[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






    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



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   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    DENNIS J. KUCINICH, Ohio, Ranking 
    Chairwoman                           Minority Member
CONNIE MACK, Florida                 JIM COOPER, Tennessee
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          BRUCE L. BRALEY, Iowa
FRANK C. GUINTA, New Hampshire
MIKE KELLY, Pennsylvania












                            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

 
    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 government 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 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.
    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.
    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:]




    
    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.
    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 re-election 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 
well-meaning, 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.
    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:]




    
    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?''
    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 5\1/2\ 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.
    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:]




    
    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.
    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.
    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 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 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 elsewhere, 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 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.
    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 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 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.
    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:]




    
    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.''
    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.
    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:]




    
    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 
1\1/2\ 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 cumbersome, 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:]




    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.
    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 year-round 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 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 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.
    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.
    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, 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 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.
    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.
    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.
    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:]




    
    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 multi-million 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 
interpretation 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:]




    
    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 inmate-on-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.
    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:]




    
    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.
    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.
    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 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-size-fits-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 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.
    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 
enlightening, 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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