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[Senate Hearing 115-21]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 115-21

     EXAMINING HOW SMALL BUSINESSES CONFRONT AND SHAPE REGULATIONS

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 29, 2017

                               __________

    Printed for the Committee on Small Business and Entrepreneurship

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         Available via the World Wide Web: http://www.fdsys.gov

                                   ______

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED FIFTEENTH CONGRESS

                              ----------                              
                    JAMES E. RISCH, Idaho, Chairman
             JEANNE SHAHEEN, New Hampshire, Ranking Member
MARCO RUBIO, Florida                 MARIA CANTWELL, Washington
RAND PAUL, Kentucky                  BENJAMIN L. CARDIN, Maryland
TIM SCOTT, South Carolina            HEIDI HEITKAMP, North Dakota
JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
JAMES M. INHOFE, Oklahoma            CORY A. BOOKER, New Jersey
TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware
MICHAEL B. ENZI, Wyoming             MAZIE K. HIRONO, Hawaii
MIKE ROUNDS, South Dakota            TAMMY DUCKWORTH, Illinois
JOHN KENNEDY, Louisiana
          Skiffington E. Holderness, Republican Staff Director
                 Sean Moore, Democratic Staff Director

                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Risch, Hon. James E., Chairman, and a U.S. Senator from Idaho....     1
Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire..........     2
Kennedy, Hon. John, a U.S. Senator from Louisiana................     3

                               Witnesses

Noel, Randy, President, Reve Inc., First Vice Chairman, National 
  Association of Home Builders (NAHB), Laplace, LA...............     4
Knapp Jr., Frank, Co-Chairman, American Sustainable Business 
  Council (ASBC), President & CEO, South Carolina Small Business 
  Chamber of Commerce, Columbia, SC..............................    12

                          Alphabetical Listing

George Washington University Regulatory Studies Center, 
  Commission on Evidence-Based Policymaking
    Comments dated November 8, 2016..............................    38
George Washington University Regulatory Studies Center, Examining 
  How Small Businesses Confront and Shape Regulations
    Statement dated March 29, 2017...............................    63
Kennedy, Hon. John
    Opening statement............................................     3
Knapp Jr., Frank
    Testimony....................................................    12
    Prepared statement...........................................    15
Lankford, Hon. James
    Prepared statement...........................................    74
National Association of Convenience Stores
    Statement dated March 29, 2017...............................    76
National Federation of Independent Business
    Statement dated March 29, 2017...............................    82
NEMO Equipment, Inc.
    Statement....................................................    91
Noel, Randy
    Testimony....................................................     4
    Prepared statement...........................................     6
    Responses to questions submitted by Senator Inhofe...........    36
Northland Forest Products
    March 8, 2017................................................    93
Pete and Gerry's Organics, LLC
    Statement....................................................    94
Risch, Hon. James E.
    Opening statement............................................     1
Shaheen, Hon. Jeanne
    Opening statement............................................     2
    Prepared statement...........................................    34
U.S. Chamber of Commerce
    Statement dated March 29, 2017...............................    95

 
     EXAMINING HOW SMALL BUSINESSES CONFRONT AND SHAPE REGULATIONS

                              ----------                              

                       WEDNESDAY, MARCH 29, 2017

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:00 p.m., in 
Room SR-428A, Russell Senate Office Building, Hon. James E. 
Risch, Chairman of the Committee, presiding.
    Present: Senators Risch, Ernst, Inhofe, Young, Rounds, 
Kennedy, Shaheen, and Heitkamp.

OPENING STATEMENT OF HON. JAMES E. RISCH, CHAIRMAN, AND A U.S. 
                       SENATOR FROM IDAHO

    Chairman Risch. Welcome, everyone. We will call the meeting 
to order. I want to welcome everyone to this issue-focused 
hearing, and the issue, of course, today, we are talking about 
is the federal regulatory structure. From my perspective, the 
best thing that Congress can do to help small businesses is to 
get out of the way. The first way you do that is to get a 
handle on the regulatory structure.
    Often, when I talk to small business people they feel, and 
I think correctly so, that their complaints, when there is a 
regulation proposed, fall on deaf ears. We all know that it is 
much easier for a large business to comply when the Federal 
Government decides it is going to enact some type of 
regulation. If you are a large corporation, you have a fleet of 
lawyers and compliance officers and accountants that can handle 
it. If you are fixing lawn mowers in your garage, in a one- or 
two-person operation, that becomes a much, much more 
challenging prospect.
    I think that small businesses need a break from the 
regulations that they have been suffering under for the last 
eight years. Under the Regulatory Flexibility Improvement Act 
that we have proposed, agencies will be required to evaluate 
the impact of regulations and do it in a realistic fashion. As 
we all know, that is already required, but our poster child for 
avoiding review is the Waters of the United States Rule. When 
the rule was proposed, incredibly, the agency said that that 
rule would not significantly impact small businesses, and we 
all know--particularly those of us from the West--how untrue 
that is.
    I am extremely confident in America's entrepreneurs, who 
provide robust economic growth when we give them the chance to 
advance business and innovation. We need to ensure that federal 
agencies listen to small businesses when making rules.
    I look forward to working on this committee to pass much 
needed reforms that empower the Office of Advocacy and give 
businesses-- particularly small businesses--a stronger voice, 
while also limiting the ability of the federal agencies to 
impose new regulatory costs on small businesses. It is small 
businesses that were responsible for building this country. 
They built this country not because of the Federal Government, 
but in spite of the Federal Government. We want to go back to 
that, as far as I am concerned.
    With that, I want to yield to my good friend and 
distinguished colleague, Senator Shaheen.

OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, AND A 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Well, thank you very much, Chairman Risch, 
and thank you to our two witnesses who are here today. We 
appreciate your taking time to be here and share with us your 
views. And I apologize for being late. I have two other 
hearings going on at the same time, as is often the case in the 
Senate.
    Mr. Chairman, I also thank you for holding this hearing 
today, because, as you point out, we can do better with how the 
regulatory process addresses small businesses. I started out 
life, my husband and I did, as small business owners, and I 
understand the challenges that small businesses face. They need 
to balance their budgets, meet payroll, find new customers, 
attract talented workers, and keep pace with the changing 
economy.
    Small businesses have a lot to worry about and our job, on 
this committee, is to try and help them grow their businesses 
and make their lives easier, and there is no question that 
poorly crafted regulations can result in an excessive burden 
for small businesses. That is why we need to ensure that 
federal agencies have a regulatory process that produces smart, 
common-sense, and easy-to-understand rules, why we need to help 
them comply, and why we need to harmonize and streamline and 
repeal regulations that no longer make sense.
    At the same time, I think it is important that we are 
mindful that well-crafted regulations have the potential to 
both encourage innovation and provide critical protections that 
small businesses need, and in anticipation of this hearing I 
reached out to small businesses in New Hampshire and heard from 
a few owners about what they would like to see with respect to 
regulations, and I want to just share two of those stories.
    I heard from Jesse Laflamme, who is a CEO of Pete and 
Gerry's Organics, which is a small business located in Monroe, 
New Hampshire, which is northern New Hampshire. They produce 
USDA certified organic eggs. Senator Risch thinks we do not 
have farming in New Hampshire, but we do.
    [Laughter.]
    Chairman Risch. No, I know you do.
    Senator Shaheen. Jesse's business has thrived for over the 
last decade, with sales growing by more than 30 percent each 
year. That is a pretty good growth rate. He now sells his 
organic eggs at more than 9,600 locations across the country, 
and he writes--and I am quoting him now--``The regulations on 
organic food and the labeling associated with adhering to these 
regulations give us an important competitive advantage in our 
market.'' He further adds that ``the organic label must have 
real meaning or our products will lose their value-added 
advantage.''
    I also heard from Jamey French, who is the CEO of Northland 
Forest Products, which is a family-run business in Kingston, 
New Hampshire, that produces lumber for markets throughout the 
United States. In his letter, Jamey writes that ``as a small 
family- and employee-owned business, we rely on a stable, 
consistent, and fair regulatory environment to protect us from 
unfair market competition and to level the competitive playing 
field.'' And he adds that ``clean air, clean water, and 
regulations that discourage mismanagement of the working 
landscape are key to our future.''
    So I believe we can accomplish the goals that all of us 
would like to see, in terms of fair, effective regulations, and 
that is hopefully the mission of this committee and the goal of 
the hearing today is to hear from you all as representatives of 
small businesses what you would like to see us do to address 
these regulations.
    So thank you very much, Mr. Chairman, and I look forward to 
hearing from our witnesses.
    Chairman Risch. Thank you so much. I appreciate it.
    I am now going to recognize Senator Kennedy, who will 
introduce one of our witnesses.

  OPENING STATEMENT OF HON. JOHN KENNEDY, A U.S. SENATOR FROM 
                           LOUISIANA

    Senator Kennedy. Thank you, Mr. Chairman. It is my pleasure 
today to introduce Mr. Randy Noel, who is one of our witnesses 
today.
    Mr. Noel is from Laplace, Louisiana, which is near my place 
of residence in Madisonville. He is a second-generation home 
builder. He has more than 30 years of experience in the 
residential construction industry. Since founding his company, 
Reve Inc., in 1985, he and his company have built more than 
1,000 custom homes in the greater New Orleans area. Throughout 
his career, he has been active with the National Association of 
Home Builders at the state, local, and national levels. That 
includes serving on the Board of Directors for more than 20 
years, and is the President of the Louisiana Home Builders 
Association, which is a very important trade association in my 
State.
    In 2018, Mr. Noel will become Chairman of the National 
Association of Home Builders Board of Directors, and I hope you 
will join me in welcoming Mr. Noel today. I know small 
businesses are important to America. They are especially 
important to Louisiana. We have over 400,000 in my state. Each 
is very important and Mr. Noel here is going to talk to us a 
little bit about some of the problems they have today.
    Thank you for coming, Mr. Noel.
    Mr. Noel. Thank you, Senator Kennedy, my Senator from 
Louisiana.
    Chairman Risch. Mr. Noel, we will hear from you, and then 
we will hear from Mr. Knapp. We would ask you to please keep 
your comments to about five to six minutes. Anything you have 
in writing will be submitted for the record, and we will have 
it published in the record.
    So thank you very much and welcome.

   STATEMENT OF RANDY NOEL, PRESIDENT, REVE INC.; FIRST VICE 
     CHAIRMAN, NATIONAL ASSOCIATION OF HOME BUILDERS (NAHB)

    Mr. Noel. Yes, sir. Chairman Risch, Ranking Member Shaheen, 
and members of the Committee, Senator Kennedy, I am pleased to 
be here on behalf of the National Association of Home Builders 
on how small businesses confront and shape regulations.
    You already know, my name is Randy Noel, and I am from 
Laplace, a second-generation home builder, and I have been 
doing it for 30 years, and as Senator Kennedy said, we have 
built over 1,000 homes in that area.
    But I understand how difficult and costly it can be to 
comply with government regulations. But it is not just costly 
for me and my business. These costs also deny too many 
Americans the opportunity to own a home.
    According to NAHB's research, government regulations 
account for nearly 25 percent of the cost of a new single-
family home. Worse, 14 million American households are priced 
out of the market for a new home. In order to reduce the 
regulatory burden on small businesses, NAHB believes you must 
restore congressional oversight authority to the process. Fix 
what is broken and focus on the disproportionate burden small 
businesses bear in complying with regulations. Today I will 
focus on the small business component.
    While the Regulatory Flexibility Act requires federal 
agencies to consider the effect of their actions on small 
entities, agencies regularly neglect input from the regulated 
community and, as a result, produce very poor impact analysis. 
Even with these flaws, the rules go into place and businesses 
are forced to divert precious resources to lengthy and 
uncertain legal challenges.
    Unfortunately, there is no other way to hold agencies 
accountable when they ignore the effects of regulation on small 
businesses, and agencies are not required to confirm their 
economic analysis with a respected, neutral third party.
    As an example of how agencies often go off the rails, I 
would draw your attention OSHA's 2013 silica rulemaking. OSHA 
stated the cost to industry would be only--only--$511 million. 
A coalition of construction groups, including the NAHB, 
commissioned an independent study that found the true cost to 
the industry at approximately $5 billion--with a B--$5 billion 
to the industry. If I provided my clients with quotes that were 
9 or 10 times below the actual cost, I would not be getting 
very much business. We would not have built 1,000 homes.
    Part of the reason OSHA got this so wrong is they relied on 
a SBREFA panel that was conducted more than a decade 
previously. The independent study showed that OSHA just does 
not understand the construction industry. For example, OSHA 
ignored some 1.5 million workers in the construction industry 
who would be indirectly impacted.
    Congress can help here. It is critical to include indirect 
costs as part of any true economic impact analysis. 
Additionally, that economic analysis should be reviewed by a 
trusted third party to ensure the integrity of the process. Had 
OSHA worked more closely and actually listened to the 
construction industry during the formation of the silica rule, 
perhaps the results would have been more effective, less 
burdensome rule for the industry. But at least they faked it.
    The same cannot be said for the EPA Waters of the U.S. In 
2014, the EPA proposed a rule challenging the definition of 
waters of the United States under the Clean Water Act. The 
agency certified the rule and, in so doing, avoided the initial 
economic analysis and small business panel requirements which 
are so critical to the rulemaking process.
    I told EPA that a more thorough analysis would have 
revealed the burdens that this rule places on small entities, 
including small home builders. This rule should have triggered 
the requirements to convene a SBREFA panel. But the EPA claimed 
otherwise and there is no means to overrule.
    Clearly, EPA was not interested in a hearing for the 
regulated community. Their only objective was to move the rule 
past the finish line. For a rule of this magnitude, small 
businesses should have had a voice in the rulemaking process. 
Congress set up a process for small businesses to be considered 
in the rulemaking process but it did not include the mechanism 
to hold the agencies accountable for the failure to comply.
    There is no judicial review provision for the failure to 
convene a small business advocacy review panel. The RFA should 
be amended to fix this critical oversight and hold agencies 
accountable.
    In addition to the common-sense changes to the RFA I have 
listened here today, there are other key components of 
regulatory reform being considered by Congress. Specifically, 
the REINS Act, which would restore congressional oversight 
authority, and the Regulatory Accountability Act, which would 
fix our decades-old, badly broken regulatory system. These two 
pieces of legislation, along with the changes to the RFA and 
SBREFA discussed today, will add fuel to the engine of economic 
growth that American small businesses represent.
    Thank you again for the opportunity to testify, and I will 
be ready for questions when they come.
    [The prepared statement of Mr. Noel follows:]
    
