U.S. GOVERNMENT PRINTING OFFICE

60–126 WASHINGTON : 1999

THE BURDEN THAT NEEDLESS REGULATIONS AND

LACK OF COMMON SENSE IN ENFORCEMENT OF

REGULATIONS PLACE UPON SMALL BUSINESS

HEARING

BEFORE THE

SUBCOMMITTEE ON

GOVERNMENT PROGRAMS AND OVERSIGHT

OF THE

COMMITTEE ON SMALL BUSINESS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

WASHINGTON, DC

JULY 27, 1999

Serial No. 106–24

Printed for the use of the Committee on Small Business

(

(II)

COMMITTEE ON SMALL BUSINESS

JAMES M. TALENT, Missouri, Chairman

LARRY COMBEST, Texas

JOEL HEFLEY, Colorado

DONALD A. MANZULLO, Illinois

ROSCOE G. BARTLETT, Maryland

FRANK A. LOBIONDO, New Jersey

SUE W. KELLY, New York

STEVEN J. CHABOT, Ohio

PHIL ENGLISH, Pennsylvania

DAVID M. MCINTOSH, Indiana

RICK HILL, Montana

JOSEPH R. PITTS, Pennsylvania

JOHN E. SWEENEY, New York

PATRICK J. TOOMEY, Pennsylvania

JIM DEMINT, South Carolina

EDWARD PEASE, Indiana

JOHN THUNE, South Dakota

MARY BONO, California

NYDIA M. VELA ́ZQUEZ, New York

JUANITA MILLENDER-MCDONALD,

California

DANNY K. DAVIS, Illinois

CAROLYN MCCARTHY, New York

BILL PASCRELL, New Jersey

RUBEN HINOJOSA, Texas

DONNA M. CHRISTIAN-CHRISTENSEN,

Virgin Islands

ROBERT A. BRADY, Pennsylvania

TOM UDALL, New Mexico

DENNIS MOORE, Kansas

STEPHANIE TUBBS JONES, Ohio

CHARLES A. GONZALEZ, Texas

DAVID D. PHELPS, Illinois

GRACE F. NAPOLITANO, California

BRIAN BAIRD, Washington

MARK UDALL, Colorado

SHELLEY BERKLEY, Nevada

HARRY KATRICHIS, Chief Counsel

MICHAEL DAY, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT PROGRAMS AND OVERSIGHT

ROSCOE G. BARTLETT, Maryland, Chairman

MARY BONO, California

PATRICK J. TOOMEY, Pennsylvania

RICK HILL, Montana

DANNY K. DAVIS, Illinois

RUBEN HINOJOSA, Texas

CHARLES A. GONZALEZ, Texas

NELSON CROWTHER, Counsel

(III)

C O N T E N T S

Page

Hearing held on July 27, 1999 ............................................................................... 1

WITNESSES

Gullo, Jr., Jack A., Mayor, New Windsor, Maryland ............................................ 3

Rose, Michael T., National Association of Home Builders ................................... 6

Boehm, Kenneth F., Chairman, National Legal and Policy Center .................... 11

Hantman, Alan M., Architect of the Capitol ......................................................... 15

APPENDIX

Opening statements:

Bartlett, Hon. Roscoe G ................................................................................... 33

Davis, Hon. Danny ........................................................................................... 36

Prepared statements:

Gullo, Jr., Jack A .............................................................................................. 38

Rose, Michael T ................................................................................................ 41

Boehm, Kenneth F ............................................................................................ 50

Hantman, Alan M ............................................................................................. 59

(1)

THE BURDEN THAT NEEDLESS REGULATIONS

AND LACK OF COMMON SENSE IN

ENFORCEMENT OF REGULATIONS PLACE

UPON SMALL BUSINESSES

TUESDAY, JULY 27, 1999

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GOVERNMENT PROGRAMS

AND OVERSIGHT,

COMMITTEE ON SMALL BUSINESS,

Washington, DC.

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room

2360, Rayburn House Office Building, Hon. Roscoe G. Bartlett

(chairman of the subcommittee) presiding.

Chairman BARTLETT. Let me call our Subcommittee on Government Programs and Oversight to order. Good morning and welcome

to this hearing of the Subcommittee on Government Programs and

Oversight of the Committee on Small Business. A special welcome

to those who have come some distance to participate and to attend

this hearing.

An important focus of this hearing is the unnecessary burden

placed upon small businesses by needless regulations and lack of

common sense in enforcement of regulations. In previous hearings,

small businesses from various parts of this nation testified to the

problems that federal regulations caused them.

This hearing again provides a national forum for small businesses to express their views on whether present federal regulatory

programs are stimulating or deterring job growth and economic development.

Another and equally important focus of the hearing is the fairness with which regulations are enforced by Federal and State entities. Have regulatory agencies in the enforcement of regulations

lost sight of the need to be fair and to use common sense? Is there

a double standard applied in the enforcement of regulations when

the violation is caused by government itself?

In the course of the hearing the Subcommittee will view and take

testimony concerning the lower step on the East front of the Capitol which is in violation of code requirements. If this same condition existed with respect to a small business, the regulatory agency

would have required the small business, at great expense, to correct the situation.

However, since it is the House of Representatives that is in violation, no enforcement action has been initiated. Selective enforceVerDate 27-JAN-2000 10:06 Feb 08, 2000 Jkt 010199 PO 00000 Frm 00004 Fmt 6633 Sfmt 6633 E:\HEARINGS\60126 txed02 PsN: txed02
2

ment such as this graphically illustrates the disproportionate regulatory burden that small businesses are required to bear.

Mayor Jay Gullo of New Windsor, Maryland, our first witness,

who is also the owner of a small business, will tell you of his experience with building a wheelchair ramp that was found to be a fraction of an inch too short.

As a former home builder, I was shocked at how grossly out of

code the House Capitol step is. Unfortunately, my experience and

those of most small businesses will show the fact that a reasonable

explanation for the discrepancy wouldn’t be acceptable if this

wasn’t the U.S. Capitol building.

My reason for pointing out the code violation with respect to the

Capitol step is not to have the step replaced at great expense, but

for the purpose of bringing reason and fairness to the regulatory

process.

I am most appreciative that you have taken time from your busy

schedules to participate in this hearing. We look forward to a lively

discussion. Thank you again for being here.

As testimony to the importance of this hearing, one of the associations that we invited to come, in spite of a plethora of horror stories, was unable to find a member who was willing to come, fearing

recriminations from the regulatory agencies.

This is perhaps the best testimony this morning; that we need

this hearing and we need changes in the attitude of the regulatory

agencies.

[Mr. Bartlett’s statement may be found in the appendix.]

Chairman BARTLETT. Let me turn now to our ranking member,

Mr. Davis, and ask him if he has comments or an opening statement this morning.

Mr. DAVIS of Illinois. Thank you very much, Mr. Chairman, and

let me first of all thank you for holding this hearing. I think it is

essential that we look at government and its operation from every

vantage point and from every angle with the idea of trying to make

sure that it is as user-friendly as possible and to make sure that

it provides for the citizens the greatest amount of service and opportunity.

And so Mr. Chairman, I welcome the opportunity to hear testimony from our distinguished panel of witnesses. The debate on the

program of complying with regulations and dealing with regulators

is always a major topic of conversation.

But first, the paperwork burden of the Internal Revenue Service

was the primary concern because preparing a regular payroll is a

constant reminder of the numerous rules and regulations dealing

with tax withholding and reporting.

But businesses’ concerns are not limited solely to paperwork

issues. Small business owners often fear that they will inadvertently fail to comply with some obscure rule and that a government

inspector will show up, close down the business, and drive them

into bankruptcy.

That is why we are here today to take a look at these obscure

rules and their application. I am sure that many of this panel believe with some justification that the government is more interested in obtaining penalties than in promoting compliance with the

law.

3

Although I disagree with that, I do believe that we should take

a valid look at those regulations that lack common sense to create

proper legislation which contain language to address these issues

and situations.

Again, I join you in welcoming the distinguished panel of witnesses and look forward to their testimony. And again, I thank you,

Mr. Chairman, for holding the hearing.

Chairman BARTLETT. Thank you very much. And Mr. Hill is also

with us. Mr. Hill do you have an opening statement or comments?

Okay, thank you very much.

Let me ask now if the witnesses will take their place at the

table? One of our witnesses is coming but he is handicapped and

it may be a few minutes before he gets here, but we know that he

is on his way.

Our witnesses this morning are Honorable Jay Gullo, Mayor of

New Windsor. I would especially like to welcome Jay. He is a

friend, a Mayor in the Congressional District that I have the great

honor of representing. Welcome to our hearing this morning.

Michael Rose will be joining us shortly from the National Association of Homebuilders. Mr. Ken Boehm, Chairman of the National Legal and Policy Center. I read your testimony with great

interest, sir.

The Legal Services Corporation, which is a major feature of your

testimony, was instrumental in closing a whole series of businesses

in our District. There is now no orchard industry in Western Maryland thanks to the Legal Services Corporation.

And I will say sir, that in the past we have tried to get orchardists from Western Maryland to come and testify here. That has

been very difficult because they fear recriminations from Legal

Services Corporation. This shouldn’t be the attitude of our citizens

and so I look forward to your testimony.

And Mr. Alan Hantman, the Architect of the Capitol, thank you

very much for also joining us, sir. And we will turn now to Mayor

Gullo for his testimony.

STATEMENT OF JAY GULLO, MAYOR, NEW WINDSOR, MD

Mr. GULLO. Thank you, Mr. Chairman and members of the Committee. It is a pleasure to be here and testify before you. What I

am going to tell you about are some of the experiences that I have

had as the Major of a small town in rural Maryland, and also as

a small business owner. I do not represent that I have any special

knowledge of regulations or the enforcement of regulations, but I

do have some interesting experiences where those regulations had

an impact on me and my community.

I also want to make it clear that while I will be talking primarily

about the Americans With Disabilities Act, I do not disagree with

the overall goal of the Act and the overall purposes of the Act. I

think it has a noble goal and I think it has a worthy place in our

society.

