County Seat Modesto Puts Advocacy in Regulatory Hot Seat

By David Rostker, Assistant Chief Counsel

Modesto is the county seat and largest city in Stanislaus County, Calif. The local economy is dominated by agriculture. The largest employers include E&J Gallo Winery, Del Monte Foods and a range of vegetable and fruit processing companies. Yet, Modesto is like most other small cities in the United States, with small businesses in a range of industries that support the needs of its citizens, from medical support to home builders. And although the state government of California has chosen to impose a wide range of additional regulatory burdens on its businesses, small businesses in Modesto know that some of their burdens can be relieved by the federal government.

The Office of Advocacy was welcomed to its Modesto Regional Regulatory Reform Roundtable by Rep. Jeff Denham, representing the residents of the 10th Congressional District, which encompasses all of Modesto, the nearby city of Turlock, and surrounding areas. The Congressman welcomed the Administration’s emphasis on regulatory reform and talked about some of the challenges that he hears about from small businesses in his district. In particular, he highlighted two major issues: abusive litigation under the Americans with Disabilities Act; and the expansive definition of the Waters of the United States issued by the Obama Administration.

The issue of abusive litigation under the Americans with Disabilities Act was a significant issue brought up repeatedly. A representative from the Central Valley Hispanic Chamber of Commerce agreed that extortionate lawsuits were a particular problem for entrepreneurs on the edge and with limited English proficiency in the Crows Landing corridor of Modesto.

Small business reps who attended our roundtable had many suggestions for regulations that the federal government could change to improve the ability of small businesses to compete and thrive in the challenging California environment. The Modesto Chamber of Commerce suggested streamlining the consultation and licensing processes for dams, since the significant delays create unreasonable uncertainty and risk for local governments and businesses. A local CDC Small Business Finance employee CDC noted that there were barriers to hiring qualified staff because of SBA background check requirements (a requirement SBA has since amended). A representative from the Manteca Chamber of Commerce noted that the marijuana market, while illegal under Federal law, faced significant financial and security challenges because of a lack of banking services.

Small businesses were also concerned about their ability to compete for federal contracts. A medical transcription company said that it was competing against large businesses that subcontracted work to overseas translation services, significantly undercutting them. A small business consultant asked for more assistance recruiting large businesses to partner and mentor small businesses in significant federal procurements. A representative of a local building trade association suggested that small businesses would be more competitive and would be better able to perform if the President repealed the Executive Order requiring project labor agreements in large-scale construction projects.

The Modesto Roundtable was also an opportunity for a few local, small businesses to make connections and ask SBA and their member of Congress for additional help. The Central Valley Chamber of Commerce asked for additional SBA attention, including consulting services and advocacy. The specific needs of small businesses in the Crows Landing Corridor, a partially unincorporated area dominated by businesses run by Spanish speakers, were voiced and addressed. A new, non-profit organization sought assistance identifying sources of capital for a disabled veteran’s group housing project. An entrepreneur asked for guidance getting EPA to recognize its product as a safe and non-toxic alternative to traditional graffiti removal products and end the Clean Water Act exemptions for less environmentally friendly products.

The Office of Advocacy greatly appreciates the hospitality of the SBA Regional Administrator Michael Vallente and Fresno Deputy District Director Dawn Golik for their assistance and participation in its Modesto Regional Roundtable.

Advocacy was in Modesto, Sacramento and Santa Clarita, Calif. for Regional Regulatory Reform Roundtable meetings April 30-May 3.

Can’t get to a roundtable near you? Fill out this form and tell us about your federal regulatory burdens. We will pass this information on to the appropriate agency and use it in the planning of upcoming Regional Regulatory Reform Roundtables.

David Rostker is an Assistant Chief Counsel for Advocacy whose portfolio includes the environment. He can be reached at