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We are from the government; We are here to help [your business]?

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Federal, state and city government agencies are crucial partners to many businesses. Regulation ranges from determining import tariffs on goods and the tonnage a truck can carry, to proper workplace safety procedures to sanitation requirements for combs and brushes.  Government agencies’ rules and regulations define, clarify and sometimes muddy the water swum in by the big and small business fish.


Federal and State agencies are created by the legislature, often to oversee specific realms of commerce or interactions in business. These agencies can be given the power to create rules and regulations that carry the force of law, and can take action to enforce their rules against businesses or individuals.


Who makes the law affecting your business? The Department of Health and Human Services, Department of Agriculture and the Environmental Protection Agency are just a few prolific rule-makers, and compliance considerations can be especially daunting considering that the rules are enforced by the Department of Justice which includes the FBI, DEA, INS and US Marshall Service.


For example, the FDA recently sent a warning letter to a Canadian company stating their website is marketing products that are intended to treat or mitigate symptoms of the H1N1 flu virus, but the company has not yet received FDA approval for sale in the U.S. While this may seem a bit far from home, the small mom-and-pop holistic medicine shop across the street may be subject to the same FDA regulations as Bayer and Pfizer. The difference is in the ability to afford a legal defense and penalties for rule violations.


In Iowa, the EPA’s recent decision to tighten air pollution levels may force some Muscatine County businesses to invest large amounts into controlling pollution from existing factories to comply with the new air quality standards.

Also, the family farmer must comply with wide ranging regulations from the Iowa Department of Natural Resources to the multiple aspects of the Department of Agriculture. Iowa farmers may find they are soon involved with the EPA in the same way that the EPA is currently involved with Amish and Mennonite dairy farmers in Lancaster County, Pennsylvania to stop manure run off from fields and pastures.


The examples that get the most press involve large companies, and the state or federal court system may be called upon when agency rules are violated or decisions are appealed. For example, the Supreme Court recently decided the case Monsanto v. Geertson Seed Farms, about the USDA decision to allow sales of a genetically engineered alfalfa seed before completing an Environmental Impact Statement. Environmental groups and conventional alfalfa growers brought suit to stop the sale of the seed until an EIS was completed. A district court entered an injunction banning the sale of the genetically engineered seed pending the completion of the EIS and Monsanto appealed. Ruling for Monsanto, the Supreme Court overturned the lower court’s ban on the sale of genetically engineered alfalfa seed so that limited sales could occur until the final impact statement was completed.


The same rules that govern large corporations apply to Joe and Jane Business-owners. Savvy business people keep their ear to the ground and sometimes even have a compliance officer on staff. You may be able to give input on proposed regulations before they take effect, or change your business ways before a regulation is enforced. Often, administrative regulations take years to develop and agencies may allow input from those potentially affected by proposed regulations. Even after a regulation is passed, there may be a certain amount of time given for your business to become compliant with the new rule/regulation. Keep up-to-date on your industry’s news and developments. You just may be able to defer agency action or spread out the costs of compliance over a couple years, instead of a couple months.


Quick Rules for dealing with Agencies:

-    If you are too small to have a compliance officer, have one person whose job is to review and stay in compliance.

-    Have a yearly review of compliance for each agency that regulates you. During that review, make sure you have up-to-date manuals and checklists.

-    Subscribe to newsletters or email from each of those agencies.

-    Get to know your agencies and officers. Most agencies prefer initial compliance over initiating penalties.

Learn which agencies affect you. In Iowa, the list may include:

-    Department of Natural Resources

-    Department of Public Health

-    Department of Public Safety (including Fire Marshall)

-    Workforce Development

-    Department of Revenue


As you are developing, look to their websites and reference materials for tips on compliance and maintaining good status. Otherwise, you may have to deal with the government when they show up at your door to “help”.


- Christine Branstad


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