However, what I always find fault with is the enforcement of the

regulations. We seem to lose something in the enforcement. The

spirit is carried out at the legislative process but when you actually

get the Executive to enforce it, it doesn’t really carry the message

to the people.

4

The first example I would like to cite is one of the successes we

have had. A small business and a small town have a lot of things

in common. They don’t have a lot of room and a lot of capital to

spare, and our small town has about 1,400 people. We have a budget of about $270,000.

Our Town Hall where we meet and carry on our meetings is a

2-story building that was built in about the 1900’s. We meet in the

meeting room which is on the second floor, and obviously at the advent of the ADA law that was not able to accommodate the requirements.

And obviously, one of the most important things about government and public meetings is having people attend and freely being

able to attend. So what was suggested to us by the inspectors that

were coming around to make us comply was that we install an elevator.

Now mind you, the second floor is just one big room. It would be

an elevator to one room of this building and the cost of the elevator

was going to be about $100,000, so a little less than half of our entire year’s budget would be spent on this elevator.

And that is the only solution that we really were given. And

what we decided was that we couldn’t justify spending that money

yet we did not want to be out of compliance, so we made a deal

with the Fire Company—it was next door to us—and said, can we

use your Social Hall?

We want to have our meetings there once a month and what we

have to do is set up the chairs and set up the tables and take them

down. We saved $100,000, we complied with the law, by using a

little bit of common sense.

That was my last victory in using common sense in government;

the two other examples I want to cite where I am not so victorious

in.

The second one has to do with the local pizza parlor in our community, and if you realize, our community is about 175 years old.

We have a lot of old buildings, small streets, narrow sidewalks, and

as all over the country, we want to renovate our main streets. We

want to revitalize downtown and revitalizing downtown means putting businesses into these old buildings.

So when this pizza parlor was about to open up they had to go

through the process of upgrading the plumbing and the electric and

things like that, and the Americans With Disabilities Act had to be

addressed as well.

Being on the corner and having no rear entrance to the building,

only the front entrance, there was the question of, how are we

going to build a wheelchair ramp into this building to make it accessible?

And after looking at it several different ways it was discovered

that the length of the ramp and the width of the ramp would just

not be able to be built because it would block not only the view of

the traffic at the corner, but it would also block pedestrian traffic

on the street.

So a waiver was obtained and they did not have to build the

wheelchair ramp. However, when they went through their plumbing inspection the ADA parts came into that as well and they were

told that, although they have no wheelchair ramp they would have

5

to build their bathrooms, two bathrooms, fully ADA-compliant so

that they would be able to accommodate wheelchairs, despite the

fact that wheelchairs would not be able to be in the building.

What this meant was, the owner of the pizza parlor lost a lot of

floor space. There were tables that weren’t being able to put in because he had to have two fully handicapped-accessible bathrooms;

despite the fact that the building was not compliant as you enter.

The most personal example I have and the one I think is particularly relevant today, deals with accessibility into my law office.

After graduating law school I decided to renovate an old carriage

house in my home town. It was actually my grandfather’s barber

shop. Again, we had to update it with the water, the electric and

things like that, and one of the things that had to be done was a

handicapped-accessible ramp.

And the office is situated—it’s basically six inches above the

street. There is a 6-inch curb and gutter that had to be addressed.

And so what we did was, we made on the plans that were submitted to the County—in this situation the County is the regulatory agency that carries out the ADA law.

They approved the plans and they were drawn to scale. But

when we were done and we built this ramp—it was 6-foot ramp,

supposedly. The curb was 6 inches and the rule for the Committee

is, you can have one foot of fall for every inch, so a 6–inch curb

would have to have a 6-foot ramp.

When we laid the ramp and the inspector came out to see if it

was in compliance, they measured the ramp and they found the

ramp was 5 feet 113⁄4 inches—so one-quarter inch off of the 6-foot

mark—and immediately said that this was not in compliance and

would have to be torn out and done over.

Well, we had serious misgivings about the time, about the expense of doing this. The contractor was in the middle of this whole

argument as well, saying that they built it and it was substantially

into compliance; that the difference was de minimis; that the spirit

of what was going on—the grade of the ramp—was really what the

law dictated.

We had an inspector that did not want to yield. He said that if

we did not like his decision we could take him to court. Well, basically we had to become experts on the ADA law; at least as relevant to our ramp. And it took us a month to get the necessary information. It took us a month of deciding, and eventually we decided it was far cheaper and far quicker to tear the ramp up and

put a new one in.

So we spent about a thousand dollars to do that, a month of lost

time—because at this point in time I did not have a use and occupancy permit so I could not practice law out of the building—and

in the end of it we tore the ramp up, the jackhammers came in,

and we recreated the ramp to be a quarter-inch longer.

And that was basically my introduction into common sense, or

lack thereof, in government. As I said in the beginning, I felt that

the purposes were being accomplished but sometimes the black and

white of the law is not exactly what we need to follow. We need

people out there that have some discretion and have some common

sense in enforcing what goes on.

6

And we try to apply that in our town government every day and

we only hope that others we deal with will do the same. Thank

you.

[Mr. Gullo’s statement may be found in the appendix.]

Chairman BARTLETT. Thank you very much. We will have opportunity a little later when we go out to the Capitol steps to contrast

your experience with the wheelchair ramp, one-quarter inch in

length, with the situation at the Capitol steps.

Mr. Rose, we are happy that you are here. Do you need a few

moments to organize yourself or are you okay to proceed?

Mr. ROSE. I am fine.

Chairman BARTLETT. You are okay, good. We have already introduced you and we are happy that you are here, and proceed as you

wish.

STATEMENT OF MICHAEL T. ROSE, NATIONAL ASSOCIATION

OF HOMEBUILDERS

Mr. ROSE. Good morning, Mr. Chairman. Thank you very much

for giving me a couple of seconds to pull myself together.

My name is Michael T. Rose. I am a home builder and developer

in the great state of Maryland, and previously I served as President of the Maryland Capital Building Industry Association, or

those of us from Maryland know it used to be SMBIA.

I am a member of the Board of Directors of the National Organization on Disabilities and in the past I have served as Chairman

of the President’s Advisory Committee on Housing for the Elderly

and Handicapped for the U.S. Department of Housing and Urban

Development, HUD. I thank you for the opportunity to come and

talk to you today on federal regulations that are impacting the

home building industry.

NAHB and its 197,000 member firms and eight million employees have long believed that every American should have the opportunity to a decent home, as part of the American dream. Providing

this opportunity is a challenge that home builders accept because

we care about housing, we care about the communities we live in,

and we care about our families.

But we happen to be one of the most heavily regulated groups

in the nation. Builders know all too well that burdensome regulations and excessive enforcement policies serve only as barriers to

affordable housing.

Today, on behalf of NAHB, I would like to discuss three regulatory issues that have contributed to the increase in housing costs,

making housing less affordable for thousands of American families:

Fair Housing Accessibility, Low-Income Housing Tax Credit Audits,

and Essential Fish Habitat.

First, I would like to talk about fair housing for a brief minute.

In 1988, Congress enacted the Fair Housing Amendments Act to

include ‘‘family status’’ and ‘‘disability’’ as protected classes under

the federal Fair Housing Act.

NAHB supported the amendments believing that affordable

housing should be accessible to every American. And at the time,

the cost of compliance was expected to be minimal. In fact, Senator

Tom Harkin in his floor speech referred to the Fair Housing

7

Amendment Act stating, and I quote, ‘‘the bill only includes minimal low-cost or no-cost features of adaptive design.’’

Senator Ted Kennedy said that it would cost ‘‘twenty-seven dollars for studs in the bathroom, accessible light switches, and widened doorways,’’ which the Senator called ‘‘absolutely minimum requirements’’.

In reality, this has not been the case, and let me tell you why.

When the 1988 amendments were enacted, there was little attention devoted to how the new disability requirements would be implemented. In 1988, we were expecting to get guidelines published

immediately.

When the guidelines weren’t published in 1989, the Home Builders Association and the disability groups formed a coalition and

published a book that I have in my hand here, that provided guidelines and information, at the same time keeping housing affordable.

It was to determine which is a bigger barrier to affordable housing: a $300 a month rent increase to any American, or a 6-inch

curb? This book had a lot of time and a lot of effort put into it. It

was submitted to HUD. Unfortunately, HUD rejected the recommendations from the various disability groups which included

the American Paralysis Association, and the National Organization

on Disabilities.

At that time, Mr. Chairman, I represented the disability groups

dealing with the home builders, since they felt that I would be the

most knowledgeable one to understand the codes and the different

issues.

The cost now ranges from $1000 to $3000 per unit, and sometimes can go as high as $12,000. But the issue here is that these

guidelines have not been distributed so many builders across the

country are in the dark.

As a result, there is no clear guideline on how to build units that

comply with the law. And HUD does not have the authority to approve any building plans that are submitted by builders.

In 1991, HUD issued its fair guidelines. In 1996, it issued the

manual and, in fact, in the front page of its manual, there was a

total disclaimer that said that if you follow this you are still wrong

and it is not guaranteed that it is right, because HUD still didn’t

quite understand what it is. HUD has now published another manual two or three years later, and we are up to 1999.

Mr. Chairman, it is necessary to understand that builders rely

on building codes. They rely on local building and land development codes to determine the requirements to follow in order to develop land and put up single-family homes or apartment buildings.

When a builder receives a local building permit, he or she thinks

that the building plan complies with all the necessary requirements. Imagine the surprise years after-the-fact, when he or she

finds out that the building is not in compliance with federal law;

specifically the Fair Housing Act.

This is what has happened to builders from Idaho to North Carolina. They are being hit with actions from government agencies and

private fair housing enforcement groups claiming that the buildings were not built in compliance with federal accessibility requireVerDate 27-JAN-2000 10:06 Feb 08, 2000 Jkt 010199 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 E:\HEARINGS\60126 txed02 PsN: txed02
8

ments, even if these builders have done everything they believe

they need to do to comply.

