By Charles Maresca, Director of Interagency Affairs
Massachusetts small businesses were well-prepared as they met with Advocacy at the most recent regulatory review and reform roundtable. From auto dealers to investment advisors, home builders to appliance dealers, each had ideas on how to reduce the federal regulatory burden on small businesses.
The auto sales industry is dominated by small businesses; in Massachusetts, it has about 25,000 employees and has consistently been among the safest industries in the country for decades, a participant told Advocacy. Yet OSHA now is requiring auto dealers to install time-consuming and expensive injury and illness recordkeeping systems.
A representative of the fireworks and pyrotechnics industry said that his company does 15 to 20 shows a year, but several new requirements from the Federal Motor Carrier Safety Administration, a division of the Department of Transportation, has put a lot of pressure on their ability to continue to do so because of the burdens it imposes on part-time drivers.
A small business which deliberately set up shop in a HUBZone now finds itself out of compliance with HUBzone rules due to factors out of its control. Another HUbzone contractor reported that he was losing money after bidding on several contracts that were cancelled.
An investment advisor asked if the Pension Benefit Guarantee Corporation had small business contracting goals, as several recent contracts have gone to foreign firms and close to 100 percent have gone to large firms.
A paper manufacture pointed out that a 2010 greenhouse gas rule had resulted in biomass waste coming under restrictions; while EPA had indicated earlier that it intended to fix the problem, it has yet to do so. Small businesses need regulatory certainty for planning and other purposes; regulatory uncertainty creates a drain on their resources. The company also reported that its decorative tissue is competing against imported tissue that is being sold for less than the cost to produce it.
A representative from the Massachusetts Restaurant Association pointed to issues restaurants are facing issued by the Food and Drug Administration’s menu labeling rules. He also pointed out difficulties with the process for obtaining needed foreign workers under the H2B visa program. He suggested that visa holders who return to the same employer in subsequent years not count against the cap on the number of visas issued per year.
Not all participants discussed existing rules. A home builder, for example, wondered when EPA would update or improve its lead renovation and repair rules. This rule requires the use of test kits, but the kits have not been available. An online auto parts dealer said that as retail sales have shifted to online, credit card fraud has gone down at retail facilities but increased on line, and this problem should be addressed with a new regulation.
An appliance dealer suggested that the Department of Energy’s energy efficiency standards require testing procedures that are too complex and too costly. The procedures, she said, are geared toward large companies who can more readily afford them. Several agencies and jurisdictions add their own additional requirements for appliances.
Advocacy thanks all of the small business representatives for taking the time to share their difficulties. Despite the breadth of the issues they raised, Advocacy intends to work on behalf of these small businesses in this new year.
By Charles Maresca, Director of Interagency Affairs
When the Granite State welcomed Advocacy to the Manchester City Library’s theater-style meeting room, we hoped to hear from local small businesses about federal rules affecting their operations and how those rules could be reformed to reduce that impact. With characteristic concern for good sense, frugality, and direct speech, these New Hampshirites did not disappoint. They all seemed to add a story that brought home the impact of federal regulations in a personal way.
First, we heard from a shopkeeper who relayed how recent rulemaking by the Food and Drug Administration was creating a financial crisis for the premium cigar industry. Among his concerns was a prohibition on providing samples to potential customers, including military members, even though cigars are the items most requested by deployed service members. It had been a cherished way of saying, “Thank you for your service.”
We heard from a farmer who is being prohibited from housing his seasonal agricultural workers in his own home near his little farm — something he has been doing for many years — because the rules don’t allow them to be housed within 500 feet of livestock. He noted drily that advertising for a new housing development on an adjacent property is boasting of its up-close views of the animals on his farm. On a recent trip abroad with his wife they visited the men who regularly return to work on their farm. Everywhere they went the couple was warmly received into their homes, yet they cannot return that warmth by welcoming the workers into their home because of this rule that is supposed to ensure that workers are not mistreated. The farmer would incur a large cost to build a new place for his workers.
Another agricultural representative noted that the visa process for foreign seasonal workers has become repetitive and expensive, and suggested that a single submission of the required information should satisfy the needs of all the federal offices who need it.
We heard complaints about the federal contracting process, and particularly bonding requirements that tie up the capacity of smaller contractors, and dealing with change orders.
Grocers raised issues with possible changes to the overtime rule, as well as issues created by the menu labelling rule, possible tax reform, and the Supplemental Nutrition Assistance Program.