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    Chairman Risch. Thank you very much.
    Our second witness is Mr. Knapp. Mr. Knapp co-founded the 
South Carolina Small Business Chamber of Commerce in February 
of 2000, and serves as its President and CEO. He also serves as 
co-chair of the American Sustainable Business Council action 
fund and is the President of the Knapp Agency, an advertising 
and public relations firm.
    Mr. Knapp, welcome, and the floor is yours.

     STATEMENT OF FRANK KNAPP, JR., CO-CHAIRMAN, AMERICAN 
 SUSTAINABLE BUSINESS COUNCIL (ASBC); PRESIDENT AND CEO, SOUTH 
          CAROLINA SMALL BUSINESS CHAMBER OF COMMERCE

    Mr. Knapp. Thank you very much, Chairman Risch. Thank you, 
Chairman Risch, Ranking Member Shaheen, and members of the 
Committee.
    Thank you for the opportunity to testify today. I would 
like to start with some facts. Most regulations affecting small 
businesses come from local and state governments. According to 
polling by the American Sustainable Business Council, 86 
percent of small businesses believe that regulations are 
necessary, and 93 percent believe their business can live with 
fair and manageable regulations.
    Regulations are not killing the economy. Tens of thousands 
of new jobs are being created every month. In February, South 
Carolina had the largest one-month increase in the number of 
people working. Regulations level the playing field with big 
business, and protect small businesses from unfair competition. 
Regulations create opportunity for entrepreneurs and small 
businesses to innovate and grow, by creating new products and 
services, requiring new jobs. And small business owners care 
about their families, neighbors, workings, communities and 
environment, which they want to keep safe and healthy--the goal 
of regulations.
    So how are small businesses involved in the regulatory 
development process? Both the Regulatory Flexibility Act and 
the Small Business Regulatory Enforcement Fairness Act give 
small businesses impacted by proposed regulations the 
opportunity to weigh in on the regulation development process 
to let Federal agencies know how their businesses would be 
impacted, and encourage modifications to make the regulations 
less burdensome.
    This process is not serving our small businesses very well. 
It takes years and years to promulgate a rule. Small businesses 
across this nation really are not having input into the 
regulatory decision-making process. The process has been taken 
over by power, often big business special interest groups with 
their own agenda, and have given us regulatory paralysis.
    Now, how do small businesses confront Federal regulations 
that are of concern to them? They can personally contact the 
Federal agency to ask for clarification or help in compliance. 
The more effective approach would be to contact the Office of 
the National Ombudsman and ask for assistance in trying to 
resolve their regulatory issue with a Federal agency. 
Unfortunately, just as the regulatory decision-making process 
is not serving small businesses well, compliance assistance is 
also inadequate.
    Here are my recommendations for a regulatory forum that 
will actually benefit our small businesses.
    Balance the balance sheet. Why do we never see the benefits 
of regulations in any agency analysis? The positive side of the 
ledger is always blank when the potential impacts of 
regulations are analyzed. The economic, health, and social 
benefits of rules, put in terms of dollars, is not considered 
by the Office of Advocacy and the regulatory agencies.
    We often hear critics say that government should run more 
like a business. Well, businesses weigh the benefits versus 
costs when making a business decision. No business would invest 
in new equipment if they only considered cost. Whether the 
absence of analyzing the benefits of a regulation in the formal 
process is by statute or custom, this must change if we are to 
get truly accurate data for rulemaking decisions, and give the 
public complete information about the value of regulations.
    Invest in better outreach and analysis. We have essentially 
starved the regulatory agencies and advocacy, while, at the 
same time, wanting them to do more. But that cannot happen. 
Small business outreach is primarily to Washington insiders who 
want to clog up the regulatory process through heavy lobbying, 
litigation, creating public anxiety by quoting huge, bogus 
costs. Then the reform proposals that get the most attention 
fix the wrong problems, and would just make more problems.
    The RFA process we have today simply needs more resources 
so it can run more effectively and efficiently, giving the 
agencies the resources to conduct a quality rulemaking analysis 
and outreach we all want.
    Final point. Help small businesses understand the rules and 
provide compliance assistance. Once a rule has been finalized, 
the job of the Federal Government is not done. Small businesses 
need to be educated about the new rule and, when necessary, 
provided regulatory compliance assistance.
    Congress has also set up a process for this, not only 
within every regulatory agency but also through the SBA Office 
of the National Ombudsman. Where the Office of Advocacy works 
on the front end of a development of a significant regulation, 
the Office of the National Ombudsman is charged with helping 
small businesses on the back end, with all regulation 
compliance. It serves as the conduit for small businesses to 
have their grievances about compliance problems, or other 
issues, with Federal agencies, heard directly by the agencies, 
in an effort for successful resolution. In this way, the Office 
of the National Ombudsman, and the agencies, can detect 
patterns of compliance problems so that the agencies can 
revisit rules for modification.
    This important component of the rulemaking process is 
woefully underfunded. The Office of the National Ombudsman 
actually relies on volunteers to help get the message out about 
its vital small business services. It is, for the most part, 
unknown and underutilized. If Congress really wants to help 
small businesses with Federal regulations, invest more in the 
small business outreach, support, and feedback loop.
    In conclusion, the current regulatory process can produce 
good rules while protecting small business from unnecessary 
burdens if we provide the adequate resources for agencies to 
expeditiously carry out the requirements Congress has already 
put in place, on the front end and the back end of the process. 
Most regulatory reform proposals, while achieving the agenda of 
some seeking to delay and stop regulations, will inevitably 
fail to help the vast majority of small businesses.
    Thank you for the opportunity to speak to you today and I 
welcome any questions the Committee might have.
    [The prepared statement of Mr. Knapp follows:]
    
