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REGULATORY IMPEDIMENTS TO JOB CREATION IN

THE NORTHEAST—PART I

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY AFFAIRS,

STIMULUS OVERSIGHT AND GOVERNMENT

SPENDING

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

APRIL 20, 2011

Serial No. 112–43

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

(

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

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JASON CHAFFETZ, Utah

CONNIE MACK, Florida

TIM WALBERG, Michigan

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

ANN MARIE BUERKLE, New York

PAUL A. GOSAR, Arizona

RAU ́ L R. LABRADOR, Idaho

PATRICK MEEHAN, Pennsylvania

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

TREY GOWDY, South Carolina

DENNIS A. ROSS, Florida

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

MIKE KELLY, Pennsylvania

ELIJAH E. CUMMINGS, Maryland, Ranking

Minority Member

EDOLPHUS TOWNS, New York

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

DANNY K. DAVIS, Illinois

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

CHRISTOPHER S. MURPHY, Connecticut

JACKIE SPEIER, California

LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director

ROBERT BORDEN, General Counsel

LINDA A. GOOD, Chief Clerk

DAVID RAPALLO, Minority Staff Director

SUBCOMMITTEE ON REGULATORY AFFAIRS, STIMULUS OVERSIGHT AND GOVERNMENT

SPENDING

JIM JORDAN, Ohio, Chairman

ANN MARIE BUERKLE, New York, Vice

Chairwoman

CONNIE MACK, Florida

RAU ́ L R. LABRADOR, Idaho

SCOTT DESJARLAIS, Tennessee

FRANK C. GUINTA, New Hampshire

MIKE KELLY, Pennsylvania

DENNIS J. KUCINICH, Ohio, Ranking

Minority Member

JIM COOPER, Tennessee

JACKIE SPEIER, California

BRUCE L. BRALEY, Iowa

(III)

C O N T E N T S

Page

Hearing held on April 20, 2011 .............................................................................. 1

Statement of:

Bender, Jolene, supervisor, town of Marion, NY; Maggie Brooks, county

executive, Monroe County, NY; and Barry Virts, sheriff, Wayne County,

NY .................................................................................................................. 65

Bender, Jolene ........................................................................................... 65

Brooks, Maggie .......................................................................................... 71

Virts, Barry ................................................................................................ 76

Mandina, Mike, president, Optimax; Rebecca Meinking, executive vice

president, Radec Corp.; and Bill Pollock, CEO, Optimation ..................... 4

Mandina, Mike .......................................................................................... 4

Meinking, Rebecca ..................................................................................... 11

Pollock, Bill ................................................................................................ 19

Martin, Cathy, president, Monroe County Farm Bureau; Jonathan Taylor,

Oakridge Dairy; and John Teeple, Teeple Farms Inc. ............................... 32

Martin, Cathy ............................................................................................ 32

Taylor, Jonathan ....................................................................................... 42

Teeple, John ............................................................................................... 52

Letters, statements, etc., submitted for the record by:

Bender, Jolene, supervisor, town of Marion, NY, prepared statement of .... 67

Brooks, Maggie, county executive, Monroe County, NY, prepared statement of ........................................................................................................... 73

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 87

Mandina, Mike, president, Optimax, prepared statement of ........................ 6

Martin, Cathy, president, Monroe County Farm Bureau, prepared statement of ........................................................................................................... 36

Meinking, Rebecca, executive vice president, Radec Corp., prepared statement of ........................................................................................................... 14

Pollock, Bill, CEO, Optimation, prepared statement of ................................ 22

Taylor, Jonathan, Oakridge Dairy, prepared statement of ........................... 45

Teeple, John, Teeple Farms Inc., prepared statement of .............................. 54

Virts, Barry, sheriff, Wayne County, NY, prepared statement of ................ 78

(1)

REGULATORY IMPEDIMENTS TO JOB

CREATION IN THE NORTHEAST—PART I

WEDNESDAY, APRIL 20, 2011

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON REGULATORY AFFAIRS, STIMULUS

OVERSIGHT AND GOVERNMENT SPENDING, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Rochester, NY.

The subcommittee met, pursuant to notice, at 9:06 a.m.,

Irondequoit Town Hall, 1280 Titus Avenue, Rochester, NY, Hon.

Ann Marie Buerkle (vice chairwoman of the subcommittee) presiding.

Present: Representatives Buerkle and Kelly.

Staff present: Joseph A. Brazauskas, counsel; Sharon Casey, senior assistant clerk; Adam P. Fromm, director of Member services

and committee operations; and Cecelia Thomas, minority counsel.

Ms. BUERKLE. Good morning, everyone. The hearing on Regulatory Impediments to Job Creation in the Northeast will begin.

Before we start this morning and get under way, I would ask all

of you to join me in a moment of silence. This morning’s paper had

an article. Three Fort Drum soldiers were killed in the line of duty

in Afghanistan. We sit here this morning and we enjoy the freedoms to talk, to discuss the issues, and it is because of the service

and sacrifices of the military.

Join me in a moment of silence to remember those brave men

who lost their lives, as well as their family and their children.

These are young men who have wives and children and parents,

and their lives will never be the same. So please just take a moment of silence. Thank you.

[Pause.]

Ms. BUERKLE. Thank you.

Before we begin our Oversight Hearings in Washington, our

chairman, Darrell Issa, always begins with a Mission Statement of

the Oversight and Government Reform Committee. So I will do

likewise here in our District Hearing and our subcommittee Hearing.

Oversight Committee Mission Statement: We exist to secure two

fundamental principals.

First, Americans have a right to know that the money Washington takes from them is well spent.

And second, Americans deserve an efficient, effective government

that works for them.

Our duty on the Oversight and Government Reform Committee

is to protect these rights. Our solemn responsibility is to hold govVerDate 17-JUN-2003 14:12 Oct 28, 2011 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\68365.TXT KATIE PsN: KATIE
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ernment accountable to taxpayers, because taxpayers have a right

to know what they get from their government. We will work tirelessly in partnership with citizenship watchdogs to deliver the facts

to the American people and to bring genuine reform to the Federal

bureaucracy.

This is the mission of the Oversight and Government Reform

Committee.

The Subcommittee on Regulatory Affairs Stimulus Oversight and

Government Spending will come to order.

First of all, let me express my appreciation to all of you for being

here. We have many of the local elected officials here to the Town

of Irondequoit. Our thanks for providing this wonderful venue to

have this hearing.

Today we will continue an effort that my subcommittee and the

Oversight and Government Reform Committee have been examining since the beginning of this year. Our committee has focused

on the regulatory impediments to job creation. Our committee has

focused on what government has done to get in the way of business

and success in our economy.

We’ve heard from job creators across the country about how the

Federal Government stifles job creation, and today we’ll focus on

the issues that affect job creation in upstate New York.

The strength of the economy and unemployment are on the

minds of most Americans. The nationwide unemployment still hovers at around 9 percent. That unemployment figure does not reflect

the millions who have given up looking for work. The rate is the

same in the State of New York, 8,000 of our neighbors received unemployment benefits during the month of March. This is unacceptable. We must create more jobs and turn the economy around for

all New Yorkers.

Today we will hear from our local job creators in business and

in agriculture. They conduct business right here in central New

York. Our witnesses are construction workers, dairy and apple

farmers, berry farmers, defense contracts and others who employ

many members from the local community and provide necessary

goods and services to our region.

As we attempt to recover our economy and put the people of this

region back to work, we must begin to understand the regulations

that these industries face on a day-to-day basis as they attempt to

survive. Industry faces an enormous amount of regulations from

many Federal agencies. This committee has heard from job creators

about regulations from the Environmental Protection Agency, the

Department of Labor, Occupational Safety and Health Administration, and the Food and Drug Administration. The cumulative impact from regulations from all these agencies is particularly harmful because of the difficulty in implementing these regulations, as

well as the tremendous cost of compliance. These costs negatively

impact job growth and really are a hidden tax on businesses.

Worse yet, last week the EPA testified before a different house

committee and admitted that the EPA ignores the affects on jobs

and the regulations that they issue.

Local governments and municipalities are struggling to deal with

the state of the economy in continuing to provide essential services

to constituents while dealing with the Federal bureaucracy. The

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practice of the Federal Government pushing unfunded mandates

down to the States leaves local municipalities under intense pressure to make their budgets work. These local governments already

have major budgetary constraints and struggle to provide basic

services for their community. Moreover, regulations that range

from health care to street sign replacement pile on even more costs

to local government together with unfunded mandates.

This hearing this morning will allow businesses, farmers and

local governments from New York and upstate New York to provide

Congress with an opportunity to hear about Federal agencies and

how they affect their ability to create jobs and provide for their

communities. We are listening to all of you and we want to hear

what you have to say.

At this time I would like to introduce my friend and my colleague

from Pennsylvania, Mike Kelly, for his opening statement.

Mr. KELLY. Thank you, Madam Chairman.

First of all, I want to thank the Congresswoman for inviting me

here today and to be with all of you. And because our mission really is to listen to what’s going on and to hear what you have to say.

This is not about Republicans, it’s not about Democrats, it’s not

about finger pointing; it’s about fixing what we have in front of us

all right now for all Americans. So I would hope that as we go

through this, and you witnesses especially, thank you. It is critical

that we learn.

And it’s great to be with one of my favorite freshmen. We met

early on when we got to Washington, and I think we have the same

type of background. We understand what it takes to run a business; we understand how difficult it can be; and we understand

also right now the influence of government on what it is that we

try to do every day because we truly are the job creators. We are

the people that will drive the economy forward and make it possible for people to get back to work if we can get government in

the role it should be, and get their boot off our throats so we can

operate our businesses in a manner that they need to be operated.

So Ms. Buerkle, thank you so much. It’s a pleasure to be with

you and it’s a pleasure to be in New York. Thank you all for being

here.

Ms. BUERKLE. Thank you very much.

I want to say, for the record, that Members may have 7 days to

submit opening statements and extraneous materials to our record.

We will also be accepting other statements and testimony from

other individuals who will not be testifying here today so that we

have a good comprehensive look at how the government is impeding success here in upstate New York.

Now I would like to welcome our first panel of witnesses this

morning and our first panel is small businesses. I would like to introduce, first of all, Ms. Rebecca Meinking. She is the executive

vice president of Radec Corp.; Mr. Bill Pollock, and he is CEO of

Optimation; and Mr. Mike Mandina, he is the president of

Optimax.

Good morning and welcome to all of you and thank you for being

here this morning.

Pursuant to the committee rules all witnesses will be sworn in

before they testify.

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So if you would stand up and I’ll ask you to raise your right

hands.

[Witnesses sworn.]

Ms. BUERKLE. Let the record reflect that all witnesses answered

in the affirmative.

Thank you very much. Please be seated.

In order to allow time for discussion and for our questions from

the Congress, we’ll ask that you limit your opening remarks to 5

minutes. However, given the fact that there is just two of us, we

have a little bit more flexibility. So we are anxious to hear your

opening statements.

Mr. Mandina, if you would like to start.

STATEMENTS OF MIKE MANDINA, PRESIDENT, OPTIMAX; REBECCA MEINKING, EXECUTIVE VICE PRESIDENT, RADEC

CORP.; AND BILL POLLOCK, CEO, OPTIMATION

STATEMENT OF MIKE MANDINA

Mr. MANDINA. Thank you. It’s a pleasure to be here, and I certainly did not want to be the first one to start.

Optimax is a precision optics manufacturer. We currently have

150 employees. We are the classic startup with one person 20 years

ago, and we are a high-tech manufacturing company just outside

of Monroe County, in Wayne County.

Two issues, one that I have written in the testimony is about the

work force issues. Optimax, having hired 150 employees and currently hiring four employees a month for the next year, is faced

with the issue of lack of skill sets for what we provide for our services, and I think that the—there are ways that—there’s a lot of

waste in the system in terms of getting the proper training to the

fresh minds that should be able to do the work that we do.

And one of the things that I have been promoting is the SECTORS Act, which is a Federal-level act that has passed the House.

This allows a clustering of around regional competencies, if that

were allowed to exist, then we could dig down deep and get rid of

some of the waste and the cost and it would be cost savings. But

this is creating an entity that doesn’t exist right now.

I will point to the WIRED grant funds that brought together our region, which we won $13 million, I believe, here a few years back.

And that was the first time that I participated in anything that

brought our region together around wealth creation. Now, around

wealth creation that generates taxes and that allows strong voices

to do the right thing, including all the stakeholders; the academic

institutions were at the table, government was at the table, the

manufacturers and hospitals, it was wonderful. So we had 60 or so

people at the table and we could have done something with that.

When the funds ran out, it stopped. And I think that was the catalyst to drive cost out of government, to drive cost in a very efficient

flow of services down.

So I would like to see—and I think the SECTORS Act is a way

to bring that back. It did pass unanimously. It’s a very—both sides

of the aisle agree on it. So I think that is something that can help

to get to the root of what you’re wanting to do in terms of removing

impediments to jobs.

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The other key thing, which is not in my testimony which I didn’t

put in there because I couldn’t remember all the words to the acronym and I still don’t know, it’s called ITAR. It’s a trade restriction

about shipping technology overseas. So for technology manufacturers who want to sell globally, it is a hurdle. Optimax does 1-week

delivery on precision optics. We have to get permission to ship

those optics. The permission takes 3 to 4 weeks to get. And we’ve

actually been denied sending a simple lens to Israel, to a company

that was in Israel, because they were associated with a nuclear

power plant. So it makes no sense to me whatsoever—so I’m sure

Germans or some other entity supplied those optics.

We currently have a—which I was sweating bullets on this—we

have a multi-billion dollar opportunity with a Chinese company

selling high-precision optics—actually they’re visiting Optimax

today. We have a ground-breaking ceremony today for 20,000-

square-foot expansion which has to do, to a large extent, with this

firm that we’re selling optics to China. We were sweating bullets

that ITAR would not approve that because it was for technology

applications. And it did go through; we were very pleased with

that. However, we almost didn’t even try because it’s such a hurdle

that we have decided strategically to only sell domestically.

If the Chinese—this company had not sought us out and asked

us to participate, we would have not. We are not the only firm that

has this issue. So anybody that’s in the technology space who tries

to sell—and if the United States can’t sell technology globally, I’m

not sure what else we can sell. The ITAR restrictions are a restriction on our ability to sell globally and to bring foreign capital into

the United States.

