"Increased fees, bureaucracy, restrictions, regulation and processing time are driving up the costs of running private business on public lands," said Rep. Rob Bishop (R-Utah), the chairman of the subcommittee.
"Properly managed, our land could provide far more toward our economic well-being, our recreational use and our conservation interests," said Rep. Bishop, noting that the government's responsibility was to promote all three interests.
Rick Lindsey, the president and chief executive of the Prime Insurance Company, told the legislators that agencies like the National Parks Service, Bureau of Land Management (BLM) and National Forest Service "are trying to put small operators out of business" through high insurance liability requirements.
Lindsey added that the regulations "can only have the effect of chilling public access" to the outdoors.
The BLM's minimum liability requirements vary depending on level of risk, but can climb up to $10 million per year for companies offering risky activities like bungee jumping and unaided rock climbing.
Teresa Kauffman, who runs a horse farm outside Reno, Nev., claimed that her insurance requirements for one operation jumped from $1 million to $5 million per year, forcing her to abandon the stables.
"This was impossible. We could in no way continue to run the business," she told the subcommittee.
Additionally, under the National Environmental Policy Act, the 1970 law governing multiple uses of public lands, commercial permits need to be approved by the government within a 180-day deadline. The applications can pile up, and Michael Friedman, a managing partner with the outdoor company Adventure Partners, told the subcommittee that a permit will be denied if it cannot be approved in time.
"This scenario effectively creates a permit moratorium," he said, urging more flexibility at the local level.
"Unless we address these issues we're likely to see a contraction in recreation access," added David Brown, the executive director of the American Outdoors Association, a trade group.
"We are, I think, at a point where we have to address these issues or we're going to see some problems down the line. And we're already starting to see them."
Rep. Joe Heck (R-Nev.) made a brief appearance before the panel to warn about excess bureaucracy that can prevent search and rescue volunteers from entering public lands, a circumstance that Rep. Bishop agreed was "an astonishing failure."
Rep. Heck claimed that the searchers "provide a valuable community service and they need to be able to get into the public park and make their search."
He added that he was working on legislation to address "a bureaucratic framework that hinders the acceptance of good samaritans offering their help," and expects to finalize the bill in coming weeks.
The outdoor recreation sector is a $646 billion industry, which Rep. Raul Grijalva (D-Ariz.), the top Democrat on the subcommittee, noted is larger than the pharmaceutical or automobile industries.
On Monday, Rep. Grijalva introduced legislation to create a 21st Century Great Outdoors Commission, which would assess different uses for public lands.