Americen farmer. Terra also produces
nitrogen and methanol products for American industry.

(As many of you know, about 14 months ago my company experienced the worst
disaster in its history — namely, a massive explosion at our fertilizer plant at Port Neal,
lowa. This tragedy touched the lives of ell of our employees and many of those who

1


23 -

Majority of the barrels originally contained silicone used for
joint sealing on concrete paving. The silicone product was in
a plastic bag lining the barrel thereby leaving a clean barrel
when the contents of the barrel were used in the process of
the paving project. The remaining barrels left at the site by
the Jensen Company where empty white pigment cure barrel: A
spokesman for the company manufacturing the white cure advised
that the resin is not a hazardous substance. It is merely a
plastic that is used as a fine spray over the concrete and it
eventually wears off with traffic.

The reality is the Irving P. Jensen Company did not contribute
in any way to the contaminates found at this site. The fact
that the barrels delivered were listed as empty on all records
and they were delivered after the EPA report on the site has
meant very little.

To date, the Irving F. Jensen Co. has paid $8711.75 in
attorney fees and $10,500 to the Scott Avenue Site Group for
the buyout agreement and covenant not to si The $19,211.75
expense to date does not include staff and management cost
involved for record searching, meetings with legal
representation, company field personnel, phone calls.

2) EPA Storm Water Runoff Regulations; the next step being
proposed is regulation of rain water from our streets and
highways. These proposed regulations will demand tremendous
amounts of administrative time from our Cities, Counties, and
States. Ultimately, the tax payer will be paying for
bureaucracy they had never envisioned, for protection they had
no desire to have. .

‘A road contractor now has a staff of personnel to secure
land, water, and air permits required to construct or repair
roads and highways under government contract for the tax
payer. The same effort is required whether the construction
is for one mile or 100 miles of pavement. This expense is in
the millions of dollars per state.

3) Spill Prevention. The USCG requires a spill plan one way,
the EPA another, OSHA is now getting in the act in regards to
thie, the DOT wante another way & individual states want
another way.

We have ‘reached a point whereby it now takes one (1)
expert staff member per division to interpret all of the
dindividual laws in each state and for each federal regulatory
agency.


144

dim Marshall, was he—I think he was not here.

Mr. Jerome Seeks.

Mr. SKEERS. Skeers.

Mr. McINTOSH. Skeers. I am sorry. Welcome.

Mr. SKEERS. Chairman McIntosh and distinguished committee
members, thank you for this opportunity to address this panel. My
name is Jerry Skeers and I am a labor safety officer with the De-
partment of Employment Services in the Division of Labor. Yes,
what that means is, I am in OSHA enforcement in Iowa.

I am especially appreciative of your concern for regulatory retal-
iation that you prefaced this hearing with against smal] busi-
nesses. Not because I believe it is very likely—I would like to as-
sure you that it is not something that our agency would involve
themselves in—but because on a daily basis, I talk with people who
believe they will be retaliated against. This is not always an em-
ployer. Sometimes it is another small businessman who they be-
lieve will retaliate against them. The problem is, if you are not an
employee and you become aware of an unsafe situation, there are
limited things that our agency is allowed to do by law. We cannot
take anonymous complaints and go respond with an investigation.

I would like to tell two stories, both about small business people.
I am sorry Congressman Dornan is not here because the first one
concerns a restauranteur that I talked to yesterday. She has a
small restaurant in a small town in Iowa. Some of her customers
who came to lunch the day she called me were talking while they
were eating of the hazards they faced at a work site. The boss was
there with them, he went to lunch with them because he was ex-
posed to the hazards with them too. This concerned the potential
of a fall into a manure pit because of the leaning walls on that pit
and the planks that were in use. I had quite a long conversation
with the Tady and she was calling because the contractor who was
engaged for the job was afraid to approach the much larger cor-

orate employer and try to do something because he thought that

is small business would suffer by losing that job. The employees
were all afraid because they felt that they would cost their em-
ployer the job.

She borrowed the fax machine of another small employer in that
town. They shared their resources. I faxed them a complaint form.
She has filed a complaint form with our agency concerning the
problem. We will have to take other action other than an investiga-
tion of that situation because it is not a formal complaint. This is
a technical provision of the law.

The other story concerns actually three small businesses. Two
small businesses share one building owned by a landlord. During
the cold weather we had here last week—which I understand went
to Minnesota, too—the employer—the owner of the business in one
side of the building called me. He was very concerned because his
employees were being exposed to high levels of carbon monoxide
and they had called the gas company out to try to figure out if that
was in fact the case because the employees were suffering head-
aches, nausea and the gas company confrmed that they were suf-
fering from carbon monoxide poisoning. The strange thing for this
employer was that he had no carbon monoxide producing equip-
ment except a furnace which was running full blast, which was


90

need to be protected, they should be and need to be protected. But
if they abuse that privilege there should be some recourse. There
should be something that that employee should sustain some type
of damage for that type of practice. We should encourage mutual
problem-solving and pursue arbitration in differences rather than
the legal system. We do not have—and I think it was very clear
in the last panel that you had an opportunity—that I had an oppor-
tunity to listen to, that the majority of the people do not have the
financial resources and the wherewithal to be able to fight or to
litigate discrepancies or differences. That came out very clearly
when several members of the Fire Service testified before the Ad-
ministrative Rules Committee here in the State before the State
legislature here a few weeks ago.

The gentleman that really touched my heart strings and prob-
ably would everyone else was a volunteer firefighter representing
the Iowa Firemens Association, which is a volunteer firefighter
group. I think he very clearly explained to the committee, they do
not have the resources. They are not in compliance. They will
admit that they are not in compliance. They cannot come into com-
pliance because they do not have the resources to be able to do so
and they are absolutely terrified of OSHA. They are absolutely ter-
rified of what OSHA can do to them if in fact one of their employ-
ees gets—or one of their volunteer fire fighters gets hurt or injured
or they are involved in some type of an emergency scenario or situ-
ation like we are. I think that pretty much characterizes or sum-
marizes my frustration in this whole process.

Having been a public official myself for this many years, a gov-
ernment agent, I see myself as an ambassador. I do not feel like
I was treated like an ambassador. I made comments in the paper,
so it is public record. I felt like, you know, I understand now what.
Gestapo tactics mean and some of the other things. You heard
storm troopers before. If I treated my constituency, the people that
I represent, the way that I was treated, I would not be in this job
or this position very long, believe me. I think it is appalling that
we have Federal representatives or agents of our government that
treat people the way we were treated. I just think that is abso-
lutely not acceptable to me and it should not be acceptable to any
of us as citizens of this country.

Mr. McINTOSH. Thank you very much, Mr. Hamilton. That was
very powerful testimony. I appreciate you coming forward and
sharing that with us.

Let us continue on with the panel and then we will get to some
questions. Dr. Madison, I appreciate you coming today. I under-
stand you are going to be talking to us about IDEA. I serve on the
Education Committee as well, so I am doubly interested in this.
Thank you for coming.

Ms. Mapison. Thank you for giving me the opportunity to speak
to you today. Today, as you said, I am going to address concerns
that we in the Sioux City Community School District have about
the Individuals with Disabilities in Education Act, commonly
known as IDEA.

It is ironic that each disabled student receives services through
an individualized educational plan, but there is nothing individual
about the funding of those individual plans. In one case in Sioux


44

our nation, and find our ultimate purpose in increasing the quality of life
for the fundamental social, moral, and, yes, economic foundation of all
western civilization: the traditional family.

Mr. Chairman, thank you for this astasmetges opportunity to come to
this great State of Iowa and participate in thi; important hearing. Again, I
am very impressed with your spirit ise of the American
people. God bless you in your continued efforts.


85

who showed up. I thought they all were going to be there, or most.
of them. And the hostility of all those groups toward the Repub-
lican party was peculiar. They were shocked at my respect for the
environment, my involvement with animal rights, amendments
that I had passed years ago as a freshman to protect and save the
peregrine falcon. I told them about one of my grown daughter’s ac-
tivities with some animal welfare groups. Then, I said somethin,
similar to what you said about—or what Gil said about we al
share the planet. I just had a 10th grandchild born within the
week and I said I want clean air for Molly Dornan. I want clean
water for her. We all do.

Well, I was immediately followed by Carol Browner, head of
EPA, and the next day was Al Gore, the Vice President. He got na-
tional press coverage the next day, she got some the night before.
I was grateful they did not beat up on me as the only Republican
who dared to come into the lion’s den. And one of the tragedies
was—and I am not being partisan in saying this. It was the level
or rhetoric by Carol Browner, head of the EPA. It was more like
a Saturday Night Live skit of what our party was trying to do to
the environment, to poison our grandchildren. I am a classmate of
Al Gore’s from 1976, an interesting class. Bob Walker in our Con-
gress now is retiring. But it is Dan Quayle and Al Gore and Leon
Panetta. I have always gotten along with Al Gore as a classmate,
but his rhetoric the next day was also inflammatory and divisive
in the extreme. That is why these hearings will have a difficult
time in the dominant media trying to do what is fair and why these
hearings are so important. We have got to hear from good Amer-
ican citizens under oath giving straight truth so that we can cut
our way through this inflammatory rhetoric that the dominant
media, without ascribing any evil motives to them, just is, you
know, screaming fire. It sells newspapers and it sells soap on TV.

But we are all protective of the environment and I do not know
how my party is going to fight back and re-establish what I laid
a claim to that night and that was Teddy Roosevelt’s conser-
vationism. We are not too far from South Dakota where he is up
there as one of the four Presidents on Mount Rushmore. The root
word of conservative is to conserve and that is where you get the
word conservationist. So we have really got our work cut out of us
to try and have hearings like this, seek the truth, write good law
that do just what all of you want; protect the water; protect the
land; protect the air, of course, that we breathe every day and do
it without destroying jobs and do it in a fair way.

Mr. McINTOSH. Thank you.

Thank you all for joining us today. We look forward to following
up with you. We appreciate that.

Let us now turn to our third panel of this hearing. These are la-
dies and gentlemen who have been working in the public sector. If
I could have Mr. Bob Hamilton who is the chief of the Sioux City
Fire Department; Dr. Linda Madison, assistant superintendent at
the Sioux City Community School District and Stephen Brevig who
is general manager of the Northwest Iowa Power Cooperative; also,
Don Meisner, director of Siouxland Interstate Metro Planning
Council. Thank you all for joining me.

If I could ask you all to please rise.


62

Finally, on January 17, 1896, EPA attomeys contacted Terra’s outside counsel,
Robert C, Gombar, to say that EPA's report would be released in two successive
“public information forums,” one at 5:00 p.m, and @ second at 7:00 p.m., at the Sioux.
City Convention Center on January 23, 1996 ~ almost 44 months after the accident and
8 months after OSHA had issued its findings and conclusions on the same Issues. In.
the conversation with Terra’s counsel, EPA steadfastly refused to share the contents of
its report in sdvance of the two forums. EPA also did not disclose ta Terra the agency's
plans for a third, earlier press conferenca to announce its findings, which was
scheduled to be held 3:00 p.m. on the same day, January 23, 1996, prior to the first of
the "public forums.” (The scheduling of the press conference for 3:00 p.m. provided the
press with enough time to prepare for the 6:00 p.m. local television news; by delaying
the ‘public forum” in which Terra was to have its first chance to see the report until §:00
p.m., EPA was effectively blunting Terra’s ability to reply publicly to the EPA
allegations.)

On January 22, 1996, through a local reporter, Terra learned of the 3:00 p.m.
press conferenca and Terra's counsel, Mr. Gombar, contacted EPA to confirm the
information. Ms. Anne Rauch, an EPA attorney, admitted that @ press conference was,
indeed, planned for 3:00 p.m. but that Terra would be barred from attendance. Mr.
Gombar’s request for an advance copy of the report — so Terra would at least be in a
position to respond to press Inquiries — also was denied.


86

(Witnesses sworn.]

Mr. McINTOSH. Thank you. Let the record show that each of the
witnesses answered in the affirmative.

Our first witness on this panel is Mr. Bob Hamilton with the
Sioux City Fire Department. I appreciate you coming. I understand
part of what you will be telling us today is a followup on the inci-
dent we just heard about with the explosion.

Mr. Hamilton.

STATEMENTS OF BOB HAMILTON, SIOUX CITY FIRE DEPART-
MENT; DR. LINDA MADISON, SIOUX CITY COMMUNITY
SCHOOL DISTRICT; STEPHEN BREVIG, NORTHWEST IOWA
POWER COOPERATIVE; AND DON MEISNER, SIOUXLAND
INTERSTATE METRO PLANNING COUNCIL

Mr. HAMILTON. Thank you, Mr. Chairman.

First and foremost, let me preface my statement by echoing com-
ment from the Chair and the distinguished Members of Congress
who are here, and that being that I also am a strong supporter of
health and safety issues for workers and also, I am extremely con-
cerned about the environment. It is one of the reasons that I en-
tered the profession that I did, into the fire service. I believe very
much in human issues and so on and so forth.