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    Chairman Risch. Thank you very much, Mr. Knapp.
    What we are going to do now is do a five-minute round of 
questions, using the early bird rule, and I would ask everybody 
to keep it to five minutes and then we will do a second round 
if it is appropriate. People can make statements, comments, or 
render questions.
    I am going to start very briefly and say, Mr. Knapp, thank 
you for coming here and providing your view of this. I have to 
say that your using the statistics you did at the beginning is 
impressive. It is the best face I have ever seen put on this 
disaster.
    [Laughter.]
    I have met morticians who could not do nearly as well as 
you did, so thank you very much.
    Mr. Knapp. Thank you, Mr. Chairman.
    Chairman Risch. With that I am going to yield to the 
Ranking Member. Thank you.
    Senator Shaheen. Well, thank you, Mr. Chairman, and again, 
thank you both for being here.
    Mr. Knapp, I want to follow up because you talked about the 
outreach by Federal agencies--it is not focused on small 
businesses but it is really focused on Washington insiders. How 
would you like to see us address that concern?
    Mr. Knapp. Well, the law does say that the agencies can get 
representation from whole organizations, trade associations, 
and they are in Washington.
    It would be great if we could get them out into the 
outlying areas in each of your districts and to hold these 
types of meetings. I think often what will happen is small 
businesses, in a trade association or other organization, at 
the ground level, you know, may do things differently or have a 
different opinion, or even help solve the problem. But that is 
not necessarily the goal at the national level and in D.C. You 
know, often trade associations, especially big ones, have their 
own agenda, and that is not necessarily to help the people at 
the local level.
    So I would like to see them out more, having more meetings, 
and actually engage in others, like Mr. Noel, at the local 
level.
    Senator Shaheen. Thank you. Mr. Noel, do you have anything 
you would like to add to that?
    Mr. Noel. Yeah. Let me--the Department of Labor introduced 
an overtime rule and had a--I suppose it was a SBREFA panel in 
New Orleans, which I attended, and the room was filled with 
small business people discussing the impact of the--raising the 
limits on overtime pay. And there really was not anyone in the 
room, and it was all kinds of businesses--big banks, retail, 
you name it--and there really was not anyone in the room that 
thought it was a particularly good idea to go as high as they 
were going at the time. And it just was a little disconcerting 
to me that after going through that end of the--half of a day 
with them, that very little came, or was seen in the reports of 
what we said.
    That is probably the most frustrating thing with rules and 
regulations, and small businesses' input. They get it, but it 
gets ignored, and there is not any way to make them account for 
that, and that, to me, seems to be the most frustrating thing.
    So even while when we get out of Washington, D.C., and we 
take the message and the instructions back to our local areas 
where the small businesses are, it is still not working.
    Senator Shaheen. Do you all think there is enough--are 
small businesses aware when there are changes being made, that 
they can weigh in on? Is there--are people getting that kind of 
information, do you think?
    Mr. Noel. I can tell you the National Association of Home 
Builders sends out, to its 140,000 members, an e-mail, letting 
them know what is coming, and we are pretty successful with 
getting responses and comments on the rules and regs in front 
of them. But again, over the years that I have been involved 
with them, some 25 years, even though we have had the comments 
and the concerns, a lot of the rules go into place without 
any--addressing any of those issues.
    Senator Shaheen. But people are actually getting that 
information because they are part of that association?
    Mr. Noel. Association. Right.
    Mr. Knapp. Yeah, so, and they--home builders do a great 
job. I mean, do not get me wrong. I have known the home 
builders in South Carolina and they do a--they are very active 
and they do a good job of communicating with their members. Not 
all business organizations are like that, and certainly not 
every business--small business belongs to a trade association 
as powerful as the Home Builders Association.
    I certainly would share Mr. Noel's concern that if 
information is not--is being conveyed at the local level and it 
is sort of not filtering or getting into the final--but again, 
I am not going to attribute motive to the people for doing 
that. I would also attribute it to the fact that they are 
short-staffed and there is not enough money to do it.
    So I can appreciate what you are saying but there might be 
a different reason.
    Senator Shaheen. I want to point out that according to 
Thumbtack's 2015 Small Business Friendliness Survey, New 
Hampshire ranked second, as the second-friendliest state in the 
country. Idaho was not far behind, at number six, for Senator 
Risch.
    But you talked, Mr. Knapp, about the percentage of 
regulations that are done at the state and local level, and the 
challenges that they present. Are there ways in which we, at 
the Federal level, can try and work with our local and state 
partners to try and address regulations so that we are not 
overlapping on regulations, and so that we are maybe working 
together in a way that is more business friendly? And this is 
like Startup in a Day, that the National League of Cities has 
launched, as one of the things that may try and work through 
some of those regulations. But do you have other ideas?
    Mr. Knapp. Well, I do not know. Again, that is something 
that would have to be considered. But I will tell you that from 
having started small businesses, that the most regulations you 
run into are at the local level--local and state level. And 
that does not mean that there is not going to be a Federal 
regulation along the line----
    Senator Shaheen. Sure.
    Mr. Knapp [continuing]. But the first obstacles are always 
at the local level.
    Working with the states and their regulatory processes, I 
honestly do not know how that would work out. Everybody has got 
their own proprietary concerns, and that would really take a 
lot more effort to do that, and I do not know that the states 
would be interested.
    Senator Shaheen. Thank you. Thank you, Mr. Chairman.
    Chairman Risch. Thank you, Jeanne.
    Senator Kennedy, you are up.
    Senator Kennedy. Thank you, Mr. Chairman.
    I want to thank both of you for coming. I enjoyed your 
presentations.
    Mr. Knapp, could you--I am not quite sure I understood your 
point. This is probably my shortcoming, not yours. But in 30 
seconds or less, could you tell me what you are advocating?
    Mr. Knapp. I am sorry. What am I advocating?
    Senator Kennedy. Yes.
    Mr. Knapp. I am advocating that our present regulatory 
process could work if it was properly funded. I really do not 
think that we are putting--giving enough resources to the 
agencies and to advocacy to do the job that they should--they 
are trying to do. And also on the back end. We need to set 
aside--if we had never had another regulation ever passed in 
this country, we have got a ton of them on the books, do we 
not?
    Senator Kennedy. I get it. I understand.