And believe it or not, these private enforcement groups are receiving federal funding from HUD to bring such actions against the

builders. In some cases, these groups, such as the one in Idaho, do

not even have a disabled person among them. They simply get paid

for finding buildings that are not in compliance with the law.

In fact, in fiscal year 1999, the Fair Housing Initiatives Program,

which literally funds organizations to ‘‘crack down on housing discrimination,’’ received $15 million: $10.5 million of which HUD

granted for enforcements or bounties, and only $4.5 million of

which was granted for education and outreach.

Again, Mr. Chairman, I have to emphasize that builders want to

provide fair housing for every American, but at what cost? As you

can see, these costs are tremendous any way you look at it.

Because NAHB believes that Congress did not intend to impose

excessive regulations in this area, we would like to work with Congress to develop legislation that would give builders some relief

from unreasonable enforcement actions, and we are willing to work

with HUD to draft guidelines that make sense.

And because the chances of a builder opening up his or her mailbox and finding a letter from the Justice Department is far greater

than finding guidance from HUD on how to comply with federal accessibility requirements, we would like to see HUD direct funds

away from enforcement and more toward education, which is woefully inadequate.

And finally, we believe that HUD should provide incentives to

State and local governments to adopt the federal requirements into

their local building codes.

To resolve these problems, we have been working with members

of the House and Senate through various means. First, Representative Walter Jones introduced H.R. 2437 which provides a ‘‘safe harbor’’ for developers and owners for certain buildings built in compliance with the applicable local accessibility requirements.

Also, we are working in conjunction with Congressional Appropriators to re-focus HUD’s attention on this issue.

The next issue is Low-Income Housing Tax Credit Audits. Another example of enforcement policies gone awry is the Internal

Revenue Service’s audits of projects that have been awarded LowIncome Housing Tax Credits by the states. Unfortunately, I can

only tell you what is happening in generalities because quite honestly, our builders are afraid to tell their stories for fear that some

of their other projects may be audited.

The Low-Income Housing Tax Credit program is the cornerstone

of revitalizing our low-income communities. Congress created the

program in 1986 to provide a limited amount of tax credits to each

State to help finance the building of affordable housing. In order

to be awarded the housing tax credits, developers have to submit

to an underwriting process by the state allocating agency at three

different times.

These three determinations include an assessment of all the

sources of financing and the total development costs for the project.

This assessment is used by the state to calculate the minimum

amount of credits necessary to fill the funding gap to make the

9

project financially feasible. Once the state agency issues the final

amount of tax credits for a project, the developer sells those credits

to investors at a discount to raise the necessary equity funds to

build the project.

It is similar to the process that you or I go through to get a mortgage loan to buy a home. We submit our credit history, our sources

of income, the asking price for the home, etceteras. Once we are approved for the loan, we buy the property, and we move into the

house, we start making payments. The last thing we expect is for

our bank to come back to us and say, ‘‘well, actually, we miscalculated the amount we can loan you. You will now need to come up

with additional funds.’’

Yet, that is exactly what the IRS is doing in its audits. It is telling developers that the state agency’s allocations of tax credits is

incorrect, and that it is going to retroactively recalculate and recapture the tax credits without proving that the housing has not been

occupied by low-income residents or that the costs should not have

been incurred. And these are funds that go to the Treasury, not

back to the housing program for the state to re-allocate.

The IRS does not think that certain portions of the developer and

professional fees should be considered ‘‘eligible’’ for tax credit equity financing. Yet, this has not been the practice in the affordable

housing industry, and if true, would not produce enough credit equity funds to finance most building projects today.

By excluding portions of developer and professional fees, the IRS

is creating instability and uncertainty about tax credit allocations.

But if it is to continue to work, the Low-Income Housing Tax

Credit program must have certainty in its determinations. Without

reliable allocations, the ability to plan for the development of housing with private financing is undermined. After all, private capital

and capital markets are very sensitive to risks and potential risks.

If the threat of an IRS audit and recapture of tax credits is looming over investors’ heads, you can bet that they will either flee the

market or lower the price they pay for the credits to cover the increased risks. Either way, it amounts to increased costs for the developer and less affordable housing.

So NAHB would like to work with Congress to develop a legislative proposal that does the following three things: (1) Increase certainty for determining eligibility basis and credit allocations; (2)

protect existing credit allocations; and (3) provide finality for future

credit allocations.

The next item is Essential Fish Habitat. Finally, Mr. Chairman,

I would like to discuss the impact of a new federal regulation, Essential Fish Habitat, that gives the federal government an unprecedented level of control over land use and property zoning decisions.

In 1996, reauthorization of the Magnuson-Stevens Fishery Conservation and Management Act—a law designed primarily to manage and regulate marine fisheries by the Department of Commerce—Congress created an Essential Fish Habitat regulation

based on the critical habitat model found in the Endangered Species Act, or ESA. The intent of this new regulation was to ‘‘minimize adverse effects on habitat due to fishing.’’

However, the National Marine Fisheries Service is interpreting

this mandate to extend its reach into non-fishing activities such as:

10

land development, home construction, forest practices, mining,

water supply, and agriculture.

It is proposing something similar to ESA’s critical habitat that

would cover all fish, including fish that are not endangered or

threatened. In fact, the National Marine Fisheries first attempt to

map EFH, it defined EFH so broadly that the entire watersheds,

more than half of Washington State and more than half of Oregon

and more than one-third of California, are covered.

So for example, a builder in Washington who wanted to get a

Section 404 wetlands permit from the Corps of Engineers would

have to wait for the Corps to consult with the National Marine

Fisheries to determine if the project will impact Essential Fish

Habitat before getting the permit.

If the National Marine Fisheries believes the project would harm

this, it would recommend to the Corps to approve on the condition

that the builder modifies the project to include the conservation

recommendations.

This includes any development project that requires any federal

permit, funding, or approval and is within a designated habitat of

essential fish species.

And keep in mind, these are not restrictions for species of endangered extinction. They are restrictions to protect the habitat of all

fished species, no matter how abundant.

As you can see, the permit processing timeline would be more

lengthy, especially if a builder has to get a biological consultant for

the larger projects within Essential Fish Habitat.

If all this sounds familiar, it should. This is exactly how critical

habitat is regulated under ESA. Although the EFH has not gone

into effect, we can use ESA as our model of what this type of regulation could look like down the road.

Already under ESA, a builder has to jump through any number

of hoops to get a permit to develop land. In the Seattle Metropolitan area, for example, the Fish and Wildlife Service listed eight

salmon species as endangered, this past spring. This has the potential of shutting down this area.

And I am not talking about home building alone. I am talking

about specific activities that will affect the economic well-being of

Washington State, such as timber harvesting, commercial fishing,

tourism, and any activity that may be related to the critical habitat

of these salmon.

Many people have said we should stop eating salmon if they are

endangered. I think there is something like 350,000 fish caught a

day and the salmon industry is one of our major economic things.

So, in addition to cumbersome ESA or wetlands consultations, a

builder would have to endure another, more important, duplicative

process. What makes matters worse is that the National Marine

Fisheries may not even have the statutory authority to create most

of this program. This is excessive regulation.

And what will be the result of longer permitting processes, more

stringent reviews, greater prohibitions on where we can develop,

and increased mitigation? Higher housing costs, because ultimately, these regulations would require the builder to spend more

time and money on complying with a requirement that has already

been fulfilled under ESA.

11

Home builders support reasonable measures to protect natural

habitats, Mr. Chairman, but we would like to work with Congress

to eliminate the regulation of non-fishing activities under the Magnuson-Stevens Act. Let us bring some balance and plain old common sense back into the picture.

Again, thank you for inviting me to testify before you today.

Home builders just want to build homes and provide affordable

housing to Americans, but it is definitely becoming harder and

harder to do so when excessive regulations and the threat of enforcement actions prevent us from doing so.

NAHB is grateful for your interest in bringing to light some of

these issues, Mr. Chairman, and we value the understanding that

you, as a former home builder, have of our industry. We look forward to working with you to create a more balanced approach to

the federal regulatory and enforcement processes and thank you for

the time you have given us today. I am happy to answer any questions that you may have.

[Mr. Rose’s statement may be found in the appendix.]

Chairman BARTLETT. Thank you very much for your testimony.

In a previous life I was a land developer and home builder and so

I listened to your testimony with great interest.

As you can hear by the bells something is happening, and that

something is a vote has been called. So let’s take a brief recess before we go to our next witness so that we can go to vote. We shall

return.

The bells indicate there is only a single vote so within about 15

minutes we should be able to return to continue our hearing. We

will stand in recess momentarily.

[Recess.]

Chairman BARTLETT. The Subcommittee will reconvene. Thank

you very much for your patience in our voting delay.

Mr. Boehm, Chairman, National Legal and Policy Center, thank

you very much for coming and we look forward to your testimony.

STATEMENT OF KENNETH BOEHM, CHAIRMAN, NATIONAL

LEGAL AND POLICY CENTER

Mr. BOEHM. Thank you very much, Mr. Chairman. My name is

Ken Boehm with the National Legal and Policy Center. We promote open, ethical and accountable government, and we act as a

watchdog on government abuses. And in this role we find lots and

lots of regulatory abuses that particularly impact small businesses.

Regulatory abuses that I will discuss today are those of the Department of Labor and the Legal Services Corporation; two regulatory bodies that particularly can negatively impact small business owners.

Each of the regulatory abuses I am going to cite not only violate

the principles of fairness and common sense, which is one of the

common denominators of all of what we are hearing his morning,

but they also are directly contrary to the expressed intent of Congress.

The whole theory behind regulations is: Congress passes a law,

the regulatory body then puts the law into effect by better defining

it with regulations. But what they are not supposed to do above all

else is change the clear meaning of the law.

12

In the first instance, voluntary carpooling by farm workers. This

meets the description that Congressman Davis mentioned at the

top of the hearing about obscure rules that can absolutely bankrupt

a small business operator. When Congress passed the Migrant and

Seasonal Worker Protection Act they did it to help laborers. They

didn’t do it to bankrupt small farm owners and operators.