I have had two experiences with OSHA. I have outlined those for
you in some written statements I provided to the committee, but
I would just like to briefly discuss those with you here this after-
noon.

The first I will describe as a friendly intervention. What hap-
pened was, we had a situation where——

Mr. McINTOsH. Just so you will know what is happening, we
have not distributed copies of your testimony. Could we make those
available to each of the committee members? Excuse me, Mr. Ham-
ilton.

Mr. HaMILTON. Oh, that is OK.

The Sioux City Fire Department is the only fire department in
the northwest quadrant in the State of Iowa that has a hazardous
material team, an active, on duty, full-time, paid, active hazardous
material team that does respond to emergencies that threaten ei-
ther the public safety or the environment. We respond within the
jurisdictional limitations of the city of Sioux City. However, we will
respond to mutual aid requests, as is a prevalent practice in the
fire service to mutual aid calls primarily rural squads. We have
done that for sometime as well.

The first incident that we had an opportunity—that I had a per-
sonal opportunity to have some intervention with an OSHA inves-
tigator was a result of our hazardous material team being called
to a hazardous material situation at a local meat processing plant
where a small amount of ammonia had been released and some of
the workers there had been injured. As a matter of fact, we had
to go in and rescue actually one of the workers out of there. I am
not sure how the investigation by OSHA was initiated, whether it
came through an employee complaint, whether it is the standard
practice from OSHA to investigate worker injuries in these types
of incidents. But in the broader scope, we were on scene. Our haz-


121

‘Quality Dairy Foods & Ice Cream

Good afternoon.

My name is Thomas Pittman. I am the Dairy Procurement Manager for Wells’ Dairy, Inc. I have
been employed by Wells” Dairy for 2 years in this capacity. I also worked as an auditor for the
United States Department of Agriculture in the Federal Milk Marketing Orders for 7 1/2 years.

‘The reason why I am here today it to let you know of the regulatory issues concerning the dairy
industry, Also, I would like to address the potential ramifications of additional regulation from
the proposed Farm Bill that is in the House of Representatives and the Senate. Because of my
work history, I am fully aware of current regulation problems and what the possible additional
regulations would mean

First, the current federal order regulations do not allow dairy producers and processors the
opportunity to set up pricing contracts. Current federal order regulations state that the dairy
producers must be paid at least the minimum price announced by the federal order. If the

minimum value is not paid, the processors are subject to fines and possibly a prison sentence.

To set up a pricing contract, the objective is to hit the average market or the announced price, in
this case, for the length of contract. Some months, the announced price will be higher than the
contract price, and some months the announced price will be lower than the contract price.
Currently, dairy processors would be required to make extra payments to the dairy producer when
the announced price is higher than the contract price. This is why processors have been reluctant
to set up a pricing contract

There are two main reasons why this is a concern. First, with a set price for a dairy processor
largest cost, it takes away alot of the price volatility in milk. If the price of milk is contracted for
the next twelve months, processors can have their prices set for that same period

Second reason, dairy producers are requesting a pricing contract for their operations. If a dairy
producer knows what his milk price will be for the next 12-24 months, he can go to his lender and
‘can show him the cash flow for his operation and can more easily obtain loans. Also, producers in
other farm commodities can lock in prices in advance if they so desire.

With the current dairy regulations that Wells” Dairy has to follow, we have to employ four extra
people to help prepare reports, handle the paperwork, and file our market reports, These four
people shufife a tremendous amount of paperwork in a one-month period. In summary, Wells’
Dairy would like to see less government regulation in the dairy industry.

WELLS’ DAIRY, INC. 1 Bue Bunny Drive +P. Bax 1310+ Lebtars, lowa 51031 + Phono: (712) 546-4000 « Fax (712) 546-1782

r


124

rural electric cooperatives, we borrow a lot of our funds through the
old REA, now the RUS, to finance our facilities. Revenues collected
from sale of existing loads is collateral and security to the U.S.
Government for these loans. If retail wheeling or open competition
comes in the electric industry, we stand a chance or a danger of
default if we lose our loads to competition or to cherry picking of
our best loads.

We also have a concern about energy efficiency. We all in the last
10 years have really done a lot in the area of energy efficiency. But
with open competition, we feel that these efforts will be severely
hampered in a competitive market.

We also have a problem with service reliability. If everyone is al-
lowed to use our transmission grid, our distribution lines and poles,
who will be responsible for servicing those lines and those poles
and who will get service first?

We also have the obligation to serve everyone, low income people,
farmers, the grain bins that are out there, the small water pump
loads, they are not profitable. Who is going to serve those loads in
a competitive environment?

The large industrial customers are pushing for retail wheeling.
They want to be able to negotiate with multiple utilities to obtain
the best deal for themselves. They say they need special treatment
in order to compete in a global economy. In some instances they
may be right; however, at whose expense are they getting the spe-
cial treatment? I say it is the small consumer.

So in conclusion, my recommendation would be to keep the pres-
sure on FERC to proceed very slowly, cautiously and in the long
range best interest of all consumers, not just the large consumers.
America is totally dependent on electricity. The wrong decision
today could affect our country’s future for many years to come.

Mr. McINTOSH. Thank you very much for joining us.

Our next panelist is Ms. Barb Renfro.

[The prepared statement of Mr. Streck follows:]


31

Mr. McINTOsH. Thank you very much. I appreciate that. There
is also the Banking Reform Act that is pending in the committee
that will deal with some of those but not all of those problems. I
appreciate hearing that, particularly the testimony making it very
real to the average person. I know there are a lot of regulations
that the banks have to deal with, but the mortgage is probably the
one where most people have the intersection with what you do.
Thank you for coming and giving that.

I have a couple of questions. First, let me introduce a couple of
our colleagues. One is Congressman Gil Gutknecht from Min-
nesota, who is here. Gil, welcome. Would you like to make any
opening remarks at this time?

Mr. GUTKNECHT. Well, the only thing I would say, Mr. Chair-
man, I am sorry I am a little late. It is great to be in Sioux City.
I am a native of Cedar Falls, IA but I must confess I have never
been to Sioux City before.

Mr. LATHAM. What? [Laughter.]

Mr. GUTKNECHT. We have been by it. I have flown through the
airport but I have never been downtown. It is great to be here. I
would also say that one of the greatest compliments I receive in
Washington is sometimes people mistake me for Congressman
Latham. ([Laughter.]

So, it is great to be here.

Mr. LaTHAM. You have my sympathy. [Laughter.]

Mr. GUTKNECHT. I think the testimony—and this is another issue
that I am interested in because I am also a real estate broker. I
mean, when you look at the mountains of paperwork and disclo-
sures that we now require, some at the Federal and some at the
State, it is amazing. This is excellent testimony. I am sorry that
Iam a little late.

h Mr. McINTosH. No problem. Welcome. I am glad you made it
ere.

Another of our colleagues is here with us today. We invited all
of the Presidential candidates and the one from the House of Rep-
resentatives who is running took us up on the offer to come and
make a statement about regulations. Bob, if you can let us finish
with this panel and then I would like to have you join us in making
statements.

Mr. Dornan. Sure. I was also a real estate broker at one time.
I just realized that is not in my bio or resume. So, hello, fellow real
estate brokers. [Laughter.]

Hello, folks. How are you doing?

Mr. McINTOSH. "Thank you for joining us today. I know you have
a busy schedule.

Mr. Dornan. I do.

Mr. MCINTOSH. Let me ask a couple of questions and turn it over
to my colleagues, if they have additional ones.

Mr. Calhoun, you mentioned the MSDS, or material safety data
sheets. I am familiar with those and some of the strange require-
ments that they have in that area, hearing examples of people who
tell me they have been fined for not having a material safety data
sheet for Dawn dishwashing liquid. They happened to have the one
for Joy but they bought Dawn that week and put it in their wash-
room and were fined for having the wrong one on file. So there are


7

out more examples of that, let me invite you to submit them to us
and we will also make sure they get into the record so that we can
have those looked at by the appropriate agencies in Washington.

Mr. Parte. Very good. Thank you.

Mr. McINTosH. Let us now turn to our first panel. The first
group of witnesses today will be several small businessmen who
will be talking about different issues they have had with regulatory
agencies. Let me introduce each of the four and then ask you all
to please rise. Harold Higman, who is the owner of Higman Sand
and Gravel; David Calhoun with the Wells Blue Bunny Dairy;
Corky Bailey, who is with JEBRO and Ellen Prescott. I am sorry,
Ellen. I did not mean to refer to only men. I am glad to see a small
businesswoman here. She is vice president and general auditor of
Security National Bank.

The chairman of the full committee has asked that we have each
of our witnesses sworn in for all of our hearings. So, if I could ask
each of you to please rise.

{Witnesses sworn.]

Mr. McINTOsH. Thank you very much. Let the record show that
each of the witnesses answered in the affirmative.

Mr. Higman, if you could begin for us. Thank you for coming by
today.

STATEMENTS OF HAROLD HIGMAN, HIGMAN CO.; DAVID CAL-
HOUN, WELLS’ BLUE BUNNY DAIRY; CORKY BAILEY, JEBRO;
AND ELLEN PRESCOTT, SECURITY NATIONAL BANK

Mr. HIGMAN. Thank you, Congressman.

I have entitled my testimony today Regulatory Agencies Out of
Control. Mr. Congressman, this is a list of regulatory agencies that
can touch my business at any moment of any given day.

[Displays long list.]

Mr. HIGMAN. The first example I use is my company, Higman
Sand & Gravel of Akron, IA. Higman Sand & Gravel was founded
53 years ago by Harold Higman, Sr., who loaded trucks one shovel
at a time. Today, this small business employs some 50 persons
from the Akron, [A community and provides sand and gravel build-
ing materials to a large part of northwest Iowa and surrounding

tates.

In its 53 years of operation, neither this company nor its owners
have ever had a criminal infraction of any kind. But, on August 23,
1991, approximately 18 agents from the EPA raided our business
with guns loaded and drawn with their usual stick them up proce-
dure, which included bursting into the private office of a newly
hired secretary, placing a loaded and cocked pistol to her face and
yelling don’t move. Needless to say, it scared the wits out of her.
This resulted in later charging the company and its two principal
officers with storage of hazardous waste. This hazardous waste
found amounted to a small amount of paint thinner dumped on our
property by an unknown party.

This case went to Federal court in Sioux City, IA. During the
court proceedings, it was discovered that the individual who turned
the Higmans into the EPA had himself placed the waste on
Higman property. This person was a paid informant, who at that


139

employer organizations and employee organizations might perhaps
tell you the same thing.

When I became Labor Commissioner in September 1995, I inher-
ited two files. The Terra chemical explosion from December 1994,
and the Sioux City Fire Department file. Let me initially say that
approximately 2 weeks after becoming Labor Commissioner, the
Terra file was at a complete standstill. That:is the way I inherited
that file. The Labor Division’s attorneys and Terra’s outside attor-
neys were barely speaking. Two weeks after my appointment, I
took the initiative of contacting Mr. George Valentine who spoke to
you earlier today. It took Mr. Valentine and myself approximately
5 minutes to reach a rapport where we wanted to sit down and ne-
gotiate a settlement to this particular catastrophe as it relates to
OSHA.

Mr. Valentine and myself in that same conversation set up a
meeting where—while both of us would have some technical people
to rely upon—Mr. Valentine and myself would be the only individ-
uals in the room negotiating settlement. That is exactly what we
did. Over a 2-day period of time, we reached a settlement agree-
ment in that.

I am not going to go into the details of our situation as it relates
to Terra explosions. George and I, I think, have a rapport. I con-
sider George to be a friend. I think he might say the same about
me. Let me only say this, my staff of OSHA inspectors are cour-
teous and professional in each and every instance. I have invited
a particular State official, who is a critic of OSHA, to accompany
my OSHA inspectors, and that is a standing invitation. It has not
yet been accepted. I have also invited that individual to speak with
me regarding any of his concerns. He has not afforded himself of
that opportunity.

But in any event, the Division of Labor was in a situation as it
related to Terra and the Sioux City Fire Department where we
were receiving a great deal of bad press in the Sioux City area be-
cause the story was coming from one side. I had officially taken the
position and established a policy in my office that even though my-
self and other IOSH administrators had an opportunity to speak to
the press and were asked to do so, that under no circumstances
while there are contested cases before this agency will we try an
active case in the media. And as a result, there were certain re-
leases that were certainly unfavorable to the Division of Labor but,
in my opinion, in many instances one-sided. I agree with Congress-
man Dornan when he states that inflammatory rhetoric does not
belong in the debate. My office has not engaged in inflammatory
debate, period. Although a certain employer in this State who was
subject to an OSHA inspection calls this gentleman from my office
and my other employees—this gentleman having served in the U.S.
Army and Army Reserve for 21 years—calls him a Nazi and Com-
munist. We do not respond in that fashion.