    Mr. Knapp. And that we need to be helping those who are 
experiencing the present regulations. If they have compliance 
assistance issues, we ought to be helping them.
    Senator Kennedy. So you think an ombudsman can cure all 
this?
    Mr. Knapp. Well, again, the national ombudsman in the SBA's 
office, that is what they are already charged with doing, is 
being that conduit if somebody contacts their office, saying, 
``I have an issue with this compliance--on this regulation.'' 
The ombudsman----
    Senator Kennedy. Mr. Knapp, excuse me for interrupting. I 
know what an ombudsman does. I did not mean to cut you off but 
I have only got five minutes.
    Mr. Knapp. Okay, sir. I apologize. But it is a different 
office. It is not the same as the agency's.
    Senator Kennedy. I want to be sure I understand what you 
are saying, that the answer to what I believe is the over-
regulation of America, which is extraordinarily burdensome, the 
answer to too much government is more government.
    Mr. Knapp. Mm-hmm. In this case, if you want to help 
resolve the problem, let us make sure the system that you have 
in place is properly funded.
    Senator Kennedy. Okay. All right.
    Mr. Noel, do you agree with that?
    Mr. Noel. Actually, not exactly. I will, to a comment that 
Ranking Member Shaheen said, that the closer--and Mr. Knapp is 
correct.
    Senator Kennedy. Mm-hmm.
    Mr. Noel. A lot of the regulations that we fool with in our 
industry is local.
    Senator Kennedy. Mm-hmm.
    Mr. Noel. Setbacks, building codes, et cetera, and some 
very good ones. I will tell you, from a personal experience, I 
find regulation coming from local government and from state 
government is a lot easier to comply with and have your voice 
heard, et cetera. Government closer to the people is a better 
government theory.
    Senator Kennedy. Is that because you have an ombudsman 
there, or----
    Mr. Noel. No. We do our own advocating there, and because 
we have the connection with the elected officials and they 
listen.
    The thing--and there is some accountability in our State--
--
    Senator Kennedy. Mm-hmm.
    Mr. Noel [continuing]. For whether that rule or reg fits 
what the legislation meant it to. We have--you know how the 
process works there. It goes back to an oversight committee and 
the oversight committee approves the rule or not. That, to me, 
sounds like the perfect world, in doing rules and regs, and 
making sure they comply with the laws that were written by the 
elected officials. We do not have that at the Federal 
Government level. The rule goes in place and then someone has 
to sue them to make them comply with the law.
    Senator Kennedy. Mm-hmm.
    Mr. Noel. I just--it is part of the reason, I think, we 
have more congressional oversight on these rules and 
regulations. We will get better rules and regulations and we 
will not put something in place that will cause a small 
businessman to have to spend hundreds of thousands of dollars 
to sue to stop.
    Senator Kennedy. Well, it has also been my experience, it 
is not just--and I would like both of you to comment on it--it 
is not just the number of rules and regulations, and it is not 
just the complexity. I think that you will find this to be 
accurate, that the Federal rules generally are much more 
complex than state and local.
    It is also an attitude. I mean, we need government workers 
who answer the telephone, and when they do answer the 
telephone, try to be helpful, which means making a decision. 
Now I know the safest way not to get in trouble is not to make 
a decision, but it kind of frustrates business. Businesswomen 
and businessmen are used to making a decision. It is government 
websites that a normal person can navigate.
    I guess what I am talking about is not just the number of 
rules, which is breathtaking, particularly the amount added in 
the last eight years. It is not just their complexity. It is 
not just the extraordinary expense. It is the attitude of the 
agencies. I mean, not every time but too often you just 
encounter condescension and smugness and this unspoken 
understanding that if you complain too much, well, what goes 
around comes around.
    Would you comment on that?
    Mr. Knapp. I will say that you have just simply made the 
perfect argument for having some entity like the National 
Ombudsman Office to be that conduit, to be the entity that goes 
to those Federal agencies and says, ``You will talk with these 
people. You will try to resolve this problem.'' That is what 
they are empowered to do, sir.
    Senator Kennedy. I am out of time. Thank you, Mr. Chairman.
    Chairman Risch. Thank you very much, Senator. You know, 
your argument is well taken. I think it even goes beyond that, 
that they should be much more results-oriented than what they 
are. This is the anecdote I tell. When I practiced law, a 
client called me and he said, ``EPA guys are here and they want 
to inspect the business. What should I do?'' And I said, ``You 
tell them to get off the property, and never set foot on the 
property again unless they have a warrant from a judge, based 
on probable cause that there is something occurring, and if you 
do not, you are going to be really sorry. Because I went 
through a lot of those enforcement proceedings and all the 
agencies were interested in was money.
    Now let me give you the other side of that. The fire 
marshal would come to my law office and say, ``Jim, I am here 
to inspect and see if you guys are in compliance. And I would 
say, ``Come on in and look it over and tell me where we are.'' 
And you know why I did that? Because I knew that guy was 
interested in seeing that my place would not catch on fire, and 
if it did, that they could put it out. He was not interested in 
raising money in fines. He would go through, he would look at 
it. If he got to the basement, there was always a problem; he 
would come up with a list and say, ``Here. You need to take 
care of these half a dozen things and I will be back in a month 
to have a look at it.''
    That is the way it should work, not walking in and saying, 
``Okay, this is going to cost you this much, and this is going 
to cost you this much.''
    You are absolutely convinced after you go through some of 
those hearings that all agencies are interested in is dollars 
and cents, and for some reason, trying to slow down the 
business from what it is trying to do.
    So if the regulatory agencies were there to help to 
accomplish things, like clean up the water, clean up the air, 
and actually be helpful to the businesses, there would be a 
whole different attitude about regulations.
    So with that, Senator Ernst.
    Senator Ernst. Thank you, Mr. Chair. Mr. Noel, thank you 
for being here today and testifying. Your testimony was spot-on 
when you spoke about Waters of the U.S. I appreciated that very 
much, and really had some interesting interactions through 
their rulemaking process, when EPA came up with that version of 
WOTUS, so thank you.
    That rule gave the EPA the power to regulate 97 percent of 
Iowa. Not 97 percent of Iowa's waters--97 percent of Iowa. So 
that really hit home with me.
    So you better believe that when that happened, when that 
rule was implemented, our small businesses were impacted at 
home, and it was EPA's failed rulemaking process, and its lack 
of consideration for those small businesses, that led me to 
work on legislation that I introduced last year called the 
Prove It Act. And we are currently working on what we consider 