Ms. BUERKLE. Thank you very much.

[The prepared statement of Mr. Mandina follows:]

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Ms. BUERKLE. Mrs. Meinking.

STATEMENT OF REBECCA MEINKING

Ms. MEINKING. Good morning Vice Chairwoman Buerkle and

Committee Member Kelly. I would just like to thank you for the

opportunity to testify.

My name is Rebecca Meinking. I am the executive vice president

at Radec Corp. We’re based here in Rochester. We are a full-service, residential, commercial and industrial electrical contractor. We

perform between $10 and $12 million of electrical work annually,

and we’ve been in business for about 35 years, a family owned

business recently transferred from the founding generation to the

next.

At our high we employed approximately 80 local people. In the

last several years, besieged by the bad economy, rising costs of construction materials and, quite frankly, government regulations that

are doing little more than strangling us and really not providing

any benefits to us, we’ve had to cut our work force by about 30 percent.

I also appear before you today as a member of Associated Builders and Contractors, the Empire State Chapter. ABC represents

around 23,000 merit shop contractors nationally and here in New

York. The Empire State chapter represents approximately 500 of

merit shop contractors like me.

ABC’s membership really is bound by a shared commitment to

the principal that a free and open market where government regulation is kept to a minimum—we certainly don’t propose that there

should be no regulation—but where government regulation is kept

to a minimum, really does provide the best foundation for job

growth and economic vitality for all of us.

I’m going to share with you three different areas where we are

experiencing difficulty from a Federal regulatory standpoint.

Executive Order 13502, signed into law by President Obama

back in February last year, or actually February 2009, basically encourages the use of project labor agreements on Federal construction projects exceeding $25 million in total cost. As a construction

industry employer, Radec’s ability to maintain and grow employment opportunities within our company is contingent on our ability

to be able to compete and perform work in the public sector. Executive Order 13502 strips away that opportunity from our company

and it does the same for the many merit shop contractors here in

upstate New York, in New York State and, quite frankly, nationally.

As a merit shop contractor, Radec Corp. cannot and will not work

under the terms of a project labor agreement and there’s two main

reasons why we won’t. First a PLA requires that we, as a company,

ignore our own highly skilled work force and, instead, employ

workers from the union hall. And in our case we are forced to employ workers from the union that works day after day to try to

unionize our company or to put us out of business. As a small business our employees really are part of our extended family, and we

can see no reason to take away their opportunity to work to provide opportunities for their union counterparts.

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It forces us basically to discriminate against our own workers

and that’s just plain wrong and we won’t do it as a company. What

right does any government entity have to tell me as a business

what workers I can use on a project and what workers I cannot use

on a project. It really is analogous to either of you running for reelection next year and the government telling you, you have to

draw your campaign work force from the campaign work force of

your opponent. It makes absolutely no sense.

Second, as a merit shop contractor, if I work under a PLA, I have

to force the few workers from my own work force that I am allowed

to use on the project to pay union dues and to, essentially, join the

union for the duration of that project. Radec Corp. employees have

freely chosen to not join a union. They don’t believe union representation is in their best interest. So a PLA is a losing proposition for them and we value and respect them much too much to

force that upon them. So our only option is to not bid jobs that

have project labor agreements attached.

Our tax dollars and our employees’ tax dollars are funding those

projects, but because we have chosen to work in an environment

free of third-party interference, our government takes away our opportunity and our workers’ opportunities to work on those projects.

PLAs discriminate against hundreds of legitimate local businesses and they’re a significant obstacle to us in our ability to

maintain our current work force, let alone grow that work force. I

would strongly encourage both the House and the Senate to immediately pass H.R. 735, the Government Neutrality and Contracting

Act which I’d like to publicly thank Vice Chairwoman Buerkle for

being a sponsor of, because it will really ensure that we all, as construction companies, whether we’re union or non-union, will have

an opportunity to participate in public construction projects financed with public dollars.

Second, the National Labor Relation Board. They have some proposed rulings and proposed rulemakings that would significantly

change the way that the work force is governed going forward and

how American workplaces will function from a labor perspective.

One of the rulings that they are being rumored to make is a ruling that would require employers like Radec Corp., who allow wellmeaning, charitable organizations, to come on to our worksites or

into our offices and talk about the work that they do and promote

the work that they do to our employees. The NLRB wants to force

us to give the same access to union organizers to come on to our

job sites if we provide that access to charitable organizations.

Another contemplated ruling would basically change the way collective bargaining units are determined. Right now in order for a

union to organize a company, they have to get the majority of the

whole work force that performs similar work to agree that union

representation is in their best interest. The NLRB would like to

change that and allow for different worksite organization. So for a

construction company like mine that performs work on several sites

on a daily basis, the unions could actually go in to one of my job

sites, organize my workers there, but my workers on four other job

sites would not be organized. So I’d be dealing with different pay

scales, different work rules within my own company. Rather ludicrous, in my opinion.

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Last, the NLRB issued a proposed rulemaking. My understanding is they are preparing to finalize this rule that will require

us as employers—and I think I have gone over my 5 minutes, I

apologize, I knew I was going to do that—they want us to post a

notice to our employees that basically lists a very incomplete list

of rights of our employees to organize. And when I say ‘‘incomplete,’’ what I mean is the notice tells our employees all about their

rights to organize, but it sort of leaves out the fact that they also

have a right to not organize, and quite frankly, the way the notice

is worded, it almost appears as though we, as Radec Corp., are actually encouraging our employees to organize, which I can assure

you is quite far from the truth. These really egregious outreaches

by the NLRB I believe need to be curtailed and I would encourage

Congress to do whatever. I don’t know the answer to it, but I would

encourage for you to look at whatever ways you can find to pull

them back a little bit.

Last I just want to touch on OSHA. OSHA has, in the past, been

somewhat collaborative in how they work with employers to ensure

job-site safety. But they have very publicly advertised a much different approach which is really enforcement driven. They’re focusing on finding worksite violations and issuing substantial fines instead of working collaboratively with us as employers to promote

the overall safety of our work places. This is pretty clear in the construction industry specifically. This new approach is just another

costly burden that we, as a business, have to deal with and it really creates a level of financial uncertainty for us that really requires

us to hold back in terms of any sort of expansion.

The other issue is, right now when OSHA finds a violation on a

worksite, only the employer is fined for that violation. I would encourage OSHA to look for collaborative ways to work with employers and employees who do have a level of responsibility in their

own safety and the safety of those who they work with to come up

with programs that will help to encourage that level of safety creating those types of programs instead of seeking to financially cripple businesses to coerce safety, really, I believe, would result in

safer work places overall.

So I would encourage Congress, again, to look at ways to help

OSHA to return to their collaborative and cooperative spirit of

working with employers instead of the punitive approach they are

currently taking.

Then I want to thank you for the opportunity to share some of

these issues. I do just want to point out, Vice Chairwoman Buerkle,

you are my congressional representative, and I’m thrilled that you

are. And I remember in your campaign you ran on the statement

that: Government does not create jobs, business does. And it really

is paramount that government realize that they are there to create

the type of environment that we, as businesses, need to grow and

prosper and contribute to the economy. And I can’t thank you

enough for allowing us to bring some of these things to light in

hopes that we can resolve them and work together to help to restore our economy.

So thank you very much for the opportunity to be here today.

Ms. BUERKLE. Thank you very much for your comments.

[The prepared statement of Ms. Meinking follows:]

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Ms. BUERKLE. Mr. Pollock. Good morning.

STATEMENT OF BILL POLLOCK

Mr. POLLOCK. Good morning and thank you for inviting me.

I’m the president of Optimation Technology, which is a privately

held ESOP company, and we are in the business of designing and

building factories; so that puts us in the manufacturing sector.

During the period from 2000 to late 2008, we grew the company

from 50 employees to 350 employees. What we have discovered is

that even when manufacturing isn’t as strong as it could be, if you

have good automation and good tools, that you can keep competitive manufacturing going in the United States. And if you look at

the statistics, you know, of course, that Monroe County is a great

exporter of all kinds of manufactured goods around the world. We

can manufacturer at Optimation things which are sold competitively all over China and Taiwan and Japan and Korea and Singapore and other places.

So it is a good place to be here. The difficulty, as you’ve asked

us to talk about, is what is the government doing to hold us back.

And that’s what I would like to talk about a bit today.

I can remember distinctly the morning of July 12, 2010, and that

was the morning I came into work early, as usual, to get going and

I opened my mail from the day before and there was a registered

letter there from the U.S. Department of Labor. And in the letter

they had lots of big words and talked about administration and enforcement and Title 1 and how they were established there to make

sure that compliance was held.

Now, it’s not only the case that there’s plenty of compliance

issues going on at the Federal level, there’s lots of audits going on

at the Federal level. And this letter was announcing an audit of the

Optimation Technology’s medical health care plan. ‘‘The Secretary

shall have the power in order to determine which person, if any

person, has violated or is about to violate any provision of the titled

regulation.’’

Now, when I read that, basically what it said was they were

there coming to audit our health care plan and that we had 7 days

to produce 28 documents and answer four pages of questions. And,

of course, we buy the health care plan from MVP or Excellus, we

don’t create the health care plan, but now we have to take all the

books, read through and become experts of the health care plan

and we have 7 days to respond to this or we’re going to be subpoenaed in violation. We asked for an extension. We were told that 3

days was the maximum extension you could have.

Now, at that point in time, when I got that letter, I will be honest with you, that was the first time I actually seriously considered

throwing in the towel. And I sent an email to my vice president

and said, you know, it’s really not worth it. We should just give it

up.

This letter was the seventh audit we had received from a governmental agency in 2010, and we’re only in July. We were in the middle of an IRS audit that had begun in May. When the IRS auditor

arrived, I said to him—first day we gave him 40,000 pages of transaction files so he could peruse through and start looking through

things—‘‘How long are you going to be here?’’

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He said, ‘‘Six months.’’

And then began—we gave him an office, gave him coffee, we

moved him in—began the ordeal. And every day I’d go down and

he would ask questions and we would produce more documents. I

will say at the end of IRS audit—well, part way through, we were

almost wrapping up—He said, ‘‘No, we’ve talked this over. We’d

like to audit another tax year.’’

They did stay for 51⁄2 months, at which point in time we got a

letter from them which said that there were no findings and that

everything was fine.

And in truth, we got through the Department of Labor audit as

well and all the other audits. We have had no fines and punitive

actions. And in truth these audits were put there really in compliance issues. They may have been looking to find money, as Becky

has implied, but they didn’t find anything from us. We are very

good at responding to audits. We are very good at staying in compliance. We are very good at creating jobs and creating factories as

well, but when our energy is sucked off to do things which are

counterproductive to the business, essentially audits are just there

to poke around and see what you have done wrong.

And there’s a mindset that’s put into these auditors as they are

trained that businesses are essentially criminals, they must be

doing something wrong, they must be abusing their employees, otherwise, how could they be so successful.

And I’ll tell you the reason we are successful is because my employees have my back all day and every day, and they do everything double, and triple and quadruple what anybody would even

consider reasonable in order to maintain the company.

But we have to deal with the Department of Labor. And these

are the State level, of course, as well as the Federal level: With the

IRS, with ARISA, with health care, with 401(k) audits, with ESOP

audits, with the Census Bureau sending endless forms to be filled

out under penalty if you don’t, with OSHA, and other regulations.

Sarbanes Oxley has lowered down to very, very small businesses.

We hire two accounting firms: One to provide counsel so that we

can make sure we are in compliance when the audit firm comes in.

Then we have to have the two firms duke it out is what really says

in the regulation.

So it isn’t a simple business running a small business anymore.

I estimate that even on that IRS audit, myself, last year I spent

200 hours of my own time. If that time had been freed up to do

marketing and sales and work with clients, we could have created

10 additional jobs instead of just dodging government bullets.

And so, I mean, I think the first piece that has to come down is

we have to look at every regulation and say, is this reasonable? Is

it practical? But then above and beyond that, how many auditors

have been hired? How large has the government bureaucracy been

grown in terms of IRS and OSHA and other people in order to force

compliance, and how much of that money is being spent is counter

productive to growing the economy? Because not only are those

people sucking off of tax dollars in order to get their paychecks,

they are also sucking off our backs and taking us away from the

opportunity to grow our own companies and do other things.

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I appreciate you listening to us. I don’t have any great expectations, but we are going to survive one way or the other. We don’t

ask for handouts. We are not asking for support above and beyond.

Let’s be a little practical about how we go about things.

Ms. BUERKLE. Thank you very much.

[The prepared statement of Mr. Pollock follows:]

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24

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Ms. BUERKLE. And thank you to all three of our witnesses this

morning for your very compelling comments.

We have had a number of these hearings, and down in Washington DC, and I have been so—and I know my colleague Mr. Kelly

as well—we have been so profoundly affected when you listen to a

group of witnesses who have run small businesses. And the question was asked to all of them: If you knew now what you—if you

knew then what you know now regarding regulations and all of the

impediments to job creation, would you have gone into business

and would you have done what you have done.

And each one of the members of that panel said, ‘‘No, we would

not.’’

And so we have reached a point in this country—and when I listen to your testimony, Mr. Pollock, what you went through with all

of your audits—we begin to wonder what’s happened to the United

States of America in our free enterprise system and our capitalist

system, where we have an understanding that the government

can’t create jobs. It is the private sector. It’s the private sector

that’s going to get this economy back on track. It’s the private sector that does the job hiring and expands businesses and buys more

equipment and improves technology.

So I want to tell you that this subcommittee and our entire Oversight and Government Reform Committee is committed to doing

that, to recognizing and understanding the impediments that stand

in the way of businesses and their success. We will do everything

in our power to help small businesses do what they do best, and

that is to create and grow a business, to work hard and be successful. Because that’s the American way. That’s the American dream

and why many of you have gone into business.

So with that, I would just like to talk a little bit about your testimony and then—so I will. I’d like to just start with the same question to all of you, whether or not you would be in this business if

you knew now—if you knew then what you know now. You can all

answer and you can start.

Mr. POLLOCK. Sure. The answer is, yes, I would. And really the

rewarding part is the employees and the company team. I mean,

everybody needs jobs and if I can be a catalyst to help that happen,

then I’m going to do it.