The individual that is engaged upon that campaign and has writ-
ten many, many letters asking that I terminate this gentleman’s
employment, who has been nothing but a valued public servant,
speaks out of context as far as what the Division of Labor had done
in his particular inspection. I can assure you that that inspection
was conducted exactly as I would have had my staff do it. The rea-



147

In this particular incident, there was some communications that
should have been done well in advance of any incident taking
place. Now what happened in this incident, my understanding is
that an individual from the fire department was the qualified inci-
dent commander through training and through schooling and re-
fused to send some of the fire department personnel into that situa-
tion because they were not trained to respond to the level that they
were expected to.

Mr. Hamilton took exception to that. He says I am the fire chief
and I will give orders in the administrative structure of things,
which he is right. But when it comes to incident command, it could
be Gary Brown, the Disaster Services chairman, that may be the
incident commander at that particular incident and calling the
shots. He is to be listened to, or whoever the designated incident
commander is.

Mr. McINTosH. I understand and appreciate the value of that re-
arrangement of the command structure where there is a pre-exist-
ing plan. I think the concern that Mr. Hamilton had, and should
be thought through by people on all sides, is where you do not have
a chance—that agreement has not occurred yet. And his concern is
obviously you do damage to the settled chains of command.

Mr. VARNER. I understand.

Mr. McInTosu. It is a more complex issue than the way it first
appeared. I appreciate your testimony.

Mr. VARNER. It is.

Mr. MciIntosu. I will talk with you perhaps later about some of
these examples because there is some good evidence for them and
some problems that are legitimate there, but I will not take further
time.

Mr. LATHAM. Very briefly, in this case however, only did OSHA
become concerned when the fire chief—who you would have to say
was probably not as well trained as the people from Sioux City to
begin with—left the scene. Then you are saying—I mean, you are
kind of saying two different things. One, that the person who has
the most training should take over the situation, but on the other
hand, you are saying that is only the case when the fire chief, local,
who is not trained as well to begin with, who you said should have
replaced in the site of authority. It is a jurisdiction question. It is
not a—in this particular case, it is jurisdiction.

Mr. VARNER. I will not argue that with you. It really should not
have been.

Mr. LATHAM. Well, I mean—but that is where you kind of—you
are talking both ways here a little bit.

Mr. Orton, I appreciate your words very, very much and what
you are saying. But, I will have to tell you—I mean, everywhere
I go in this district, in this State, I hear people day after day say-
ing that the OSHA has become not an agency of assistance, of co-
operation, but one of penalizing and fining people only. That there
is not the cooperation. And, I respect very much—maybe it has not
had time to change. But, I mean, I am hearing what you are saying
and I am hearing what hundreds of people have told me. They do
not mesh.

In the interest of time, we will move on because everyone has a
very tight schedule here.


46

in some cities—is equally, if not superior, to the financial bank-
ruptcy. So, I just hope that your chairman, 1 year from now, is still
having hearings in the field. It may be my last term, but I just
hope that our party is up to holding onto the House and the Senate
and getting a 4-year burst for the first time since 3 years before
I was even born, and I am a senior citizen.

Mr. McINTOSH. Thank you. I appreciate you joining us today in
the middle of your busy schedule.

Let us now turn to our second panel, which is several people who
have been active in the agriculture industry. If Mr. Craig Davis
could come forward; Mr. George Valentine and Mr. Ron Marr.

Mr. GUTKNECHT. Mr. Chairman, I would like to congratulate
Congressman Dornan for saying what certainly needs to be said
outside of the beltway. Just to reiterate one point that he made,
because I am not certain it has been covered as well as it needs
to be outside of the beltway. We have had an awful lot of flack
about your efforts to rein in on the amount of subsidies that special
interests get. But, I want to reiterate a point to be made, over $30
billion in Federal grants are going out to various groups and we
really have an incredibly weak level of accountability for those
funds, and it is amazing. There have been estimates—we have
heard wild estimates anywhere from $200 million to several billion
dollars that actually gets plowed back into some kind of political
activities. I think if the American people begin to hear more about
that, I think they are going to share the outrage that you and I
have had. I want to thank Congressman Dornan for raising that
point because I think it is something that the American people
need to understand, how much money is flowing through the Fed-
eral Government back to special interests and then back through
the political process. It is a revolving door that needs to stop.
Thank you for bringing it up.

Mr. McInTosH. Thank you, Gil. I appreciate that. You are abso-
lutely right.

Our next panel are three businessmen who have been very active
in the agricultural area here. Let me ask you all to please rise.

[Witnesses sworn.]

Mr. McInTosu. Thank you very much. Let the record show that
each of the witnesses answered in the affirmative.

Our first witness is Mr. Craig Davis who is the owner of Davy’s
& Jim’s Seed Store. Welcome and thank you for coming, Mr. Davis.

STATEMENTS OF CRAIG DAVIS, DAVY’S & JIM’S FEED STORE;
GEORGE VALENTINE, TERRA INDUSTRIES, INC.; AND RON
MARR, PETROLEUM MARKETERS OF IOWA

Mr. Davis. Thank you. ¢

Mr. Chairman, first of all, for the record, I would like to say it
is Davy’s & Jim’s Feed Store, not seéd store. I do not want Con-
gressman Latham to have any defensive reaction here. (Laughter.]

Mr. McINTOSH. Thank you for catching that. He might be wor-
ried that you were branching out.

Mr. Davis. No, not at all. [Laughter.]

Davy’s & Jim’s—excuse me. Davy’s Feed Store started as a small
feed dealership in 1958. Later it was incorporated into Davy’s &
Jim’s Feed Store.’ In 1964, Davy’s brother-in-law, Jim Bleil, pur-


6

streams. I think both of these are successful programs that are not
run out of a bureaucratic government agency. They are run out of
a State University. They are not threatening to businesses. They
are designed to work with businesses. They cannot fine or penalize.
I think we should consider using this successful model to restruc-
ture OSHA, consulting or other Federal mandated programs pos-
sibly.

In Iowa, we are working together in an effort to have jobs envi-
ronment that promotes a partnership in government and business.
The theme that I think we all ought to focus on is government can
wear the white hat.

I thank you for the opportunity to visit with you today and I en-
courage you to carry our message back to Washington. If we can
assist in any way, we would be happy to. Thank you.

Mr. McINTOSH. Thank you very much.

Tom, do you have any questions?

Mr. LatHaM. I just want to make one additional statement that
I failed to earlier. About 90 percent of the problems that we deal
with are with regulators—in our office. I think one very chilling
fact in this hearing today that should be brought out and made
part of the record is that we actually had people who were afraid
to come here and testify today because they felt if a regulator found
out that they were testifying about some of the problems that they
were having, that somehow, they would get back at them. And, I
think, in a free society that is simply outrageous.

Mr. MCINTOSH. You are exactly right. And let me state for the
record, if there is any incident of that happening or any effort to
intimidate anyone, our committee will fully investigate that and
hold the agency and the personnel accountable to the public for
their actions. It is outrageous that someone would not feel fully
confident in being able to come before their elected representatives
and tell them about problems they are having with their Govern-
ment.

Paul, I could not help thinking as you were describing your per-
sonal business of an incident that happened in my district over the
summer. During the heat wave, we had a real problem on the con-
struction crews in a couple of the road construction sites where the
Indiana OSHA was telling them that they had to wear long pants.
Finally, it got so bad that people were falling over with heat ex-
haustion and the employers sent their employees home because
that was the safer route. Well, the employees—not the employer,
the employees, men who were working on these sites called my of-
fice and said you have got to do something about this. This is Gov-
ernment at its worst. We would much rather be working. Frankly,
we would much rather do it in our shorts because we know how
to stay away from all of the hot asphalt. We can get the job done
without having to wear these long pants.

We wrote to IOSHA, Indiana OSHA, and pointed out the prob-
lem. We did not get that much of an immediate response. Fortu-
nately, the heat wave broke and they were able to get back to
work. It was just yet another example where the failure to use
common sense caused more problems than it solved.

Thank you for coming today and thank you for all of your assist-
ance in helping us to prepare for these hearings. And as you find


40
16th Amendment, and establishing a consumption tax in its place.

Other systemic reforms don’t always get the same kind of attention
as big tax, health, or ‘defense issues. Even so, they are just as important.
For instance, aad({@Chairman ean pgnbably. anticipete-what Lanwebout—

AoOR Jobbying reform is a huge issue affecting the very nature of how
things get dong in Washington. I was very pleased to see during ourhgeTM
session ty fy Poriston to prohibit certain lobbying groups from
receiving tax dollars made it into law. Those of us who s@iipeknow how
our government works know the importance of this single small step.

Another reform which has yet to occur is a counterpart, testhe
-tfarementioned>Government oversight and regulatory review are
desperately needed in the area of federal grants. Over thirty billion tax
dollars every year are poured into direct grants*o" dios entities and
organizations. And yet, there is very little acdbuntbitty in the system.
Mr. Chairman, you have been a leader _in attempting to reform this
problem and, ‘while various procedural strategies arose last year, I must

say that I appreciate your support for and encouragement of my “zero
tolerance” approach.
———_—_—_—

This approach is very simple to understand. A long-standing law

2


120

for extra solids that they have no desire for anyway. So at this
point, Wells’ Dairy has taken the stand that we are firmly against
any action to increase these government regulations. We would like
to see them move toward deregulation. I believe this would benefit
the [onsumers, our dairy producers and the dairy processors in
total.

Thank you.

Mr. McIntosu. Thank you very much, Mr. Pittman.

What I think I will do is hear from everybody on this—these four
and then maybe see if there are questions. Tom is the expert on
the Ag bill.

Mr. GUTKNECHT. We will have him explain milk marketing.

Mr. McINTosu. That is right. [Laughter.]

It is impossible, if you ask me.

Mr. Ken Streck.

[The prepared statement of Mr. Pittman follows:]


19

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sdequately sccessed and you guaranteed your company addidonal paperwork.

‘Tt would seerns more beneficial to take the time necessary 10 access the sitvation with the help of local
Officials, if necessary, before deciding to report the release to the federal officials.


14

Mr. McIntTosH. Thank you very much, Mr. Higman. Those are
two incredible incidents. I was amazed when I was reading through
your testimony that EPA would feel it necessary to come in at gun
point in that situation. Tell me this, who had actually paid the in-
formant who ended up bringing the substance onto the property?

Mr. HicMan. In testimony from the individual’s wife, $2,000 had
already been paid to him by the Government and they were in con-
sideration of paying the additional money and bringing it to
$24,000 had the case been successful.

Mr. McINTOSH. So the taxpayer was ultimately the person pay-
ing this informant to come into your business and take care of this
and inform the Government on you?

Mr. Hican. That is right.

Mr. McIntTosH. That is an amazing use of taxpayer moneys on
that. We definitely need to look into that one.

Let me ask you this, what single thing do you think would most
help us, if we were to change it, make sure that the agencies did
not engage in this type of unhelpful behavior?

Mr. HiGMaN. First of all, I do not think you need any agency
within the bounds of government coming in on anybody at gun
point in a business of that type for any infraction. Second, I think
we need a clear cut means of giving information back to the Gov-
ernment. That is to say, checks and balances in dealing with our
regulators. As I aforementioned, I do not think it is so much the

les. There are certain rules that we need today to maintain our
status of society. By the same token, when placed in the hands of
individuals that are not schooled and properly conditioned as our
Secretary of State said, these people have to be taught that, you
know, we are human beings too and we need to be treated as such.

Mr. McINTOSH. Statutory authority is required before an agency
can use firearms in its enforcement activities. I think you raise a
good point, that perhaps what we ought to do is make them refer
any cases where they think there may be violent episodes to the
FBI or some other enforcement agency and let them use what is
better discretion often. I will look into that. I think that is a very
good point.

Mr. HicMaN. I appreciate that, sir.

Mr. McIntosu. I have no other questions.

Tom, do you have anything?

Mr. LATHAM. I would just like to have the record show that we
have about 20 feet of paper stretched out across the floor here and
it is only about half unrolled—all the forms that were filled out.

Do you have a copy of the court record from the case where the
individual—where it was shown that the individual was paid the

2,000?

Mr. HIGMAN. That is correct, Tom. We had a court record made
for our own well-being. We considered taking it to court to come
back on them. In all truthfulness, it was my mother who said, no,
we were not brought up that way. You leave well enough alone and
you go on about your business.

Mr. LaTHAM. Would it be possible to provide us with a copy of
that? I would ask unanimous consent that that be inserted in the
record, Mr. Chairman.


3

One other comment I would like to make for the record is, the
ranking Democratic member, Collin Peterson, was hoping to be
here today but was unable to make it and asked me to express his
regrets. He has been enormously helpful in moving forward the
work of this committee, making it a bipartisan effort to cut back
on these unnecessary regulations.