The attendees put forward a number of highly technical rules as needing reform. A producer of tissue products suggested that EPA’s rule on nonhazardous secondary materials could be improved, and so too could EPA’s Multi-Sector General Permit. She said her industry felt that the Federal Acquisition Council’s rule on recycled content is out of date.
A small telecom company complained about the proliferation of reports required by the FCC, and their steadily increasing complexity. It takes an average, he said, of 922 hours a year to make all those reports, nearly half a full-time employee.
Community banks in New Hampshire are declining in number; the remaining small banks face increasing demands on their time and resources imposed by regulations issued under the Dodd-Frank Act, many of which target the largest financial institutions, but whose burdens fall heaviest on the smallest banks.
Finally, representatives of a small company engaged in the construction of communication towers made the good sense suggestion that OSHA, which has been considering writing a tower erection standard for years, should adopt a consensus standard already written and followed by businesses large and small. Like the other proposals put forward by New Hampshire small businesses, it’s just good sense.
By Claudia Rodgers, Senior Counsel
The Office of Advocacy heard detailed concerns from local small businesses in Manchester, NH, Gloucester, Mass. and Boston, Mass., during the most recent visit of its Regional Regulatory Reform Roundtables on Nov. 28th and 29th. Frustrated small business owners told Advocacy about specific federal regulations that have been burdening their businesses in recent years in hopes that some relief will soon be seen. As a result of President Trump’s executive orders mandating that federal agencies take a good, hard look at existing regulations to see which ones can be revised, reformed or eliminated prior to promulgating any new rules, Advocacy has been actively seeking small business input to determine which regulations are most troublesome.
Small businesses in this region were not shy when it came to highlighting their problems with a number of federal regulations and provided Advocacy with specific suggestions on changes that can be made which will make a difference in the everyday costs of running their business.
“These rules are preventing us from being successful…” a small apple farmer in New Hampshire declared. “The reasons for the regulations may be common sense, but the regulations themselves are not,” stated a small smoke shop owner. Similar sentiments were shared and small businesses present at the roundtables agreed that one of the major problems with federal regulations, and the unending paperwork burden, is that federal agencies need to work together and eliminate the unnecessary duplication that is weighing down America’s small business owner.
In Gloucester, MA frustrated fishermen told Advocacy of the numerous NOAA regulations that they feel has severely damaged their industry. “No one can afford to operate a business in our industry because of all of the regulations,” one exclaimed. “The amount of oversight of my business by the federal government is outrageous,” stated another. They spoke to Advocacy about the problems with the National Marine Fisheries Program (NMFS)’s observer program and the high fees associated with these rules, and they provided dramatic data on the impact of NOAA’s quota reductions on the various types of fishing in the New England waters.
In Boston, small business owners were equally fed up with the amount of federal oversight of their operations and the unnecessary costs they incur as result of federal regulations. “There has been an enormous increase in the cost of compliance in recent years,” stated a small automobile dealer. “…Staying on top of these regulations is extremely costly,” said a small chocolate manufacturer.
Specific regulatory complaints ranged from FDA’s Tobacco Deeming rule, the State Department’s visa programs, rules surrounding service disabled veteran-owned businesses, DOL’s Overtime rule, EPA’s Non Hazardous Materials rule, OSHA’s Combustible Dust rule, CFPB’s enforcement of Dodd-Frank legislation, to the Department of Transportation’s Electronic Logging Device rule, and many more. One thing is clear to Advocacy: Small businesses are desperate for regulatory relief in this country and they are extremely appreciative that someone is finally listening.
For more information on Advocacy’s Regional Regulatory Reform Roundtables, or to provide information on small business regulatory burdens, please visit our webpage.
By Linwood Rayford, Assistant Chief Counsel
On November 28, Advocacy’s regulatory team visited the famous Red Arrow Diner in Manchester, New Hampshire, to see its operation and hear its regulatory concerns.
Red Arrow Diner was first opened in 1922 by David Lamontagne. After a few ownership changes the diner was purchased by Carol Lawrence in 1987. Now with four locations in the state, Red Arrow is considered a historical landmark in Manchester.
The accolades the diner has received over the years in print and on TV solidified its status as a hot spot. It was named one of the Top 10 diners in the U.S. by “USA Today” in 1998. The diner was featured on chef Guy Fieri’s TV show “Diners, Drive-Ins and Dives.” The staff can even tout that during the 2016 presidential campaign, nearly all of the candidates sat at its counter, and probably chowed down on one of the diner’s 500,000 breakfasts that they serve up annually.