Ms. BUERKLE. Thank you.

Ms. MEINKING. Well, I’m not the company owner actually, but I’ll

speak for him. And I don’t think that he would not be an owner

of a business simply because of the ability that being a business

owner allows you to contribute to your overall community through

job creation and things like that.

I think we, as a company, are very proud of what we do. We’re

just looking for some assistance in making it a little easier to do

what we do.

Mr. MANDINA. I think many people involved in small business

are survivors and very creative and they’re entrepreneurial and

that’s why they’re doing what they’re doing. So certainly no matter

the odds, I think most would attempt to be successful. As the odds

are stacked against them or those that actually are successful, become fewer and fewer.

26

And certainly the migration of manufacturing jobs overseas in

this country is appalling. And certainly manufacturing can be profitable and it can grow in this country. But we have to have some

fortitude and we have to have some policies that help support that

because manufacturing jobs are really—generate, on the order,

seven other jobs once they’re here. Optimax has high-paying jobs.

These are career jobs. You can have cars, put your kids through

college. Those types of things. They’re not all gone; they are here

and they’re actually growing. But we have to support that. And we

are not the adversary. And the adversary is the global market

space, and we are competing against countries with policies that

make it very easy to manufacture, and I certainly would be—I can

speak for myself and my partner—we would absolutely do what we

are doing with Optimax in spite of whatever the rules were and

how ridiculous they were. But it would create impediments to our

growth and we may not be successful, but that’s just the nature of

an entrepreneur, not because we’re being asked to do it.

Ms. BUERKLE. Thank you. I just do want to comment, Mr. Pollock, if this gives any piece of mind, the Continuing Resolution that

we voted on last week did stop the IRS from hiring 10,000 additional employees. So we were able to de-fund those positions.

Mr. POLLOCK. Thank you.

Ms. BUERKLE. With that, I’ll yield my colleague Mr. Kelly.

Mr. KELLY. Mr. Mandina, I think it’s important, because the general public doesn’t understand what—I’m an automobile dealer.

That’s what I’ve done for a living. If somebody asked me 2 years

ago would you be in Congress, I would say, absolutely not. I’m too

busy raising my family and running my business. So I have a little

bit of an idea what it’s like to deal with OSHA and everybody else

that comes into our business and has absolutely no investment but

is a partner we don’t really need to have on our back.

This ITAR—because I’ve talked to other people in the same type

of business—kind of walk us through what ITAR is and what you

have to do in order to compete and why it makes it so difficult for

you.

Mr. MANDINA. If a firm in a foreign land who’s on a list of—if

they’re not on a list, it’s fine. But most countries are on the list.

So Israel, I thought, is a friendly nation. They’re on the list.

Ms. BUERKLE. Explain what the list is.

Mr. MANDINA. The list is now—it puts you to another list of

questions that you now have to go and process. This is for—we’re

a OEM manufacturer so we quote things. So we win about 25 percent of what we quote. So we now have to decide if we want to

quote something. And so anyway, there’s a process. I have to decide

whether you want to do the work on 75 percent of the inquiries

that you know you’re not going to win.

So if it’s Israel, we now have to look at—go through the list and

ask questions about what is the use of this optic. So we have to

go to our customers—and in the technology space, a lot of times

they don’t want to tell you because it’s competitive information. So

you have to say what are you using this for; what’s the end product; who’s our customer—explain to another customer, who’s your

customer; what country are they in; what are they putting it in?

That’s kind of ridiculous.

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Mr. KELLY. The idea is, if you would, because most people don’t

understand this. The idea is at the end of the assembly, this product could possibly be used by a terrorist country or be used in a

military fashion. So you’re responsible for every little piece that

goes out somewhere into the world as to finding out where it’s actual end use is going to be? Is that——

Mr. MANDINA. That’s correct. An example of that could be that

it goes into a laser welding machine that is made in France, going

to be sold to China. And you can use laser welding equipment to

make weaponry. So that’s—it’s—you just draw the dots. Everything

goes everywhere. So, well, ultimately you can make weapons with

a lot of things. You need rubber bands to hold the paper together.

Where do you stop? And so you go through that. You ask those

questions. You go back and forth, intimidate your customer, make

them feel like they’re having to divulge information they don’t want

to give you. Then you quote the job if you think it’s—oh—then you

can’t actually get their license for it until you get the order. And

then once you get the order, you then go and ask for permission

to sell if they’re on that list, and they can say no. And so it takes

4 weeks.

So meanwhile you’ve gone through the whole dance of going back

and forth. You’ve done the bid. You somehow miraculously got an

order. They have to wait to see if you can move on the order or you

have to wait until you can move on the order. Then they say no.

So meanwhile your customer has gone 8 weeks through the cycle

and then they have to start over again because the U.S. Government said this manufacturer cannot sell this to you.

How they make the decisions about what you could sell and what

you can’t, I really have no idea. It is an absolute crap shoot. And

we have decided—we do almost $20 million worth of business a

year. We do almost zero overseas, and we could sell overseas. We

get inquiries all the time. We have said no, because we don’t want

to have to deal with the government—the uncertainty of the government. It takes way too much extra work on our end. We’re probably $5 million worth of business a year that we’re just turning our

back on because of it.

Mr. KELLY. What agency do you work with—who is responsible

for the ITAR? Who does it go through?

Mr. POLLOCK. Department of Commerce.

Mr. KELLY. There’s a lot of them. I know it’s hard.

Mr. MANDINA. Tell you what. I was really fresh on this a year

and a half ago when we decided not to do this. And so—because

we’re not doing it, it’s out of my mind. I’m into growth in the domestic market space.

Mr. KELLY. I think the bottom line of this whole thing, is you’re

in a business that you have an opportunity to sell a certain product

or pieces for a product that’s going to be assembled. You now have,

because of this overreach, have decided not even to bid that business.

Mr. POLLOCK. Exactly.

Mr. KELLY. I would assume, like everything else in business,

time is of the essence. The process that you have to be to go

through would be a lot different than a foreign competitor would

have to go through. Plus waiting for the licensing, waiting for the

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OK, it’s just better for you. It’s the old story: Don’t worry about the

mule, just load the wagon. I think at this time, the mule is about

ready to walk away.

I appreciate your testimony. I can tell you really, the American

public has absolutely no idea what you are going through on this,

not only what you are going through with ITAR, but the other regulations. I think that’s the one thing we are finding out on a daily

basis. We have to find some way of amplifying this problem so that

people understand. This isn’t just you coming here and complaining

because you can’t compete. You’re coming here talking about a situation that makes it impossible for you to compete and, unfortunately, it’s your own country. So I appreciate your——

Mr. POLLOCK. If I can add one more thing. There’s another part

to that restriction and it has to do with employment. We had 130

people working at Optimax and one was a part-time consultant,

Canadian. Because that person did not have a green card and was

not a U.S. citizen, we had to put locked cabinets and create a whole

infrastructure of security for this dangerous Canadian consultant

that we had working, otherwise we were in violation.

The Canadian quit because she didn’t feel it was appropriate

that we go through all that expense in order to keep her employed.

And now most companies in technology, manufacturing companies,

will not hire anyone who does not have a green card or is a U.S.

citizen. There are a lot of very smart people who are—who don’t

have green cards, who are not U.S. citizens that could really help

generate wealth in this country that we can’t hire because we have

to put these infrastructures in.

It’s most technology manufacturers, certainly in optics, and many

machines shops and other places are—do some level of defense

work. If you do some level of defense work, you have this other barrier now that’s in place.

So there’s had a lot of cost around this. I understand the reason

too for it. Certainly there’s reasons for it, but the way it’s structured is so ridiculous, it’s actually impeding U.S. exports.

Mr. KELLY. I have friends in Meadville that do the same thing

and they’re going through the same process and problems. I think

what really disturbs all of us is who is it that makes up these lists

and what’s the criteria for somebody being on the list or not being

on the list. And it would be like me selling a car and before I sell

the car, I’d have to ask that person: Is there any time in the future

that you think anybody could possibly be getting in and out of this

car that maybe could be a problem for the country. If I couldn’t answer that, I couldn’t sell the car.

So I get it and I’ve got to tell you, it is the scope of overreach

and over-involvement that’s killing all of this. I appreciate fully.

Don’t give up on us. We’re not going to quit until we get it fixed.

Thank you.

Ms. BUERKLE. Thank you all very much. I have one last question

and I’m not sure if you have anything left?

Mr. KELLY. I did want to ask Ms. Meinking something.

And I know right now, because of the events in Wisconsin and

around the country, there’s a renewed interest. And often it’s become too polarizing between organized labor in the private sector.

I think that’s done a tremendous disservice to both sides. And I

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would certainly think—we’re interested in it. I gotta tell you, I

have friends on both sides of it. I have friends that do both.

PLAs are something that a lot of people don’t understand. People

understand Davis-Bacon, and I think Bacon is a Republican from

New York, and Davis is a republican from Pennsylvania. So when

people say, ‘‘Come on, these Republicans don’t like unions,’’ those

are the two guys that started it, and they’re both Republicans.

As we go forward—and I think we would all agree that bargaining is part of the practice, but bankrupting an entity is not.

And if you can’t—because I know you are very concerned. I read

your testimony with the PLAs. Explain a little bit what that does

to you and your ability to bid on a job. You can bid on a job using

Davis-Bacon, but with the PLAs that’s had a little different. That’s

more exclusive, is it not.

Ms. MEINKING. That’s correct. In fact, if we do bid a job that is

a Federal job, we are required, by law, to follow Davis-Bacon rules

which, in essence, means that we’re paying union scale wages and

benefits. And the whole principle, of course, behind Davis-Bacon

was to level the playing field, if you will, from a wage standpoint.

So when we bid and perform work at the Federal level, we do pay

Davis-Bacon wages.

You don’t need a PLA to level the playing field from a wage

standpoint, because you already have Davis-Bacon or if we’re talking New York State, we have New York State prevailing wage. A

PLA literally, as I said in my testimony, tells me that I cannot use

my own workers. And, quite frankly, we have crews that are supervised by very experienced foremen who work with these people day

in and day out. They develop processes and procedures to make us

the most effective and cost-effective contractor that we can be. And

when we have to put people who have absolutely no vested interest

in the success of our business and, in fact, have an invested interest in the shutting down of our business, to eliminate us as competition to their signatory contractors, I mean, it’s kind of like asking me to swim through a pool of alligators and hope I don’t get

bit.

You know, it’s ridiculous. And I will honestly tell you that if we

see PLA language in a bid, we aren’t going to take the time to even

bid it. Can we bid it? Absolutely. We can. But it sets up a scenario

that, from a business standpoint, it’s completely and utterly impractical for us. So we close the specifications and we throw them

in the garbage. And unfortunately, that takes away opportunities

from our current employees and takes away our opportunity to

grow our business using tax-payer-funded projects to do it.

Mr. MANDINA. Could I comment on that as well?

We, like Radec, are a non-union contractor. We have over 200

journeymen. We have a New York State certified apprenticeship

program where we’re bringing up 24 young men and women into

the trades. We are 1 of 9 out of 100 something apprenticeship programs that’s non-union in New York State.

Ms. MEINKING. And we are one of the others.

Mr. POLLOCK. Our principle and practice, based on the regulations, is that we simply do not bid any governmental jobs whether

they’re local, State or Federal. We find our business entirely elseVerDate 17-JUN-2003 14:12 Oct 28, 2011 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\68365.TXT KATIE PsN: KATIE
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where, because the compliance issues are immense. It’s not that we

couldn’t do it, it’s just it’s not cost effective to stay in line.

And in truth, every single governmental job that we have ever

done, someone has guaranteed that we were audited. The time

spent was pretty humongous, so we backed away from it. So our

position maybe is different from theirs, but similar. We just find

other work.

Ms. MEINKING. And we do, as well, but quite frankly, in this

economy, the private sector has not been building as much as they

used to. So in many cases we’re forced to look to markets that we

might otherwise avoid simply to stay in business.

Mr. KELLY. And the other thing, if you would just comment briefly, because I’ve been through OSHA audits. And, again, it comes

down to the public’s awareness of what these mean.

I have always been a little disappointed. I’ve been through some

OSHA reports. Remedial action would be something in my—if you

find something wrong in my workplace, I want to make sure it’s

safe for my guys. One of the things our guys are supposed to wear

if they put cars up in the air, they’re supposed wear hardhats and

goggles.

I don’t know if you can mandate common sense in a workplace.

I think you can set guidelines, but at the end of the day, I don’t

know how you get one of the people that works for you to look out

for their own good. So having said that, the remedial process is the

one that I think is lacking in all these audits.

We used to have something called the Voluntary Protection Plan,

which makes sense, which is where you sit down and you talk

about these possible problems and how to fix them. I know with

OSHA, when they come in and they do an audit, most of these

things, there’s no cost-benefit analysis. It’s just this is wrong, this

is wrong, this is wrong, fine, fine, fine. I don’t think it accomplishes

the same type of an effect that the insurance company coming in

trying to help you to eliminate possible losses or dangerous situations in your business to, because they’re actually there to do something with you to fix it.

I get the feeling, when I hear folks talk, that the government

comes in, the idea isn’t to fix it; it’s to fine you. So let me know.

Am I reading this wrong in my little corner of the world?

Ms. MEINKING. You’re reading it exactly correctly. In fact, I will

tell you that we recently had an OSHA inspector show up on one

of our job sites and—you know, this is an OSHA inspector that we

have seen on other job sites. And you’re absolutely correct. As an

employer, safety is paramount to us. We want to make sure that

every one of our people goes home every night to their family.

Nothing is more important to us.

We have had an OSHA inspector who has been on a number of

job sites, and we are a very safe contractor. We do not have a lot

of issues. But this OSHA inspector confided in us that the directive

from above from Washington DC is that these inspectors are to go

onto job sites and find violations that can result in fines. Because,

my understanding is, that it’s because OSHA is sort of self funding

and they need to generate the revenue to support all these additional inspectors and things that they have decided will be their

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approach to safety, as opposed to the programs like the VPP program and things like that.

So it’s a complete reversal from, quite frankly, what OSHA used

to be in terms of being a collaborative agency. They are now simply

looking for ways to generate revenue, and to me, that’s counter productive.

Mr. KELLY. Thank you.