Before we start with our formal session taking testimony, I
would like to give thanks to the Iowa Secretary of State, Paul Pate,
who has been helpful and encouraged us in coming out here to hold
the field hearings. Paul has done a lot of work in this area himself
in holding similar sessions around the State and listening to people
in Iowa about problems they have at the State level. I wanted to
ask, Paul, if you have any comments for us before we begin with
the official panel?

STATEMENT OF PAUL PATE, SECRETARY OF STATE, STATE OF
IOWA

Mr. Pate. Thank you for the opportunity to share with you the
concerns of Iowa’s small businesses, Congressman McIntosh. Con-
gressman Latham, I think, articulated it very well. Coming from
his business background, he knows firsthand the challenges that
these business people are encountering and I hope to expound on
those a little bit here this afternoon and share with you some of
the issues that have come forward.

While I might be involved in politics, I am also grounded in the
real world with my background as a paving contractor. My family
is third-generation in construction and we know firsthand the
struggles and the frustrations that Iowa businesses go through
every day in trying to deal with government red tape. I have filled
out boxes of government forms to get a small contract and have
had to wade through volumes of paperwork and months of waiting
for payment.

I have got DNR sniffer wells on my property that were imposed
on me, even though the spill was not mine. I have had to meet a
payroll. In those early years, I can remember the challenge of
meeting that payroll and making the tough decisions of running my
own company. I have often worked alongside my crews. I know
many of us are looking outside now and probably thinking about
when the sunshine is going to come back, Pat I also remember the
heat of that hot July working with my crew in putting down 300
degree asphalt. We were looking for cooler weather. I will take to-
day’s weather any day.

I truly believe that government and business can work together
as a team. I think government can wear the white hat. That is my
theme and that is one I try to share. I think we can be the good
guys when we come together. I think part of this committee process
that you are performing here today is going to make that happen.

This past year, I have traveled the State meeting with business
owners and community leaders in over 50 communities and I have
heard some of their frustrations firsthand from real people in the
real world. I have listened to their common-sense solutions. I think
these folks that I have met within these communities are true lead-
ers. They are not evil business owners who want to destroy the en-
vironment or hurt their employees. They are not fly by-night own-


132

have the freedom to demean and devalue a human being.

All students need to be able to compete in the global economy. We cannot afford 10 send
one uneducated or undereducated student into the work force. The U.S. economy is a team
competing against economic teams from other nations. The team members are the graduates of
our schools. The weakest team member will impact the entire effort. The success and well-being
of the strongest team member is dependant upon the contribution of all others. Education is not
a charity, it is the future of each one of us. of our country. What is the cost benefit of IDEA?
Spend money now on education for all students, or spend much, much more later.

How can education be harmful, excessive, and counterproductive. Education is
productive! Don't throw ws back into the pre-Depression era. Americans shouldn't be afratd of

the harm their government can do. We truly need a kinder and gentler nation.

Thank you.
Barbara Renfro Anne Camerer
1915 West Street 3233 Glenn Avenue
Siow City, 14 51103 Sioux City, IA 51106
(712) 252-1508 (712) 274-1291
Johnette Kobes Vicki Brown
2008 W. 18th Street 3033 Kensington Ct
Siow City, IA 51103 Sioux City, 1A 51104

(712) 255-2585 (712) 255-5244


110

per year to pay for state water testing “primacy” from the
Environmental Protection Agency.

+The Village of Concord, Nebraska (population 135) spent $2,011
for water testing in 1995, up trom $584 in 1994.

«The City of Sloan, Iowa (population 938) spent $972 in their 94-
95 budget year and expect to spend $7,000 in 95-96. The fee to the
Iowa Department of Natural Resources is $132 in 95-96.

We beleive most of these tests are not needed.

The Siouxland Regional Transit System expects to spend $10,000
in the current year for drug and alcohol testing of its 59 drivers at
$76.50 per test. We estimate it requires approximately $2,500 per
year in administrative expenses of these requirements, Additional
resources were expended in the training necessary for
implementation of these regulations.

This testing is not needed for small rural transit systems.

These examples can be multiplied hundreds of times in Siouxland.

Don Meisner, Director


69

~ Federal agency allegations that effectively cannot be challenged;
and

- Pure bureaucratic arrogance — when agencies try to find a way to
do something TO the public rather than looking for ways to do
something FOR the public.

Thank you, once egain, for giving Terra this opportunity. 1 would be happy to answer
any questions you might have.

1a


24
SEE EAT AG

February 6, 1996
Hegorable Tom Latham
Sig cisnon Mouse Gftee Bids.
‘Washington, D.C. 20515
Dear Mr. Latham:

zee bese maerials ania nil prmig tae

Re: Federal Regulatory Impediments

et Oe ee ae ‘removal of coal ash from

federal regulations is that the goverumest seldom scems to know when “enough
roe Johar many regulon inpetsby ach wnyaa of eencion tat fhe
® ‘oftea conflict becuse ete te agri Go So an comunciae wk each otkesr Wee yet,
fate percin a ange a smhlvdous wit ech pec donot imow what

the other is doing. For example, comsider the Envireumestal Agency,

‘The Air Quality Division imposes fired energy ' which demsad that the
‘known ‘be to move from clean alr toward az. These

mandates are resulting | Gs. {bed bollers, low NOx bumers, fine gas

units, etc.) which are bagely in terms of fad tiow. And, these

technologies the volume of solid ware,

to those wastes ‘render them unusable for wide spread applications that have been.

for “older” types of coal resides. ‘bed boilers produce itcen tes the qusat ot

coal ash generated in 2 similacty sized coal boiler with an

ash
Prscipiator. Quite oft te fidined bed unin produce he which asso cannc ta mans 38
mikes which ona Mckdincancts sod for rey ofc pape, soataety pemtoce

‘Rt seems that federa) bureaucrats in the EPA do not understand that if ope removes a minor
consdmeat on by ft into
ais polcion Seaverting a ajor | constituent of land and water

a

2220 HAWKEVE DRIVE - 8OX 2957 - SIOUX CITY, IOWA 51108 TR RPA Mem ene Anon. ory meee cae nae oe


143

this country where public sector employees do not have health and
safety coverage under Federal OSHA.

Mr. LaTHaM. Is that the case in lowa?

Mr. VARNER. Iowa has OSHA coverage because they have adopt-
ed OSHA law because they have adopted OSHA law into State law
and have their own administration here in the State of Iowa. Ne-
braska does not. South Dakota does not for their public sector em-
ployees. So we have got 27 States out there where public sector em-
ployees have no coverage. But in emergency response—in emer-
gency response to chemical releases, which was the Terra situation,
in those States where OSHA does not have jurisdiction for the pub-
lic sector, EPA enforces 1910.120. That is the OSHA standard. EPA
enforces that.

Mr. McInTosu. Is the opposite true in those States where OSHA
does have jurisdiction over the public sector employees, then EPA
does not?

Mr. VaRNER. I cannot answer that because I questioned that my-
self. All I do know is that in those States—because we do training
in States that do not have State OSHA and EPA enforces OSHA’s
laws there. Your question was how did OSHA get in the health
and—or how did EPA get in the health and safety business? That
is one example that I can offer you there.

Mr. LaTHAM. We are going to have to move on.

Mr. McINTOSH. Yes, perhaps we can cover some of these during
the question and answer segment. I do have a couple of questions
for you, Mr. Varner. Let me catch some of the other people, if I
may, unless you want to conclude with a couple——

Mr. VaRNER. I just want to be real brief in a conclusion.

Mr. MCINTOSH. OK.

Mr. VARNER. The gentleman said the impact on family. Byron
has had firsthand experience, and will have another experience to-
morrow that nobody wants to have. And that is going to an inci-
dent where there is a fatality. And that is going to an incident
where the family is there. If you want to talk about real family im-
pact, talk about a death, a fatality. It has happened here in the city
of Sioux City. It has happened to 20—it has happened to 45 of our
young people in the State of Iowa since 1972 in trench collapses
alone. These were not the employers that were the good employers.
We have seen several good employers here and they have got the
highest of intentions and I applaud them. I applaud the employer
that gives his employees right to know training because I was a
victim of not knowing what chemicals. But when you go and you
see a family that has seven kids and a father that is killed in a
trenching accident—and it is most generally severe head injuries.
In a trenching accident, most generally the people’s heads are
blown off. They are unrecognizable. And our kids—most generally
the young kids because they are the ones down in the trenches, you
know, doing the work and us older guys are up there running the
backhoes. We have had 45 fatalities, even with OSHA laws, in the
State of Iowa since 1974. That is impact on family.

you.

Mr. McINTosH. Thank you for your testimony. I would like to ac-
tually gain some more information about this incident command
question during the questioning time.


10

PRESENTATION FOR CONGRESSIONAL
SUB-COMMITTEE

Sub-committee Chairman
DAVID MCINTOSH of Indiana
Congressman

TOM LATHAM of Iowa
Congressman
GIL GUTKNECHT of Minnesota
sman
BOB DORNAN of California

REGULATOR AGENCIES
“QUT-OF-CONTROL”

Testimony by
Harold Higman Jr.
Febraury 8, 1996


141

Mr. MCINTOSH. Let me now call on Mr. Dan Varner.

Mr. VARNER. Thank you for allowing me this opportunity to tes-
tify before you and maybe I get to do the opportunity of rebuttal
here on some of the issues that were touched upon earlier today.

First of all, I am a employee representative of public employees
in the State of Iowa and throughout the country, I work for the
American Federation of State, County and Municipal Employees. I
live here in Iowa and have lived here most of my adult life. And,
as a matter of fact, on employee issues have had a good relation-
ship with Iowa OSHA since their existence here. We have had
some problems with OSHA, too. We feel that in some cases their
enforcement has not been strict enough in some issues and that our
members have been placed at risk.

I would like to read to you, or read into the record—it is part of
the EPA report that was issued on the Terra situation, and it is
on page 32 of the report in the level of preparedness to respond.
“The level of effort, ability to coordinate a multi-agency response
and utilization of available resources by the local response commu-
nity was exceptional. The Woodbury County Disaster and Emer-
gency Services incident commander, Gary Brown, coordinated the
actions and resources of over 165 private, local, State and Federal
agencies which participated during the response.” That is the Terra
response that I think there was some testimony earlier they were
called incompetent.

Mr. LATHAM. This is the EPA report?

Mr. VARNER. Yes.

Mr. LatuaM. OK. Are we talking about OSHA?

Mr. VARNER. This—well, I am responding to a comment that was
made by Mr. Hamilton on——

Mr. Lariam. But in relationship with OSHA was my under-
standing?

Mr. VARNER. Yes.

Mr. LATHAM. But this is an EPA report?

Mr. VARNER. Yes. It is a report that was issued January 31st
at—I guess there was a news conference.

Mr. LaTHam. OK.

Mr. VARNER. So contrary to what may have been said, they were
given commendations not only on this incident but the Disaster
Services for Woodbury County on the DC-—10 incident was given ex-
ceptional marks. The fire department was a part of this Disaster
Services. Mr. Hamilton should be complimented for his role in that
and commended for it no differently than the hospital personnel,
the emergency medical personnel, and the airport firefighters. They
all did a great job in that. As a matter of fact, the city of Duluth,
MN came down here after that incident and met with the city and
has used their emergency preparedness as a model and taken it
back to Duluth. The risk manager up there came down personally
and met with the city of Sioux City. So for somebody to say they
were called incompetent, I find that hard to believe. They were not
by EPA and they certainly were not by OSHA. They should be com-
mended for their actions.

On that same line, incident command, as Mr. Hamilton referred
to, is different in emergency response to hazardous materials than
it is to structural fires. Mr. Hamilton is mistaken when he said


29

HAVE AN OUTSIDE COMPANY COMPLETE THE DETERMINATION FORM FOR US, THE
2.50 PER LOAN WHICH IS PASSED ON TO OUR CUSTOMERS.