One of the things that they did was say that if you are a farm

employer, if you are a farm contractor, you have certain responsibilities for transporting your labor. But if it is a voluntary carpool, the way lots of workers in this country get to work—even up

here when I worked on Capitol Hill much of our staff came in by

carpooling—then the reach of the law was beyond that.

In fact, Congress was so intent that voluntary carpools were beyond the reach of this law that in their Committee report when

they passed the law they said specifically:

‘‘The Committee intends, however, that voluntary agreements between individual workers for the transportation to and from their

place of employment (‘‘carpooling’’) for which they receive no fee or

other benefit from the employer is not within the scope of this section.’’

They were telling the world that if a bunch of workers get together and they carpool and they don’t get any money from the

farmer and they don’t get any money from the labor contractor, the

law doesn’t reach it.

Well, by the time the Department of Labor finished their regulation interpreting this voluntary carpool exemption, they came up

with a rule that in many circumstances, almost guaranteed that

the farmer would be held responsible.

Here is what they did. They said, any compensation or valuable

consideration—and ‘‘any’’ meaning even de minimis amounts—over

the amount of the cost of the transportation, makes that carpooler

automatically a farm laborer and by extension, extends the liability

to the farmer who is supposed to have some control over the farm

laborer.

The net result is, there is a chain reaction of liability with often

disastrous legal consequences. Suddenly, if a driver charges not 30

cents but maybe 50 cents a mile to his fellow workers, the driver

becomes an unregistered farm labor contractor.

The driver is now transporting workers in violation of federal law

and it is likely the vehicle doesn’t meet the strict legal safety and

insurance standards, including insurance coverage of $100,000 per

seat.

The farmer, who may not even know about this unless he questions each of his workers every day as to how they got there and

what the costs were and the rest of it, suddenly is liable, and if

there is an accident or something else, that farmer can face devastating—not just legal costs but various statutory penalties.

This is an example where Congress says one thing, voluntary

carpools are outside the reach of the law, and by the time the

Labor Department gets finished writing their regulation, a tiny infraction by a farm worker who may not and probably isn’t knowledgeable to fine points of the Code of Federal Regulations, means

that not only is he liable but the farmer is liable. A clear case of

a regulation doing the exact opposite of what Congress intended.

13

The Legal Services Corporation all too often targets small business. They target them for a variety of reasons, not just the fact

that there are legitimate complaints of poor people against small

business, but many times small business can’t afford the legal fees

and will fold without a fight because the cost of defending is too

high.

One of the examples, and again it involves in many cases, small

employers who are farmers, is the alien presence requirement. Congress passed a law and has passed it each year as part of LSC’s

appropriation, to say they can only represent aliens, non-citizens,

if they are present in the United States—they have to be here—

and are otherwise eligible.

Legal Services has reinterpreted the phrase, ‘‘the alien is present

in the United States’’ to mean, the alien was present in the United

States, and has insisted on representing people who haven’t been

in the country for several years. How you can misinterpret the

meaning of the word ‘‘is’’, is difficult to explain, although it has

sometimes been a problem in other context.

And right now you have, as we sit here today, farmers in Kentucky, North Carolina, and other states being sued on behalf of

people who are residing in Mexico and other places despite the

clear intent of Congress that the particular client must be present,

is present in the United States, strikes most people as a very common sense requirement.

It, for example, doesn’t mean is present in Mexico or Jamaica or

some other area. The problem here is that the LSC Board and the

LSC management decided that they don’t want to enforce this law

that Congress has told them to enforce.

And so the President of LSC in March of this year wrote a letter

saying that they were not going to enforce this law and this regulation as part of the appropriations law tied to their appropriations

against any Legal Service’s program because they may have misinterpreted the meaning of the word ‘‘is’’.

So therefore, so much for Congress passing laws telling a program what they can or can’t do. The bottom line is, they appointed

a special commission, there were no representatives of small business there, there were not representatives of the farm community.

In fact, the 5-person commission was very, very one-sided, held

some hearings, and they are about to interpret this regulation in

a way that is going to hurt people. And it is going to hurt poor people here in this country because Congress intended the scarce

funds to help poor people; even if they are not citizens at least they

have to be present in the country.

But because of a misinterpretation of the word ‘‘is’’ to mean

‘‘was’’, you have this entity run by and for lawyers turning logic

and Congressional mandate on its head.

Another example: lobbying. Congress said you can’t lobby if

you’re in Legal Services. Legal Services all too often lobbied against

small business by promoting taxes, by promoting more regulations,

by promoting one-sided and often convoluted consumer legislation

that hurts small business.

Congress told them you can only lobby in very limited circumstances: either when you are called to testify or when you have

14

a client whose very narrow, specific problem can best be solved by

this lobbying.

What happened in South Carolina this past year was, a business

down there saw Legal Services lobbying on some legislation that

would have hurt that business. They complained to the Legal Services Corporation saying, you know, they are lobbying on some legislation that hurts us. We didn’t know they could do that.

Legal Services investigates, but not much, and they forget to

even check if they even had a client; one of the clear, legal requirements. If you don’t have a client what are you lobbying for? You

are lobbying for what you as a Legal Services lawyer might want

the law to be, but without a client you don’t have a case is what

Congress has told them, and what their own regulation says.

They dismissed the business’ complaint. They said it was not

well-founded. They dismissed it. The business then, not to be

thwarted, went to a federal Judge down in South Carolina, in a

case called RMC v. Legal Services Corporation. They asked the federal judge, was this lobbying against the business interests illegal

or legal?

The federal Judge looked at it, found that they didn’t even have

a client, the client they claimed they had never talked to the lawyer who was doing the lobbying and didn’t even have a special

problem that could be solved by lobbying, so it was wrong on every

count.

And the Judge basically threw the book at Legal Services, said

that what they were doing was in violation of federal law and

Legal Services Corporation had no rational basis for dismissing

this valid complaint.

So once again, the common denominator, as with the Department

of Labor case, as with the case of the definition of the word ‘‘is’’,

and in this case was, Congress passes a law, tells a regulatory

body—whether a Department as in Labor or a government-funded

agency such as in LSC—you can or can’t do a certain thing, or this

is the definition we want you to use.

And by the time it comes out the other end the regulation is either misworded or misinterpreted in a way that it violates every

kind of common sense, every kind of common usage of common

words, and the ultimate victim in all these cases are small business

operators who, as everyone in this room knows, very, very frequently don’t have a whole lot of money to pay for expensive lawsuits.

And the fact that they have to pay for those lawsuits for a regulatory abuse that violates the intent of Congress, is the worst part

of the scenario that is discussed in these three types of violations.

So Mr. Chairman, I commend you and this Subcommittee for

having this hearing. Redress of grievances is part of the First

Amendment. Small businessmen have real grievances when their

very livelihood is threatened by regulatory abuse as it is in these

cases.

Thank you, sir.

[Mr. Boehm’s statement may be found in the appendix.]

Chairman BARTLETT. Thank you very much. And now Mr.

Hantman, who I would like to note was not the architect when the

15

steps were designed, was not the architect when the steps were

built, so he has inherited the steps. Your testimony, sir.

STATEMENT OF ALAN HANTMAN, AIA, ARCHITECT OF THE

CAPITOL

Mr. HANTMAN. Thank you, Mr. Chairman. Thank you for inviting

my testimony concerning the lowest step of the monumental stairs

on the East Front, House Wing of the United States Capitol.

May I start by saying that there are significant differences in

how codes deal with new structures and with work on existing

structures that are not recognized as historic in nature. Historic

structures are usually given more leeway than other structures and

I am here today to present my view as to whether the step in question does indeed, constitute a code violation, since it is clearly a

historic structure.

I would like to begin with general comments on the application

of codes to the work of this agency as it undertakes projects at the

direction of the Congress. By law the Congress can of course, impose codes and standards in our work.

No specific building code has been legally applied to our projects

in light of the practice of the agency to follow appropriate national

codes in the construction, reconstruction, and restoration of the

property entrusted to our care. The Congress has, through the Congressional Accountability Act, required us to comply with OSHA

and to the extent that OSHA has other related laws we would be

legally bound by those as well.

In new construction projects the agency follows the BOCA Building code. I would like to briefly discuss the history of the monumental stair replacement and the replication project. It was undertaken because of the structural failure of the brick foundations and

the general wear of the treads after 130 years since their construction in 1863 as part of the Capitol extension designed by the Architect of the Capitol, Thomas U. Walter.

The project design started in 1993 prior to the Congressional Accountability Act and was completed in 1996. As you noted sir, it

began under the supervision of Architect of the Capitol, George M.

White, and was completed under the supervision of William Ensign, Acting Architect after Mr. White’s retirement in 1995.

The project was intended to replicate the historic stairs as Thomas U. Walter had originally designed them but in a more desirable

granite material. Consequently, the treads and risers were replaced

in the exact configuration as the original stairs in keeping with historic preservation objectives.

Most of the lowest riser is seven inches or less except for the portion of the Southern and Eastern sections where it gradually rises

to become ten inches above the sidewalk grade. It is important to

note that this portion is not with the usual, direct path of traffic,

either in or out for those stairs.

Although a riser height of greater than seven inches would violate the BOCA Code in a newly constructed building, it is permitted by BOCA for existing buildings, including historic buildings,

or work on existing stairs where such work does not result in a reduction in safety from the previously existing condition.

16

There has been no reduction in safety from the previous condition in this particular case. In fact, safety has been increased because the marble material was changed for a more non-slip granite

finish material. So the safety has been somewhat increased over

there.

Also, BOCA does have a text of permitting the bottom riser of

steps touching a sloping sidewalk to have a variable riser height.

Of course, this doesn’t in the least mean that the riser height over

seven inches is to be optimal. It is certainly not optimal.

Although it is not technically a code violation, it needs to be

changed. It is not an optimal conditional. And my predecessors in

fact, considered whether it would be feasible to avoid this condition

by adjustments to the adjacent sidewalk.