Ms. BUERKLE. We had OSHA in and we did hear their testimony,

and were able to ask them questions. And we were really struck

by the fact, in one of the people—one of the members from OSHA

was there, and he mentioned the fact that employers will comply

with OSHA regulations in order to prevent a visit because they

fear OSHA going onsite to visit their business.

And I said to him, ‘‘Fear? This is the United States of America.

We shouldn’t be fearing government agencies. We should be working with them,’’ as you said, to find and ensure safe work places

for our employees. No one cares more about employees than the

employers. Not OSHA, but the employers.

So we were struck by the fact that it has changed from being a

partnership to work together for safety to this punitive—trying to

look for and find for offenses.

Ms. MEINKING. I do think, to a certain degree, it goes back to the

mentality that seems to be pervasive in government now, that employers are bad, and they are looking to profit on the backs of their

workers at any cost. And I think until we change that mindset,

quite frankly, partnerships and collaboration between government

and business is going to be hard to accomplish.

Ms. BUERKLE. Well, then, I think a good way to end our first

panel here is to say to you, to all of you and all of the businesses

in upstate New York that we appreciate you. We appreciate your

sacrifice; we appreciate your entrepreneurial spirit. We know that

you are the job creators, and we hope you will work with us to continue giving us information we need so we can go back to Washington and begin to create an environment where businesses can

do well and be successful and not be penalized for all of their hard

work and efforts.

I want to thank all three of you on behalf of Mr. Kelly and myself. Thank you for being here this morning and sharing your testimony here with us.

With that, we’ll conclude panel No. 1 and seat our second panel

this morning.

Ms. BUERKLE. We will begin the hearing of the second panel.

This morning I’d like to introduce Ms. Cathy Martin. She is the

president of Monroe County Farm Bureau; and Mr. Jonathan Taylor, he’s owner of Oakridge Dairy; and last, John Teeple, owner of

Teeple Farms.

Welcome this morning to our hearing.

It is the custom of Oversight and Government Reform Committee

to swear in our panelists, so if you would please stand, raise your

right hands.

[Witnesses sworn.]

Mr. KELLY. Let the record reflect that all witnesses answered in

the affirmative.

Thank you very much.

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Ms. BUERKLE. Ms. Martin, if we could start with you, with your

testimony.

Again, thank you all for being here this morning.

STATEMENTS OF CATHY MARTIN, PRESIDENT, MONROE COUNTY FARM BUREAU; JONATHAN TAYLOR, OAKRIDGE DAIRY;

AND JOHN TEEPLE, TEEPLE FARMS INC.

STATEMENT OF CATHY MARTIN

Ms. MARTIN. Thank you for the opportunity to testify before you

today. I appreciate your time and consideration on these important

matters to agriculture.

My name is Cathy Martin and I’m the office administrator for

John B. Martin and Sons Farms. We are a 3,000 acre fruit and vegetable farm and have a small on-farm processing operation for cabbage and winter squash.

Both our cabbage and squash operations are labor intensive and

we require approximately 100 employees on a seasonal basis and

40 full-time employees. My job has oversight of all aspects of office

procedures for the efficient day-to-day running of our farm. In the

past few years the most difficult and time-consuming aspect of my

job has been working to require legal employees from the Federal

H–2A Visa Program.

I’m here today before you to discuss the regulatory impediments

to job creation in the northeast. New York has become one of the

most heavily taxed and regulated States in the United States and

many farms are struggling to stay in business. With all the complications that are currently endured, short growing seasons, extreme and unpredictable weather and labor shortages, it continues

to become more difficult to keep farms in business with the constant addition of new regulations. Among these regulatory impediments is that of the H–2A Guestworker Visa Program. This program is intended to supplement farms with foreign labor when

there is a domestic labor shortage. However, the complications

within the program have largely increased, growing to a level that

is causing the program to become unusable.

The H–2A Program was created in 1987 and was not updated

until 2008 when the Bush administration made changes that

helped growers by streamlining the application process and making

the program easier for farmers to use. However, with the new administration coming forward in 2009, these changes were quickly

reversed and an even harsher environment for using the program

was created with excessive time delays and paperwork burdens.

While immigration issues have become a growing concern across

the Nation, agriculture still needs access to a liable, stable, legal

work force through a Federal guestworker program. It is vital to

my farm that when my application is submitted for use of the H–

2A Program that there is a consistency, accuracy and timeliness in

execution of the program and process. At this point there are different interpretations of the program rules and this has made compliance increasingly difficult.

While I understand there must be proper paperwork and documentation in this process when I specify a date of need for my

workers on the application, it is often overlooked and not met by

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the U.S. Department of Labor. These extreme delays have caused

a loss of—loss in my crops as workers have not been available to

plant, pick or do essentially work on the farm that is crucial to

staying in business.

Processing problems have repeatedly occurred in the National

Processing Center in Chicago. Within the past year there have

been an abnormally large deficiencies and denials of H–2A certificates. Many of the deficiencies and denials have involved requests

for experienced workers within specific employee classifications of

a job order, reference requirements, temporary and seasonal work

and a differing interpretation based on prevailing practices—surveys that are conducted by the State Department of Labor with inconsistent results. These difficulties cause delays in the process

and force farmers, in desperate need of workers, to engage in costly, stressful and time-consuming administrative appeals. This is a

huge burden on the farmer especially when most of these appeals

have been ruled in favor of the farmer.

When an employer is filing their H–2A job order, there are sections that include a description of the employee’s job duties. Also

included is a section stating the level of experience required to be

able to sufficiently complete the job description. These types of employee requirements can vary from farm to farm and depend on numerous factors:

The farm is able to provide more training, therefore, they are

able to lower the amount of experience required by the farmer.

Different modes of production vary from farm to farm and not all

requirements are the same. For example, when apples are picked

for fresh market, it requires more experience and delicacy than

when applies are picked for processing.

And similar to other job qualifications outside of farming, there

are times when a job description may have different requirements

from year to year—job expectations can change and farms should

be allowed to determine what is necessary on their farm.

However, when applications are sent through, the regulatory requirements of this program force farms into a ‘‘one size fits all’’

scheme. That makes it extremely difficult for my farm to fulfill requirements for the application process and ensure that we will

have access to labor that will accurately and safely complete the

job order.

Farmers must advertise for workers in three separate States to

demonstrate that they cannot find domestic labor. Advertisements

in newspapers must be for a specific number of days and on specific

days of the week. This advertising adds expense and time to the

application process. Farmers seldom recruit domestic workers

through this process and almost never from further away than the

local area even given the recent high rates of unemployment.

While I understand the need of foreign workers must be demonstrated to access the program, these advertising requirements

must be adjusted to be a procedure that actual employers would

reasonably undertake with an ability to recruit potential domestic

workers. At it’s current level, the recruitment requirements are unrealistic.

The regulatory process of the H–2A Program also creates problems with it’s restrictive definitions and limited use of program for

34

certain industries within agriculture. Dairy and other livestock

farmers, who have a year round rather than a seasonal need for

labor, are not able to access the program because they’re not included in the agricultural employment definition. However, they

face the same challenges in recruiting reliable workers as fruit and

vegetable farms.

Additionally, farmers cannot use H–2A workers for incidental

employment. On my farm there are a large variety of tasks that

must be done to keep the operation running. It is unrealistic to expect one worker to only complete one task throughout his or her

entire employment period. Coupled with illnesses or days off for

other employees, at times there are situations that require workers

to pick up extra tasks to get the needed jobs done. Allowing H–2A

workers to do these incidental tasks while employed by a farm

would be extremely helpful and common sense. Expanding these

definitions will allow for a stronger and more efficient use of workers during their employment, while at the same time, creating

stronger work force on the farm.

Prevailing Practice Surveys are distributed yearly by each State

in the United States as required by the H–2A Program—to farmers

based on their commodity, asking detailed questions about farm

practices and labor experience. These surveys have caused complications at both the State and the U.S. Department of Labor as

the survey develops a standard for employment and allows applications to be denied if farms deviate from the norm.

It is not appropriate to determine that all agricultural operations

will have standard needs across an entire State. Every farm is

unique and will have different requirements and job positions in its

application depending on its needs.

All these factors, including others, have caused great complications within the H–2A system through the past years and, specifically, over the past 3 years. The regulatory burdens that complicate

this program have hindered job creation, not helped to create a usable work force within agriculture. While farms utilize all attempts

possible to bring in domestic workers, there comes a point when

the H–2A Program becomes crucial to gaining foreign workers.

If we don’t have a reliable work force in agriculture to plant,

pick, cultivate and tend to animals, then our farms will not survive

and job creation throughout New York and the United States will

fail. For every one job on a farm there’s a ripple effect that creates

three more jobs off the farm.

With coordination these are problems that can be fixed to create

a usable guestworker program for agriculture. As these problems

are fixed, farms will be able to spend more time directly working

with their employees and tending to the crops and animals. This

opens up opportunities for a strong business environment and a

successful work force on my farm and off the farm as well.

I look forward to working with the committee on these important

issues. I truly appreciate the opportunity to express these concerns

with you and hope to continue this dialog in the future. During a

time of such economic concern, it is important to discuss the potential for a stronger, more reliable agricultural sector which, in turn,

will create recovery.

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Thank you for the time to discuss this regulatory impediment on

job creation and potential solutions that could be addressed to lessen the burdens.

Ms. BUERKLE. Thank you, Mrs. Martin.

[The prepared statement of Ms. Martin follows:]

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Ms. BUERKLE. Mr. Taylor.

STATEMENT OF JONATHAN TAYLOR

Mr. TAYLOR. Good morning and thank you for allowing me to testify before you here today.

I am before you as a dairy farmer and a representative of the

New York Farm Bureau, the State’s largest general farm organization. New York Farm bureau represents nearly 30,000 family farm

members and I represent the members of the Finger Lakes region,

including orchards, vineyards and wineries, vegetable growers and

other dairies.

I’m a fourth-generation dairy farmer and agriculture has fundamentally changed from my father’s generation. More than ever,

family farms, like where I work, must recognize and adapt to my

generation’s new realities—volatility in the global marketplace, increasing energy costs, and a relentless regulatory burden being

placed on the farm community. Whether as a blunt sledgehammer

or micromanaging guardian, overzealous regulation is killing our

family farms, depriving it of any potential for growth and eroding

our local food infrastructure.

Without question, producers of all sizes and sectors identify the

myriad of regulatory stresses from the Federal and State level as

the No. 1 obstacle to business growth, profitability, and in some

cases, business survival. Government mandates have become a tangible barrier to our farm families being able to pass their business

on to future generations as they compete with foreign competitors

who do not have to tolerate such rigorous and expensive regulations. No one wants lesser quality food from questionable sources,

like China, but with the diminishing number of farms in New York

State due to a hostile regulatory climate, who will be left standing

to fill in the food gap? If food security, public health and accessibility to local, nutritious, high quality foods are Federal priorities,

then something must be done to reign in the many regulations that

demand extremely high compliance costs from family farms with

very little environmental, public health or any other beneficial

gain.

New York’s family farms are experiencing an unprecedented

level of Federal regulatory and agency oversight in the sectors of

environmental management, labor and food safety. Much of this

regulatory activity is being seen in the form of broad-based mandates that do not take into account existing Federal and State regulatory and voluntary programs and, most importantly, do not take

into account their success record on the ground.

While simplistic in theory and implementation, such mandates

are counterproductive in providing effective solutions for each specific State and waste the limited resources of farmers, taxpayers

and government agencies. For example, the original draft to the

Chesapeake TMDL would have discounted the progressive best

management practices [BMPs] farmers have installed under the

State’s Agricultural Environmental Management program and replaced them with less effective and more expensive protocols that

work against New York’s unique landscape and agricultural traits.

In cases like these, farmers think government should follow the

common-sense adage, ‘‘If it’s not broken, don’t fix it.’’

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In the last 6 months alone, New York Farm Bureau has invested

a great deal of time and resources on a number of regulatory and

agency policies that comprehensively will drive New York family

farms, particularly smaller farms, out of business. For example, the

Chesapeake Bay TMDL; NRCS Nutrient Management Practice

Standard Code 590; Greenhouse Gas Regulation; Duplicate pesticide permitting under the Clean Water Act; FDA Milk Residue

Sampling Assignment; Web based pesticide labeling; Protection of

dairy product identity; Exclusion of certain vegetables from the

school lunch program.

Today I will address three of the most urgent issues:

The EPA has brought agricultural industry under intense scrutiny for its environmental sustainability. Continually improving

water quality and the environmental conservation is a paramount

priority for New York farmers. While we support the EPA’s intent

of improving water here in New York and nationwide, we do feel

that their reasoning and methodology in development and implementation of certain regulations lack a foundation in sound science

and ignore inherent State-specific factors that will influence compliance like seasonality and topography. These regulations also fail

to produce any environmental gain outside of what can already be

achieved through alternate, less costly means that have proven to

be equally effective.

I offer the following examples: To improve and restore quality in

the Chesapeake Bay, the EPA developed a regulatory framework

called the Total Maximum Daily Load [TMDL]. For New York and

the other five States with waters entering the Chesapeake Bay.

The EPA’s draft TMDL was inequitable, unattainable and threatened the livelihood of all 900 farms in New York and the Chesapeake Bay area without markedly improving the water quality for

the bay. The EPA’s proposed TMDL imposes disproportionately

stringent restrictions and requirements on New York’s farm industry at a cost of billions of dollars in order to help other States meet

their overall TMDL goal.

If intervention was not made by New York Farm Bureau, other

partners and our congressional delegation, the final TMDL, the

farm community would have seen small farms put out of business

and those remaining would have seen large increases in costs, staff,

time and red tape to adhere to the restrictions.

The NRCS Practice Standards provide a suite of tools for farm

site-specific solutions for sustainable environmental management.

In the past, these guidance documents were usually found on practical, science-based approaches that do not place undue burden on

farm families. NRCS stepped away from this philosophy with several policy revisions that abandon scientific justification in place of

a one-size-fits-all mandate. Particularly New York Farm Bureau

strenuously opposes the NRCS proposal to implement a national

calendar ban on nutrient spreading for farms of all sizes and management levels. A one-size-fits-all Federal practice standard cannot

replicate nutrient use efficiencies, optimum crop response and environmental gain that Cornell University on-farm research and trial

results have provided to New York farmers to inform their farm

management and business planning decisions.