SECTION S24(eX) REQUIRES BANKS TO NOTIFY THE BORROWER: Ar THe TIME OF
ORIGINATION OR ALANY TIME DURING THE TERM OF ALOAN WHEN FLOOD
INSURANCE {8 NEEDED. THIS MEANS THAT IF THE FLOOD MAPS: CHANGE BANKS MUST
BE ABLE TO TRACK THEIR LOANS SECURED BY IMPROVED REAL ESTATE BY ADDRESS:
OR LEGAL DESCRIPTION TO BE ABLE TO IDENTIFY THOSE THAT NEED FLOOD
INSURANCE, TO REQUIRE BANKS TO PERFORM A DETERMINATION OTHER THAN AT
ORIGINATION SEEMS EXCESSIVE, WE COULD NOT DO THIS WITHOUT SUBSTANTIAL
INVESTMENT IN SOFTWARE OR PROGRAMMING. THE MOST COST EFFECTIVE METHOD:
FOR US TO HANDLE THIS REQUIREMENT WAS TO AGAIN HIRE THE SAME COMPANY
‘THAT DOES THE INITIAL DETERMINATION TO TRACK FLOOD MAP CHANGES OVER THE
LIFE OF THE LOAN. THIS OPTION COSTS OUR CUSTOMERS AN ADDITIONAL $10.00 FOR
EACH LOAN WHETHER THEY ARE IN A FLOOD ZONE OR NOT. BANKS HAVE BEEN
REQUIRED TO DOCUMENT THEIR DETERMINATION OF FLOOD ZONE FOR SOME TIME,
HOWEVER THESE NEW REQUIREMENTS HAVE FORCED US TO ADD COSTS TO THE
CUSTOMER WITH NO BENEFIT TO THEM. WHY SHOULD BANKS BE REQUIRED TO
NOTIFY CONSUMERS OF FLOOD MAP CHANGES? eRe RESPONSIBILITY WOULD BE
BETTER HANDLED BY FEMA OR ONE OF THE OTHER GOVERNMENT AGENCIES:
INVOLVED WITH FLOOD INSURANCE. THI6 ISN'T A BURDEN FOR WHICH OUR
CUSTOMERS SHOULD HAVE TO PAY,

SECTION $2zteK) REQUIRES BANKS TO ENSURE THE LOANS IN A FLOOD ZONE ARE
COVERED BY FLOOD INSURANCE FOR THE LIFE OF THE LOAN. AGAIN THIS ADDS A
BURDEN ON THE BANK TO DEVISE A SYSTEM TO TRACK THE INSURANCE. CURRENTLY
SECTION 1364 (C) REQUIRES FEMA TO NOTIFY THE SERVICER OF THE LOAN OF THE
EXPIRATION OF THE FLOOO INSURANCE 45 DAYS PRIOR TO EXPIRATION. IT WOULD
‘SEEM MUCH SIMPLER TO REQUIRE FEMA TO NOTIFY THE SERVICER ONLY IF THE
FLOOD INSURANCE WAS NOT RENEWED. THE SERVICER COULD THEN RELY ON THOSE
NOTICES AND FOLLOW UP ON NONRENEWALS RATHER THAN TRACKING ALL FLOOD
INSURANCE POLICIES ON ITS OWN SYSTEM.

BAIR HOUSING ACT

THE RECORDKEEPING REQUIREMENTS OF THIS REGULATION ARE DIFFERENT FOR
NATIONAL BANKS AND STATE BANKS. TOIL RANKS MUST OBTAIN 20 PIECES
OF INFORMATION AS PART OF A COMPLETEO APPLICATION FOR A HOME LOAN. 12 CFR
27.3(b) SPECIFICALLY SAY "SHALL ATTEMPT TO OBTAIN THE INFORMATION",

ITEMS REQUIRED ARE: YEAR THE HOUSE WAS BUILT, NUMBER OF YEARS APPLICANT
HAS BEEN EMPLOYED IN THEIR PRESENT LINE OF WORK AND NUMBER OF YEARS
APPLICANT HAS BEEN EMPLOYED IN THEIR PRESENT JOB.

STATE BANKS REQULATED BY THE FDIC NOT LOCATED IN A METROPOLITAN
STATISTICAL AREA (MBA) OR WITH TOTAL ASSETS OF $10 MILLION OR LESS ARE ONLY
REQUIRED TO OBTAIN NINE PIECES OF DATA PER FDIC REGULATION 338.7(@}(1). STATE
BANKS WITH AN OFFICE LOCATED IN A MSA AND TOTAL ASSETS OVER $10 MILLION
NEED TO REQUEST 34 ITEMS ON A HOME PURCHASE LOAN APPLICATION.


98

Mr. Chairman, I want to take this opportunity to thank you for
this opportunity to express our concerns about this regulatory
nightmare. As you can see, Basin Electric, NIPCO and Dakota are
doing everything possible to develop the full potential of this facil-
ity under extraordinary regulatory difficulties. We appreciate your
time and assistance and hope that you can help us in this matter.

Mr. McInTosH. Thank you. I appreciate you bringing it forward.
We look forward to hearing more on that.

Our final witness on the panel is Mr. Don Meisner with
Siouxland Interstate Metro Planning Council. Mr. Meisner, thank
you for coming today.

[The prepared statement of Mr. Brevig follows:]


140

son that I know it, that particular employer videotaped the entire
inspection. It is available to you folks any time you would like to
see it. I probably will use it as a training film for OSHA inspectors.

Let me just very briefly—and I know I am taking more time than
I should, but if I might take 1 more minute and simply point out
this. I have spoken to many, many employer groups and many,
many employee groups since becoming Labor Commissioner. I have
pledged to employers that they can expect certain things from this
Labor Commissioner. First and foremost, if they are an employer
that is committed to workplace health and safety, OSHA need be
of no fear to them. If we have employers who are having difficulty
complying with OSHA regulations but are trying to do so, I have
assured them they have no fear of OSHA in that we have consulta-
tion folks and that is our preferred approach to issues of workplace
health and safety. For those employers who are uncommitted to
workplace health and safety and are unconcerned about abating se-
rious hazards, then yes, this Labor Commissioner will vigorously
enforce OSHA laws.

I cannot conclude without briefly mentioning the Sioux City Fire
Department situation. The story was not completely told by Mr.
Hamilton. I saw that he found it necessary to refer to my people
as Gestapo, Gestapo tactics. I do not sit by and take that. It is not
true. Mr. Hamilton has never informed me that my people acted
in a Gestapo fashion. I heard him say that my people called him
and his fire department incompetent. I would be extremely shocked
if that was said. As a matter of fact, I will be on the telephone to
Mr. Hamilton tomorrow asking him to identify that person, and if
indeed that did take place, that individual will be severely, severely
punished and disciplined up to and including discharge. My first
day on the job, my staff was told I have zero tolerance for discour-
teous behavior.

In concluding, let me simply point out that the Division of Labor
seeks cooperative partnerships with employers and employees on
matters of workplace health and safety. That message has been
spread throughout this entire State. I would suggest that employ-
ers who know me and have heard me will agree with that. Em-
ployee groups also know that they have rights under the OSHA
laws which will be enforced when common sense dictates enforce-
ment. Cooperative partnerships is our preferred approach. Enforce-
ment when necessary is the vehicle that is then utilized.

In conclusion, I would like to say that until 2:45 this afternoon,
I was planning on also being at the event tomorrow morning in Des
Moines; however, that now will not be possible in that I have a pol-
icy of going on OSHA inspections on all fatality investigations, and
recently received a telephone call where a construction worker this
morning in Des Moines fell 20 stories to his death.

Thank you.

Mr. McINTOSH. Thank you for your testimony. Let me commend
you for making that decision to be there personally on that type of
tragedy. I appreciate your strong testimony on behalf of your agen-
cy. I want to say that I think we are in perfect agreement on your
philosophy about consultation where someone takes safety seri-
ously and vigorous enforcement where it is needed.

Mr. ORTON. Absolutely.


91

City, a student was a danger to himself and others to such an ex-
tent that he required the services of a full-time teacher, one-to-one,
just for him and a full-time teacher’s assistant. In other words, two
adults were necessary at all times in order to provide a safe edu-
cation for this child. His weighted funds generated about $9,200
but the salary expense alone for this child was over $40,000 per
year. Some other social service agencies can determine when a cli-
ent has reached maximum benefit from a program and can then
discontinue services if continued assistance appears to be a waste
of time and resources. That is not true under the Individuals with
Disabilities in Education Act. This child must be educated in the
least restrictive environment and that appears to be in a regular
school with two adults assigned to him. Where do we draw the line
between realistic expectations and intensive assistance from birth
to age 21?

Another student was severely visually impaired. This child also
required a full-time teacher’s assistant, equipment to help her
learn Braille, services of a teacher who specialized in teaching stu-
dents with visual disabilities, assistance in learning to use a cane,
and assistance of a multi-categorical teacher. This child was edu-
cated in the neighborhood school and in the normal classroom with
over 20 other children. The school district received about $2,400 in
assistance for this child, while the expense for that assistance ran
over $10,000 annually. In this situation, the student displayed
great potential. The neighborhood school was the best placement
for her but the funding did not nearly cover the expense. A hidden
cost in situations like this is the necessity to keep class size lower
so that the teachers have opportunities to work with the disabled
children and also to provide time for regular education students. So
a classroom that normally would accommodate 25 students may be
held down to 20 students.

Related services are an area of concern for educators as well.
School personnel today are required to do tube feedings, catheter-
izations and other related services in order for children to attend
school. Carried to an extreme, schools could be required under the
Americans with Disabilities Act or Section 504 of the Rehabilita-
tion Act to provide glasses to students who cannot see well enough
to read. Where does the responsibility of the home and other com-
munity agencies end and where does the responsibility of the
school district begin? That is the question we need to have an-
swered.

How much money should be spent in an attempt to educate a
nearly comatose student and is that service education or is it ther-
apy? With the arrival of assistive technologies, some students have
been found to have great potential where we previously thought
they were mentally disabled. Assistive technology holds great
promise but it also holds a great price tag.

When the Federal Government requires States and local districts
to provide an education for all students who have disabilities, re-
gardless of the potential for benefit, the Federal Government
should provide the necessary financial support. Public Law 94-142,
as originally adopted, provided States with a formula for special
education funding at 40 percent of the national average per pupil
spending for each student served in special education classes. Ac-


ll

Regulatory Agencies “Out-of-Control” !

The first example I use here today is my company Higman Sand &
Gravel of Akron Iowa. Higman Sand & Gravel was founded 53 years
ago by Harold Higman Sr. who loaded trucks one shovel at a time.

Today this small business employs some S0 persons from the Akron
Towa community and provides sand and gravel building materials to a
large part of N.W. Iowa and surrounding states,

In its 53 years of operation, neither this company or its owners have
ever had a criminal infraction of any kind.

But on August 23, 1991 approximately 18 agents from the EPA
raided our business with guns loaded and drawn with their usual
stick’em up procedure which included bursting into the private office of
a newly hired secretary placing a loaded and cocked pistol to her face,
and yelling, “don’t move! ”

Needless to say, he scared the wits out of her! This resulted in later
charging the company and its 2 principle officers with storage of
hazardous waste. The hazardous waste found amounted to a small
amount of paint thinner dumped on our property by an unknown party.

This case went to Federal court in Sioux City, Iowa. During the court
proceedings it was discovered that the individual who turned the
Higmans into the EPA, had himself placed the waste on Higman
property. This person was a paid informant, who had at that time
received $ 2000 with the promise of receiving $ 24,000 if this case was
successful.

‘We mounted the best legal defense team we could afford which
included the hiring of the largest law firm in the U.S. and adding to it
numerous outside attorneys, research personnel and investigators.
During this time one of our original attorneys was hired by the EPA, and
when confronted about this her comments were. “I don’t understand
why the EPA is coming down so hard. They did not find anything
significant, but having spent so much money developing this case and
thinking you have deep pockets, they must now go for the big bucks to
cover their costs.”

SECOND: “I cannot afford NOT to work for the EPA for what they are
offering me.” Obviously the government pays much more than the
private sector, so it can win large amounts in settlements and fines.


97

gas purchase agreement to begin with. FERC consolidated consid-
eration of the settlements and the complaints and then set the
matter for hearing.

Following the trial before the administrative law judge, the ALJ
ruled that pipeline companies were not prudent in the settlement
agreements. In addition, though it was clearly not within the scope
of his assignment, the ALJ made the findings that because of the
changes in the natural gas industry, extraordinary circumstances
warranted—existed warranting the modification of Opinion 119.
Based upon these findings, the ALJ modified the pricing of the syn-
thetic gas and limited the amount of synthetic gas to be sold.

Finally, despite the fact that FERC had no jurisdiction with re-
spect to intrastate pipelines such as the 34-mile one that runs be-
tween the Great Plains plant and the Northern Border Pipeline,
the ALJ established a new transportation rate at approximately 40
percent of the rate that had been in effect since 1985.

To add insult to injury, the ALJ ordered that these changes with
respect to price, output and transportation be retroactive to May 1,
1993 and ordered that the pipelines refund their customers all
amounts paid by the customers in excess of limitations established
by the ALJ. Dakota estimated that these refund obligations would
aggregate approximately $276 million from Dakota.

f this decision of the ALJ stands, the results are tragic. The
plant would close and 640 Dakota employees would lose their jobs,
as well as 220 additional Basin Electric employees for a total loss
of 860 direct jobs. In addition, North Dakota Tax Department has
estimated that the impact of the plant closing would result in
elimination of almost 3,900 additional full-time equivalent posi-
tions, or a total of 4,700 jobs.

Dakota is also now in the process of completing an anhydrous
ammonia plant that would directly—that would direct approxi-
mately 20 percent of the plant’s raw synthetic gas into production
of approximately 1,000 tons per day of anhydrous ammonia. If Da-
kota is unable to complete this facility, the market of anhydrous
ammonia will not receive the additional supply, keeping the price
of fertilizers at high historic levels.

