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RESOLVED

The Small Business Legislative Council urges Congressional hearings to study how best to achieve the most effective representation of the interests of small business within government. Such an analysis should include consideration of the establishment of a truly Independent agency (an independence comparable to that of the Securities and Exchange Commission but without its regulatory authority) to represent small business within government. It should promote from the small business community truly vigorous competition to entrenched and concentrated industries, including oversight of the 1980 small business omnibus legislation which, among other provisions:

• required the President to report annually on the state of small business and the impact of Federal programs on small business and competition.

• required that SBA create and maintain a data base of small business economic information.

• established a federal Small Business Economic Policy.

Consideration should also be given by Congress to transfer (from the FTC) to such an agency, of the Bureau of Competition (Including Robinson-Patman Act enforcement) and the Bureau of Economics.

Because of the salutory track record of the House and Senate Small Business Committees, we urge that consideration be given by Congress to retention by such Small Business Committees of legislative authority over any new agency of government established to represent small business. We urge further that the House and Senate Small Business Committees' authority be retained over any existing programs of the Small Business Administration, regardless of whether such programs are continued under the Small Business Administration or transferred to other agencies of government.

EXECUTIVE REORGANIZATION OF

THE SMALL BUSINESS ADMINISTRATION (SBA)

In a November 14, 1980, memorandum to President-
elect, Reagan from his Small Business Issues Task
Force the following was recommended:

"There should be an immediate and thorough
review of the Small Business Administration
and its programs, leading to an early decision
on whether to retain the SBA in its present
form. An alternative which should be carefully
considered would be to incorporate the SBA
within the Department of Commerce . . . In
any event, all SBA loan programs should be
thoroughly examined to determine if they can
be transferred to the private sector."

RESOLVED

Any plan to change the SBA, to restructure the agen-
cles involved with small business programs, is a mat-
ter of serious concern to small business. The Admin-
istration must provide opportunity for small business
input before any reorganization takes place. Until
there is assurance that small business interests will be
effectively represented within the government, the
status of SBA as presently structured should be con-
tinued.

TWO-TIER REGULATION

In the past few years the number of Federal regulatory agencies has grown, and so has the accompanying regulatory burden upon the private sector. Traditionally, government regulation has been applied equally to all companies across the board, without regard to the company size or impact on the economy. Statutory protection of the well-being of American citizens, while in many areas necessary, need not be the deterrent to economic progress it has become.

Small business is especially hard hit by excessive regulation, particularly when required to comply with regulations tailored to giant corporations. Unlike the larger companies, small business firms often haven't the time, personnel or expertise to meet the requirements of federal regulations. The small business owner wears many hats in the day-to-day operation of his business-the time and resources spent meeting often-frivolous government policy objectives erodes his effectiveness as a manager, his competitive stance, and his place in the local economy.

For these reasons, a flexible, tiered regulatory system has been adopted by Congress. When General

Motors and Joe's Machine Shop are required to meet the same government standards, they are not being treated equally or fairly. With respect to both substance and procedure, small business 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 continue to suffer from entanglement in the regulatory net; the social benefits of applying regulations to small firms are always diluted. Small business is different in terms of its ability to comply and also in its economic impact on the community. These facts should be recognized by the Congress and the regulatory agencies of the government by implementing flexibility in regulations, thereby leading to a reduction in paperwork and compliance burdens borne by small business.

Achieving this goal will require vigorous Congresslonal oversight of the implementation of the Regulatory Flexibility Act. Federal agencies must be required to comply with both the letter and the spirit of this landmark law.

RESOLVED

The Small Business Legislative Council urges the nggressive enforcement of a flexible, multi-tiered system of regulation, as mandated by Congress in 1980, in order to equalize the compliance burden of all companies. Congress should oversee the enforcement of flexible regulation and rules, and in addition, seek other legislative remedies, such as tax incentives to spur compliance.

COST JUSTIFICATION FOR REGULATIONS

Excessive government regulation is a significant in-
flationary factor. In fiscal 1979, the aggregate cost of
government regulation was expected to reach $102.7
billion, a 30 percent increase over fiscal 1978
estimated cost of $79.1 billion.

The cost of complying with government regulations
has been estimated at $3,600 per year for every small
business in the land. Most small firms are experienc-
ing inordinate amounts of financial and managerial
problems in their attempts to comply with the pro-
liferation of regulations generated by federal agen-
cies.

The time and energy spent on federal paperwork, and
the large capital expenditures required to meet en-
vironmental standards, job safety standards or other
mandatory standards can be a matter of life or death
for a small business. The inability of a small business
to finance the cost of mandatory compliance is
reflected in the higher direct costs a small business in-

curs.

The Administration is attempting to deal with this
problem by means of Executive Order.

Many pieces of legislation have been introduced to
remedy the situation, but in many cases these bills are
too narrowly drafted and apply only to the indepen-
dent regulatory agencies and do not cover the Ex-
ecutive branch. One exception is the Paperwork
Reduction Act of 1980.

Another remedy can be found in the Regulatory Flex-
ibility Act of 1980. This law requires federal agencies
to study the impact of proposed rules on small
business prior to publication of new regulations

RESOLVED

The Small Business Legislative Council urges passage
of broad based legislation to reform the regulatory
system, by way of imposing cost justification re-
quirements upon the regulators prior to implementa-
tion of regulations, and recommends that the same
requirements be placed upon the legislative process.

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