This is basically a 6-inch curb now above the street grade but an

essential element of the final configuration of the street, the sidewalk, and the steps was the introduction of a curb cut for the access of the disabled. That cut occurred at the Southeast corner of

the sidewalk.

Access for the disabled was essential at that location because it

is a primary photo opportunity for members and their constituents.

To exclude wheelchair access at that point would have violated the

American With Disabilities Act, in the opinion of the Architects.

Moreover, the solution of raising the sidewalk to the grade to

eliminate the riser problem was unacceptable in that it would have

resulted in a curb height of 10 inches at the exact point of desired

wheelchair access, which would have reduced the safety from the

previous condition.

Another potential solution would have involved raising the grade

of the East Plaza, essentially the street at that point, which would

have allowed the sidewalk height to be raised in turn.

The reason the agency rejected the idea at that time was because

the East Plaza grade was going to be changed as part of the future

Capitol Visitor’s Center Project, which as you know, Mr. Chairman,

has been delayed. We anticipate that this grade change will be accomplished when the Visitor Center is approved for construction.

As you know, Mr. Chairman, I stated earlier that historic structures are usually given more leeway than other structures, and I

had experience before I came here as a former Vice President of

Rockefeller Center. But since local building code officials certainly

vary in their interpretations and the rigor of their enforcement actions, there are certainly cases where interpretations and enforcement actions for any type of structure can be unreasonable and unduly burdensome on private business and citizens.

This Committee’s call for a degree of common sense is certainly

appropriate. I would be happy to answer any questions you might

have, Mr. Chairman.

[Mr. Hantman’s statement may be found in the appendix.]

Chairman BARTLETT. Thank you very much. Let me recognize

Mr. Hill for his questions and observations.

Mr. HILL. Thank you, Mr. Chairman. Mr. Hantman, I am not

sure a 10-inch rise is the right solution or the wrong solution. It

certainly sounds like the only practical solution to the problem that

you are dealing with. And I guess I would ask for your comment

17

on Mr. Gullo’s situation in working with an historical structure

where he had to tear out a ramp for a quarter of an inch tolerance.

Mr. HANTMAN. I think Mr. Gullo’s comments were really right

on-target. Clearly, if we have the intent trying to be met, the contractor tried to fulfill the code as written—for a quarter of an inch,

for a half an inch, for an inch, whatever the issue is—it certainly

in my mind, as a professional, as a reasonable person, that it was

certainly unreasonable to demand ripping out something of that

nature.

Mr. HILL. And a 6-foot long concrete slab, how much will that

shrink when it cures?

Mr. HANTMAN. You are absolutely right. It could have shrunk

during the curing process.

Mr. HILL. I guess I am kind of interested in solutions and I

would like to talk a little bit about that. I guess I would probably

ask you, Mr. Rose, if you could respond to this.

First of all, there are soft costs and hard costs in construction.

Soft costs are the development fees, the design fees, the permitting

process, the inspection process. Could you give me some idea today

what portion of the cost of building a house is soft costs and what

portion are hard costs?

Mr. ROSE. Are we talking about a home or an apartment?

Mr. HILL. Well, both I guess.

Mr. ROSE. Okay. On a single-family residence today, let us start

with the profit goals. Most home builders in the United States

make somewhere between three to five percent profit on the sale

of a home.

This can be verified by looking at the publicly traded home building companies that try and show their profit as high as they possibly can to drive their stock price up—not as much as an Internet

stock—but they try and drive the price up. And it usually runs

from three to five percent.

Land in different parts of the United States typically run 20 to

22 percent. Unfortunately, those of us in Maryland and Washington, D.C. know that that is typically 30 to 35 percent of the

sales price. A hard construction cost, the bricks and sticks and

mortar, runs somewhere between 42 to 45 percent in a Washington, D.C., New York, L.A. urban environment.

And then the financing depends on the remaining dollars that

are left that are a combination of the construction financing while

the building is being built before it is transferred to the buyer, and

the dollars spent to assist the buyer in obtaining either a VA/FHA

or a conventional finance of the property.

So if a home is 42 percent hard and 20 percent land, that is 62

percent and 5 percent profit, that’s 67 percent. So you have 33 percent up for interpretation, and in some areas it is even less than

that. If the land jumps up in Washington from the 20 to the 35 percent, you are down to 18 percent.

But it is usually extremely well documented, particularly if it is

in a multi-family situation and it is approved by all the local people. You have a superintendent, a project manager, customer service, et cetera. And the issue in terms of the low-income housing tax

credit, is that the buildings are approved, the tax credits are approved.

18

And then ten years later or eight years later say, Mr. Hill, if you

were an investor in the project, you file to the IRS to get your tax

cuts. IRS sends back and says no, you can’t have that. So the investor immediately goes to the syndicator and says, Mr. Syndicator,

IRS says it is not approved. He says, well, it is approved by the

state and all the government agencies. How can this be reinterpreted?

Then they go back to the builder who built it in the first place

and then they spend hundreds of thousands of dollars trying to negotiate this settlement with the IRS to prevent the apartment

building from being closed down, and then the money that they get,

they take the money and it goes back to the Treasury.

It doesn’t go back to the states, it doesn’t go back to anyone else.

And if you had to go back and look at your exact records ten years

ago——

Mr. HILL. That would discourage me from making an investment,

I can tell you that.

Mr. ROSE. And that is the problem, because the investors will

stop making investments, there will be no more low-income housing tax credits, because the investors will be scared to death that

they are going to get hurt. The middlemen, the syndicators, won’t

want to do it and the builders sure as heck don’t want to build it.

Mr. HILL. I was actually kind of headed towards discussing those

soft costs—design fees, inspection fees, financing fees, supervision

costs, allocation of overhead—are very time-sensitive. In other

words, if a project takes longer than anticipated you lose control of

those costs, isn’t that right? That comes right out of your profit?

Mr. ROSE. Absolutely.

Mr. HILL. And so when you have to deal with changes in the

project as the project is moving forward, it can add to those costs.

In other words, Mr. Gullo is talking about his experience with having to delay his construction project a month for one situation and

two weeks for another. Those add to the soft costs dramatically.

Mr. ROSE. Oh, time is the biggest killer of all. If you are only

making a five percent profit in the first place and if you just said

it is a $100,000 house and you are making $5,000 profit and your

hard costs are 42 percent, that is $42,000. If you have a 10 percent

variation that is $4,200 right there. That 10 percent variation is a

90-some percent variation of profit diminution.

And that is for—you know, it is a $100,000 house if you have a

71⁄8 percent, 81⁄2 percent construction loan plus points, plus taxes,

say it is a 10 percent—that is a 10 percent interest. That is

$10,000 a year divided by five. If the project is delayed at all the

profit is totally gone and you are into a loss situation.

Mr. HILL. And it seems to me your suggestion of some sort of a

safe harbor solution with regard to low-income tax credits, that

also would apply with regard to design. There has got to be some

way to empower local inspectors to sign off on the federal requirements and create some safe harbor that people can move forward

with their construction and complete their project.

Would you agree with that? Is that one of the solutions?

Mr. ROSE. Yes, I would say that is definitely a solution.

Mr. HILL. Mr. Boehm, what should Congress do to assure that

the Legal Services Corporation implements the intent of Congress?

19

Going back to this North Carolina case, did the Court impose any

sanctions on the Legal Services Corporation for purposely violating

the law?

Mr. BOEHM. No, all they could do was remand it because—remand it back to Legal Services and say, go and revisit this complaint.

And the reason for that is the Legal Services Corporation Act,

which was actually passed into law 25 years ago today—it is its

25th birthday—under that only one body, the Legal Services Corporation, has the regulatory and enforcement authority to enforce

violations of its rules.

Congress forces them to do the rules but only LSC can do it. So

they develop this cavalier attitude if they don’t like a rule they just

will enforce it in a very lax way. And this federal Judge, Judge

Herlong in South Carolina, told them what you did violated all the

laws.

But all he could do is remand it back to them to say, now decide

it based on the fact that the law says you have to have a client,

and these folks didn’t have a client.

Mr. HILL. So what should Congress do to make sure that Legal—

I mean, in essence what you are saying is, is that they have oversight over themselves.

Mr. BOEHM. Well, there is some oversight, and there is an example that is in my written testimony. I didn’t go into it as much because it was less small business. When Congress said no attorney’s

fees in 1996, the Legal Services Corporation interpreted that to

mean they could charge attorney’s fees to the poor and disabled.

That was directly contrary to what Congress said and so Congressman Hal Rogers who chairs the Appropriations Subcommittee

that deals with Legal Services, essentially chewed them out at the

hearing and said, we told you no attorney’s fees. Now you are

charging attorney’s fees in cases involving the poor and disabled.

You are on thin ice. And as a result of that tongue lashing they

went back and changed it to no attorney’s fees.

But the problem is you are dealing with a program with a lot of

lawyers. They know a loophole when they see one, and you can’t

always get Congress to jump in the way Congressman Rogers was

able to do in that situation.

What I would propose since only 5 percent of the legal assistance

to the poor in this country comes from Legal Service’s lawyers—the

other comes from private lawyers doing pro bono, and even that

five percent is based on their case figures which have now been

shown to be as much as two-thirds off—that Congress just eliminate the funding but do other steps to encourage other pro bono.

And that I think would solve the problem.

Mr. HILL. Thank you very much. A very interesting panel. Thank

you, Mr. Chairman, for holding this hearing and thank you for the

time.

Chairman BARTLETT. Thank you, very much. Mayor Gullo, thank

you very much for your testimony. You know, when you tell this

story to the average American they are just disbelieving. When I

first heard the story I thought it was a quarter of an inch in

height, but this is a quarter of an inch in length over a 6-foot

length?

20

Mr. GULLO. In length. My understanding—and again, I am not

an expert in the building area—is that the shorter the length

would be the more of a percent grade it would be. And so it has

to make a certain grade to go down that height, and my grade had

to be a 6-foot ramp. And it was 5 feet 11 inches and three-quarters,

and so therefore there was some percent grade that was not being

met and that is why we had to redo it.