a 2.0 version of the Prove It Act and we are requesting lots of 
feedback from different groups. But at its core, the bill seeks 
to strengthen the voice of small business owners and improve 
the quality of agency certifications and analysis, which we 
felt was lacking as we went through WOTUS.
    Last year we had the support of NFIB, the Chamber, and 
Women Impacting Public Policy. It is a good government bill 
that says if there is a difference in opinion between the 
Office of Advocacy and a Federal agency on the economic impact 
of the rule, such as a certification, then Advocacy should have 
the ability to request that the agency take a second look at 
its analysis, which we feel is reasonable. It would serve as a 
check on whether the agency certification of no impact on small 
businesses is correct, which is a need that you mentioned in 
your testimony, so thank you for highlighting that.
    So my question to, Mr. Noel is this: do you think providing 
greater accountability for agency certification would improve 
the rulemaking process and outcomes for small businesses?
    Mr. Noel. Well, absolutely. I mean, if you have no 
accountability you can do anything you want to do, knowing 
there is no repercussion.
    To tag on to the story about--we have builders on the north 
shore, in St. Tammany, that were making sure that the dirt did 
not go into the street, but had not had the right paperwork in 
their file to prove that they inspected it weekly, and 24 hours 
after the rain. Got fined $1,500. They were accomplishing the 
goal of the runoff but because the paperwork was not--the same 
thing happened on lead paint on a remodeling. Because he did 
not have a document saying he had given a pamphlet to a 
homeowner, he got fined. Now come on.
    Senator Ernst. Mm-hmm. Mm-hmm.
    Mr. Noel. And there is nothing you can do about it, because 
the fine is not enough to justify hiring a lawyer and suing 
them, although Volks Construction did that in Baton Route and 
won. But this is not fair to the small American business.
    Senator Ernst. Right. So we do think there should be a 
check and a balance----
    Mr. Noel. Absolutely.
    Senator Ernst [continuing]. Available there, so that if 
there is question, go back and have them take a second look at 
it, and we are hoping to gain a little traction on that piece 
of legislation this year, or in this Congress. So thank you for 
that.
    And then, second, in your experience and in your role with 
the National Association of Home Builders, how many proposed 
regulations would you say were either improperly certified by 
agencies or made it through the process without thoughtfully 
considering the comments of the small business community? Just 
an estimation on your part.
    Mr. Noel. How many rules came out in the last eight years?
    [Laughter.]
    Or the last 12 months. Hundreds?
    Senator Ernst. Thousands. Yeah. Thousands.
    Mr. Noel. I know that we are dealing with, right now, at 
least five that we are spending court money on to stop.
    Senator Ernst. Wow.
    Mr. Noel. That is not a very good use of our members' 
money, especially if we can stop the rule from going into place 
before it harms the small business.
    Senator Ernst. Absolutely, and that is why I think the 
Prove It Act is necessary. If there is a discrepancy that can 
be shown, it can be re-evaluated before it is promulgated.
    Mr. Noel. That is wonderful.
    Senator Ernst. Yeah, so, anyway, thank you very much, 
gentlemen, for being here today. I appreciate it.
    Mr. Noel. Thank you.
    Chairman Risch. Thank you. The last time I looked at 
statistics on the number of regulations, there were 80,000 
pages of regulations passed in that year. Congress, on average, 
passes 800 pages of law. Now that is on average. That does not 
include a year when they pass ObamaCare, an extra 3,000 pages, 
or something. But on average it is 800 pages of law compared to 
80,000 pages of regulatory work.
    Senator Ernst, we are looking forward to your bills and 
looking forward to debating them.
    Senator Rounds.
    Senator Rounds. Thank you, Mr. Chairman.
    Mr. Noel and Mr. Knapp, first of all, thank you both for 
being here today. In South Dakota, like in 41 other states, we 
have a rules review process. The Federal Government does not 
have one, at least not one that works. At the Federal level, 
the Congress will create a law, allow the Executive branch the 
administrative authority to write the rules, but there is no 
requirement, as Mr. Noel has indicated earlier, that that ever 
be reconciled with the actual law itself unless, at the cost of 
a small business person or a business person in some place, 
that agency is sued.
    It seems to me that the best way to approach this is to 
have a rules review process in place at the Federal level, just 
like we have in 41 other states.
    Can I ask each of you if you would agree that that would be 
an appropriate way to handle the rules processes in the future, 
and would that actually help us solve this problem?
    Mr. Noel. Well, I will answer it. Absolutely. It works well 
in my home state, and good rules and regulations and the people 
that participate in them, participate in the conversation, so 
it is not hard to enforce.
    Mr. Knapp. Yes, sir. In fact, in 2002, I was part of the 
group that promoted the South Carolina--passing the--their 
flexibility--Small Business Flexibility Act. But that is on the 
front end, though. So it is a volunteer group that looks at 
every rule promulgated by a state agency, and if they have got 
problems with it, they take it back to the state agency and 
say, you know, ``Fix this.'' So that has worked exceptionally 
well in South Carolina.
    Your proposal regarding having an independent entity look 
at a rule to make sure it complies with what the legislation 
said, I have not looked into that.
    Senator Rounds. Actually, my legislation required that an 
agency, like in 41 states, would bring their proposed rule back 
to the appropriate committee at the congressional level for 
approval, before it becomes enacted, and while the agency could 
not--or while the Congress would not be able to necessarily 
permanently stop the rule, they could delay it for a period of 
time.
    Most bureaucrats want their rules to go into effect, and 
what you find is an interest in actually working through the 
issues to get an appropriate and fair rule in place, and that 
is after you have input from the public. The WOTUS is a great 
example of one which never, ever would have been allowed to 
move forward if it would have had a congressional oversight 
prior to the implementation.
    I have another question as well. Do you think--would either 
one of you think that it is appropriate for the agency 
responsible for enforcement and action, do you think they 
should fund their agency using the fines that they collect?
    Mr. Noel. Absolutely not. I think it is a moral hazard. 
Education and--other things the money could be used for, other 
than funding the agency.
    Mr. Knapp. Certainly it creates a perverse incentive to 
finding problems when you do it that way, but I imagine those 
agencies have been told by Congress maybe they have to be self-
funded.
    Senator Rounds. The unfortunate part, CFPB is a good 
example, which is supposedly for consumers and yet it basically 
has the ability to go into a business that works for or markets 
to businesses, and basically they can fine a business, and they 
keep the money, and they actually operate the CFPB with those 
