Public Citizen to Congress: Don’t Give Businesses a Free Pass on Paperwork Reporting Requirements

Sept. 26, 2006

Public Citizen to Congress: Don’t Give Businesses a Free Pass on Paperwork Reporting Requirements

Proposed Law Would Limit Flow of Information and Put Public at Risk, Public Citizen Testifies

WASHINGTON, D.C. – Congress should not give small businesses a free pass for failing to provide information the public needs, Public Citizen told Congress today. Robert Shull, Public Citizen’s deputy director for auto safety and regulatory policy, testified today before a House subcommittee against a bill that would give amnesty to businesses that neglect to collect and report information that could be vital to public health and safety.

Shull raised concerns before the Subcommittee on Regulatory Affairs of the House Committee on Government Reform about “The Small Business Paperwork Amnesty Act” (H.R. 5242), which would revise the Paperwork Reduction Act. The bill would eliminate fines for first-time violations of paperwork requirements as long as the company complies within six months of notice of the violation.

“H.R. 5242 would staunch the flow of information and put the public at unnecessary risk,” said Shull. “Under the guise of benefiting small businesses, this bill would create perverse incentives for corporate interests to refuse to provide the information we need to protect the public.”

Currently, agencies almost always waive fines for first-time paperwork violations. H.R. 5242 could encourage even more violations because small businesses would know they could avoid reporting requirements until they are caught for the first time. Moreover, “first-time” exemptions would apply to each individual government agency, allowing for multiple violations of different agencies’ requirements. The bill would have the perverse effect of putting law-abiding businesses at a competitive disadvantage while denying the public vital information to protect public health, safety, civil rights and the environment.

The bill would affect enforcement of information collection requirements that are essential to safeguarding the public. For example, when a worker safety protection is issued, businesses often need to report information so that agencies know whether or not businesses are complying and workers are getting the full benefit of the new protective standard. The Environmental Protection Agency (EPA) relies on self-monitoring and reporting under the Clean Water Act and the Safe Drinking Water Act to head off potential dangers to the water supply. Firefighters rely on businesses to report on hazardous chemicals so they can respond safely and effectively to potential chemical fires.

“H.R. 5242 is blind to the value of information and puts all of these important safeguards at risk,” Shull testified.

H.R. 5242 also does little to reduce or eliminate paperwork for small businesses, instead merely granting immunity to violators of the law. It excludes Internal Revenue Service paperwork, which is responsible for more than 75 percent of current paperwork burden. In contrast, all other agencies combined do not amount to even 25 percent. The EPA accounts for a mere 2 percent and the Occupational Safety and Health Administration is responsible for even less.

“What’s at stake is not simply mindless government ‘paperwork,’” Shull said. “This bill would affect almost every single federal requirement for reporting, labeling or collecting the information we need to protect the public.”

“Congress should be considering options that enable small businesses to continue to be the engine of economic growth in this country while helping them to be good corporate citizens,” Shull testified, advising the committee to explore alternatives that do not reduce the quantity, quality or utility of information for the public.

To read the full testimony, visit click here.

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