Dakota is also in the process of completing construction of a flu
gas desulphurization scrubber which will produce 350,000 tons per
year of ammonia sulfate fertilizer. Dakota’s production will equal
10 percent of U.S. consumption. Loss of this new facility will also
have an impact on the price and supply of this fertilizer.

Dakota is also negotiating a major oil—negotiating with a major
oil producer to construct a pipeline to sell the oil company a portion
of its projects, carbon dioxide waste gas steam for use in tertiary
oil recovery. The technology can double the actual total production
of maturing oil fields that would otherwise cease production.

The most immediate concern for the people of Iowa served by
NIPCO is the fact that if the Great Plains plant did in fact have
to close down because of the ALJ’s decision, Basin Electric esti-
mates that it would have to increase the wholesale electric rate it
charges to its members, including NIPCO, at least 13 percent and
this would result in an increased cost to the rural consumers
served by NIPCO of $2.16 million annually. And that also equates
to $1.1 million annually to Minnesota.


102

avoiding a continuation of the taxpayer subsidy of the operation of this project.
Based on production to date, this walver has saved the federal government $360

million,

Basin Electric formed Oakota, a wholly owned subsidiary, which purchased the
Great Plains facility on October 31, 1988. Shortly thereafter, disputes arose
between Dakota and the four pipaline companies that purchase the synthetic
gas output of the Great Plains plant. These disputes led Dakota and DOE to file
a lawsult against the pipelines over the price for synthetic gas, the amount of
gas the pipelines are required to purchase and the rate for compression and
transportation of synthetic gas on the project's 34-mile pipeline. Rather than
take these matters to trial, in February 1994 the pariies entered into four nearly
identical settlement agreements. Because these sattlements would amend the
gas purchase agreements, the settlements are subject to approval of the FERC,

In April of 1993, a group of gas distribution companies from Michigan and
Wisconsin filed 3 complaint pursuant to Section 5 of the Natural Gas Act with the
FERC claiming that the prices charged by Dakota for synthetic gas exceeded
those authorized by FERC Opinion 119, the 1981 FERC Opinion approving the
985 purchase agreements. This complaint claims that there are standards with
respect to the price of synthetic gas in Opinion 119 independent of the pricing
provisions of the gas purchase agreements spproved by Opinion 119. Upon the
pipelines’ submission to the FERC of the settiements, FERC consolidated

4


118

of something that we need to ask ourselves once in awhile and that
is, who really cares more about those kids? Folks from Washington
who have never met the kids or the people who live here, who work
here and the parents? Somehow, we have gotten this notion wrong
that there is more caring and more compassion and more concern
than there is out here. Every day on the news, we see examples.
I'm glad that Congressman Latham reminded us of the DC-10 inci-
dent that happened here in Sioux City, only to have that very same
department—which I think everyone in the Unites States who
watched that whole thing—it seems like it was replayed again and
again and again and the actions of your department. And then to
be called incompetent by your own Federal Government is—it
strikes me that somehow we have got to get back to some basic
common sense. And more importantly, we have got to remind our-
selves that people who live and work out here in the Great Plains,
you know, we care about people too. We care about the environ-
ment. And all care and compassion in the village does not nec-
essarily have to be centered in Washington, DC, to care about these
people.

We have got a big task ahead of ourselves because there is a
mindset that is difficult to change. We have been told by some of
the agencies in some of these hearings that they understand they
have problems and they have undertaken some phone etiquette
programs and so forth to try and be more consumer friendly. I am
somewhat dubious as to whether or not those efforts will ever real-
ly bear fruit as long as they are predicated on the basic notion that
people out here do not care about people and do not care about the
environment and do not care about anything else. Somehow, we
have got to get back to the notion that the founding fathers started
this whole experiment with.

The testimony here has been just excellent, Mr. Chairman. I do
not really have any questions. I thank you all.

Mr. McINTOsH. Yes, thank you very, very much. I appreciate it.
It has been tremendously helpful to us.

At this point, we will move to the open microphone section of the
hearing. This is something a little bit unusual for congressional
hearings where we invite people who are from the audience and
would like to share their testimony with us. What I will do is call
the names of four people at a time. If you could come forward then
and we will administer the oath. I will ask each person to testify
for 3 minutes or less and any additional remarks we will accept in
written testimony.

The first four names that were given to me by the staff were Mr.
Tom Pittman; Mr. Ken Streck; Ms. Barb Renfro and Mr. Daniel
Cougill. If you would all please rise.

[Witnesses sworn.]

Mr. McIntosH. Let the record show each of the respondents an-
swered affirmatively.

I appreciate you participating in this hearing. Your testimony
will become an official part of the record of this congressional hear-
ing. Mr. Pittman, would you please lead off.


65

During its press conference on January 23, 1996, EPA admitted publicly that the
‘agency did not consult with Terra’s experts while preparing Its report on the Port Nea!
accident. Unbelievably, EPA also admitted publicly that it used Mississipp! Chemical
Company — Terra's adversary in litigation and the designer of the sparger ~ as a
consultant during the preparation of the agency's report. Promptly after EPA made its
report public, Mississipp! Chemical issued @ press release to the Sioux City media
claiming that EPA's report supports Mississippi Chemical's theory ofthe Port Neal
explosion. This was notwithstanding the fact that Mississippi Chemical had recently
paid $18 million to settle lawsuits by our employees based on Terra's sparger findings.

‘There Is no question that EPA, for some time, has been well aware of the
litigation between Terra and Mississippi Chemical. The agency also clearly understood
the potential impact of its report on the litigation. In effect, therefore, EPA has chosen
sides in a private dispute and is inappropriately attempting to Influence the outcome.

EPA'S CONCLUSIONS ON PORT NEAL

EPA concluded in its January 23 report that it could not develop ‘one irrefutable
‘scenario’ to explain the Port Neal explosion. Moreover, at the press conference on
January 23, EPA admitted that it did ng testing or simulations to support its report and,
therefore, that it could nat discount Terra's conclusion ~ i.e,, that the explosion was
triggered by in improperly designed nitric acid sparger.


7

‘Ms. Carol Browner & Mr. Dennis Grams
United States Environmental Protection Agency
January 20, 1996 .

Page2

by personnel that there wes no independent basis for concer over safety issues at
these plants, which leads one to conclude that the inspections were done only in support
of the press conference In Sloux City, lows.

‘These due process issues aside, in order to resolve the differences between Terra and
EPA on substantive grounds, | propose the following:

1 Our experts wil mast wih EPA's experts to address the key asue in the Port Neal

‘explosion — namaly, whether the explosion stafted outside the MCC-designed
‘sparger (as EPA contends) or inside the MCC aparger (as Terra's testing and
analysis has established).

2 ‘Afar the meeting, EPA end Terre, ha ont press conference, wil male the results
known to the public.

‘This proposal is consistent with your (Mr. Grams’) statement to Terra's General Counsel,
George Valentine, shorty before the press conference that you would be glad to have EPA
and Terra meet to discuss thelr findings. Furthermore, given Mr. Thomas’ public comment
last Tuesday that EPA will change its report If R ts wrong sbout its key assumption
concerning the MCC-designed sparger, EPA should be eager to join in this proposal.
‘Terra Is flexible on the timing of the experts’ macting. | look forward to hearing from you.

Sincerely,

ia

BMJ:rmb


16

The question I ask myself at work daily—the question I ask my-
self as I work daily to meet the responsibilities I have at Wells’
wairy of protecting the environment and providing a safe work

lace is, how is what I am working on right now making a dif-
ference? As I drive home at night and think about this question,
the answer all too often is that what I did throughout the course
of my day probably did not make the workplace a whole lot safer
or the environment any cleaner. The reason that I sometimes do
not make much of a difference is that I probably spend much of my
day trying to comply with government regulation. Most of these
regulations were probably developed with the best of intentions by
people who have a sincere interest in these areas. But the goals of
a safe workplace and a clean environment have become clouded.
For example, material safety data sheets are required on chemicals
in the workplace. A recent survey of 500 employees that we put
through a refresher safety training course revealed that only seven
employees had ever used a material safety data sheet. A tremen-
dous amount of time is spent copying, indexing and distributing
these sheets to our facilities. One cannot help but wonder if this
time could be better spent doing something which has a positive
impact on a larger percentage of employees.

everal years ago, we discovered that we had an underground
storage tank site that had experienced a leak. We immediately dis-
continued the use of the tank and began working with consultants
and regulators to clean up the free product at the site. Seven years
and some $40,000 later, we have actually started to clean up the
site by pumping the free product out of the ground.

When a company has a release of a hazardous substance into the
environment which is equal to or exceeds the reportable quantity
established by EPA, a report must be made to the national re-
sponse center immediately. An EPA official has defined imme-
diately to me as within 15 minutes. That means at a time of crisis
for your company, someone needs to remember to drop what they
are doing and call the NRC. Instead of having everyone involved
in evacuations, repair work or containment work, somebody needs
to be on the phone complying with the immediate reporting re-
quirement.

The reportable quantity for the refrigerant we use, ammonia, is
100 pounds or roughly 20 gallons. If a company has an ammonia
leak, they must estimate the amount of release within this time-
frame. This results in some releases being reported that might not
need to be reported because it is impossible to determine the
amount of the leak in that timeframe.

When you report a leak to the NRC, they send you a 10-page
questionnaire to complete. So when you called the NRC, you were
not sure if the report was necessary because you did not know the
exact amount of the leak. You did not have any specific information
to provide them with about the situation because it had not been
adequately assessed, and you are guaranteeing your company addi-
tional paperwork. It would seem to me more beneficial to take the
time necessary to assess the situation with the help of local offi-
cials before deciding to report the release to Federal officials. If reg-
ulators were truly focused on what should be their goals of protect-
ing the environment and providing a safe work place, I seriously


NORTHWEST IQWA POWER COOPERATIVE

2 twesT owe row ae

THE POWER NETWORK #. @ Box 240, 31002 C98 PHONE 7t2-548-4141
Le Mars, owe 51033-0240 Fax 7i2-646-B705

Tastimony of Steve Brevig, General Manager of Northwest lowa Power
Cooperative (NIPCO) ata ag Nearing to be held at Sioux City February 8, 1996,
before Representative Dave Mcintosh, ‘Chair, U. 8. House of Representatives
‘Subcommittee an Economic Growth, Natural Resources and Regulatory Affairs.
Good morning Mr. Chairman:

My name is Steve Brevig. | am General Manager of Northwest lowa Power
Cooperative (NIPCO), which Is s wholesale electric generation and transmission
cooperative owned by 9 rural electric cooperatives and one full-service
municipal electric cooperative. NIPCO also provides transmission service to
‘another municipal cooperative providing electricity to 13 lowa towns. Together,
the NIPCO Power Network serves farms, homes and industry in a 6,500 square
mile area of western lowa. The NIPCO headquarters is located in Le Mars,
lowa.

NIPCO receives a portion of its wholesale power supply as a member of Basin
Electric Power Cooperative (Basin Electric), headquartered in Bismarck, North
Dakota. Founded in 1961, Basin Electric is a consumer-owned regional
cooperative which operstes 3,304 megawatts of electric generating capacity.
Basin Electric operates 2,351 megawatts of this capacity for 128 rural electric
member systems, including NIPCO, in the eight states of lowa, Colorado,
Minnesota, Montans, Nebraska, North Dakota, South Dakota and Wyoming.

Ae


21

Like I said, Harold, it is nothing compared to your quarter of a mil-
lion. It is tough today to do business in the construction industry.

EPA storm water runoff regulation. While it is tough on the con-
struction industry, the next phase being proposed is going to be
really tough on the average citizen. They are now proposing in
Washington the regulation of rain water from our streets and high-
ways. These proposed regulations will demand tremendous
amounts of administrative time from cities, counties, States and,
ultimately, the taxpayer is going to be paying for a bureaucracy
that it never envisioned and for protection they really do not care
to have. It is going to be a tough Battle to regulate rain water com-
ing off the street.

‘oad contractors now have staffs of personnel to secure land,
water and air permits required to construct or repair a road under
government contract for the taxpayer. It takes the same effort from
the contractor whether it is to repair 1 mile of road or 100 miles
of road, and it does not take very long for this to be millions in
each State. Millions soon turn into tens of millions, which multi-
plied by 50 turn into billions. Like one good Senator once said, a
billion here, a billion there, before you know it, you have got a lot
of money.

Another challenge for industries like the MSDS is spill preven-
tion. If we could just have one plan, but we have to have a spill
prevention for the Coast Guard; we have to have a spill prevention
plan for the EPA; we have to have a spill prevention plan for
OSHA and now the DOT wants to have a spill prevention plan and
none of these plans are the same. Nobody will take the other agen-
cy’s plan. So now we have to have a staff of people that are well
versed and educated in each one of the plans to hopefully limit our
future liability. But as evidenced by the case in the Des Moines
Barrel and Drum site, you can do things right today and still not
limit your future liability.