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New York Farm Bureau requests that the committee intervene

with NRCS to withdraw this overreaching policy.

Greenhouses Gases: The EPA is using the authority under the

Clean Air Act to regulate greenhouse gases. Dairy farms with 25

cows or more would be considered a major source of emissions

forced to pay an annual permitting fee of $175 per cow. The average dairy size in New York is 100 cows. So we have more than

3,300 dairy farms in New York State that would have to pay this

tax under the EPA greenhouse gas ruling. EPA itself estimates

that 37,000 farms nationwide would be impacted at an average annual fee of $23,000. In New York we have farms that would pay

in excess yearly of $300,000 for this tax. It’s really difficult, if not

impossible, for farmers to control the amount of emissions from

their animals. A natural process for this regulation is equivalent to

a cow-tax penalty just for growing food. This kind of regulation by

the EPA on farms is not going to provide a positive impact on

greenhouse gas on this country. Instead it’s going to be another

barrier, another expense for farmers like myself who are just trying

to put milk or other food on the table.

Another barrier our farmers are facing is duplicative pesticide

permitting structure that EPA has been forced into by a court decision in January 2009. This court ruling forces applicators to get a

National Pollutant Discharge Elimination System permit under the

Clean Water Act in addition to the usual Federal Insecticide, Fungicide and Rodenticide Act [FIFRA].

Previously, pesticides governed by FIFRA were exempt from regulation under the CWA because they go through extensive testing

before they are allowed in the market and applicators must receive

thorough training and follow label guidelines before they can apply

pesticides. Farmers complying with FIFRA were never intended to

be required to receive duplicative permits. It’s like asking someone

to have two drivers in the same State. This duplicative pesticide

permit only adds cost and credit burden on the farmer, opens them

up to citizen lawsuits and there are no additional environmental

benefits.

A bill to correct this H.R. 872 was recently passed in the House

of Representatives, but we must ensure that this actually becomes

law to protect farmers from this perversion of the Clean Water Act.

And going forward, as Congress takes up environmental, labor,

food safety and financial/tax legislation, please be judicious in your

consideration and hold our farm businesses harmless from overreaching policy. If my children choose to carry on as the fifth-generation family farm to produce food, I hope together that we can

work to make that happen.

Thank you for your time to speak with you today. We appreciate

your immediate attention and concrete actions to assist farm families.

Ms. BUERKLE. Thank you very much, Mr. Taylor.

[The prepared statement of Mr. Taylor follows:]

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Ms. BUERKLE. Mr. Teeple.

STATEMENT OF JOHN TEEPLE

Mr. TEEPLE. Thank you and good morning. Thank you for the opportunity to share with you some of the concerns of the apple industry.

My name is John Teeple. We are apple growers in Wayne County. We have been in business for over 50 years. I’m the third generation. I have two nephews who are going to be fourth generation.

We are also part owners of Lake Country Storage. It’s apple storage that involves 10 other farms and we store 11⁄2 million bushels

of apples. We are also part owners of the Empire Fruit Growers

Coop, another farm coop and packing facility. I’ve also served on

the Board of the New York Apple Association and currently on the

U.S. Apple Association.

On our farm we have 12 full-time people, and during the harvest

season we will ramp up to around 65 people. At our packing line

and storage facilities we employ approximately 35 full-time people.

I’d like to focus on two issues that I think Mrs. Martin and Mr.

Taylor have done a great job on highlighting some of those already.

Mrs. Martin talked about labor. Labor is probably the biggest issue

for fruit and vegetable farms in the United States. We need a reliable, legal labor force in this country. The apple industry is a world

market. We ship apples all over the United States as well as export

apples to other countries. If we are to keep the apple industry in

New York, we must remain competitive. New York State needs approximately 8,000 workers for about 8 weeks to harvest the apple

crop of 30 million bushels.

We need a unique labor force to harvest these apples. It must be

physically fit. Picking apples is hard work. They must be dependable and work 8 to 9 hours per day, 6 days a week. Apple are very

time-sensitive and must be picked at the proper time. They must

have the ability to spot pick apples for color and size and not to

bruise them, so it’s a specialized labor force. There’s not many people that meet that criteria and are waiting for us to give them a

job for 8 weeks in the fall, and certainly not 8,000 when we need

them.

At the same time that we are starting the apple harvest, all of

the other apple-related businesses are also gearing up, the packing

lines, the storages, the processing plants like Motts. Most of our

local people prefer these jobs as they’re more long-term, usually 45

to 50 weeks.

So to meet our needs we have to attract migrant labor workers

from around the country. We do this by paying them well and giving them free housing. We pay by-the-piece rate, which equates to

about $10 to $15 per hour, plus the value of free housing and utilities which is another $3 per hour.

Much of the employment documentation we are given at the time

of hiring turns out later to be inadequate. This puts the employer

in a position of having to terminate the employee and possibly face

stiff fines, or we have to use the off-shore labor program, H–2A,

which Mrs. Martin detailed very well. The H–2A Program is administered by the Department of Labor, is very expensive, it’s cumVerDate 17-JUN-2003 14:12 Oct 28, 2011 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\68365.TXT KATIE PsN: KATIE
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bersome, it’s very restrictive as to the use of the workers and it’s

unpredictable as to the timing of when we will receive our workers.

We need agricultural labor reform in this country. Something

like the AgJOBS bill that has been introduced in the past. We need

a legal, migratory work force that’s willing and able to move where

the crops need to be harvested. We are quickly approaching the

turning point in this country. If we are not allowed to import labor

to harvest our fruits and vegetable, we will be importing our fruits

and vegetables.

My second point: Exports play a critical role in the economic vitality of the American apple industry. Promotion programs established under the Farm Bill help maintain and increase overseas

apple sales. Under these programs, the U.S. apple growers partner

with U.S. Department of Agriculture to increase consumption of

U.S. apples overseas. American apples are grown commercially in

over 30 States. Our $2.2 billion crop is produced on approximately

350,000 acres of orchards. This means that over one in every $3 in

apple revenue comes from exports. Our overseas apple sales are

critical to our orchards and the entire apple industry.

The America Access Program referred to as MAP, and the Technical Assistance For Specialty Crops Program and the Emergency

Emerging Markets Program are part of USDA farm bill. The industry provides matching funds for the MAP program. These are good

programs, vital to our industry.

I would urge your continued support for these programs in the

new farm bill. I would welcome any questions that you have at this

time and thank you for the opportunity.

[The prepared statement of Mr. Teeple follows:]

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Ms. BUERKLE. Thank you all very much.

I think I would like to start, and I’ll yield myself 5 minutes for

questions, because for many months now, really, it’s been a recurring theme from the dairy industry, from agriculture, from the

apple industry, we need a reliable legal work force.

So maybe we could spend a little bit of time today having you

tell us, what would that program look like? What would a stable,

reliable, legal work force, what would that process look like and

how can we help to achieve that.

And we can start with each one of you. I’d like to hear your comments.

Ms. MARTIN. I think agriculture is very different from most other

industries. We have, as Mr. Teeple mentioned, we have a short period of time that we need workers. The feeling in the United States

is that those workers are there because there is unemployment.

But you’re not going to get somebody to give up their unemployment—what they may make from unemployment to come to work

on your farm for a short period of time and the work is very, very

hard. It’s been documented. I had workers last year, domestic

workers, who came to us—and by domestic we mean from the

United States, not necessarily like a domestic worker in a home—

who came to us and they lasted 4 hours. They couldn’t do the work.

That’s not necessarily going to be true, but because that is generally what happens, we need a program that allows me to bring

workers in. The H–2A Program is the only legal program that I

have available to me at this point. The Federal Government has—

it’s not a well-run program. You can do one thing 1 year and then

the next year you do the same thing when you put in your applications and they’ll turn it down. That’s what’s called a Deficiency

Letter—and for no reason.

We just had a conference call with Congresswoman Slaughter’s

office and the U.S. Department of Labor and we tried to nail them

down. Like, you know, we got a Deficiency Letter because we did

not put—we didn’t say why we needed more workers sent in the

year before, for example. And they just automatically threw it out.

When we pointed that out to them, why did that happen? They

said, well, you didn’t tell us why. Well, where on the form does it

ask us to tell us why? We just answered the questions on the form.

And their answer was, well, there’s no place on the form. You have

to write a letter to us. Well, that kind of thing—and you’re also

given 3 days to get this done. So when you receive a Deficiency Letter, you have 3 days to correct it and get it back to them. It’s an

impossibility.

Ms. BUERKLE. Could I interrupt for a minute?

Currently when you file an application and it has to be done

every year for the temporary employees, and when you do that, is

there a timeframe at which the Department of Labor must respond

to you? Is there an expectation that within 10 days or 30 days,

you’re going to hear back with a determination?

Ms. MARTIN. There is a timeframe and there is an expectation.

We are held to the timeframe. We are hopeful in our expectations

of what’s going to happen. The U.S. Department of Labor does not

respond consistently or fairly. That’s the biggest part of the problem. We don’t know.

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And in agriculture when you have a product or something that

needs to be planted or harvested or cared for and you count on your

employees to be there, and they hold you up for 6 weeks, everything on your farm has been planted, everything has been ready

to go, and they don’t—for no good reason that we can figure it out,

don’t send you the workers and hold you up, you’ve got 6 weeks of

something that you have probably just lost your entire—well, there

will be no profit that year. And there’s no good reason and no explanation on their part.

Ms. BUERKLE. Thank you.

Mr. Taylor.

Mr. TAYLOR. Yeah. Dairy farms, at the minimum, need inclusion

into H–2A Program. There have been bills in the past to try to do

that. We do not qualify for H–2A as dairy farms. We need yearround labor. Even in times of high unemployment, in the last 4

years we’ve had three domestic workers come to the farm and ask

for jobs. Two high school young ladies are helping on the farm,

have taken those jobs and are happy to have them. The other person was not even remotely qualified. And that’s kind of a misnomer

with agriculture. A lot of times people feel these jobs are unskilled

and anybody can do them and it’s not true at all. There’s a tremendous amount of technology involved. We need a skilled labor force,

and regardless of pay, which is another misnomer, a domestic laborer does not want to take jobs on farms unfortunately. So the

challenge for us is to find a labor force and many times they turn

to migrants for that.

One of the other challenges—you asked about is what would it

look like. We need a Visa Program, whatever you want to call it,

a Visa Program, maybe a 3-year Visa that would have to be renewed for terms of 3 years. We need to bring these people out of

the shadows. Unfortunately the need for people to work here has

been rolled into the whole immigration discussion, and it almost

seems like it will never be solved because there’s so many factors

with it. In agriculture we need a Visa Program. We can’t send

them all back at once. We—simply farms would have to shutdown

because they could not continue without a labor force. If you bring

them in, make them pay a fine, get a Visa, the ones who do not

come in, those are the ones you need to chase. If there is an issue,

the ones that don’t come in are probably the ones you should go

after.

So I would implore you to work for a Visa Program, at the very

least, we need to improve H–2A. Ms. Martin and Mr. Teeple have

talked about that quite a bit. We need a stable, reliable work force,

and Visa Program, if we could get one in place and try to separate

it from the emigration discussion as a full package would help us

tremendously.

Ms. BUERKLE. Mr. Teeple.

Mr. TEEPLE. I would agree with Mr. Taylor. A Visa Program to

address the issue of the people that are here. You know, there’s an

estimated 8 to 12 million undocumented workers here in the

United States. I think we estimate approximately 2 million work

in agriculture. These people want to be legal. They want to be able

to come and work, and they want to be able to go home. The current system has trapped them here. Right now they don’t dare go

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home because they can’t get back across the border. We agree, and

I think in agriculture we agree that we want secure borders. We

need to make a provision for these people legally to be here.

We had these 8 to 12 million undocumented workers working

here in the United States while we had almost full employment in

this country. It’s a different labor force than the labor force that’s

currently unemployed, especially for fruits and vegetables where

we need this migratory labor force.

The H–2A Program works sort of, but these people can’t move

around the country. If you have an H–2A person come to your

farm, they can only work for your farm for that specific purpose.

They can’t go to your neighbor if he needs work. A lot of our help

migrate around the country. Most of our people are picking blueberries before they come and pick apples. That won’t work under

the H–2A Program. We need the H–2A Program changed and we

need a Visa Program.

Ms. BUERKLE. So you’re talking having two separate programs

when you say improve the H–2A or have the Visa or both?

Mr. TEEPLE. Both. You need to address this population that’s

here.

Ms. BUERKLE. And the dairy industry has been excluded from

the H–2A Program because it’s year round?

Mr. TAYLOR. Yes. Exactly. Under H–2A, I believe the maximum

is 8 to 10 months that you are able to continuously stay here. I

may be wrong on that, but—it’s 10 months. OK.

And the dairy industry, we need laborers year round and continuous and it’s very—well, it’s not allowed, but it would be very difficult if it was allowed under the eight to 10-month guideline. It

would have to be allowed for year round work.

Ms. BUERKLE. Thank you.

I yield to Mr. Kelly.

Mr. KELLY. Thank you, Madam Chairwoman.

A question for all of you. This is not all that involved. I don’t

know if you were here for the previous group. I’m an automobile

dealer by trade.

But my experience has been the people that come in to talk to

me never had any experience in what it is that I do. And they’ve

never actually done the job nor been involved with anything of that

job. They may be very good with laptops, but when it comes to actually doing the job and understanding what it is, the challenges

that you all go through, if you could, just help us. The people that

you talk to, any of them have any experience? Anybody ever sit

down with you—and we have something in the automobile industry

called 20 groups where you get 20 people of like size in different

areas of the country, sit down and discuss common problems and

come up with solutions that make sense.

I would suggest that’s really where we seem to be dropping the

ball here. I don’t know anybody that I have ever talked to that’s

done an audit at my place that had any idea what it is that I do.

So if you could—and you all are in agriculture, different parts of

it.

Ms. MARTIN. I think you’re absolutely right. Most of the general

public knows about farming from what they hear, and what they

hear is advocate, labor advocates who have the funding to be out

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there and to stage things, stage presentations on how bad farmers

are.

I think most people, my friends, most of my friends are teachers.

They’re not in agriculture and they look at me kind of, really, like

if I have a thought that’s important, it’s like, wow. You know, so

you kind of have to overcome that a bit.