When Advocacy staff visited the diner, they were greeted by the front manager, Crystal Otis, and long-time employee, Penny Kolski. The diner employs between 20 and 25 people working four shifts. Kolski, herself, has worked at the diner for more than a quarter of a century. Each server and cook prides themselves on offering the Manchester community a quality meal for a reasonable price, 24 hours per day.
On the menu of the diner’s regulatory issues included offering its employees affordable health care and labor costs such as minimum wage and overtime.
Advocacy thanks Red Arrow for allowing us to learn about their business, making us hungry for more.
By Linwood Rayford, Assistant Chief Counsel
On Nov. 29th, Advocacy’s regulatory team visited with the Massachusetts Fishermen’s Partnership in Gloucester, Mass., to discuss the regulatory challenges facing the industry. The industry is comprised of many small seafood businesses. The MFP is an organization of commercial fishermen’s associations from all geographic sectors of the Massachusetts fishing industry. Established in 1995, the partnership works to provide solutions to problems common to all fishermen.
Advocacy was greeted by many members of the MFP who informed us about the importance of the 1976 Magnuson-Stevens Fishery Conservation and Management Act (MSA) as it related to their industry. The MSA is the primary law governing marine fisheries management in United States federal waters. To manage the fisheries and promote conservation, the Act created eight regional fishery management councils. The 1996 amendments focused rebuilding overfished fisheries, protecting essential fish habitat and reducing bycatch.
While the MFP is supportive of the legislative intent underlying the MSA, they believe that it has unintentionally created several barriers to their business survival. They believe that the federal agencies responsible to enforcing the MSA have placed fish resource recovery ahead of their small businesses, and that there needs to be a better balance of how the law is implemented. Primarily through the reduction in federally-mandated fish quotas, and other associated regulatory costs, MSA noted that the fishermen are hurting. This has resulted in a marked reduction of federally permitted boats that fish the New England waters. Also, because of the diminution of the fishermen fishing the waters much of the seafood consumed in the U.S. is now imported.
The MFP discussed many regulatory areas that need reform, but they condensed their regulatory wish list to two areas: first, an increase in the fishing quota, and second, the elimination of the requirement that the captain must now pay for observers that are responsible for monitoring the fish caught by the vessel. The latter was the undertaking of the National Marine Fisheries Service.
Advocacy thanks the Massachusetts Fishermen’s Partnership for allowing us to learn about their operation and for providing us with their regulatory reform suggestions.
By Claudia Rodgers, Senior Counsel
The Office of Advocacy held a listening session to aid in President Trump’s regulatory reform efforts and to find out which federal regulations are most problematic for small businesses. This time we went to Glen Allen, Virginia at the request of Congressman Dave Brat, who had heard of Advocacy’s recent outreach to small businesses regarding regulatory burdens they are facing.
“We aren’t against regulations, they just need to be sensible” was a common theme heard at the October 16th roundtable. The industries in attendance ranged from trucking companies to small retail shops. One thing they all had in common was a strong belief that something must be done to stem the tide of the overly burdensome regulations affecting our nation’s small businesses.
“The burden is absolutely immense on us small employers,” declared one small owner. “There actually seems to be an overall attempt to make it difficult for small businesses to succeed.”
As a result of Executive Orders 13771 and 13777, signed by President Trump earlier this year, Advocacy began hosting Regional Regulatory Reform Roundtables across the country to bring small businesses to the table to discuss specific federal regulatory burdens they have been facing. While small businesses from each city and state gives Advocacy a different picture of the regulatory landscape across the country, there are common themes heard loud and clear —frustration and desperation on behalf of the small businesses.
“We are struggling, yet we are the good guys who are doing all that we can to stay afloat,” explained a Virginia small home health care provider. When faced with regulations that they consider to be “poor policy” many small businesses in Virginia told Advocacy they feel as if they are drowning in unnecessary regulatory costs.
A variety of specific regulations were highlighted by small businesses at the roundtable; including rules from the Federal Highway Administration, the Department of Labor, the Environmental Protection Agency, the Federal Motor Carrier Safety Administration, the Federal Emergency Management Administration, the Food and Drug Administration and so many more. With so many regulatory concerns facing small business in Virginia, Advocacy will continue to ensure that these voices at the roundtable and those across the country continue to be heard.