Chairman BARTLETT. You used the legal term ‘‘de minimis’’, and

this was certainly de minimis if ever there was a de minimis. I am

not sure—and I was in the building business and I have measured

a lot of things—I am not sure how precisely you can measure the

length of a concrete ramp that approaches almost asymptomatically

both the bottom and the top.

I am not sure, you know, when you cut off and say, that is the

bottom of the ramp and that is the top of the ramp. This is a

poured concrete ramp with the troweling going over the existing at

the bottom over the existing at the top, and I am not sure you can

read a rule precisely enough to say that that is a quarter of an inch

out of spec.

But this is a great example that illustrates the mindlessness of

many of these regulators, and the fact that he was unbending and

that you would rather put in another ramp then go through all of

the legal costs involved in protesting this.

You know, this just shouldn’t happen in America. It just

shouldn’t happen in America.

Mr. Rose, thank you very much for your testimony. You mentioned that if the regulatory agencies approved the plans ahead of

time, that they make no guarantees that after the project is finished that they will in fact, be in compliance. Is that what I heard

you say?

Mr. ROSE. What I said was that when the law was written in

1988 Congress told HUD, you must issue guidelines so people will

know how to build a building. Because we don’t tell them how to

build the buildings you have to interpret. They have no way of

doing that.

They did not publish their first set of guidelines until ’91 because

they said it is a very complicated issue and we really don’t understand the ramifications. And based upon that they issued their own

book in ’96 and the whole inside cover was a disclaimer that basically said, if you follow this you still haven’t met fair housing because we are not exactly sure what fair housing is.

So it opened it up even more so to these groups that are suing

small businesses and small home builders every day based upon

projects they built eight years ago. Even if they did it according to

their own guidelines and publications they still could be sued because they themselves, said they did not totally understand the

issue.

And it wasn’t until 1998, it was just last year, that they republished this again and finally agreed to remove the disclaimer that

said that they were disclaiming everything that was in their book.

Chairman BARTLETT. Your story reminded me of a small business in Carroll County. I am having trouble remembering the name

of the proprietor of the business. He is a disabled person who had

21

advanced arthritis before he was born, and so he has extremely

limited movement of his arms and legs.

But this has not deterred him from being a successful small business person. And what he does is to get all of the regulatory agencies together for final plan review. And he gets them all at one

time in the same place and he tells them, this is your last opportunity for input. After today, this is the way it is going to be built

and you are going to have to live with the product.

He came to this because of his experience with a restaurant

owner who had his plans approved and he was building them, and

ADA came through and told him, we approved the plans but we are

sorry. Your bathroom wasn’t big enough. You have got to make the

bathroom bigger. And so he did that; tore out walls which were already in and made the bathroom bigger.

And then the Fire Marshall came through and said, you can’t do

that because when the door of that bathroom is open you cannot

have proper egress from your building and so you cannot do that.

So here was the poor restaurant owner caught between these two

regulatory agencies. And so this young man saw an opportunity for

a business to avoid this kind of problem in the future.

I noted you said that HUD was supporting—actually helping to

pay for lawsuits against builders?

Mr. ROSE. HUD has a bounty system that we refer to it as. They have $10.5 million a year that they issue to these groups to encourage them to sue builders. All you have to do is send a letter in to

a builder. Like in the case of Idaho, this group sent in letters to

everybody saying, we feel that your buildings don’t meet fair housing. Please send us your plans and all that kind of stuff.

And the prior cases that were mentioned is, everyone wants to

settle the case. It is not worth going to court and spending tens of

thousands of dollars. So they get money that is settled in the case,

they get money from HUD to sue in the first case, and the investors don’t want to build buildings any more, they don’t want to own

the buildings any more.

It is even so ridiculous that if it is a condominium building and

each person owns a condominium and they say, we don’t care that

this is a nondisabled person in this unit, we want that person to

remodel their unit to make it with railings or some other—in their

interpretation.

To me, everything should be universal design, which would make

it handicapped accessibility without railings. But because of the

way the law is interpreted, everyone thinks railings should be

there and ugly sinks and all that type of thing.

As my position on the American Paralysis Association Board, unfortunately, many times a year I meet with families of people who

have just been disabled or put in wheelchairs, and besides the

trauma of, what are they going to do in the future, they are very

concerned about their home. What is their home going to look like?

So I usually take them to my house and say look, I have no railings, I have, you know, different things that I have done that may

not meet the letter of the law but it sure allows me to get around

in my wheelchair.

And you can make a universal design that is a very attractive

thing and it is nothing to be fearful of. We have enough things just

22

you know, in family relationships today that that is something you

should not be concerned with.

Chairman BARTLETT. The other day in thinking about our history

and how we got here as a country, I re-read the Declaration of

Independence. And when I came to one part of it I thought that

I was reading some current literature. This was one of the reasons

that our forefathers felt that they were justified in separating

themselves from England. And let me read this paragraph, this

reason.

‘‘He’’—that was the King then; now it is our government and our

regulatory agencies—‘‘He has erected a multitude of new offices

and sent hither, swarms of officers to harass our people and eat out

their substance.’’

Now, this was grounds for a revolution, in declaring your independence. We have kind of gone full circle, haven’t we? Let me read

that again. ‘‘He has erected a multitude of new offices and sent

hither, swarms of officers’’—all of our regulators—‘‘to harass our

people and eat out their substance.’’ Which is pretty precisely what

these regulations and their mindless implementation is doing

today.

Yes, Mr. Rose?

Mr. ROSE. I think that is extremely appropriate. The only difference is that these swarms of regulators have said that there are

not even enough of them that they are going to pay your neighbor

now to turn you in and get fees; which is even more frightening a

thought with these bounty systems. Which is a sad thing to say

about our 1999 society.

Chairman BARTLETT. They have a bounty system which

recompenses neighbors and persons that are not directly involved?

Mr. ROSE. Oh, they have zero involvement; no involvement whatsoever. I could earn a very good living if I wanted to be unscrupulous, without even going to the projects; just getting a list of every

multi-family project that has been built in America and send them

a letter. All I have got to do is send them letters from posting and

I can make millions of dollars. No problem whatsoever.

Chairman BARTLETT. Now, was this required by law or was this

done by the regulators in addition to law?

Mr. ROSE. The law does say that there should be this type of

thing. It doesn’t spell it out exactly the way they are interpreting.

The law was really intended to take care of more of the education

process, but in the interpretation of it I think it has gone way

above and beyond.

When you spend $10.5 million this year alone to pay for lawsuits

as opposed to only $4.5 million to educate the problem—if you did

a survey of the Mayors and the counties and the cities and the

states that approved the building plans—which is the main issue.

A builder has a set of plans and they are going to build an apartment project. They take it in. They have the meeting like you described the meeting. They have everybody together. They have the

Zoning people, they have the Park and Planning people, they have

the Fire Marshall, they have everybody. Does this meet all your

plan requirements? Everybody says yes, they build the building.

Ten years later they get a thing. It doesn’t meet the federal fair

housing guidelines and everybody says, well we were never notiVerDate 27-JAN-2000 10:06 Feb 08, 2000 Jkt 010199 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 E:\HEARINGS\60126 txed02 PsN: txed02
23

fied. We never received anything. The inspector inspected it the

way he thought was right, the permit reviewer reviewed it the way

he thought it was right, and everybody did it the way they thought

it was right.

Now the federal government is now suing—paying money to people to sue.

Chairman BARTLETT. You mentioned that compliance with HUD

regulations has resulted in decisions by IRS that the implementation was incorrect and therefore IRS is collecting monies?

Mr. ROSE. The Low-Income Housing Tax Credit which was

passed in 1986, the intent was that the local states would get their

shares and appropriation of tax credit dollars. They would give

these tax credit dollars out on a project-by-project basis after they

went through a 3-step, a multistep review process.

They are approved again, by the states and everybody else. Now

IRS—and it has been approved by HUD and everybody has approved the building. The buildings are built; they have been occupied; people have been living in them eight years, ten years, seven

years.

They now receive a letter from IRS that says aha, you as an investor filed your income tax return. In your income tax return you

took these low-income housing tax credits that you bought that allowed the Fair Housing program to be built. We think you got too

much credit. We want to review everything that everybody else has

approved and we, IRS, is going to tell you what is right or wrong.

So they immediately call up the syndicator. The syndicator says,

how is this possible? This building was built eight years ago. The

right people are in it, it is approved by all the municipalities. In

some case they are award-winning projects that everyone says is

exactly what the community wants. How is that possible?

They say, well we don’t know. They call IRS, they call the builder, and they end up in a room spending hundreds of thousands of

dollars trying to settle the lawsuit with IRS and giving IRS money

plus their own lawyers money. And then that money just goes into

the Treasury. It doesn’t even go back into housing to create more

low-income housing tax credit in the first place. The money just

goes in a totally different direction.

Chairman BARTLETT. Is the problem that HUD had not cleared

their requirements with IRS?

Mr. ROSE. I couldn’t say that. I think IRS is just changing the

rules. They were playing football; now they’re playing basketball.

You know, it is an uneven—it is just like the time delays that Mr.

Hill was talking about. You can’t all of a sudden change the rules

when you are in the middle of the process.

Everybody has approved these programs for years and now all of

a sudden IRS has a different interpretation of what they are. But

you know, they are also saying that they are only auditing I believe, 400 companies, but they are auditing 400 development companies that may have 20 projects or 30 or 40 projects each, so you

are getting into thousands of projects.

And you know, this has been going on for two years and it is

building and building and building. And I think it is from—I don’t

build low-income tax credit projects, but from talking to the various

people who are in that market they are seriously considering just

24

totally getting out of it because their investors have had it, the syndicators have had it, and they said it is doing what Congress intended it to do but they can’t fight with IRS. It is impossible.