That is all I have to say. Thank you very much.

Mr. McINTosH. Thank you, Mr. Bailey. I look forward to getting
back to you. You describe a classic case of gotcha, when the agency
gets you after the fact.

Our final witness on this panel is Ms. Ellen Prescott, who is with
the Security National Bank. Thank you for coming today.

[The prepared statement of Mr. Bailey follows:]


“ebruary 8, 1996
Testimony
of
J. Craig Davis
Davy's and Jim's Feed Store, Inc.

Highway 20 West
Moville, Iowa

Davy's Feed Store started as a small feed dealership in 1958. Later it was
incorporated as Davy’s and Jim's Feed Store, Inc. In 1964 a brother-in-law, Jim
Bleil, purchased 49% of the business. At that time we began selling liquid fertilizers
that we from the Lohry brothers who owned and operated Nutra-Flo
Chemical Company in Sioux City, Iowa.

In 1974 my brother, Rob, and I purchased Jim's share of the company stock. Both of
us graduated from Iowa State University in Ames, Iowa. Davy has since retired
and my brother and I operate the business. Davy's and Jim's Feed Store, Inc. sells
fertilizer, chemicals, feed and seed, and provides custom application services.

We have 7 full time employees and hire 5 part-time people for help in the spring.
Davy’s and Jim's operates 6 different custom application machines some of which
ost several hundred thousand dollars each.

Our feed business has decreased each year with the ever decreasing numbers of
livestock in this part of the state. Our current customer base {s made up of average
sized to smaller farms. We do not deal with any wealthy farmers or those who
farm 2000 acres or more. Twenty years ago 90% of the farmers raised hogs and 60%
of them fed cattle, and all of them were raising grain. Today we are losing livestock
farmers by alarming numbers. I would estimate that no more than 25% of the
farmers are rafsing hogs and less than 10% of them are feeding cattle.

Almost all of our fertilizer is custom applied and many of the chemicals we sell are
applied with the fertilizer. Our gross sales for 1995 were over 1.7 million dollars
and were somewhat less than past years. I would say that Davy's and Jim's is pretty
typical of an independent full service agribusiness in Iowa.

‘When we started in business there was very little regulation from the federal or
state governments. Today, however, it's a different story. We are required to
comply with Environmental Protection Agency (EPA), Occupational Safety and
Health Administration (OSHA), Department of T: ion (DOT),
Department of Agriculture and Land (IDALS), United States
of Agriculture (USDA) and Food and Drug Agency (FDA). As we
speak Tier I forms are being filed with the state. This form lists all the chemicals
we have stored in our warehouse, including a determination of their physical and
} ‘th hazards if they are involved in a fire or spill. An Emergency Action Plan is


> Been suas
4) < 91,098,%87>
2. Total Realdant Pupils Served - 1,097
‘s. Total NaitReeldeat Pupile Sivas a
“4. Total Pupils Tuitioied Out to Other Agencies - 95 |
5. Total Tuition Dollare Received - $429,707
. ‘With $159,680 of Receivable te af €-30-95
"6. Metal Tuition Dollars Paid Qt -. $668,408
“With 346,542 Payable an 6-80-06)


33

that make them think twice about some of the citations that they
issue?

Mr. BAILEY. I think it may make them do their homework a little
bit better before they dive in. I would like to comment, regulations
are good. I think this is one of the greatest countries in the world
and regulations are kind of like locks. They keep honest people
honest. Right now with the tremendous pressures in Washington
on these agencies to cut funds, they are going—they have to get
funds somewhere else and they are tending to turn from accident
prevention or aid regulatory agencies to criminal prosecution agen-
cies and they need capital to finance their business of regulating
people. Desperate people do desperate things, somewhat like locks

eep honest people honest. If somebody needs something, a lock is
not going to make any difference. That is what happens with some
of these regulatory agencies. They need funds to continue and it
puts tremendous pressure on them to break down your door. Most
people will just pay the legal fee and cut it short like we did, or
else we would sit and battle this thing—this started in—the first
letter was in 1993. We would be into the next century as part of
this $5 million cleanup, and we would have half a million dollars
in legal fees. We chose to cut our losses. But as is evidenced by the
testimony submitted, this was a clear cut deal, we were not in-
volved. Gotcha, as you say.

Mr. McINTosH. Yes, I know exactly. And one of the things Presi-
dent Clinton has done is task the Vice President with finding out
ways of improving the efficiency of government. I actually borrowed
that phrase from him. His goal is to prevent the agencies from
playing gotcha. Hopefully, we will be able to pass some legislation
to make that stick and create the right incentives for it.

Thank you all. I appreciate it.

Tom, do you have any questions?

Mr. LaTHaM. Yes, just briefly.

Mr. Calhoun, can you—and Y know your company very well. They
are very responsible corporate citizens. What substance was leak-
ing? What was found in your underground storage tank?

Mr. CaLHouNn. Gasoline.

Mr. LaTHAM. It was gasoline. Do you have any estimate about
what it cost to have all of the studies and consultants and every-
thing? Do you have a number as to any estimate of what that cost
you to go through the whole process that has taken 7 years?

Mr. CALHOUN. Well, the $40,000 number—actually, it is not a
complete cost of Wells’ Dairy. Some of that funding is supplied
through GAB and the State of Iowa. So, surprisingly enough, most
of that $40,000 is taxpayer money. The additional money that was
spent—and there was a substantial amount of money spent on con-
sultants and so forth; no, I do not have an exact figure.

Mr. LATHAM. But the cost of the cleanup was about $40,000?

Mr. CALHOUN. The clean up has actually just begun.

Mr. LATHAM. So even though you spent—or there has been
$40,000 used up in the whole process over 7 years and it is still
not cleaned up, you do not know what the whole thing is going to
cost you?

Mr. CALHOUN. No, sir.

Mr. LATHAM. Seven years later?


133

Mr. CouGILy. Thank you.

Mr. Chairman, my name is Daniel Cougill and I am the presi-
dent of the Sioux City Professional Firefighters Local 7 of the
International Association of Firefighters. I appreciate this oppor-
tunity to appear before you today to represent my local and the
IAFF and to share the views of 210 professional firefighters on
Federal and State occupational safety and health regulations and
their role in protecting firefighters. It is the regulation that has
saved the lives of thousands of firefighters and citizens over the
last 25 years.

The profession of fire fighting is and always has been a hazard-
ous occupation. Every year the IAFF publishes an annual death
and injury survey and each year the hazards of fire fighting con-
tinue to exist and display ever-varied forms. During the 10-year pe-
riod 1984 to 1993, the death and injury survey has found that pro-
fessional firefighters experienced 345 line of duty deaths, 598 occu-
pational disease deaths, 362,000 injuries and 7,372 forced retire-
ments due to occupationally induced diseases or injuries. Fire-
fighter line of duty fatalities have ranked fire fighting among other
publicized hazardous occupations in the private sector such as min-
ing and construction.

Of the injuries reported, approximately 80 percent occur while at
the emergency scene. Sprains and strain are the leading cause of
on-duty injury, followed by lacerations, contusions, burns, inhala-
tion of hazardous materials and eye injuries. The data has showed
that more than 40 percent of all firefighters can be expected to be
injured at least once during the next year. Occupational diseases
such as heart disease and cancer constitute more than 90 percent
of all the reported firefighter deaths when their occurrences are
combined.

These figures only roughly scratch the surface when it comes to
detailing the hazards of fire fighting. The nature of the job is so
varied and extensive, often people do not truly understand what a
firefighter’s job is all about. Firefighters are physically and psycho-
logically challenged. Challenges exist at all building fires, vehicle
accidents, hazardous material incidents, rescues, wildland fires, ex-
plosions, chemical exposures, extreme temperature environments,
infectious disease exposure, occupational disease and cancer, fire
ground accidents, environmental exposures, psychological stress,
noise, physical fitness conditioning and personal time management.
Firefi; Jhters are constantly making transitions from the calm,
peaceful environment of the firehouse to the hostility presented by
fire. The constant transformations from quiet to raging infernos
have numerous psychological and physiological side effects. Within
15 to 30 seconds after the fire alarm sounds, research studies have
found that firefighters’ heart rate—that a firefighter’s heart rate
can increase by as much as 117 beats per minute. In addition, a
firefighter’s heart can beat twice its normal rate throughout the en-
tire fire fighting operation. These extreme psychological stresses
obviously—and physiological stresses obviously lead to severe coro-
nary problems which have been documented by numerous authori-
ties.

The working environment can also mean a transition from below
freezing temperatures to temperatures with 100 degrees to 500 de-


17

question if my office would have to spend time completing some of
these tasks. The regulators’ efforts need to be refocused on the
Boals of protecting the environment and providing a safe work
place.

Thank you.

Mr. McINTosH. Thank you very much, Mr. Calhoun. I look for-
ward to asking you a little bit about those MSDS criteria.

Our next witness is Mr. Corky Bailey. Mr. Bailey, thank you for
coming today. Before we start, let me just ask unanimous consent,
if people do not mind if the gentlemen and ladies who feel like it
could remove their coats. It is awfully hot in here and I certainly
do not mind if we become a little less formal in this process. So
anybody who would like to, feel free to.

Mr. Bailey.

{The prepared statement of Mr. Calhoun follows:]


61

contest OSHA's findings and conclusions.

After a series of negetiating sessions, Terra and OSHA reached a settlement of
the case, Inthe settlement, OSHA withdrew aver 75% of the citations, and Terra
agreed to pay @ reduced fine. The fine paid by Terra ($330,000) was less then 10% of
the fines issued to other companies in the industry for similar accidents, (For example,
the penalty fer a similar explosion Involving another fertilizer menufacturer, IMC, was
$14.1 million.)

OSHA thus carried out its regulatory mandate and ended its involvement with
the Port Neal accident by early October 1995.

EPA

EPA's team of investigators did net leave the Port Neal plant until August 1995,
some three months after OSHA had already completed its fleld investigation and Issued
its citations. in Auguel EPA stated that it would be Issuing 8 report on safety Issues by
the end of September 1895. The report Issuance date first slipped to the end of
October, then to the end of November, and then to no fixed date, Terra was told that
because this was EPA's firet attempt at doing such an investigation and issuing such a
report, the report was being scrutinized by officals at both the regional and national
levels of the agency.


130

Pen Fre

CHILDREN FIRST ADVOCATES’ COMMENTS
TO THE UNITED STATES HOUSE SUB-COMMITTEE ON
NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES
AND REGULATORY AFFAIRS

Let's be honest. The issue isn't regulatory reform, as it applies to the Individuals With
Disabilities Education Act (IDEA), whether or not the federal regulations are too excessive,
burdensome or counterproductive, the unvoiced issue is that the student with a disability is

viewed as a “burden.” Taking the “punch” out of the federal regulations will not reduce the

number of students with disabilities in Sioux City, in lowa, or in the United States. It will onty

result in the reversal of quality education for students with disabilities.

Logic tells us that for all students, a solid education is the foundation for a successful,
independent adulthood. For most students, this process follows the form of a pyramid. A strong
educational foundation peaking as adults contributing as independent members of a community.
Too often, students with disabilities operate within an inverted pyramid. The most minimal os
support is given to the foundation of education, resulting in an adulthood of dependency,
underemployment, and unemployment. It is only strong implementation of the federal
regulations, as it is now written, that will allow students with disabilities 10 operated within the
same pyramid offered to everyone else. Let's flip that pyramid for these students

Except for those in this room that are family members of students with disabilities, no one
else will have to live with the negative impact of the dilution of IDEA. Where will you all be
{five years from now, ten years from now, 20 years from now? Will you be there when the
outcome of a new de-regulated system mirrors pre-1974?

Let history teach us a lesson, Students with disabilities weren't welcome in schools

before IDEA. The same mind set will close the doors again twenty-two years later. {t wasn't


114

Mr. McINTosH. Thank you, Mr. Meisner. I will take you up on
that. One of the things I have found in talking with people about
this problem is, if you go through a dry analytical description of it,
your audience goes to sleep because it is regulations and their eyes
glaze over, but if you can show them some of the ridiculous as well
as the serious examples, it drives the point home. So, I am always
looking for new examples of stupid regulations and there seem to
be many of them. So, thank you, I appreciate that.

A real quick question for Dr. Madison. You talked about the
IDEA Act and we have looked at that in the Education Committee
and have some reform legislation in that area. Another problem
that I have heard with that regulation was that teachers felt it
made it difficult for them to do a good job teaching students who
were not handicapped. Everyone wants to see handicapped stu-
dents have an opportunity to learn and an opportunity to be full
members of our society, but the teachers felt that it was making
their job, if not impossible, much more difficult with the other stu-
dents in the classroom. Has that been your experience as well?

