the correspondence files developed during the more than 15 years for which the Federal Trade Commission was requesting information. Our staff is small and the regular duties of the individual members would not have permitted any time for such research, nor would any of the staff members, other than the executive director, have the professional capability to make the judgments required in answering some of the proposed questions. We advised the General Accounting Office that it would take, in our best judgment, several hundred hours more than the 30 hours set forth in the Federal Trade Commission request, and we stated that this, in our judgment, would place an unconscionable burden on the association and that the expense involved would be disproportionate to any possible benefit to the public or the association of its members.

Upon analysis, other bar associations made similar determinations, and so many protests were filed that responsibility for the investigation was shifted from the Boston office of the Federal Trade Commission to the Cleveland office. I should tell you that the Boston office had developed the questionnaire without consulting a single State bar association with respect to the nature of the records kept and with respect to what might be required to provide the Commission with the information which it felt it needed.

Furthermore, there was no distinction drawn between integrated bar associations and voluntary bar associations, such as our own Iowa State Bar Association. In an integrated bar, membership is a condition precedent to the practice of law, and such associations are strictly controlled by the Supreme Courts in those respective States. In Iowa we have a voluntary association which strives to work in close cooperation with the Supreme Court, which controls the practice of law in the State.

At our invitation, representatives of the Cleveland office visited the offices of the Iowa State Bar Association to discuss informally some of those difficulties which we perceived with the original questionnaire as proposed by the Boston office as well as the nature of the operations of our own office and the availability of information from association records. We came away from that meeting convinced that the questionnaire would be substantially revised and the burden substantially reduced. I tell you this as a basis for my own support of the concept, that the law should permit, as S. 299 does, Federal agencies to develop less burdensome reporting compliance requirements for small concerns than for large.

I would go a step further. I would require development of less burdensome requirements for the small entity, and I would suggest that your committee give serious consideration to amending S. 299 to include such a requirement. One of my clients is a relatively small organization conducting its business in three States. This requires that it duplicate its reporting for unemployment tax, sales taxes, property taxes, and income taxes for all three States. It has only a handful of employees in each location, but in trying to provide a balanced compensation package, it has adopted a pension plan and is now burdened with the dual reporting requirements to the Internal Revenue Service and to the Department of Labor.

Because of these requirements and the constantly changing standards for qualification, this business is now seriously considering the

discontinuance of its present pension plan. It regrets the necessity for such action, but the administrative costs have become unduly vexatious and burdensome. Many of my clients have asked that I particu larly object to the information of census reports which the Department of Labor requires on a rather irregular basis. Most all of them regard this as a time-consuming report of data which, after it is compiled, is of no value to any small businesss.

Such reports seem to them to be designed simply to provide "make work" for a number of additional Government employees. Some indicate that their normal procedure is to ignore these requests until they receive a series of letters threatening penalties for noncompliance. As a last resort, some have even indicated that they submit scrawled, handwritten, and illegible reports on a best estimate basis. Since this seems to satisfy the Labor Department and they never hear from these, they wonder what useful purpose is expected to be served by the idea in the first place.

Another one of my clients is a small wholesale supplier of meats to restaurants, fast food outlets and grocers. He gets a questionnaire from the Department of Commerce which particularly annoys him because it looks like it is designed for grocery stores. It is entitled "Census of Distributive Trades, Groceries and Related Products." His bookkeeping and reporting is on a fiscal year and the form requires data on a calendar year basis, which requires considerable adjustment to eliminate the overlapping months from his fiscal results and to then factor in the same months from the prior year's results.

He tells me the form is 18 inches long and is some six pages. It requires the breakdown of sales by commodity and then asks for percentages. He doesn't keep these kind of records for his own purpose, and it has never been demonstrated to him what useful purpose it serves by his trying to do so for the Department of Commerce. However, he tries to provide what he regards as reasonable estimates.

The form asks for a breakdown of inventory values and then asks for the identity of the person computing the value of the inventory. You might be interested in his answer, which was, "The manager prices, the bookkeeper figures it, and I check it." At one time as part of his operation he operated a small locker plant. Senator Culver, being a native Iowan, I know that you are familiar with the operation of a locker plant and that it is almost always a small operation where only a few animals, usually cattle or hogs, are slaughtered daily, and in due course they are processed, frozen and returned to the customer.

It got to the point where he was filling out so many forms pursuant to the requirements of the "Packers and Stockyards Act" that he was glad to sell the locker plant and be rid of the requirements for completion of the forms.

In my service as president to the Des Moines Area Community College Board I learned of some of the reporting requirements imposed upon a public educational institution by the Federal Government where Federal funds are involved. Under Iowa law the community college system, when it was created, was required to absorb what was then a locally supported junior college system. Here in the Des Moines area, we had only one, and that was Boone Junior College.