resources today. I find that very inappropriate. I do believe 
there is a moral hazard involved in that, and I disagree with 
the fact that it was ever done that way by Congress in the 
first place and should be one of the first things that we stop. 
We have legislation available now.
    Let me ask another question very quickly. Right now we 
have--at the Federal level we have, as you have indicated and 
as the Chairman has indicated, probably 80,000 rules on the 
books today. We have 1 million--there is 80,000 a year--we have 
a million rules on the books today. The total cost to the 
American public today is about $1.9 trillion annually, just to 
comply with the rules, and if you compare that, put it in 
numbers that people could actually understand, personal income 
taxes actually cost the American public, on April 15th, about 
$1.4 trillion. So the actual cost to the American economy, on 
an annual basis, is a half a trillion dollars more than what 
personal income taxes are to the individuals who actually own 
those businesses.
    It seems to me that if those rules were reviewed on a 
regular basis that we would have fewer of those, there would be 
more dollars to the bottom line, there would be more revenue 
generated on actual profits delivered, and you would actually 
have some happier businesspeople and you would have happier 
consumers as well. Your thoughts, gentlemen?
    Mr. Noel. I would say I would agree with that. Certainly 
our economy has been dragged by these regulations that we have, 
and the industry that is leaving our shores is clearly an 
indication of that.
    Mr. Knapp. My first comment about that $1.9 trillion 
figure, I think that was produced by a study for Advocacy, 
which later was disavowed by SBA, so I am not sure about the 
number.
    Senator Rounds. It is probably higher.
    Mr. Knapp. But the look-back thing, there is nothing wrong 
with that. You know, in South Carolina that regulatory 
flexibility access, yes, they should go back and look at the 
rules to see if they are still appropriate or need to be 
modified. The problem with that is it takes money to do that, 
and again, I just do not think we are funding the process well 
enough to do that, which we may all agree with.
    Senator Rounds. Thank you. Thank you, Mr. Chairman.
    Chairman Risch. Thank you, Senator Rounds.
    I think one of the problems on this whole regulatory thing 
is that we have all forgotten, or were never taught in our 
basic civics classes in grammar school that with the regulatory 
structure, the regulatory enactment is not an inherent power of 
the second branch of government--that belongs to the first 
branch of government--yet somehow that has slipped away. The 
first branch of government, of course, from time to time, 
allows the second branch to enact those regulations, and has to 
because it cannot enact them all. For instance, a classic 
example is Fish and Game type things, shooting hours, bag 
limits and that sort of thing. Those are the rules and regs 
that should be sent out.
    But we need to get back to an understanding that the second 
branch of government is merely the second branch of government. 
Their job is to execute the laws that the Congress--or in the 
states, the legislature--enacts. The legislative authority is 
not inherent in the second branch of government. It only exists 
because of what the first branch gave it.
    Sometimes when you listen to courts and you listen to other 
people, they talk like rulemaking is an inherent part of the 
second branch of government, but it is not. When a rule or 
regulation is enacted, it has substantive effect of force of 
law, and it was never intended by the Founding Fathers to be 
part of the second branch of government. It was supposed to be 
such that the second branch would execute.
    One of the strengths of this country is the fact that it 
gave us three branches of government that would be separate and 
equal, and each would have its own lane that it stayed in. We 
have really drifted away from that.
    What we do in Idaho, I think is unique. When I came to the 
state legislature in 1975, rulemaking and rule review, et 
cetera, was the same as it is here right now. If the agencies 
enacted a rule pursuant to the rulemaking authority by the 
legislature, then that had the full force and effect of law. If 
the legislature wanted to change agency rules, it took a bill 
in each house and signature by the governor.
    What we did, when I headed the State Senate, I negotiated 
and we changed that. What we have now is a situation where the 
bureaucracy can pass whatever rule and reg it wants, pursuant 
to authority from the legislature. But that rule only lasts 
until the last day of the next regular legislative session. 
When the session starts, all the rules and regs that have been 
enacted during the year are handed out to the appropriate 
committees. They review them and the only way that the rules 
last is if, on the last day of the session, when they pass an 
omnibus regulatory bill, that the rule or reg is in there. Some 
90 percent of them do pass and they are in that bill, but they 
always leave about a dozen of them on the table. This is done 
not by a statute, but by a resolution, so it does not go across 
the governor's desk. It is the first branch of government doing 
what the first branch of government should do, and that is 
dealing with legislation.
    It is a good way to do it. I often thought that would work 
substantially better here, because the substance that is passed 
here is just breathtaking when you see the kinds of things that 
the bureaucracy does here. I mean, you look at that and you 
wonder why there is a first branch of government when the 
bureaucracy is doing what it does.
    Senator Rounds. Would you yield for just a----
    Chairman Risch. Certainly.
    Senator Rounds. I absolutely agree with your analysis on 
it, and I think if there was one thing that we, as a committee, 
could do, if there was a way to begin the process of an open 
dialog, and a rules review process that was more adept than the 
one which is currently here, which, you know, we are working 
through right now where it literally takes an act of Congress, 
signed by the President, on a rule, and you have still got 
limits on that in terms of what you can do, and it still runs 
through a time frame in which we have to be proactive in 
getting the thing done.
    It seems to me that any rule at the Federal level should 
still be subject to some sort of a congressional oversight, and 
when you look back at the committees that are there, it seems 
to me that they are reasonable and it would not be an 
unreasonable approach to have those committees, with 
jurisdiction, to review those particular proposed rules, prior 
to the fact that they go into effect, if nothing else, just 
because, like in 40 states, or 41 of the states, you actually 
get better rulemaking process and you get a more open intake, 
because the bureaucrats learn real quick that if they want it 
to happen they are going to have to accept some input from the 
people that they are regulating.
    And I think we have really fallen down on that, at the 
Federal level, and I think we could do marvelous things for our 
country, and for the businesses that are generating jobs, if we 
could get a hold of this regulatory morass that we have got 
today.
    Thank you, Mr. Chairman.
    Chairman Risch. Well, there is no question about that, 
Senator. We appreciate that.
    I would like to introduce Marty and Cindy France from 
