The Drive For Regulatory Reform Hits The Highway

Evening sessions, bringing bills up for floor votes in a matter of days instead of weeks and cutting back the layers of red tape is behavior not often associated with our representatives in Washington. But in the era of a new "meaner, leaner" Congress, this behavior has become commonplace. And at the center of this beehive of activity is a rock-solid commitment from the Republican leadership to make regulatory reform a reality.

Regulatory reform has always been seen as the prize on top of the mountain for pest control professionals burdened with overlapping and often contradictory regulations. The regulations imposed by agencies such as the Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA) and the Department of Transportation (DOT), while well intentioned and justified in many cases, have also added to the cost of doing business for PCOs, many of whom already run on a thin financial line.

The passage of regulatory reform legislation such as H.R. 9 (Job Creation and Wage Enhancement Act of 1995) and H.R. 450/S. 219 (Regulatory Transition Act of 1995) in the House of Representatives sends a strong signal that the "Contract With America" has been drawn up to benefit small businesses, like pest control companies, who make up the backbone of the American economy.

However, it must be cautioned this new package of regulatory reform legislation, while garnering strong support among House members, will face a much tougher challenge when it moves across the Capitol Rotunda to the Senate, and an even tougher challenge when it makes the trip down Pennsylvania Avenue to the White House. It must also be remembered PCOs won't wake up tomorrow morning and find a land of milk and honey when it comes to regulations. Regulations will still be there, but the long-term benefits of reform will eventually come.

BACK IN TIME. To explain fully how this sweeping legislation could impact PCOs, we must first take a look back at the origins of regulatory reform, and how it became a priority of the 104th Congress and small business owners everywhere.

In the 1950s and 1960s the American environment was in sad shape. Between the dumping of toxic wastes into our rivers and the belching of hazardous fumes into the air, Americans were unknowingly, in most cases, being exposed to some serious health risks. This is why agencies such as the EPA were formed and in the beginning the benefits of their actions literally saved our environment for the next generation.

Unfortunately, the mission of these agencies, while clear cut at the outset, became clouded and misdirected. As time progressed and the original reform goals were met, these agencies took to adding layer upon layer of unnecessary additions to existing regulations and this is where the wild child of regulatory reform was born.

"The environmental regulations established in the '60s and '70s made sense and were a great benefit to the country, but unfortunately those agencies wanted to continue regulating when it wasn't necessary," said Bob Rosenberg, director of government affairs for the National Pest Control Association (NPCA). "These agencies have become large, unwieldy bodies whose lifeblood is drawn from creating new regulations, and that simply isn't practical today."

A prime example of the absurdness caused by the overdevelopment of the regulatory process comes in the form of the Federal Register, the government's in-house record of all regulatory and legislative activity. During the last 12 months alone, the federal government published 67,927 pages of notices, proposed rules and final regulations.

Another by-product of agency over-growth has been the introduction of government bureaucracy to the regulatory process. Overlapping and contradictory regulations set by different agencies with different agendas has added to the confusion faced by industries such as pest control. There have also been instances where agencies have created regulations simply to justify departmental budgets and staffing, without any consideration of the economic impact on businessmen who must comply with these regulations.

"Today, the issues of cost/benefit analysis, comparative risk analysis and the economic impact on small business must be considered when establishing regulations and that is the goal Congress is aiming for with this legislation," said Rosenberg.

SLAYING THE MONSTER. Going about regulatory reform is much easier said than done, especially with an Administration that favors regulation. But the landslide Republican victory in last November's elections put the drive to reform the regulatory process in high gear. The initial skirmishes have yielded positive results and the future picture is quite positive.

At the centerpiece of the regulatory reform movement are H.R. 9 and H.R. 450/S. 219 which make sweeping changes to the existing regulatory structure. These pieces of legislation, which have drawn strong criticism from the Clinton Administration, include long sought after industry goals such as cost/benefit analysis and risk assessment, and have the potential for radically changing the way regulations are made.