Chairman BARTLETT. Thank you. Mr. Boehm, you mentioned the

carpooling situation. Are the environmentalists weighing in on

this? Clearly, this is an impediment to carpooling. Are the environmentalists weighing in on this?

Mr. BOEHM. Well, the regulations came from the Department of

Labor, so we can only guess who may have had an input or not had

an input. But at the time they were considering the regulation and

were taking comment, a lot of the businesses looked at the legislative history and they said, wait, Congress said this is exempt but

the labor folks didn’t really hold it in high regard what Congress

said and came up with that regulation anyway. We don’t know if

there were other folks weighing in. At least I don’t.

Chairman BARTLETT. I meant weighing in after the decision by

the Department of Labor. Because this clearly is an impediment to

carpooling.

Mr. BOEHM. Yes.

Chairman BARTLETT. If you carpool you put yourself at risk, depending upon how the IRS wants to look at the costs involved

there. So what that means is that people not to be put at risk will

simply not carpool, so this means more cars on the road and this

means more pollution.

Mr. BOEHM. You are exactly right.

Chairman BARTLETT. I would think that the environmentalists

should be weighing in on this. You haven’t heard them weigh in

on it?

Mr. BOEHM. I have not. I have not. But you are absolutely right;

that is the net effect.

Chairman BARTLETT. There is an old saying that birds of a feather flock together and it may be that the environmentalists are

loathe to do battle in this situation.

Mr. BOEHM. I couldn’t say, but it puts the farmer in a very, very

awkward position because he can’t go to each one of his workers

each day and say, who did you carpool with today? Did he charge

you the right number of cents per mile? how many miles did you

go?

And even if he did all that, which would be highly impractical,

if it is over it doesn’t matter with respect to their intent because

they could still find that the individual worker was a labor contractor and therefore the farmer was jointly liable because that is

how they interpret those relationships, and then the farmer is still

behind the 8-ball legally.

It is a very misinterpreted regulation with a lot of very negative

effects.

Chairman BARTLETT. You mentioned the Legal Services Corporation. I said in introducing you that I was very familiar with what

they had done. They I think, with malice aforethought, put a whole

industry—all the orchard industry in Western Maryland—out of

business. They did this by systematically harassing them.

They would get the migrant workers to sign a form. The migrant

worker had no idea what the form was. It could have been a blank

form that they subsequently filled in as a complaint that now reVerDate 27-JAN-2000 10:06 Feb 08, 2000 Jkt 010199 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 E:\HEARINGS\60126 txed02 PsN: txed02
25

sulted in a suit. And our biggest orchard there was owned by a

wealthy German, and just a little bit of this harassment he said,

I don’t need to do this. I quit.

So you can go out there now and see his acres and acres of apple

trees, unpruned, untended. And there was—I don’t know if it has

rotted down yet—but a few years ago there was a very large pile

of apple crates right out in the open; the picking boxes. He just

quit and walked off. And there is not now a single job in orchards

in Western Maryland.

Mr. BOEHM. And not only are you right, Mr. Chairman, our National Legal and Policy Center wrote a book, ‘‘Harvest of Injustice’’

about two years ago that interviewed many of your constituents

who had previously worked in apple orchards and some of the

former owners, and it was devastating.

And unfortunately, it wasn’t limited to Western Maryland. The

sugar cane industry used to employ 10,000 Jamaican workers. Now

they use equipment because equipment doesn’t file frivolous lawsuits against the farmers. So the very people that they were most

trying to help, the workers who depended on those jobs, have been

the unintended victims of these waves of lawsuits.

And the real purpose for the lawsuits has been, as many of the

Legal Services lawyers said is, they didn’t like the H2A program

where people were brought into the country to help with the harvest because it ran contrary to the United Farm Workers Union because you couldn’t organize folks who were already getting four or

five times what they would make in their home country. They

didn’t want to join a union.

And so for political reasons they have run these jobs out of the

country and destroyed some industries and small business owners

in the process. And hurt the people that ostensibly were supposed

to be helping.

Chairman BARTLETT. You made an observation which I don’t

think everybody understands and that is, that these migrant workers come here because they can work a part of the season here and

make far more money than they would have made working all year

back home.

Mr. BOEHM. That is correct. They get paid the prevailing wage,

they get paid all of their transportation, they get paid their housing, and they fight to get into this program at a time that, as we

all know, there is a real labor shortage in this country.

So it is a win/win situation. It is a win for the American consumer who eats the fruits and vegetables picked, and it is a win

for the foreign workers who get a job that allows them to save a

lot of money and go back to their home country.

But it is a lose/lose when the lawsuits start flying because then

the programs shut down and you have vacant orchards as you do

in your district.

Chairman BARTLETT. Of course, Americans have benefited from

increased agricultural productivity. When I was younger the general rule of thumb was that you spent 25 percent of your income

on food. Today that figure is down to about nine or ten percent,

and food is so cheap today that 2 years ago for the first time in

our history, more Americans ate meals outside the home than in

the home, and that disparity is growing.

26

I tell people, please don’t criticize farmers with your mouth full.

But what this kind of regulation is going to do is to increase the

cost of food, and every American is going to pay for these excesses

in regulation.

Mr. Hantman, you did a pretty good job of defending the indefensible. Let me just look at the regulations here. And they have not

changed. I remember them as 81⁄4 inch steps because I built houses

and that is what it is inside a house. If you are outside it is seven

inches.

And the exceptions here for treads and risers, any stairway replacing an existing stairway within a space where, because of existing construction the pitch or slope cannot be reduced. This really

wouldn’t pertain to what you did there. We will go out in a few moments to look at the steps there.

But there were solutions to your problem that would have avoided the violation. You mentioned they could have raised the curb,

but if you were not going to have an excessive curb height then you

would have had to have raised the parking area there.

We are only talking about two inches. I suspect that you could

have sloped that sidewalk, I guess you call it, at the bottom of the

steps. You might have sloped that the two inches to avoid the excess, and I think you would have still been less than the one per

foot.

And certainly you could have sloped the 15 or 20 feet of the parking area and no one would have known it. Had this been a job anywhere other than a government job, that absolutely would have

been done. Or after the job was completed the regulators would

have been around, as they did to Mr. Gullo, forcing you to tear it

out and do it over again.

You mentioned historic structures and I was reminded of a story

in New York City with Mother Teresa. And they wanted to buy a

building for homeless people, many of them dying. And the regulators told them that they could not use the building unless they

put in an elevator.

And Mother Teresa’s people told them, we can’t use the building

if we have to put in an elevator because we can’t afford it. And the

regulators held their ground as they did with Mayor Gullo. And so

Mother Teresa and her people went away. And now there are people dying on the street who might have spent their last days and

hours in that building.

Now that was an historic building. It was an old building. But

the regulators would make no concession for Mother Teresa. To the

average American this is the ultimate in mindless enforcement of

the regulations; to prohibit Mother Teresa and her people from

using a building in New York City to take homeless people in off

the street so they could die with some kind of dignity.

What do we have to do to correct this situation? Some of these

agencies flagrantly violate the intent of the law. What do we have

to do—and by the way, Mr. Boehm, I voted against Legal Services

Corporation. I denied them all of their money. We don’t need them.

If we give some minimal incentives there is a lot of pro bono

work done now; 95 percent you say, of all of this is pro bono. The

other five percent can easily be accommodated by a tax law that

27

gives some incentive to lawyers to do this kind of work. And they

will be unlikely to have a political agenda.

And I think much of the activity of Legal Services Corporation

is in pursuit of political agendas rather than pursuit of the rights

of the people that they are supposed to be representing. So I did

what you would have liked the Congress to do. Unfortunately, not

enough of us did that.

Mr. BOEHM. Thank you.

Chairman BARTLETT. And we still have Legal Services Corporation. But there will be another day and there will be another vote

and we will see what happens.

But what can we do to reverse this situation? We don’t need repetitions of the kinds of horror stories that you tell. And by the way,

one association couldn’t provide a witness today because they were

concerned for recriminations.

They wouldn’t come and testify. We have not been able to get an

orchardist from Western Maryland to come and testify as to their

mistreatment by Legal Services Corporation because they are

afraid of recriminations.

Mr. BOEHM. Yes, in fact, we have had the same problem. I remember that instance and we had the same problem when Congressman Gekas had oversight hearings on Legal Services. Time

and again we would contact people who were really victimized in

a very abusive way by Legal Services lawyers.

They were afraid to testify; so much so that Congressman Gekas,

during the reauthorization hearings a couple of years back, twice

had to remind the Legal Services program lawyers there in the

room, that it is against federal law to retaliate against a witness.

One of the farmers who got up to testify from North Carolina,

Stan Eury, predicted that he would be sued as a result of his testimony. And just a matter of a few months later he was in fact, sued

on some fairly trumped-up charges.

So what you experienced with your farmers not wanting to come

out publicly and say it, Congressman Gekas experienced as well.

Chairman BARTLETT. What can we do? What should we do?

Mr. BOEHM. Well, getting back to the point, we have no shortage

of lawyers in this country. We have 900,000 to a million lawyers;

a lesser number in private practice. Up and down my block everybody is a lawyer in this Washington area. Most of the money, most

of the resources to help poor people does not come from Legal Services. At best it is 5 percent. The other comes from pro bono, it

comes from contingency lawyers.

What we need to do, I think, is de-lawyerize—to coin a phrase—

lots and lots of the everyday disputes of poor people. We do that

by raising the jurisdictional amount of Small Claims Court, where

people who have a problem that involves a couple of hundred dollars—it is futile and against common sense to have a group of lawyers fighting over relatively small amounts of money.

And I think what you need to do is to take a lot of steps to have

mediation, arbitration, for these smaller disputes. The problem you

run into is that the American Bar Association has a vested interest

in maintaining all sorts of things. They will fight tooth and nail

against any other type of professional to render any kind of legal

assistance.

28

Never mind that many countries around the world, those exact

types of problems are handled by non-lawyers. We have the largest

per capita lawyer population in the world. Other countries, Western countries, countries that make good cars and good products

who seem to be very, very advanced, have figured out you don’t

need a lawyer to handle every small problem.