It took some 10 years for the Department of Health, Education, and Welfare to understand that that once-absorbed Boone Junior College was part of the Des Moines Area Community College and that

e reporting statistics had been properly combined. However, there re a good many years that separate reports were demanded, and the early years under threat of punitive actions were provided. The community college now serves more than 6,000 students nually, and its operations have grown so that there are several ployees who spend almost all their time filling out one Government rm after another, either pursuant to the requirements of the Higher lucation General Information Survey of the Department of Health, ducation, and Welfare or with respect to financial aid, some of hich are required by the Veterans' Administration.

While the provisions of S. 299 do not address the problems of late vailability of forms and short time frames within which to file the me, I would like to call the attention of your committee to the fact at there are many times that a form is past due for filing when the lank is received at the community college level. While this, too, may ot be totally germane, I would like the committee to know that the dditional costs which are incurred by beneficiaries of Federal funding, uch as the Des Moines Area Community College and such as the egal Aid Society of Polk County, are frequently disproportionate to he benefit originally perceived in such Federal funding.

. Since I practice in the Des Moines metropolitan area, I don't ave as many farm clients as lawyers practicing in county seats aving a small population where many of the residents are farmers. That brings me to the Department of Commerce Census of Agriculture. Again, we have an 18-inch multipage request for the most niniscule kinds of details. Farmers regard providing this kind of detail as a useless exercise that will never do them any good as Individuals in their own farming business.

Neither they nor I understand the basis on which some of them are asked to report monthly. Those who are selected for that kind of reporting requirement find it particularly burdensome.

Senator, I commend you for those provisions of the Regulatory Flexibility Act, which will make it possible for agencies to target more effectively their efforts to correct serious abuses of the competitive process and critical threats to health or safety without overburdening small businesses with requirements that simply increase costs but produce no identifiable benefit for the persons who are required to bear such costs.

If federally generated paperwork is subjected to public scrutiny and comment before being imposed on the public, it should in the long run produce more meaningful information. As I said at the outset, I speak for a goodly number of small businessmen, many of whom would like to see a requirement that perceived benefits be identified and recognized and that they then be given an opportunity for input on the question of whether or not the information requested by such agency will make a significant contribution to attaining such perceived benefits.

Senator Culver, I share the belief that you expressed in the editorial in the July, 1979, "Voice of Small Business," that flexible regulations can be an important management tool for regulators. It will enable them to force their ideas toward where it will do the most good and where most of the problems reside by placing the biggest burden on the broadest flexibility regulations. I believe regulations are more likely to be successful. You have heard it, you heard more before me

today. I simply want to join in. Thank you for letting me appear before you to share my views.

[The prepared statement of Mr. Grefe follows:]

PREPARED STATEMENT OF ROLLAND E. GREFE

Senator Culver, members of the Subcommittee on Administratice Practive and Procedure of the U.S. Senate Committee on the Judiciary, I am pleased to have the opportunity to participate in this hearing and to focus on S. 299, the Regulatory Flexibility Act, which would establish the principle that regulations should be designed to fit the scale and abilities of the institutions being regulated and the main purpose of which is to require regulatory agencies to adjust their com pliance and paperwork requirements to make it easier for small businesses and local governments to comply. I have been a practicing lawyer in Des Moines for over 30 years and during the period I have devoted much of my own time and effort toward representation of small businesses and their owners as they strive to serve their customers, pay their suppliers, comply with the increasing requirements of Government, and still have something left to provide for their families, and the increasing capital needs of a growing business.

I have also performed public service in that I served as a board member and was elected president of the Legal Aid Society of Polk County during a 5-year period when Federal funding was initially provided for legal services to the indigent. I served for almost 10 years as an elected member of the board of directors of the Des Moines Area Community College and as president of the board for all but 1 of those years. Most recently I have served my profession as a member of the board of governors of the Iowa State Bar Association and am the immediate pastpresident thereof. I can honestly say to you gentlemen that the increasingly heavy hand of the Federal Government has been felt not only by my clients but by the Legal Aid Society of Polk County, the Des Moines Area Community College, and the Iowa State Bar Association. Gentlemen, I commend you for those provisions of S. 299 which would direct Federal agencies to study the anticipated impact of compliance with the proposed rules on small businesses and cities before the regulations are issued and for those provisions which would permit an agency to find that a uniform set of requirements applying to small and large entities alike would place a disproportionate burden on small enterprises and which would then require such agency to determine whether less burdensome reporting and compliance requirements should be developed for small concerns.

I would like to call your attention to a notice in the Federal Register on January 16 which advised the public that comments were invited to be submitted to the General Accounting Office by February 5 on a request by the Federal Trade Commission for clearance to send a questionnaire to the bar associations of the 50 States and the District of Columbia.

[The notice referred to above follows the prepared statement.]