But the other thing is, no, I think most people think we pay minimum wage or we try to pay less than minimum wage. That’s not

true. The Adverse Effect Wage Rate which is the required wage for

an H–2A worker is $10.65. I pick my workers up at their house in

Mexico; I get their Visas; I pay all their expenses up to my house;

I pay for their food even while they travel; I provide free housing;

take them to the store; take them to the doctors; whatever they

need, and that’s in addition—and then I send them home. And lately we’ve been flying them home because of the border problems in

Mexico. That’s in addition to the $10.65 an hour that they earn

here.

That may not seem like had a great deal in industry, but when

you add in all the other things, it’s really not a—it’s not an inexpensive way for us to run our business and it’s not a cheap wage

for the workers.

So, no, I don’t think people do know what we do. And we’re really

too busy to do what we do to get ourselves out there to share that.

We also lobby in Washington DC and in Albany.

Mr. TAYLOR. This is a very interesting question for us because

it really hits home. And Congresswoman Buerkle’s district especially now, we’re dealing—especially on environmental issues. The

non-farm community at large doesn’t understand what we do and

why we need to do it and the amount of regulation that we’re

under.

We have individuals in communities here who have tried to

make people believe that we’re bad and that alls we want to do is

pollute the environment, which nothing else could be further from

the truth. Particularly in Wayne County now we have been dealing

with a group of three or four people that have spent a lot of time,

have a lot of time, sending us this message against agriculture.

A number of us in the ‘‘Ag’’ community have stepped up and

tried to hold community meetings to educate them. We’ve brought

in people from Cornell. This Saturday we just had a tour on a

1,000 cow dairy to talk about methane digesters and other things.

And to really try to educate the non-farm public about what farms

are doing to protect the environment, which is a tremendous

amount. And yet, we still have people with ideas that we aren’t

doing anything.

One thing that I did talk about at the Chesapeake Bay, one interesting fact about that: New York is far and above a lot of other

States in the country in its environmental protection and we’re

thankful for that and farmers have worked to embrace that. We

have medium sized CAFOs as well as large CAFOs based on size.

The U.S. geographical survey just inside Pennsylvania shows

that the water leaving New York is clean. And if it were the same

water that reached the bay, the bay would not be impaired and we

would not be facing this Chesapeake Bay clean up.

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So we’ve always tried to point out to people we’re doing everything we can, but sometimes it’s a very difficult message for us to

get through and get people to understand. If we are going to grow

food in this country—and we have a tremendous ability to grow

food in this country. Globally in less than 40 years we have to increase our food production globally by 40 percent. That’s the way

we need to look at our food production, is globally. There will be

over 9 billion on the planet and how are we going to do it? This

country is positioned to do that. We are environmentally sound; we

have good management practices; we produce a high-quality product and it’s safely done. Other countries like China, Mexico and

Brazil, if we don’t do it, they’re going to do it for us. And they will

feed the world and I don’t think we want that.

So we certainly do have a number of challenges getting people

to understand what we’re doing and why we’re doing it and the

need for us to be able to do it. You can’t move my farm to China,

but China will do the job for us. So I think it would be better suited for us to realize that we can protect the environment and

produce a high-quality product.

Mr. TEEPLE. Ninety-eight percent of the farms in America are

family owned farms. We have our children, our relatives. We’re

working on our farms. We’re concerned about our farms; concerned

about the land. We’re good stewards of the land. We seem to be labeled as corporate farms; most of us are corporations for business

reasons. That doesn’t mean that we’re still not family farms. We,

you know, I think as I pointed out in my testimony, I think we’re

going to be reaching a point with high-labor farming in the fruits

and vegetables that either we import this labor to harvest these

crops or we will be importing our food. We can go the same way

that the garment industry did in this country.

In the northeast we used to have a lot of garment factories. They

didn’t just all disappear overnight. Slowly they started moving. The

same thing is happening right now with fruits and vegetables. The

California area, it’s very easy to cross the border and have that

produced in Mexico and it’s happening now. I don’t think in this

country that we want to give up our production of food and especially on fruits and vegetables.

Mr. KELLY. But do you have a chance—I mean the people that

come to see you, do you have a chance to review with them or do

they have any idea when they come there what it is that you do?

My whole concern is most of the people I talked to in these agencies and bureaucracies never have done the job that they’re trying

to regulate and that’s scary to me.

Mr. TEEPLE. It is scary.

Mr. KELLY. And most of them have no clue. Thank you.

Ms. BUERKLE. If I might, I just have a couple more questions I

want to flesh through a little bit more this labor issue because it

seems to be something that I’ve heard about and is a big issue.

In New York State we have lost so much industry, and we are

fortunate to have agriculture and dairy farming. The industries—

that’s one of the leading industries in this State. So we need to

work hard to ensure your success. And as we talked about in the

previous panel, to get the government out of the way so you can

do what you know how to do and what you do best.

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Regarding the labor issue, what are you hearing is the impediments? Why can’t this be streamlined? The Department of Labor—

or who you have talked to? What is the impediment? Why won’t

they talk about reforming the process so you can get people here

reliably, get them back home when the season is over with, and get

what you need rather than the situation as it is? What are the obstacles? What are you hearing.

Mr. TEEPLE. It’s a huge problem. We’re talking comprehensive

immigration, and it becomes larger. It’s like the comprehensive

health care plan, and we’ve seen all the concerns around that.

Immigration is probably larger than the health care plan as far

as it’s issues. Because of that, it’s difficult to tackle. And with high

unemployment, it’s politically poisoned talking about bringing in

foreign workers. You know, maybe we need to divide it up in pieces

and work at it in smaller pieces.

Ms. BUERKLE. I heard testimony, though, that the folks you bring

in to work don’t want to stay here. They want to go back home and

then come back when it’s time to work again. Is that your experience?

Mr. TEEPLE. There’s some of both, but a lot of the younger fellas

come and work and would like to go home. Usually in the apple

industry, speaking for apples, these folks have worked in other

areas of the country, working with sweet corn in some places, watermelon, peppers and blueberries and apples are about the end of

the crop. We finish the first, second week in November. A lot of

them would like to go home for Christmas. A lot of them don’t dare.

Ms. MARTIN. I think your question of what needs to be done to

be fixed, that’s the big question. We don’t know. We don’t know

why the impediments are there. It gets worse and worse every

year.

Our feeling as farmers is that they want to do away with the H–

2A Program, and also our feeling as farmers is that is only legal

option, we have to get go legal workers here. We’re trying to work

within the system. Immigration, if you took immigration aside and

didn’t even deal with immigration, we’re just asking for a legal

work force anyway we can do it.

The impediments that the Federal Government is putting out

there, to us, make no sense. There’s no reason. And we actually

ask—I personally ask the Department of Labor, the U.S. Department of Labor, give me the name of someone I can contact when

I have a question—I had trouble between the State Department of

Labor and the Federal Department of Labor—just give me a name

so I don’t have to just keep trying to work my way up to an answer.

And their answer to me was, ‘‘Well, on our Web site we have a

box that says ‘‘help’’ and you click the box and then you’ll get help.

Well, it doesn’t work. In an ideal world it would work, but there’s

no one there who really is answering and there’s no one who wants

to say, ‘‘My name is so and so and I’m going to give you this answer.’’ I think that may be the way the agencies work. But we have

no answers and that’s what we would like to get to the bottom of.

Just give us a program that works—make the program work.

Ms. BUERKLE. Have your organizations, have you put together

some piece of legislation or some kind of dream piece of legislation,

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have you begun to put together what a good H–2A Program would

look like and could we, you know, get that from you so we can

begin to look at this process that would work? I think you’re right,

maybe the issue to break it down and not look at immigration like

this, but look at a legal, safe work program as a small piece.

Mr. TEEPLE. The jobs bill that has been introduced a number of

times in the past addresses the H–2A Program and the Visa Program. It’s a good piece of legislation but it just hasn’t garnered

enough support to work through Congress.

Mr. TAYLOR. I know the New York Farm Bureau has made several attempt to make changes to H–2A and to push for ‘‘Ag’’ jobs

and other things and, unfortunately, we have not been able get

things to move through.

And, yes, some of the things that we’ve seen that have been impediments to this, one example of something in H–2A that’s really

absurd. Workers are required to apply online in their own country.

Most countries that these workers are coming from to find a computer and then to understand how to use one, it isn’t even practical. So farms are actually paying people to go down there, to

get—find workers, help them apply online for the H–2A Program

to get them here. And it’s things like that.

We have a fruit and vegetable grower in Ontario County, that

the way to—you have to start earlier and earlier in this process

each year—he’s one of the largest cabbage growers in the State—

and 2 years ago his workers were supposed to arrive on May 15th.

June 15th he still didn’t have workers. By the time it was full cabbage planting time, he had help from his neighbors and friends and

other farms. Literally he had over 90 people on the payroll in 1

week just to plant cabbage. He had no workers under H–2A until

July 15th. There’s horror story after horror story like that.

If this is the program we are going to use, we need to have it

standardized and make some changes to it. And the other issue is

the rules have changed several times in the last 5 years. We had

what we call the Bush Rules, then President Obama came in, then

we had the Obama Rules, and there were lawsuits. That was

upheld. We’re going to stay with the Bush Rules for a while. Now

we’re back to the Obama Rules. So the constant flux and no improvements to the program is not helping call.

Ms. BUERKLE. Thank you.

Mr. Kelly.

Mr. KELLY. I had one last question and I think, Ms. Martin, you

talked about it.

Because there’s a feeling out there that when we say what the

minimum wage is, people write in there mind, look at what the established Federal wages, in your case maybe it’s New York State.

It actually has nothing to do with the effect of minimum wage

which is driven by the region you work in. It’s the total wage that

you pay, because I think you said, it was $10 to $15, plus transportation, plus lodging, plus, plus, plus. So your minimum wage, your

effective minimum wage, is the total, cumulative value or amount,

or the amount that you spend—and I think that—and one of the

things we’re finding out when we hold these hearings—and I don’t

mean this in anyway disrespectful—the American people, if you

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were to ask them where milk comes from, it’s from the grocery

store. Because that’s the way we’ve grown up.

But when it comes time to talk about what we have to pay people—and I think this is the thing that bothers me—because they’re

only minimum-wage jobs. Nobody has the idea of what a minimum

wage actually means to an employer.

So if each of you could tell me, what’s your effective minimum

wage? It’s not what’s being posted as the minimum wage, because

I can’t hire anybody at that. In my area I’ve got to pay them much

more than that.

So if you could just maybe talk just a tiny bit about that, because

I think it’s important for folks to understand what that dollar

amount actually is.

Ms. MARTIN. Well, as I mentioned on the H–2A Program, it’s

called an Adverse Effect Wage Rate that is set by the government,

and that right now is $10.25 an hour. Our average workers—I

would say, we have what’s a cabbage line, we have processing. I

think the minimum that—and they all receive free housing too. So

I would say that normally on a farm you’re probably paying for a

part-time worker; you’re probably paying $12 and probably—and

some of our supervisors—you’re probably paying—and they get

houses. I mean, these are not small little places. So if you figure

that in, they’re probably getting $30 an hour.

I mean, some our supervisors who started out as a migrant labor

are making about $72,000 a year. And that is before you get to

their housing, before you get to all the things that farms do. I don’t

think—I don’t think that’s—I don’t think that’s out of line with

what other people pay, but because we aren’t out there speaking

for ourselves and—actually we’ve learned in agriculture that you

have to fly a little bit below the radar. That’s unfortunate.

I want to stand up and say, ‘‘Hey, look it. I’m proud to be a farmer and this is what we do and this is what we do in our community,’’ but I can’t say it. Even in church I have to listen, while we’re

taking up a collection for the ‘‘poor migrant farm workers.’’ I’m like,

I know what these ‘‘poor migrant farm workers’’ are making. Lets

build a little bit of self esteem for them also. They’re hard workers.

They work harder than most Americans I have had on my farms.

So I think they are well paid, and I think that they’re extended

family. I don’t think they get the credit that they deserve, and I

think we are blacklisted as employers who like to keep people

down.

Mr. TAYLOR. On our operation the wage rate is from $8 to $16

an hour. That also does not include housing. So it’s different for everybody, their skill level and time in agriculture. So there’s a varying scale for us.

Also I’d like to, you know, one thing that doesn’t get talked about

a lot, people think that we set the wage rate as employers and

nothing could be further from the truth. The employees set the

wage rate. They know what they are——

Mr. KELLY. It’s market driven.

Mr. TAYLOR [continuing]. It’s market driven. They know what

they’re—we like to say, ‘‘They speak with their feet.’’ If you don’t

pay them enough and they are good workers, they’re going to go

somewhere else and find another job.

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Mr. TEEPLE. Excellent point. People aren’t staying on our farms.

We’re not forcing them to stay. They can go any place they want

to.

On our farm we pay by the piece rate, which most apple picking

is done by the piece rate. People aren’t picking apples for minimum

wage; it’s hard work. These people want to make some money and

they’re making—on our farm the minimum would be $10 an hour,

most of our people are making $12 to $15 an hour and receiving

free housing and utilities, which I figure is worth about another $3

per hour.

Mr. KELLY. I think this is the problem. Because we talk about

the domestic work force that doesn’t want to do these jobs because

they’re minimum-wage jobs. Just because it’s posted as $7.25 an

hour, that’s not what you pay. You pay what the market in your

area demands that you pay.

And I think—I mean, we’ve got a huge problem in our country

branding it for what it is and marketing it for what it is and having to reaching frequency out there. When I talk to people, they say

I won’t work for $7.25 an hour. I say, you know what, not only you,

but nobody else I’ve ever hired will work for that. So I’m on board

with you.

But you know what? We have an uphill battle with this because

minimum wage is certainly not the way it’s being played out.

Thank you so much. Appreciate it.

Ms. BUERKLE. Thank you all very much.

We want to thank you for the hard work all three of the industries that have been represented here today represent years and

generations of hard work and commitment, and we want to thank

you for that.

Thank you for what you bring to the upstate economy and to the

State of New York, and we look forward to working with you to try

to resolve some of these problems, and thank you so much for being

here this morning.

Ms. BUERKLE. We will now welcome our third panel of witnesses

for this morning’s hearing.

This morning we have Ms. Maggie Brooks, who is the county executive of Monroe County; Jolene Bender, the town supervisor for

Marion, New York; and last, but certainly not least, Sheriff Barry

Virts, and he is the sheriff of Wayne County.