Congressman Brat, who sits on the House Small Business Committee, assured the roundtable attendees that small business concerns in his state are a priority for his office and that he will do everything he can in Congress to fight on their behalf. Brat also promised to work closely with Advocacy as summaries from our Regional Regulatory Reform Roundtables are provided to encourage common sense changes to unnecessary and overly burdensome federal regulations affecting Virginia small businesses.
“The willingness of senior leaders at the Small Business Administration Office of Advocacy to make their rounds and come visit the 7th District to hear from small business owners is proof the Trump Administration is committed to listening and wants small businesses to succeed,” Rep. Brat said in his office’s press release. “By working together, I am confident we can identify legislative solutions to deliver results to hard working Virginia business owners.”
For more information on the Regional Regulatory Reform Roundtables, where the next Advocacy event will be held, and what progress is being made on these important small business issues, please visit our website.
By Janis Reyes, Assistant Chief Counsel
The Office of Advocacy hosted a Regional Regulatory Reform Roundtable in Glen Allen, Va., at the request of U.S. House Small Business committee member Rep. Dave Brat to obtain feedback about federal regulations that burden small businesses. More than 50 small businesses and their representatives attended this packed event and urged federal agencies to pursue sensible regulations.
“Today I heard not just stories about inefficiencies here and there, but horror stories across every industry represented about regulations forcing small businesses to permanently shut their doors,” Brat commented in a statement after the event.
Small businesses in the home health care industry expressed anxiety with rising health care costs and paperwork burdens under new health care regulations. Another worry for these companies was the low reimbursement rate for Medicaid services at only $13 per hour in Virginia, a state with a high cost of living. One small business noted as an anecdote that you couldn’t even hire a high school babysitter at these rates. One home health care company recommended reform of a 2015 Department of Labor regulation which changed the companion care exemption for workers who provide services for elderly individuals; those working at third party agencies would have to be paid overtime. One participant commented that this rule has resulted in employers having to cut employee hours because their clients could not afford overtime payments.
Premium cigar companies cited the high compliance costs and cumbersome requirements of the Food and Drug Administration’s Tobacco Deeming Rule. According to participants, many of these companies are now deemed to be manufacturers, subject to extra testing and reporting requirements. One small business stated that this rule has resulted in thousands of dollars in costs and has put up barriers to entry or expansion for businesses in this industry. The FDA has recently delayed the enforcement dates of several of the compliance requirements of this Deeming Rule.
Multiple companies in the transportation industry expressed concern regarding regulations by the Federal Motor Carrier Safety Administration, which assigns Safety Measurement Systems scores for trucking companies. One brokerage company that coordinates trucking shipments stated that many trucking carriers are not rated with a SMS scores or data on whether they are out of service. Multiple small trucking companies commented that their drivers were not responsible for accidents that occurred on the road, but these incidents hurt the companies’ safety ratings. In both of these cases, it took months and many manager hours to fix these safety ratings.
After this roundtable, Advocacy visited VHI Transport, a small transportation intermediary in Chester, Va. Representatives from this company were also concerned about FMCSA’s rules about SMS scores and electronic logging devices. One small business manufacturer cited a Federal Highway Administration policy that required the re-testing of traffic signs, even though there was no data regarding accidents involving their products.
Small businesses also mentioned problematic labor regulations and environmental regulations. One representative for the National Association of Home Builders mentioned a litany of federal regulations from many federal agencies that are responsible for 25 percent of the cost of building a home in the United States. While small businesses expressed frustration with federal agencies for their regulatory burdens, many participants expressed support that the Office of Advocacy and their legislative representative are listening to their concerns.
By Bruce Lundegren, Assistant Chief Counsel
The Office of Advocacy hosted a Regional Regulatory Reform Roundtable in Glen Allen, Virginia — just outside of the state capital Richmond — Oct. 16th that attracted dozens of small businesses and their representatives who were eager to discuss federal regulations that burden small business. The meeting also featured participation by Congressman Dave Brat, who represents the district in the U.S. House of Representatives.
Following the roundtable, Advocacy staff visited VHI Transport, a woman-owned transportation company that was established in Chester, Va., 40 years ago. VHI operates two distinct lines of business, a trucking transport operation and a transportation brokerage service. Advocacy was hosted by Bruce Gee, the President and Chief Operating Officer of VHI Express (the trucking operation), and Kristy Seaton, the Chief Operating Officer of VHI Transport (the brokerage service).