Ms. MADISON. Yes, some teachers do feel that way. They need to
make accommodations for all students obviously. That requires ad-
ditional training for teachers who may have started in the profes-
sion 20 years ago. The other thing is, we are looking at efficiency
in education trying to make the best use of tax dollars. So, if you
have students who learn at an average to above average rate of
speed, they do not have difficulties. You can have 25 to 30 students
in a classroom, when you place a severely disabled student into one
of those classrooms for half a day or so, you have a serious problem
with the amount of education the teacher can provide. So then the
solution is to provide a one-to-one assistant and that is expensive.

Mr. McINTOsH. And the other aspect of that I have heard was
the inability to remove problem children if they come under one of
the categories in the IDEA. The teacher felt they could not dis-
cipline the classroom adequately.

Ms. MapIson. That is a concern. If you have a student that is
not receiving special education services who has a discipline prob-
lem, you can deal with that discipline problem swiftly which is usu-
ally appropriate. With a student receiving special education serv-
ices, you need to call the IEP team together; they need to deter-
mine whether the action was related to the student’s disability or
not and after that discipline is applied. It takes time to get that
IEP team together.

Mr. McINTOSH. Meanwhile the rest of the students may be dis-
tracted.

Ms. Mapison. And may wonder why one student was disciplined
right away and another student appears to have nothing happen-
ing.

Mr. McINTosH. Let me ask you another question. I just cannot
resist to see if you have heard this. As I was touring some of the
schools in my district in Indiana some of the kids came up to me
and started talking about--that one school that they called it crazy
checks and another school it was funny money. Have you heard
that from the kids?

Ms. MADISON. No, I have not heard that at all.


116

ing some 53-odd violations of the hazardous material regulations.
So the scope of the investigation was completely different in the
1994-1995 investigation.

Mr. LATHAM. I have had many constituents tell me they think
the attitude in that agency has changed dramatically, that they
have reversed their role from being one of—we talked today about
being proactive rather than reactive. That they are now coming in
with the intention of finding people and looking for violations rath-
er than trying to help with the safety of the workplace. I just want
to emphasize to the chairman and everybody on the committee that
this is a very, very significant incident. Nationally, it is going to
very much affect not only all the relationships here in Iowa but
across the country when we talk liability wise and everything else
in the communities. It really opened the gate up for a lot of dif-
ferent interpretations of what should be very clear. I thank you
very much and your suggestions are excellent.

Dr. Madison, I just wanted to ask you; in your testimony, you
talked about there are other social—that you are not a social serv-
ice agency, or at least, you were not intended to be. There are
agencies who determine when a client has reached maximum bene-
fit in their system. How do they make that determination and how
would you suggest maybe in the school system that you could make
a determination like that?

Ms. Mapison. I do not know how they make that determination.
That would be a new concept to us. During one of the earlier pan-
els, a comment was made that government should look at the cost-
benefit analysis sort of concept. Maybe that is what we should do.
I do not have a formula for that, but we would sure be happy to
look at it.

Mr. LATHAM. Could you give us examples of possibly—and I real-
ly appreciate the fact that you brought out a very positive story in
your testimony of something where it had been successful for a stu-
dent who had a certain disability and was able to mainstream and
was very successful. I am very sensitive to that also. Could you
give us an idea maybe of some of the duties or services that you
are asked to provide for some of the students possibly that maybe
you would not expect in the school system?

Ms. MADISON. Well, I think the tube feedings and the catheter-
izations are two things. We have medically fragile students that
are in regular schools and appropriately so. I mean, I think they
need to be in school. But we are providing what is traditionally
health services and that is a difficult thing for schools, I think, to

10.

Mr. LaTHAM. You think of yourself as an educator and not a
medical provider in that regard.

Ms. Maoison. Right.

Mr. LaTHAM. Thank you very much.

Steve, in the interest of time, I want to ask you what—and
maybe Mr. Foss would know too—what the status is today—right
now, in your situation, what is the time table coming up as far as
getting any resolution?

Mr. BREvIG. Why do I not have Mark—I have got Mark Foss
with me who is the general counsel with Dakota. He has been—


4

ers working out of a pickup truck or a back alley. They are owners
who are trying to make something happen for the good of the peo-
ple. In many cases, these are second-generation owners hoping that.
they can pass those businesses or farms on to their children. They
are volunteers that are active in their communities and their
churches and they care about their State, their communities, their
neighbors, their employees and their businesses. Many of them
share a common concern; I think a common frustration and even
a common fear. They are honest and they want to provide jobs with
good wages and they want their communities to grow and they
want to hire more people. But, I think, they are also frustrated at
Government and the rules and what sometimes does not make
sense to them. They want to follow those rules, but they sometimes
need a little help understanding why Government is doing what
they are doing. I think sometimes Government needs to sit down
and figure out why they are doing what they are doing. Today’s
hearings should provide key insight on those issues.

If you will give me a moment here, I would like to share with
you a couple of examples of my own. One happens to be a central
Iowa company that told me that OSHA had fined them $500 during
an inspection on the job site. On the back of their truck was a
water cooler—and we have seen those plastic water coolers, and
the workers use paper cups for it. After they use it, they wad it
up and throw it on the ground. Well, unfortunately, the OSHA in-
spector happened to come by and see this and he reasoned that
some worker might come along, pick it up, unwad it and reuse it
again.

I think later, you are going to hear about the Sioux City Fire De-
partment’s experiences with Iowa OSHA. Now, this was a wakeup
call for many people in this State. While OSHA has agreed not to
fine the city, they feel they were right and in similar circumstances
could fine another fire department.

Now, the positive side to this story is that momentum for posi-
tive change is happening in Iowa. Iowa OSHA has agreed to not
fine emergency workers during crisis situations and is starting the
process of implementing a common-sense approach.

Now, the movement by Congress and the White House to im-
prove a partnership approach to worker safety, I think, is to be ap-
plauded and I want to make sure that it is encouraged. I think it
is a key area.

Another key area of runaway government red tape is EPA’s role
in the air and water quality guidelines. Iowa businesses face such
regulatory hurdles that we had a backlog of 300 applications for
economic growth, jobs, right here that were being held hostage.

One more example of red tape comes from a small business in
western Iowa. I think this is intriguing. It goes along with Con-
gressman Latham’s remarks, I think. A crematory was applying for
an air permit and one of the questions the agency asked was for
them to project the amount of emissions if they ran 24 hours a day,
7 days a week, 365 days a year. I think you can quickly figure out
the dilemma they ran into. They had already cremated everybody
in Sioux City, Council Bluffs, Omaha and were working their way
toward Des Moines and they had not even dented the market. So,


93

US. House of Representatives Subcommittee’ on
National Economic wth, Natural and"

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Linda Mist cd Preneanent the does Clty Goteonuniey Scheal Bates ers it

Sioux City, lowe. ‘Today. T wil address caneeras about mendates required :
he LasiePluals with Disables in Bduacton Act comavaly kagwh ou IDEA.



38

group, XYZ, can get another $100,000 from a private sector donor,
say the Ford Foundation, given for the exact purpose of lobbying
Congress to appropriate more taxpayer money in the future. The
$100,000 grant from taxpayers in essence frees up for lobbying pur-
poses the $100,000 received through private donations. As we
know, this money game is called fungibility. Tax dollars are fun-
gible, hence, a group involved in lobbying Congress that also hap-
pens to receive a Federal grant is thereby doing so at taxpayer ex-
pense. I have got some specific examples and I will just submit
them for the record.

In each of these cases—hundreds of others—a grant recipient
was lobbying Congress to continue the taxpayer money flow. Not
once over the years have I ever received a letter—I wonder if any
Member of Congress on the panel has—from a giant recipient tell-
ing me it is time to cut back their funding. Mr. Chairman, it is the
nature of the Federal beast, this problem just is not some aberra-
tion, it is the rule. The only thing left for us to do is to disconnect
the tube. We must effectively prohibit grantees from directly lobby-
ing for the continuation of the grants they receive. And, of course,
any time you dry out an addict, you meet intense resistance. All
sorts of excuses will be made as to why these groups ought to be
able to lobby for the tax dollars they receive. And you will recall
my plan embodied in H.R. 1130, this plan takes each of these main
objectives into consideration. And again, I will submit for the
record how that works out.

Let me just conclude—and again, reemphasizing how happy I am
to join this panel. To take a moment to raise another regulatory
subject that is often overlooked. In 1987, then Ronald Reagan, who
celebrated his 85th birthday 2 days ago, he issued an Executive
order requiring all new Federal regulations to undergo scrutiny,
prior to being issued, regarding how that regulation might impact
families. Of course, that in a broad sense is what you discuss at
every hearing. The intent of President Reagan’s order—actually
written by our friend Gary Bauer of the Family Research Council—
was to stop confiscatory financial assault and immoral cultural at-
tacks by the Federal Government that was underway against the
traditional two-parent family. Mr. Chairman, I strongly urge your
subcommittee to look into reviving this regulatory oversight that
protects the American family. After all, we should not pursue regu-
latory reform for the singular reason of increasing Wall Street’s
profit margins. We should look deeper into the soul of our Nation
and find our ultimate purpose in increasing the quality of life for
the fundamental social, moral and yes, economic foundation of all
western civilization, the traditional American family.

I thank you for this opportunity to come to the great State of
Iowa and participate in one of your important hearings. Again, I
am very impressed with your spirit and dedication. And again, out
of the whole freshman class, on behalf of our American people, God
bless you in all or your efforts out there on the road in the heart-
land, the real America.

(The prepared statement of Hon. Robert Dornan follows:]


125

SIRECK Ha
Ida County Rural Electric Cooperative PHONE
Rk, Highways 59 & 175 East, 712) 364.3341
PO Box 72 FAX
‘Ida Grove, lowa 51445-0072 (712) 364-3343

RETAIL WHEELING

Deregulations of the electric utility industry will bring about many
challenges. The goal is competition which will bring about lower electric

rates for all consumers.

The evidence suggests that electricity prices could likely fall in the short
term. The magnitude of this decrease is not clear. The probability of
average long term retail prices rising appears larger than for such electric
rates falling.

Utility rates in the midwest are among the lowest in the country. With open
access we could see our power moving out of our region forcing us to buy
power from someone else at a much higher rate.

In an electric industry structure that is more competitive, it is likely that
different choices or levels of quality, reliability, and service will be provided
at varying price levels. Customers would have the opportunity to pick
services that best meet their needs. The actual billing is likely to become
more complicated with charges from different companies for energy,
transmission, distribution, and retail services. Detailed billing can lead to
more educated choices for some customers. It can also lead to poor choices

among customers who cannot understand all the information.


100

‘The Great Plains Synfuels Plant located near Beulah, North Dakota, is the only
facility in the world that manufactures pipeline quallty synthetic gas from coal.
Great Plains is owned and operated by Dakota Gasification Company (Dakota),
@ wholly owned subsidiary of Basin Electric, Great Plains was constructed
pursuant to a $1.5 billion loan guerantea issued by the Department of Energy
(DOE) pursuant to the Federal Non-nuciear Energy Research Act of 1984. The
balance of the cost of this $2 billion project was provided by the project
‘sponsors, four of whom are affiliates of the four pipeline companies that
purchase the plant's synthetic gas output. DOE issued Its loan guarantee based
upon Federal Energy Regulatory Commission (FERC) Opinion 119 which
approved high priced gas purchase agreements between Great Piains and the
four pipeline purchasers and allows the pipelines to pass these costs on to their
customers. Basin Electric joined with the project sponsors in developing joint
mine, rail and water facilities to be shared by Great Plains and the adjacent
Antelope Valley Station, a 900 MW power plant then being constructed by Basin
Electric.

As a result of the down tum In world energy prices, the project sponsors
abandoned Great Plains following its completion on August 1, 1886. The DOE
assumed operation of the project and eventually secured ownership through
foreclosure.


41

-3-

has held that no tax dollars can be used to lobby any level of government
or influence any legislation. In other words, Group XYZ getting a grant
of $100,000 to provide Head Start in a community is prohibited from

spending one of money on lopbying Congress, What isn’t

widely nom aaa, Inderstood php oxpayers, is that

Group XYZ might get another $100,000 from a private sector donor

given for the exact purpose of lobbying Congress to appropriate more Znypmyer-
money in the future. The $100,000 grant from taxpayers, in essence,

frees up for Jobbying purposes the $100,000 received through private

donations Sins money eure is called fungibility. Tax dollars are

fungible, hence, a group involved in lobbying Congress, that also happens

to receive a federal grant, ei so at taxpayer expense.

Let me get even more specific. Every 1,2 Rooded with mail
asking us to support this program or reject that program from
organizations which are drawing heavily. af. United States Treasury. I
remember one letter received last year from the American Association of
Retired Persons (AARP) lobbying me to vote against our Budget
Committee's budget resolution, which of course cuts federal spending
dramatically in many areas supported by AARP. A cursory check of the
Post-Award Grants Information Services, available to every Member
online from House Information Resources, revealed that AARP received

3