Welcome to all of you and thank you for being here. As is the

rule of the Oversight Committee that we will swear you in. Would

you please stand.

[Witnesses sworn.]

Ms. BUERKLE. Please let the record reflect that all witnesses answered in the affirmative. Thank you.

We are very pleased to have you here this morning to conclude

our third panel of testimony regarding how the government, the

Federal Government, with its whole host of regulations gets in the

way of success. We’ve heard from industries about small business

as well as the agriculture industry.

Now it’s our pleasure to welcome all of you to speak about municipalities and what the Federal Government is doing to impede

your success as well as affect the cost of doing business in your municipalities in Monroe County.

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With that I will start with Ms. Bender.

STATEMENTS OF JOLENE BENDER, SUPERVISOR, TOWN OF

MARION, NY; MAGGIE BROOKS, COUNTY EXECUTIVE, MONROE COUNTY, NY; AND BARRY VIRTS, SHERIFF, WAYNE

COUNTY, NY

STATEMENT OF JOLENE BENDER

Ms. BENDER. Thank you. Greetings, Congresswoman Buerkle,

members of the Committee on Oversight and Government Reform

and guests.

My name is Jolene Bender, supervisor of the Town of Marion in

Wayne County. I appreciate the opportunity to highlight some of

the regulatory changes placed upon the town and local government

by Washington.

I’d like to state that it is my belief that local government is a

government closest to the people. The key to our success at the

local level is the expansion of, and improvements to, water lines,

wastewater treatment and highway infrastructure improvements. I

appreciate your support which allows local municipalities to

buildupon their existing infrastructure. We cannot build on the opportunity or create jobs or enhance the movement of persons into

our communities without improvements to our basic infrastructure.

Some of the issues that I have faced with regard to water district

expansion and extension are:

One, often co-funding by more than one funding agency is necessary to make a project affordable; however, the funding agencies

do not seem to work together to facilitate the co-funding.

Each agency has different requirements for application packages.

Consequently, municipalities are forced to prepare and submit separate applications packages to each agency which unreasonably

adds costs, and prolongs the application process.

Two, next, each agency interprets the National Environmental

Policy Act [NEPA], requirements differently. Consequently each

agency requires separate NEPA reviews which differ from other.

Rather than confusion, these funding agencies should, if possible,

accept one NEPA standard for all sources of Federal funding. Why

can’t you have one simple standard that all Federal agencies can

share and adhere to.

Three, Federal funding agencies often require the commitment

co-funded project. But when a town does not have that seed money

to make a commitment before it is funded, that makes it difficult

to obtain a funding commitment from other agencies. No one wants

to be the first to make a commitment toward a project.

Funding agencies change their application requirements frequently, and if their request for information needed to be submitted, they often make those changes mid-stream and worse after

a municipality has already submitted its application, or is in the

process of tying to prepare one. Frequent changes that lead to extreme confusion and contribute to delay because the municipalities

have to scramble to assemble all those additional documents and

all that new information required to satisfy those revised requirements.

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For instance, one recent change that was created a lot of extra

work that delayed one application was the requirement that towns

must now provide consumption figures and a head count of residential and non-residential units within the town’s existing water or

sewer districts before we could be considered for funding. I expect

this helps to show justification for the money to be spent, but the

requirement is just too difficult.

Five, Rural Development has also made a recent change in the

procedures. It eliminated the agency’s pre-eligibility determination

PED and the funding package estimate which the agency would

offer when the full application was submitted. This makes it difficult or even impossible, for towns to establish water districts

when they require the New York State Comptroller’s approval. The

State Comptroller’s Office will not take into consideration potential

funding from Rural Development unless that agency provides an

upfront written estimate of its funding package. As a result, the

State comptroller will not approve the formation of those water or

sewer districts. This situation hinders municipalities in their attempts to create water districts, and it also prevents them from

garnering bonus points for project readiness which can improve the

competitiveness of their project, and improves the chances of that

project being funded sooner.

For me, personally, my Town of Marion has a wastewater treatment plant problem. The EPA and the DEC are moving toward

stricter limits on discharge water quality which may force us to

build a new treatment plant. All indications are that they will increase discharge requirements upon small rural communities, those

with 500 users or less and with a discharge into existing streams

of 125,000 gallons per day. This will result in drastic increases to

our cost of compliance, which then has to be passed through to my

community as increased user fees which they cannot afford. The

Town of Marion is one such community where increased user fees

would result from renovating, upgrading and replacing existing

wastewater treating facilities to meet those higher discharge standards and requirements, however, those higher standards do not

seem required or justified.

It would be more prudent to study the present impact on existing

water qualities prior to discharge and after discharge to determine

if water quality is actually being adversely affected by the discharge. If water quality is not being adversely affected, then the

burden placed upon small communities to meet unnecessary stricter limits appears unreasonable, especially during these more difficult economic times. While it is important to strive for and

achieve high water quality, it’s also important to consider that the

stricter limits, once imposed, merely result in hardship to my local

community, without a substantial impact upon the water quality

discharged to a local waterway, then why should we do it?

In closing, anything you can do to address the above type of

issues and concerns and which would assist Marion to increase its

efficiency and effectiveness, will be greatly appreciated. Thank you.

Ms. BUERKLE. Thank you very much.

[The prepared statement of Ms. Bender follows:]

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Ms. BUERKLE. County Executive Brooks.

STATEMENT OF MAGGIE BROOKS

Ms. BROOKS. Well, thank you very much for the opportunity, and

certainly there’s no issue of greater importance to all of us in government than to strengthen the local economy and to be able to

create jobs. It’s certainly our priority.

Although government doesn’t create jobs, we are certainly at the

table working tirelessly to foster the environment that increases

economic development opportunity and certainly allows business to

grow and expand and to create jobs in the private sector.

There are a number of things that we do locally by maintaining

a stable tax rate, providing affordable financing and incentives,

through our Industrial Development Agency. Monroe County is certainly at the table each and every day to assist businesses to improve and expand their operations locally.

Despite this activity at the local, there are a number of Federal

regulations that when coupled with the cost of unfunded mandates—and you hear us talk about that all the time—has led to

enormously high property taxes that have threatened our economic

prosperity by driving businesses, jobs and young talents away from

our State in search of greater opportunities elsewhere.

Certain Federal regulations have grown increasingly detrimental

to the small to mid-sized companies that have become this region’s

economic bread and butter. For example, the Federal Funding Accountability and Transparency Act of 2006 and 2008 hinders small

businesses looking to become subcontractors on large Federal contracts, because it’s not cost effective for them. Federal reporting requirements are the same for a prime contractor who has a multimillion dollar contract as it is for a small contractor who’s doing

$25,000 worth of the work. These reporting requirements for small

business include salaries and bonuses of officers, pension values,

specifics on compensation in excess of $10,000. This rule highly discourages small business from bidding and securing subcontracts on

Federal projects as the cost of monitoring and reporting outweighs

the profit.

Another impediment to local economic development in Monroe

County is a requirement under the U.S. Small Business Administration 504 Program. The 504 Program is widely used in this community. It requires that one job be created for every $65,000 in

Federal funds borrowed. The amount should be increased to one job

for every $100,000 borrowed to allow businesses to focus on investing in the new technology required to remain competitive in a global economy.

Often times in government too much emphasis is placed on a

company’s head count. What often gets neglected is a company’s investment in the economy. Investing in capital equipment is often

a great indicator of positive economic growth.

Federal regulations can also indirectly impact local economic development efforts by forcing counties to pick up the cost of unfunded mandates leaving little left over for economic development

initiatives that put people to work and strengthen the economy.

One example is New York State changing their interpretation of

a current Federal transpiration regulation. The State’s new interVerDate 17-JUN-2003 14:12 Oct 28, 2011 Jkt 000000 PO 00000 Frm 00075 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\68365.TXT KATIE PsN: KATIE
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pretation requires transportation departments to obtain temporary

easements for right-of-way acquisitions instead of grading release.

In the past, these projects only required a grading release, which

is, in essence, an unofficial handshake for a use of a property and

only required a grading release that was inexpensive, yet effective.

The new requirements adds thousands of dollars in cost to project

totals and prohibits construction from moving forward in an efficient manner.

It’s critical that New York State use the original requirements

for right-of-way acquisition so costs are not eventually shifted on

to the taxpayer or back to the State and Federal Governments who

often pay a portion of a county’s transportation project costs.

Another Federal transportation regulation that is impacting

counties is the requirement to replace all street signs with new

higher visibility road signs. Monroe County has estimated that this

new mandate will cost $3 million in this community alone.

A new Federal environmental services regulation will soon

change the way counties are required to clean up storm water runoff with no long-term funding source to do so. This new regulation

has the potential to add significant cost to the planning, design and

construction of new economic development projects.

When we get into the question-and-answer phase, I do have

three people here with me: Mike Garland from our Environment

Services Department; Judy Styler, Economic Development Director;

and Terry Rice, our Transportation Director, because they are the

detailed people.

In closing, I will just mention one other thing that we discovered

in a very real way during the distribution of the stimulus moneys.

A lot of counties like ours were unable to apply those dollars because the requirements needed to take a property from idea to

shovel-ready status made it impossible for us to ever have a project

ready to receive stimulus fund designed to create jobs. So certainly

when you talk about environmental regulations and some of the

permitting processes that local governments have to go through to

make sites shovel-ready, it’s an impediment to us being able to

help business on the local level.

And Medicaid is my final word. I don’t have to say anything

about Medicaid today. You know that is the cost dragger of property taxes mainly in New York State. So that’s a whole different

testimony.

But thank you for the opportunity today.

Ms. BUERKLE. Thank you very much.

[The prepared statement of Ms. Brooks follows:]

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Ms. BUERKLE. Sheriff Virts.

STATEMENT OF BARRY VIRTS

Sheriff VIRTS. Representative Buerkle, Representative Kelly,

thank you for the opportunity to testify before your subcommittee

on Regulatory Affairs Stimulus Oversight and Government Spending.

My topic is the Prison Rape Elimination Act [PREA]. Several

years ago Congress passed the Prison Rape Elimination Act

[PREA]. I’m sure everyone is in favor of eliminating rape in prisons, but I’m not sure PREA will accomplish that. What I am sure

it will do is add cost to the operation of county jails around the

country. The act did not spell out how prison rape was going to be

eliminated, but left it to the Attorney General of the United States

to specify regulations that would accomplish it. The Attorney General proposed standards implementing PREA were published on

the Federal Registry on February 3, 2011.

The PREA standards apply not only to Federal and State prisons

which are designated to hold long-term prisoners, but also to the

county jails that which are designed for short-term incarceration of

persons awaiting trials and those serving a sentence of 1 year or

less.

Most New York State sheriffs, like their counterparts in other

parts of the country, are the chief law enforcement officers of their

representative counties and the administrators of the county jail.

Sheriffs take seriously their responsibility to operate the county jail

safely and securely for public safety and for inmates in their care

and custody.

We recognize the critical issues related to the sexual assaults of

inmates while incarcerated and understand the need to take reasonable steps to prevent any such abuse. Sheriffs know that sexual

misconduct have no place in a professionally and morally run correctional environment. We also know that rape, especially inmateon-inmate rape, is much less of an occurrence in county jails than

in prisons due in part to the short-term stay of the most county jail

inmates, their local community connections, their opportunity for

and ease of visitation for family and friends.

It is clear that many of the proposed PREA standards, although

perhaps appropriately designed for prisons, will apply equally but

inappropriately to county jails. Prison systems are generally much

larger than county jails and they are intended for long-term stays.

PREA does not really recognize the difference in the two types of

correctional facilities, prison systems and county jails.

Imposing burdensome standards on county jail facilities would be

impractical even in the best economic times.

The inmate population turnover and county jails is frequent. In

2010 Wayne County incarcerated 1,719 inmates with 55 percent, or

945 inmates, being released in the first 72 hours of incarceration.

Under these conditions, many of the proposed standards could not

be implemented effectively, yet many of the proposed standards

would impose huge costs on our small county jails to address a

problem that occurs primarily in the large prison systems around

the Nation.

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For example, PREA would impose stringent rules which many

county jails lack sufficient physical facilities to comply with those

rules. Counties would be faced the with the enormous and burdensome cost of building appropriate space, or the enormous and burdensome cost for litigation and sanctions for violating the standards.

The proposed standards which require each jail to collect and report detailed data and to hire an independent auditor to assess a

jail’s compliance with PREA. Most jails, certainly all of New York

State county jails, already have detailed data collection and reporting obligations to their State oversight agency. In our case the New

York State Commission of Corrections. Adding a Federal layer of

audit will only add a financial burden and will create conflicting

obligations between State and Federal mandates.

Again, all sheriffs recognize that inmates should be free from

sexual assault while incarcerated. Washington should not presume

that sheriffs will not do the right thing unless mandated in minute

detail by a Washington rule.

Congress should not leave it to a Federal agency to determine

how a sheriff can best accomplish his or her obligation to operate

a safe, secure and humane county jail facility. The safety, security

and good working order of a county jail is best determined on a

State and county level with a sheriff administering his or her county jail, not Washington’s one-size-fit-all regulations.

[The prepared statement of Sheriff Virts follows:]

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Ms. BUERKLE. Thank you, Sheriff Virt, and thank you to all three

panelists.

I will begin by yielding myself 5 minutes, and I have questions

for each one of the panelists.

Ms. Bender, I’d like to start with you. You mentioned the EPA

imposing stricter standards on water quality. How did that come

to be and what is the stricter standard and how will that impact

you?

Ms. BENDER. I’m not really sure how it came to be, but about a

year and a half ago the Town of Marion asked engineers to do a

study about our wastewater treatment plant. It’s approximately 30

years old as is most wastewater treatment plant are in rural upstate New York. So we thought we were being proactive in asking

for an engineering study to see what, in future, was going to have

to be done.

They did the report. The result was we probably were going to

have to invest $5.4 million to make improvements to our wastewater treatment plant. The problem is we had approximately 500

users to that plant and the cost to those users is going to be astronomical. We can’t afford it. We are a wastewater treatment plant,

little plug, our operator was just named Operator of the Year, so

he knows what he’s doing.

And we feel that the water that we’re discharging after it goes

through this cycle is as clean as the water coming into the plant.