Idaho. Could you stand up? They just came in. Mr. Knapp, they 
will be happy to sit down and tell you that their business was 
a casualty of government regulation. They came to see me today 
and it was fortuitous that we were having this hearing. Thank 
you for coming, we appreciate your issue, and we are going to 
try to see if we cannot do something about that.
    With that, Senator Heitkamp is supposedly on the way. Is 
that right?
    [Pause.]
    Gentlemen, do either of you have anything else for the good 
of the order?
    Mr. Noel. Just other than thank you for giving me the 
opportunity to represent the 140,000 members of the 
association.
    Chairman Risch. We appreciate that, and Mr. Knapp, we also 
appreciate you. This is not a partisan issue. Admittedly, we 
have a little different issue as to the mass of the 
regulations. But on the other hand, I think we all agree that 
there are some regulations that are necessary, there are a 
whole lot more that are not, and we all need to be vigilant on 
that.
    Senator Heitkamp, I have been stalling here. I have been 
filibustering. You know what a filibuster is?
    Senator Heitkamp. I do. You do too. Unfortunately, we do.
    [Laughter.]
    Chairman Risch. Thank you so much for joining us.
    Senator Heitkamp. Mr. Chairman, thank you so much for 
giving me an opportunity to ask a few questions. I was just 
over at another committee, and so I think it is always 
important. Small business, obviously, is the cornerstone of 
American business, but it is particularly important in North 
Dakota. And so I take the role on this committee quite 
seriously and always appreciate the work that the chairman does 
in a very nonpartisan way----
    Chairman Risch. Thank you, Senator.
    Senator Heitkamp [continuing]. To----
    Chairman Risch. We have had a really good, robust 
discussion.
    Senator Heitkamp. Good. Well, I will have to watch it on 
YouTube. I am sure it was so interesting it will probably make 
the nightly news.
    Chairman Risch. It might have three views.
    [Laughter.]
    Senator Heitkamp. When I talk to North Dakota small 
business I think they continue to be really concerned about 
regulatory burdens and how do we kind of overcome those. But I 
know that a lot of this ground has been covered, and so I want 
to say where I believe it is always important to consider 
actual consequences of proposed legislation. So I want to ask 
both of you if you worry that legislation which adds analytical 
requirements, which cause regulatory delay, whether that is 
going to be a problem for small business, because a lot of what 
we hear is not just the regulation itself but the uncertainty 
and the delay in finding out what the rules are going to be.
    So I ask that question of both of you. Randy, maybe you 
could start.
    Mr. Knapp. Well, thank you, Senator, and welcome. 
Uncertainty is really, really an issue for any business, small 
or large. How can they make a decision on what they are going 
to do if they do not know what the rules are going to be two 
years from now, four years from now, five years from now? So 
anything that does not improve the system and simply adds more 
time, more delay, is not a way of addressing the problem that 
we all agree that there are problems.
    So, yes, that would be my response. If you are going to do 
something that is going to actually help fix the problem, and 
it delays it a little bit, okay. But if it is simply going to 
delay, to stall, to wait for a new administration to do 
something, then we are not helping anybody.
    Senator Heitkamp. Randy.
    Mr. Noel. Okay. Regulations to keep water from flowing into 
the waters of the U.S. and polluting the water is a good 
regulation. When I build a home, I have to do a storm water 
prevention pollution plan. I have to figure out a way to keep 
the pollution from coming off my site, into the drainage 
system, into the waters of the U.S.
    The Environmental Protection Agency oversees that with the 
state. They tell you not how to do that. They refuse to tell 
you how to do that. You have to figure that out on your own, 
with best practices, and research, et cetera, et cetera. But 
they do fine you if you do not have the paperwork, where you 
were supposed to make the inspection every week, or after a 
rain, or you happen to have a little bit of river sand in your 
street. They do fine you and fine you for that.
    So when we do rules and regulations, you know, I think the 
American people get we want clean water and clean air and 
safety when it comes to building homes, et cetera, but, you 
know, let us get there with something that makes sense. The 
paperwork does not help us get there. Why are we fining them 
for that, you know. So when we do a rule or reg, if they will 
listen to the people that are involved in the rule or reg, on 
how to accomplish the goal, and actually put it in the rule or 
reg, we have a fighting chance. But if the agency just 
completely ignores what we tell them, there is no repercussion 
to the agency.
    Senator Heitkamp. Yeah. I think one of the challenges that 
we have is this seemingly adversarial relationship that should 
not exist, because we all have the same goal. And, you know, 
one of the things that we have been working on is doing 
something in a broader way with advanced notice of proposed 
rulemaking. I like to put it this way, that, you know, if you 
gave me a task and I sat down and thought about it hard, and, 
you know, I got some input from some people that work around me 
and I write the regulation, and then someone comes in and tells 
me I am full of it, I am going to be a little more defensive 
and protective of that regulation.
    But if I open up the door, on the front end, and say, 
``Okay, we want to prevent runoff. What is the best way to do 
it, and how can we--what concerns would you have on this? Do we 
need to have paperwork every week? Do we need to have 
compliance checks every week? Can we do this in a way that we 
can trust each other a little bit, as long as we have common 
goals?'' and I think that continues to be the challenge, this 
adversarial relationship that presupposes people do not have 
the same goals for clean air and clean water.
    So we need a little common sense in all of this and we are 
working to try and make it happen, but I am particularly 
concerned with the impacts that all of this has on small 
business, because, you know, if you can hire an army of 
lobbyists here, you know, you are going to be well represented. 
They are going to knock on our door. But if you are just the 
contractor that is out there struggling, trying to make it 
work, and you just get it heaped on and heaped on and heaped 
on, eventually you are going to give up.
    Mr. Noel. Right.
    Senator Heitkamp. And so we are going to continue to 
examine this area. We have got a number of pieces of 
legislation I think we need to work through, but I wanted to be 
here because regulatory reform is a big part of what I am 
trying to do, not just on this committee but also on the 
subcommittee that I serve on, on Homeland Security and 
Government Affairs. So stay tuned. We are hearing you and 
hopefully we will get you some relief.
    Mr. Noel. Thank you.
    Chairman Risch. Encouraging words. Thank you very much, 
Senator.
    Gentlemen, thank you. I appreciate it. It has been a good 
hearing and I thank all of you who attended.
    This meeting will be adjourned.
    [Whereupon, at 4:02 p.m., the Committee was adjourned.]

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