Ernst Discusses Unchecked Regulations, Prove It Act at Small Business Hearing

WASHINGTON, D.C. – At yesterday’s Senate Small Business and Entrepreneurship Committee hearing on examining how small businesses confront and shape regulations, U.S. Senator Joni Ernst, a member of the committee, discussed with hearing witness Mr. Randy Noel, President of Reve Inc. and First Vice Chairman of the National Association of Home Builders, the rules and regulations that impact America’s small businesses.

Senator Ernst highlighted her legislation, the Prove It Act, which would provide a check on federal agencies that too often issue rules without completing enough analysis to determine how that rule would impact small businesses.  As an example, the Iowa Senator referenced the Waters of the U.S. rule, which would cover 97 percent of Iowa. Mr. Noel agreed that the opportunity for a second look at these federal agencies’ analysis would be beneficial to the small businesses who felt they were unjustly fined.

Click here or on the image below to watch Senator Ernst’s discussion with Mr. Noel.

Senator Ernst: “Thank you Mr. Chair. Mr. Noel, thank you for being here today and testifying. Your testimony was spot on when you spoke about Waters of the US. I appreciated that very much. Really had some interesting interactions through their rule making process when the EPA came up with that version of WOTUS, so thank you.

“That rule gave the EPA the power to regulate 97 percent of Iowa. Not 97 percent of Iowa’s waters, 97 percent of Iowa. So that really hit home with me. So you better believe that when that happened, when that rule was implemented, that our small businesses were impacted at home.

“And it was EPA’s failed rulemaking process and its lack of consideration for those small businesses that led me to work on legislation that I introduced last year called the Prove It Act. And we are currently working on what we consider a 2.0 version of the Prove It Act and we’re requesting lots of feedback from different groups.

“At its core, the bill seeks to strengthen the voice of small business owners and improve the quality of agency certifications and analysis, which we felt was lacking, as we went through WOTUS.

“Last year, we had the support of NFIB, the Chamber, and Women Impacting Public Policy. It’s a good government bill that says if there is a difference in opinion between the office of advocacy and a federal agency on the economic impact of the rule, such as the certification, then advocacy should have the ability to request that the agency take a second look at its analysis, which we feel is reasonable.

“It would serve as a check on whether agency certification of ‘no impact’ on small businesses is correct, which is a need that you mentioned in your testimony, so thank you for highlighting that.

“So my question to you, Mr. Noel, is this: do you think providing greater accountability for agency certifications would improve the rulemaking process and outcomes for small businesses?”

Mr. Noel: “Well absolutely. If you have no accountability, you can do anything you want to do, knowing there’s no repercussion. To tag on to the story, we had builders on the north shore in St. Tammany that were making sure that the dirt didn’t go into the street but had not had the right paperwork filed to prove that they inspected it weekly and 24 hours after the rain. Got fined $1500. They were accomplishing the goal of runoff, but because the paperwork wasn’t – same thing happened with lead paint on a remodeler. Because he hadn’t had a document saying he’d given a pamphlet to a homeowner, he got fined. Now come on. And there’s nothing you can do about it because the fine is not enough to justify hiring a lawyer and suing them, although Volks Construction did that in Baton Rouge and won, but this is not fair to the small American business.”

Senator Ernst: “Right, so we do think there should be a check and a balance-”

Mr. Noel: “Absolutely.”

Senator Ernst: “-available there so if there is a question, go back and have them take a second look at it. We’re hoping to gain a little traction on that piece of legislation this year or in this Congress, so thank you for that. And second, in your experience and in your role with the National Association of Homebuilders, how many proposed regulations would you say were either improperly certified by agencies or made it through the process without thoughtfully considering the comments of the small business community? Just an estimation in your part.”

Mr. Noel: “How many rules came out in the last eight years? Or the last twelve months? Hundreds?”

Senator Ernst: “Thousands.”

Mr. Noel: “I know that we’re dealing with right now at least five that we’re spending court money on to stop. That’s not a very good use of our member’s money, especially if we could stop the rule from going in place before it harms the small business.”

Senator Ernst: “Absolutely, and that’s why I think the Prove It Act is necessary, if there is a discrepancy that can be shown, it can be reevaluated before its promulgated.”

Mr. Noel: “Oh, that’s wonderful.”

Senator Ernst: “Yeah, anyway, thank you very much, gentlemen, for being here today. I appreciate it. Thank you.”