The first piece of legislation, the "Job Creation and Wage Enhancement Act of 1995" (H.R. 9 — one of the original pieces of legislation in the "Contract With America"), focuses on the key issues such as requiring accurate risk assessment and cost/benefit analysis, and strengthening the Paperwork Reduction Act and Regulatory Flexibility Act. If passed into law, this legislation would force federal agencies to base their future regulatory decisions on sound science and business principles — a real benefit to PCOs.

"This legislation would remake the way business is done in Washington and would force agencies to be more accountable when creating regulations," said Rosenberg. "Enacting the principles of sound science and common sense is what the pest control industry has promoted for years, and this legislation is the first step in guaranteeing that it becomes part of the decision making process."

The second piece of legislation that breaks down the regulatory reform wall is the "Regulatory Transition Act of 1995" (H.R. 450/S. 219) which would place a moratorium on new rulemaking until December 31, 1995 to allow Congress time to adopt a new regulatory reform package. This piece of sweeping legislation would stand to reduce the amount of regulations constricting small business and start the push for greater reform in the future.

PCOs should understand passage of this legislation would not eliminate any existing regulations or make them void. The legislation also will not prohibit the introduction of new regulations necessary to protect the public from imminent threats to public health and safety or those involving enforcement of criminal laws.

According to Norm Goldenberg, vice president of government affairs for Terminix International, the world's largest provider of pest control services, this legislation is the beginning of a new era in the regulatory process — an era that hopefully will be marked by regulations proposed with common sense in mind.

"PCOs won't see a drastic change overnight in the amount or nature of regulations, but they will see the benefits of this action in the long term," said Goldenberg. "This legislation will curb government agencies from creating unnecessary regulations and force them to interpret the need for regulation more sensibly. It should also give the industry greater input with the regulatory community when it comes to drafting future regulations."

A prime example of the type of poorly constructed regulations this legislation would eliminate is the one proposed by OSHA regarding indoor air quality and the application of pesticides. The rule, which was part of a much larger agency effort to eliminate smoking in the workplace, was literally buried among a 100-page document dealing with indoor air quality and was so vague that compliance by PCOs would have been nearly impossible.

The proposed rule, which raised more questions than answers, would require any person applying a chemical, insecticides included, in a public building to notify employees of this action. It also failed to properly define a workplace, procedures for notification (written versus posted) and what to do when making an emergency application.

For instance, the rule failed to specify if a PCO making a crack and crevice application in a bathroom on the 12th floor of a 50-story building had to notify only those people using the bathroom or everyone in the entire building. If the latter was the case, the cost of notification alone would be so prohibitive a PCO would probably not even bid for the business.

"It is this type of regulation that all small business owners can do without and would never pass the scrutiny of a cost/benefit analysis," said Rosenberg. "Regulations have an important place in the pest control industry and we support responsible regulation that protect consumers and environment, but we don't support regulations that impose an economic burden to PCOs and fail to provide a benefit to the public."

NOW AND LATER. The immediate results of the regulatory reform movement currently moving its way through Congress will be dramatic, but not as important as what it could set the stage for in the years ahead. In the short term, a moratorium on regulations would reduce the overall number of regulations being created and ideally spur business development for PCOs. In essence, Washington is changing the rules in order to come up with a formula for making better rules in the future.

"We are at the beginning of a long-term process that could produce a complete and fundamental change in the way small businesses are regulated in the United States," said Rosenberg. "This won't be accomplished overnight, but the seeds have been planted and the groundwork laid for future action."

As Rosenberg and other regulatory watchers have indicated, the long-term benefits of regulatory reform as members of the 104th Congress see it are significant. Once a framework is said Rosenberg. "This won't be accomplished overnight, but the seeds have been planted and the groundwork laid for future action."

As Rosenberg and other regulatory watchers have indicated, the long-term benefits of regulatory reform as members of the 104th Congress see it are significant. Once a framework is set for how regulations will be developed in the years ahead, Congress is likely to go back and review the viability of existing statutes. However, it should be mentioned agencies do not deserve all of the blame for bad rule making. In many instances they have simply reacted to the hand they've been dealt by Congress.