We have it in this country and it is largely because there is a

vested interest by the bar in keeping things in court. They are the

biggest proponents of legal services because every time a legal services lawyer sues a small businessman that small businessman has

to go out and hire a lawyer. And so it is subsidized litigation and

as everybody knows, when you subsidize something you get a lot

more of it.

And so they are in favor of increased taxpayer subsidization of

litigation. The solution I think, is just the opposite. You go and

take a page from these other countries’ books. You come up with

ways to solve small, everyday neighborhood problems without getting lawyers involved.

Chairman BARTLETT. That kind of legislation is tough, because

about half the Members of Congress are lawyers.

Mr. BOEHM. That is true, and the Bar—I am going from here to

a Member’s office who is being visited today as we speak, by a delegation of lawyers saying we should be spending lots more for Legal

Services. So they do have a vested economic interest.

On the other hand, poor people and middle class people for that

matter, have a vested interest in being able to solve their problems

without having to hire lawyers. If you have a $15,000 or $20,000

dispute and you have to go to court, you really have a $50,000 dispute depending on—if you have to go through trials or if it is in

Federal Court. And that is just against common sense.

Chairman BARTLETT. It is indeed. Do other members of the panel

have suggestions as to what we might do? Mayor Gullo?

Mr. GULLO. Well, being an attorney I have to say that the government regulators were not afraid of doing something to an attorney when he was remodeling his law practice. I mean, they saw the

sign right there.

I guess I would urge more accountability in the government. And

I say that for two reasons. First of all, if the government were more

accountable for their mistakes—again, in my situation, they approved the plans. They required the plans, they reviewed the plans,

they approved the plans. They should be bound by their decision

and they should say okay, these plans are what we are going to

build.

And I didn’t mention in my testimony but there were other

things that they made me change similar to what was talked

about: taking out walls and adding doors after the fact.

If they were more accountable and I had some recourse towards

them to say that I am going to take you to Court and win, then

I am going to be able to recover my costs, my attorney’s fees. But

right now you make an economic decision that number one, I have

to go to Court. It is not a Small Claims matter because you are

dealing with the equity jurisdiction.

Number two, my construction loan is already having interest on

the part of the building I have already paid the contractor. And

29

number three, my business isn’t productive because I am outside

the business looking in.

So there is an interesting principle, at least in Maryland law,

that the government can’t use the estoppel principle. Meaning that

if you came for a building permit and one of the clerks gave you

the permit but down the road I found out that permit shouldn’t

have been issued, I am not estopped from coming after you, stopping you and making you correct the action.

In the private sector we have that principle; that if I did something for you and had a contract with you and I found that, you

know, you hadn’t done something right but I okayed it, I am estopped from coming after you for that.

That doesn’t apply in Maryland at least, and I think that accountability is one of the things that we really have to look for because it levels the playing field. We all play by the same rules.

Chairman BARTLETT. Thank you very much. And what you said

about the lack of accountability is also true. You can get approval

from a government agency to proceed. You proceed consistent with

that approval and that does not mean that you cannot be challenged by that same agency in the future for not being in compliance.

I guess this needs to be written into law, and I appreciate that,

because clearly we have to do something. Everybody wants a safe

workplace, everybody wants safe drinking water, everybody wants

pure air. There is no disagreement as to the objective.

The only disagreement is to how we get there. And there is nobody that I know that really has any fundamental disagreement

with the intent of the original legislation in all of these cases. The

problem comes with the writing of the rules.

And sometimes as Mr. Boehm pointed out, the agencies set out

to circumvent the law. Their intent is to not abide by the law. And

they use very creative reasoning to get to where they are, redefining what ‘‘is’’, is. Quite literally in the one case, redefining what

‘‘is’’ is, ‘‘is’’ became ‘‘was’’ in that case.

Well, let us move our hearing and we will adjourn our hearing

at the Capitol steps, and let us just go from here to there. We will

have a brief discussion there as to the problem there and then we

will adjourn our meeting there.

[Recess.]

Chairman BARTLETT. We were just noting that the existing violation here—this step is a full two inches higher than code. And in

addition to that it is clearly more than three-sixteenths of an inch

different in height than other steps.

The code says two things. One is that the maximum height of a

riser outside like this is 7 inches. And the second thing the code

says is that no two adjacent steps can be more than three-sixteenths of an inch difference in height. And no two steps in a run

of steps can be more than three-eighths of an inch different in

height. And this is a clear violation of both the seven inch maximum and the three-sixteenths inch difference.

It could have been avoided very simply by either increasing this

slope a little bit or raising the curb and increasing this a little, or

not increasing the slope here at all but simply raising the curb 2

inches and then sloping a little bit out here you could lose 2 inches

30

out there very quickly. You would never notice it. Nobody would

have known that you did it.

The violation here is clearly I think, an oversight. Nobody was

paying attention. They didn’t have to pay attention because the

government is not subject to these regulations.

When we came to Congress, when we came to power in ’94, one

of the first things we did in ’95—and this was already about to be

completed by that time, it was kind of cast in concrete if you know

what I mean—but the first thing we did was to say that Congress

was going to be held to the same regulations as everybody else.

Now that clearly isn’t true because were this anywhere else in our

country that wouldn’t be there for all this time.

The Architect said that this wasn’t a major travel route, but

every Congressman that walks from Cannon House Office Building—I was there for 6 years—uses these stairs that they go up.

That is how I first noticed it and it was the first time that I did

it.

I was a home builder. I notice steps that are out of code. And

the first time I took that route I said, this is not right. And everybody that comes from Cannon House Office Building goes this way

up the steps.

And we had the Chief Compliance Officer here and he says yes,

it is out of code. What we will do is to put a sign there saying,

watch your step. My response was, would you let GE do that? And

he was silent. Clearly, they would not let GE do that. If GE had

this violation they would have torn it out a long time ago.

That is by the way, a hazard. Many of the things that they hang

up on in the real world rather than here are not hazards. That

clearly is a hazard. When you are coming down those steps an

extra two inches at the bottom is a real jolt if you are expecting

a step the same size as the steps above. And you notice that difference.

The first step being out is not as bad as others being out because

you get a rhythm in going up the steps and the reason they have

the three-sixteenths of an inch is if you are out much more than

that you are going to be tripping on the steps. That is not as true

for the bottom step.

But this is a clear violation of the code and I don’t think there

is any way to rationalize it, that this had to be done, because you

easily could have raised this. So in effect, it was torn out to there.

You know, you would have had no problem at all getting an inch

slope there and no problem at all getting another inch slope here.

No one would have objected to that or hardly known it. And then

you wouldn’t have been out of compliance there at the step.

But we don’t want the step torn out. When Newt Gingrich was

here he wanted the step torn out. He said, we need to make an object lesson of this. We are going to be subject to the same rules as

everybody else or we will change the rules.

Now, I would hope that we would change the rules before we

jackhammer this step out. But what we want to do is just to use

this as an example. So I mean, nobody has fallen here, and thousands of people have gone up and down those steps since they have

been put in and nobody has fallen there.

31

That is a risk. It is clearly a minimal risk because nobody has

fallen there yet. And what we want is common sense application

of these laws when the regulations are written and when the regulations are enforced. And this wouldn’t be permitted anywhere else

in our part of the world and it shouldn’t be permitted here.

What we need to do is to change the regulations so that some

common sense is used. And Mayor Gullo, this just is so different

from your experience. He had a 6-foot long ramp that was onequarter of an inch out in its length, not in its height. One-quarter

of an inch out in its length and he was forced to jackhammer it out

and put in a new one.

Now, if you had to do that as a struggling, young, small, businessman in New Windsor, Maryland, what are we going to ask the

U.S. Congress to do here? I mean, if we are going to pass these

laws that result in these regulations that are having the effect they

do on the rest of the world, how do we justify this and what are

we going to do about it?

What I hope we do about it is, is rewrite the laws so that the

regulators are going to have some accountability, will have to be

reasonable in the implementation of the regulation. I don’t want to

see jackhammers in here tomorrow. It is my money that built these

steps.

They were built wrong but you know, we can live with it after

they are built. I would have preferred they were built without the

violation, but now that they are built I sure don’t want to use my

money and your money in jackhammering the steps up. But I want

this same kind of rationalization to be applied to other situations

so that there is no more Mayor Gullos and jackhammering up a

ramp which is one-quarter of an inch out in length.

I am not sure that I can measure that quarter of an inch and

I was in the building business. Because that ramp is approaching

the street level and approaching the threshold at the door up there.

And it is almost an asymptotic thing. Where do you cut off the

line? Where does it stop, where does it end? And it was mentioned

at the hearing that if you pour a 6-foot ramp it may shrink a quarter of an inch in curing.

Well, I want to thank you all very much for coming. Do any of

the witnesses have any comment relative to this and how this

might be used to produce good things for the average citizen out

there?

Mr. GULLO. I guess, since this is clearly a situation like my ramp

was, you can notice all the people going up and down and no one

is falling, there is not a sign here. Maybe the regulations are the

things that are wrong, and if you can say, well look at this situation right here.

It is not presenting a hazard more than anything else is. Maybe

we need a little bit of leeway. And you empower the inspectors to

give you that leeway. They gave the leeway because it was the

Capitol, but maybe we need to apply it other places as well.

Chairman BARTLETT. Well, I want to thank you all very much for

coming. I want to thank the Architect for accommodating us and

providing an opportunity for us to come here. And we will now adjourn our hearing and we will leave the record open for several

days. There were members of our Committee who wanted to be

32

here and couldn’t because of the press of other Committees and

they may want to ask questions.

So we will leave the record open for several days. And written

statements will automatically be put into the record. If any of the

witnesses want to provide additional information just give us a

written statement and without objection that will be automatically

included as a part of the record.

Well, thank you all very much for coming and our hearing will

now be in adjournment. Thank you.

[Whereupon, at 12:10 p.m., the subcommittee was adjourned.]

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63