So we don’t understand why the DEC, via the EPA, are saying that

we have to make improvements to our plant to that extent.

Ms. BUERKLE. And so that $5.4 million, that increase in cost

would be because your complying with this standard?

Ms. BENDER. Correct. We know probably some improvements

need to be made. We don’t believe they need to be made to that

extent. And it is happening across the region that DEC and EPA

are looking at these plants, probably justifiably so, but we would

love to do it, we just can’t afford it.

Ms. BUERKLE. The other issue I wanted to ask you about was the

co-funding issue.

Can you—that was sort of a generic, the co-funding problem. Is

that a specific issue with you? Is that one instance where this happened or what were the agencies involved and what were the problems.

Ms. BENDER. First I’d like to say, the agencies we worked with,

the people are wonderful.

A few years ago—well, about 10 years ago Marion seriously

started looking into extension of water districts and expansions,

simply because probably only at that point only a quarter of our

town was covered by municipal water, and people were, rightfully

so, demanding water. So we started looking into it and got one or

two projects done through rural development. And then maybe 5 or

6 years ago co-funding was like the thing you were supposed to do.

So we would look at co-funding with rural development and small

cities. And they both expect different information out of us via this

dual applications. And, of course, that would take twice the time

and cost the town twice the money to have the engineers and administers do all that work.

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So we found it very difficult. We were fortunate enough to get

one program funding, but one of the main reasons that was probably funded is it was a joint municipal project with another town,

and between the co-funding and joint municipal work, that was

very favorable. It was a lot of work.

From the time we look at these projects and the time we begin

getting them into the ground is at least 2 years. People, you know,

on a weekly basis, are calling my office. They want municipal

water; we want to get it to them, but it’s a difficult process.

Ms. BUERKLE. Thank you.

County Executive Brooks. There’s so many things I could ask you

about from your testimony this morning.

I think you mentioned about expanding and the importance of

the 504 Program where you talk about, it should be raised from

$60,000 to $100,000. Just so you know, the Federal stimulus bill

only created one job for $300,000.

I wanted to talk to you a little bit about this Federal regulation,

the transportation regulation, with the street signs. Can you expand on that and what’s expected of the county and what drove

that change in legislation.

Ms. BROOKS. Yeah. And Terry Rice could certainly add what

drove it. I don’t have the answer to that, but he can add that to

the testimony.

There is a requirement that communities change all of their

street signs, their existing street signs, from lower case to capital

letters. And there’s a deadline in which we have to comply with

that. And for this community it’s about a $3.6 million cost and

we’re just one county, you know, across this great Nation.

What we propose, as an alternative, is that local communities

manage the condition of their street signs. And as we go out and

make changes to those street signs, as we have to do, we can certainly comply with the Federal requirement. But to just say, let’s

go out and replace signs, some of which are very new, just doesn’t

make sense to me. And it really is, I think, when we look at some

of the poster-child examples of, you know, mandates that don’t

make sense, to me that’s a glaring one because it’s just a waste of

money and $3 million that we could put to good use elsewhere.

I know—and again, Terry could probably add to this—that there

were some thought that, you know, people couldn’t see the signs.

You know, as the population ages and our eyesight—you know, all

the reasons that really just don’t make sense. It’s kind of an excuse

to go out there and replace all these signs when we don’t need to.

So we have struggled with how we’re going to pay for it, quite honestly.

Ms. BUERKLE. So the county would fund the sign replacement?

Ms. BROOKS. We would have to pay for the replacement. And in

Monroe County, we are the traffic department for the city of Rochester and all 19 towns and villages, so, you know, this is quite an

endeavor.

Ms. BUERKLE. And, basically, it’s just from lower caps to capital

letters?

Ms. BROOKS [continuing]. Capital letters and more reflectivity requirements as well.

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You know, I think within the mandate there’s probably some valuable rationale, but to just say, you have to do it now—let us figure—you know, say this is what—here’s the goal. Let the local communities figure out how we get there and how we manage the resources to pay for it.

Ms. BUERKLE. Thank you.

While we have the opportunity, I would be interested—I know

Medicaid is such a significant issue for the counties and what it

does to your property taxes. With regards to, and I digress just a

little bit, the block. Does it help or does it not make a difference,

if we talk about Medicaid being a block grant funding to the State,

rather than the way it is now, in the proposed budget, does that

help the county? Does it impact on you at all.

Ms. BROOKS. It depends, again, you know, we’re so reliant on the

State and one of our frustrations is, in New York State, the counties pay for 25 percent of the program. And I believe there are only

two States left where the counties actually have a financial stake

in the Medicaid program. But we are very reliant, 100 percent reliant, on the State making the decisions.

I’m a big believer that the cost of a program needs to reside with

the level of government that has the decisionmaking authority over

it. Obviously, we’re working with the State to try and take over

Medicaid.

It’s, you know, we have property taxes 79 percent above the national average here. Medicaid is the cost driver. We did a study,

my colleagues across the State, there are nine programs, Medicaid

being the largest, that consumes—nine programs that consume 90

percent of the county property tax levy statewide.

So take everything we collect, 90 percent of that is paying for

nine programs and Medicaid is the largest, because we don’t know

what that would look like. But to the extent that the counties have

to bear such a big portion of that program, it’s certainly of concern

to us, and we are always involved in that conversation.

Here in Monroe County we’ve spent $315 million on Medicaid

since 2009. So it’s a growing problem. I spent 15 months on the

Federal Medicaid Commission. A lot of smart people around that

table, myself excluded, but a lot of smart people working on how

we can rein in a program that’s lived well beyond it’s means. And

certainly the Federal aspect of it, you know, it’s become a universal

health care program, not in just New York State, but across this

country. We have Medicaided everybody that doesn’t have insurance or who is underinsured.

If you want to talk about taxpayer burden, that’s probably,

again, a whole different session, but clearly a concern here in New

York State.

Ms. BUERKLE. Thank you very much.

Sheriff Virts, just briefly. I know I’ve gone over my 5 minutes—

Mr. Kelly will yield.

Mr. KELLY. Yes, ma’am.

Ms. BUERKLE. This PREA, is there a date that the Attorney General’s Office has for compliance?

Sheriff VIRTS. Not that I have seen for the New York State Sheriff’s Association. We’ve got a committee statewide. I know Sheriff

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O’Flynn here in Monroe County also has a representative, as I do

from my office. But we have not heard when it would be imposed.

A facility like Monroe County that houses somewhere between

1,200 and 1,400 inmates a day, could possibly have to put two,

three or four employees on. I would be forced to put a full-time employee on to interview every inmate that came through. I already

have 70 officers and 140 inmates today in the facility. I think it’s

burdensome. Because of the programs that we have built since

2000, also all the audits that we have done, I have a Federal team

that comes in every January that’s there for a week, five people for

a week. I have the State Commission of Corrections that comes in

2 or 3 days twice a year. The Department of Health comes in and

inspects. The Department of Education comes in because jails have

to provide education to 16 to 20 year olds for 3 hours a day. So we

basically have schools in our jails. Plus we are very open in our visitation of contact with family and friends.

I just think, again, prisons and jails are two completely different

systems. They house two completely different type of people. Ninety-five percent of inmates in the Wayne County jail—probably be

parallel across the State—are released back to the same people

places and things, their towns and villages. Only 5 percent go to

State prison. In our application that’s only about 80 people out of

1,700 will go to State prison. So we’re talking about a different

level of inmate.

Ms. BUERKLE. Is there any provision in that regulation that

would allow the county jails to opt out or is there any room, you

know?

Sheriff VIRTS. It’s a one-size-fits-all package. And that’s our

whole complaint.

Obviously, if a sheriff or entity is running a jail that’s not up to

standard and they are sanctioned, then they should be under more

scrutiny. But us sheriffs that do run good jails and don’t use the

walls just to keep the inmates in, but allows the community to

come in to be part of our incarcerating system, to be part of alternatives to incarceration, we should not be punished by a one-sizefits-all from Albany.

And, again, I agree with the county executive here. If we are in

charge of the jail, we should have more decisionmaking power and

how we run our jails.

Ms. BUERKLE. Have you been able to estimate the cost of what

compliance would mean for your jail?

Sheriff VIRTS. For my jail alone I am going to say it will probably

be somewhere between probably $90,000 and $150,000.

Ms. BUERKLE. Thank you.

With that I’ll yield to the gentlemen from Pennsylvania.

Mr. KELLY. Thank you, Madam Chairwoman.

Ms. Bender and Ms. Brooks, I come from a community that has

a similar problem with yours when it comes to the DEP and water

runoff. A lot of the homes that were built in the early part of the

century and beyond. But wastewater and storm water, and in a lot

of cases, we’re seeing where when these folks built those homes a

lot of their downspouts were connected to storm sewers and wastewater was connected. So now when there’s a heavy rain, there’s a

flooding situation that’s caused. I know the DEP has placed my

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town in a very difficult position, because we’re talking about a

major overhaul of our whole sewage system: Storm water, wastewater and the implications on that.

If you could, because I understand—and I also had the privilege

of serving on our city council—when you have CEBG money that’s

been reduced dramatically because of the wars we’re fighting and

other things that are taking our fund, now we are working with

less. But on top of that there’s regulations put into effect that even

further limit what you can do with those funds. I know it’s very

difficult for small towns.

If you could just as a matter of, you know, just enlightening us.

The public doesn’t understand the effects of this, especially when

you start getting your sewage bills, how much they’re going to go

up, and then our inability to fix some problems that we have either

on our sidewalks, streets and towns because of the, first of all, the

reduced of limit of CEGB funding and then again the restrictions

put in place that really limit what you can do with those funds.

So, just briefly, and I know you can’t be brief on this. By the

way, Ms. Brooks, I think you are being kind by thinking these people mean well. Thank you, though.

Ms. BENDER. Well, I can tell you several years ago we applied for

a mitigation grant to alleviate the problem of storm drainage in our

little hamlet. With that, we had to change the sewer lines; we had

to do the storm water drains. And it probably took us almost 4

years to complete that project.

I went to a seminar before one of the projects began, and they

said the first thing you need to do is buy a four-drawer cabinet, because by the time we get this project done, it’s going to be full and

that’s the paperwork that we have to go through to complete a

project. I mean, it’s just unbelievable.

And the cost to our residents, if we have to borrow, or whatever,

the $5.4 million and spread that among 500 users, it can’t be done.

It just can’t be done.

We have another project that we’re going to do that kind of ties

into that. Recently by New York State DOT we were awarded a

millions dollars to remove and replace the sidewalks in our hamlet.

It was a—I think it was a 70/30 grant: 70 percent from the State,

30 percent from the municipality. We feel that project is probably

going to cost these same homeowners another $100 on their tax bill

every year.

Our sidewalks you cannot use: The elderly can’t walk on them;

you can’t push a baby buggy on them. They’re terrible. We want

those sidewalks put in.

And then the EPA and the DEC came in and said, ‘‘Whoa, wait

a minute. You’ve got to fix your wastewater treatment plant.’’ So

we’re looking at this $5.4 million. We want a nice place to live. We

want to give our residents a nice place to live. I don’t know how

we do it with all the regulations and the funding we would love to

get and have been successful, but we need more.

Ms. BROOKS. I want to make sure you have a great answer to

your question. Would you mind if—Mike Garland is our Environmental Services Director and is an expert in this. I can talk about

Medicaid all day long. He can talk about storm water and wastewater.

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Mr. GARLAND. Thank you.

In Monroe County we have the Pure Waters Program to address

wastewater on virtually a county-wide basis. In the city of Rochester we have a combined sewer system, and so when you talk

about storm water and wastewater flowing in the same pipe, it creates challenges.

In Monroe County we had the foresight, beginning roughly 40

years ago, to consolidate relatively discrete wastewater treatment

plants, but also to take advantage of Federal dollars available to

mitigate overflows of combined sewers into the Genesee River and

into Irondequoit Bay.

So we have a system in place in our city to deal with that. Our

Pure Waters Program is a special taxing district, so we are able to

raise revenues to address those issues. But as it relates to our suburban communities where we have elicit connections between

storm water and sanitary sewer under the Phase Two Storm Water

Regulations that County Executive Brooks technically referred to,

that’s an unfunded mandate where we are looking to improve the

storm water quality of our community.

It’s a program that came out of the Clean Water Act, the same

act that promulgated regulations associated with wastewater, is

now addressing storm water. While we understand the environmental merit and benefit of addressing storm water, it is, once

again, an unfunded mandate for our community both in the public

as well as private sector.

Mr. KELLY. And I think that’s the part that the public doesn’t

often see. Because my understanding is that is the wastewater was

started to really protect the quality of the ground water.

We’ve gotten from a situation that was a concern for public

health to a concern of public spending. And I don’t know how in

the world we can continue to put mandates on people. The intentions, I’m sure, are good, but the ability to actually pay for it is not

there. So if I can tell you that you have to do something, but I don’t

offer you anyway of doing it, then the burden then falls on the people that are paying the local taxes. That’s sometimes overburdening. We don’t see that down the road.

Ms. BROOKS. And just to emphasize that point, in Monroe County, 744,000 residents, we have a $1 billion budget, 82 percent of our

budget is mandated by the State and Federal Governments. So

when we talk about mandates, imagine running your business and

controlling 18 percent of what you do.

Mr. KELLY. The overall costs, I think, Sheriff, you did talk about

when Ms. Buerkle asked you the cost of it.

That is the thing that we all are concerned with. Because most

of these programs—I’m sure they have some merit at some level,

but it does go down to the same way we run our homes and our

businesses. You can only do what you can afford to do. The fact

that somebody legislates it or regulates it doesn’t make it doable.

So thank you so much for what you’re doing, and I know it’s frustrating, but just stick with us. We’re going to try to get this fixed

for you.

Ms. BUERKLE. Thank you all very much for taking the time out

of your busy schedules to be here today. This was very enlightVerDate 17-JUN-2003 14:12 Oct 28, 2011 Jkt 000000 PO 00000 Frm 00089 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\68365.TXT KATIE PsN: KATIE
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ening, and I’d like to thank all of you for being here and the committee will stand adjourned. Thank you very much.

[Whereupon, at 11:50 a.m., the subcommittee was adjourned.]

[The prepared statement of Hon. Elijah E. Cummings follows:]

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