"Many of the regulations currently on the books are self-defeating to small business owners, like PCOs, and we need regulatory reform to keep our businesses viable," said Mike Katz, general manager of Western Exterminator in Irvine, Calif., and chairman of the NPCA's Government Affairs Committee. "Congress needs to take a closer look at existing regulations and make corrections as needed."

A good example of the pressing need to update existing regulations is a case in California involving the Endangered Species Act. The act, which was designed to safeguard endangered animal species from human and environmental threats, prohibits the use of pesticides in "critical habitats" where endangered animals and/or plants may live.

This, however, is not good news for the management of a food processing facility in the San Joaquin Valley that happens to be located on land considered a "critical habitat" for the San Joaquin Kit fox. This means no rodenticides can be used to protect the facility, and as every PCO knows, rodents and food processing facilities are not a good mix.

"This case demonstrates how well-intentioned regulations can actually cause more harm than good," said Rosenberg. "As the reform process progresses, Congress needs to take a closer look at the economic and health implications of denying pest control services in areas such as these. It is a choice that has to be made — the fox or the American food supply.

"With today's advanced rodent bait technology, a pest management program could easily be designed to control the rodents and not pose a threat to wildlife. This is where industry and government can work together to the benefit of all."

THE OPPOSITION. If you're looking for a second, third or fourth opinion on an issue, Washington is a good place to look, and in the case of regulatory reform there are plenty of dissenting opinions. From the Clinton Administration to the Natural Resources Defense Council (NRDC), the cry of "no fair" is being yelled, and reform opponents are gearing up for the "mother of all battles" to maintain the status quo.

President Clinton has indicated a veto is likely when the bill reaches the Oval Office, and EPA Administrator Carol Browner has gone on record saying that the Republican "Contract With America" would "undermine virtually every public health and environmental protection standard that Americans have come to depend on.... it is a perversion of science and common sense."

The sentiments are no different with environmental groups, like the NRDC who proclaimed their fight against regulatory reform and the "Contract With America" as "the single most important environmental campaign ever." It is good to point out that the NRDC was the organization that brought the Alar apple controversy to light several years back and has proven repeatedly it can garner significant media attention.

Even select members of the Republican-controlled Senate have voiced their concerns over the aggressive, radical approach the House legislation takes towards regulatory reform. Sen. John Chafee (R-RI), chairman of the Senate Environment and Public Works Committee, the committee which has jurisdiction over most environmental statutes, has already expressed his interest in seeing a "watered down" version of the legislation.

"The environmental groups have taken this as the biggest attack against their views ever, and they're working hard to defeat it," said Rosenberg. "Their claims of how damaging reform will be are not based on common sense and sound science."

The accusation that reform will wreak havoc on the environmental well-being of Americans is just not true, according to industry observers. It is a well-known fact that PCOs are required to follow strict label instructions when applying pesticides, and that the "label is the law."

"Regulatory reform will not adversely impact the safety of customers, applicators or the environment," said Katz. "In fact it will do the opposite. The judicious use of pesticides is a reality for PCOs, and through reform that standard will grow. Remember, the pesticide label judges the use of the product, and that's not going to change."

A LONG ROAD. As with any important legislative issue, its success or failure often depends on the efforts of those impacted by the issue. The NPCA encourages its members to write their Senators in the next month or so and tell them how this legislation will positively benefit your company, your customers and your community as a whole.

"What we are seeing is the start of the dismantling of the regulatory system as we know it," said Rosenberg. "Regulations won't or shouldn't be eliminated, but the way these regulations are created and enforced needs to be changed. Even if the reform package doesn't make it past the Oval Office, the seeds for future action have been planted."

The issue of over-regulation has been with the pest control industry for decades, and it will remain the focus of the industry's lobbying efforts in the years ahead. However, this recent flurry of activity in the House of Representatives sends a signal to small businesses that Washington has heard the voices of a concerned America and is finally doing something about it.

Jeff Fenner is Senior Editor of Pest Control Technology magazine.