Ms. Seaton explained how transportation – or freight – brokers operate. They are the intermediaries between a shipper who has goods to transport and a carrier who is able to move that particular freight to the desired location. While this is mostly done by truck, VHI also arranges for transit on rail, air, and barge. While they are not directly regulated by trucking regulations, the companies they contract with are. VHI arranges for the movement of everything from agricultural products and pharmaceuticals to aggregates and electronic equipment. While they mainly service the mid-Atlantic and Midwest regions, their services cover the entire country as well as Canada and Mexico.
Ms. Seaton also demonstrated VHI’s computer system which identifies qualified transporters who are authorized and qualified to handle the particular cargo to be picked up and delivered. There are, literally, thousands of companies. She also explained how they use Safer Web, a service that tracks companies’ qualifications and links the broker to the Federal Motor Carrier Safety Administration’s (FMCSA) safety evaluation database.
Mr. Gee oversees the trucking side of the VHI operation, which has its terminal in downtown Richmond. These are the actual trucks that carry and deliver freight. Mr. Gee, who attended Advocacy’s Glen Allen roundtable, noted several regulatory issues that impact his business. The two main ones are the FMCSA’s impending mandate to install and use Electronic Logging Devices and the FMCSA’s use of Safety Measurement System data to evaluate carriers and drivers. Mr. Gee would like a delay in the ELD mandate and a complete re-thinking of the SMS methodology.
Please join us in Iowa as we continue our roundtable road trip across America to hear from you!
Advocacy is hosting small business roundtables in order to hear, firsthand, from small businesses facing regulatory burdens. Come tell us which federal agency regulations should be considered for reform or elimination. Let us know which regulations are problematic for your business.
The purpose of the Regulatory Reform Roundtables is to gain valuable insight into which specific federal regulatory burdens present the biggest barriers to small business growth. With these recommendations, Advocacy can better assist federal agencies in complying with President Trump’s directives to reduce burdensome regulations. Additionally, information compiled from this roundtable and others will help Advocacy generate a new report informing Congress and the public of the top regulatory issues for small businesses.
You can register for the most convenient roundtable:
By Bruce Lundegren, Assistant Chief Counsel
While California’s fertile San Joaquin Valley might be more famous for its production of almonds and other commodities, the area also produces over one billion dollars of walnuts each year. For that reason, Advocacy staff visited the Great Pacific Nut Company in Westley, just outside of Modesto.
Great Pacific Nut Company – a small business with 12 full-time employees – was founded in 2012 by Dan Hepler and Chris Reece. Dan and Chris run the processing side of the business while Chris’s brother Zac oversees the planting and harvesting of the walnuts.
The journey began on land that has been farmed by Zac’s family for several generations. In 2005 they planted 40 acres of walnuts to add to their other plantings. Walnuts are time-consuming to farm, as it takes about four to five years from the time a walnut tree is planted until it produces its first yield. Zac and his family have slowly expanded their walnut plantings from the original 40 acres to over 250 acres today.
Walnut harvesting involves mechanically shaking the nuts from the trees and then scooping them up with harvesters. Harvested nuts are taken to a “huller” that removes the green hulls from the shell and then dries the nuts in gas dryers (until they reach the appropriate moisture content). When dry, the nuts are ready for storage or processing. Processing involves cracking the nuts, separating them by size and quality, and then packaging them for shipment. Great Pacific’s walnuts are sold shelled or unshelled, in bulk. However, walnuts, like other tree nuts, must be processed and stored properly, as poor storage can make walnuts susceptible to insects and fungal mold. California producers and processors like Great Pacific are held to strict food handling and safety practices.
Great Pacific processes all of its own walnuts plus those of some thirty other area growers. About 90 percent of their production is exported abroad where high quality walnuts fetch premium prices. Their largest export markets are to Turkey, Germany, South Korea, and other countries. Domestic walnuts are sold for personal consumption as well as to candy and snack manufacturers.
Dan and his partners at Great Pacific are excited about the future. They are planning to build a new processing plant for the 2019 season as they are quickly outgrowing their current facility.
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.
Bruce Lundegren is an Assistant Chief Counsel for Advocacy whose portfolio includes safety, transportation, and security. Lundegren can be reached at email@example.com.