Senator LEVIN. Thank you, Mr. Carey. TESTIMONY OF JOHN H. FITCH, JR., DIRECTOR OF GOVERN- Mr. FITCH. Mr. Chairman, I am director of Government Affairs of the National Society of Public Accountants. I am appearing today on behalf of the Small Business Legislative Council, an organization of national trade and professional associations whose membership is primarily small business. SBLC focuses on issues of common concern to the entire small business community. The SBLC membership and their affiliates represent approximately 4 million small business firms nationwide. The Small Business Legislative Council is happy to endorse, in principle, the measures being considered by this committee. The SBLC has endorsed three policy position papers which apply generally to the bills being considered today. These positions cover "TwoTier Regulation," "Sunset Laws," and "Cost Justification for Regulations." These three papers appear as attachements A, B, and C to our complete statement. Basically, SBLC firmly believes that if all Federal departments and agencies are required to assess the actual or perceived need for a particular rule or regulation, and further, to evaluate the economic, competitive, cost, compliance, and paperwork impact of such a proposal, they will be forced out of the regulation mentality and either select an alternate mode of assurance or the least burdensome rule or regulation that adequately fulfills that need. In addition, with judicial review, sunset and congressional oversight, if a perceived need fails to materialize or an actual need fails to rise to such a level as to require rulemaking attention, such a rule or regulation can be eliminated without substantial harm either to the public health, safety, and welfare or to the public's checkbook. The important factor that must not be lost sight of is the need for flexibility in the regulatory process to provide for the consideration of the impact on small business of a rule or regulation and the ability to make that impact be it economic, competitive, et cetera, substantially less while still insuring adequate compliance. SBLC concurs with the significant or major rule threshold concept of the bills as well as the paperwork and competition aspects of S. 93 and S. 755, it should be noted here that S. 262 does not contain the latter two provisions. S. 262 does not contain the latter two provisions that relate to paperwork and competitive impact statements. We also support the use of performance standards rather than design standards as a method of evaluating the goals or objectives of a particular rule. We believe that the tools necessary to accomplish this task are contained in the bills being considered today. It is our hope that you will be able to incorporate the best provisions of these bills in your final report. 50-941 0 80 77 Finally, we ask the committee to consider to what extent the law should be made applicable to legislation under consideration by Congress. There can be no doubt that the determination of the economic impact of legislation is far more difficult and speculative than for more detailed regulations. That does not mean, however, that there should be no attention given to the potential economic effect of pending legislation. This concludes our presentation, Mr. Chairman. Thank you. [The prepared statement of Mr. Fitch, with attachments, follow:] STATEMENT SMALL BUSINESS LEGISLATIVE COUNCIL BEFORE THE SENATE COMMITTEE ON HOLDING HEARINGS ON S.93, S.262, S.455, and S.755 May 18, 1979 Mr. Chairman and Members of the Committee: My name is John H. Fitch, Jr. I am Director of Government Affairs of the National Society of Public Accountants. I am appearing today on behalf of the Small Business Legislative Council (SBLC), an organization of national trade and professional associations whose membership is primarily small business. SBLC focuses on issues of common concern to the entire small business community. The SBLC membership and their affiliates represent approximately four million small business firms nationwide. The Small Business Legislative Council is happy to endorse, in principle, the measures being considered by this Committee. The SBLC has endorsed three policy position papers which apply generally to the bills being considered today. These positions cover "Two-Tier Regulation", "Sunset Laws", and "Cost Justification for Regulations." These three papers appear as Attachments A, B and C to this statement. It has long been our contention that "Joe's Machine Shop" and General Motors cannot be treated in the same manner by regulatory agencies. In the case of regulations, if you have equality in proposing, you have inequality in application. With respect to both substance and procedure, small business -2 should in every case bear a different compliance burden. Since so many regulations have come into effect in an effort to control the practices of the largest companies, small business should not suffer entanglement in the same regulatory net; the social benefits of applying regulations to small firms is always diluted. Small business is different in terms of its ability to comply and also in its economic impact on the community. A few years ago during hearings by a Subcommittee of the House Committee on "I had not fully realized until I came to Washington how |