The questionnaire purported to be part of an investigation by the Federal Trade Commission "To determine whether or not providers of legal services are subject to acts or practices which are unfair, deceptive or anticompetitive * * *” A copy of such notice is attached hereto. The Federal Trade Commission estimated that the respondent burden on each of the 51 bar associations would be 30 hours. Our own analysis of the questionnaire indicated that many of the questions asked on the proposed questionnaire were so broad and so comprehensive that it was almost impossible to answer or to even guess as to whether the answer suggested might fall within the purview of what the Federal Trade Commission had in mind. The Iowa State Bar Association is a small association of some 5,000 members and its records are not kept in such fashion as to permit correct and complete answers to many of the questions without an item-by-item examination of most of the committee files and all of the correspondence files developed during the more than 15 years for which the Federal Trade Commission was requesting information. Our staff is small and the regular duties of the individual members would not have permitted any time for such research nor would any of the staff members other than the executive director have the professional capability to make the judgments required in answering some of the proposed questions. We advised the General Accounting Office that it would take in our best judgment several hundred hours more than the 30 hours set forth in the Federal Trade Commission request and we stated that this in our judgment would place an unconscionable burden on the association and that the expense involved would be disproportionate to any possible benefit to the public or the association or its

members. Upon analysis, other bar associations made similar determinations and so many protests were filed that responsibility for the investigation was shifted from the Boston office of the Federal Trade Commission to the Cleveland office. I should tell you that the Boston office had developed the questionnaire without consulting a single State bar association with respect to the nature of the records kept and with respect to what might be required to provide the Commission with the information which it felt it needed.

Furthermore, there was no distinction drawn between integrated bar associations and voluntary bar associations such as our own Iowa State Bar Association. In an integrated bar, membership is a condition precedent to the practice of law and such associations are strictly controlled by the supreme courts in those respective States. In Iowa we have a voluntary association which strives to work in close cooperation with the Supreme Court which controls the practice of law in the State. At our invitation representatives of the Cleveland office visited the offices of the Iowa State Bar Association to discuss informally some of those difficulties which we perceived with the original questionnaire as proposed by the Boston office as well as the nature of the operations of our own office and the availability of information from association records. We came away from that meeting convinced that the questionnaire would be substantially revised and the burden substantially reduced. I tell you this as a basis for my own support of the concept that the law should permit, as S. 299 does, Federal agencies to develop less burdensome reporting compliance requirements for small concerns than for large. I would go a step further. I would require development of less burdensome requirements for the small entity, and would suggest that your committee give serious consideration to amending S. 299 to include such a requirement.

One of my clients is a relatively small organization conducting its business in three States. This requires that it duplicate its reporting for unemployment tax, sales taxes, property taxes, and income taxes for all three States. It has only a handful of employees in each location but in trying to provide a balanced compensation package it has adopted a pension plan and is now burdened with the dual reporting requirements to the Internal Revenue Service and to the Department of Labor. Because of these requirements and the constantly changing standards for qualification this business is now seriously considering the discontinuance of its present pension plan. It regrets the necessity for such action but the administrative costs have become unduly vexatious and burdensome.

Many of my clients have asked that I particularly object to the information or census report which the Department of Labor requires on a rather irregular basis. Most all of them regard this as a time-consuming report of data which, after it is compiled, is of no value to any small business. Such reports seem to them to be designed simply to provide "make work" for a number of additional Government employees. Some indicate that their normal procedure is to ignore these requests until they receive a series of letters threatening penalties for noncompliance. As a last resort, some have even indicated that they submit scrawled, handwritten, and illegible reports on a best estimate basis. Since this seems to satisfy the Labor Department and they never hear from these, they wonder what useful purpose is expected to be served by the idea in the first place.

Another one of my clients is a small wholesale supplier of meats to restaurants, fast food outlets and grocers. He gets a questionnaire from the Department of Commerce which particularly annoys him because it looks like it is designed for grocery stores. It is entitled "Census of Distributive Trades, Groceries and Related Products." His bookkeeping and reporting is on a fiscal year and the form requires data on a calendar-year basis which requires considerable adjustment to eliminate the overlapping months from his fiscal results and to then factor in the same months from the prior year's results. He tells me the form is 18 inches long and is some six pages. It requires the breakdown of sales by commodity and then asks for percentages. He doesn't keep these kind of records for his own purpose, and it has never been demonstrated to him what useful purpose it serves by his trying to do so for the Department of Commerce; however, he tries to provide what he regards as reasonable estimates. The form asks for a breakdown of inventory values and then asks for the identity of the person computing the value of the inventory. You might be interested in his answer which was, "The manager prices, the bookkeeper figures it, and I check it." At one time as part of his operation he operated a sinall locker plant. Senator Culver, being a native Iowan, I know that you are familiar with the operation of a locker plant and that it is almost always a small operation where only a few animals, usually cattle or hogs, are slaughtered daily and in due course they are processed, frozen and returned to the customer. It got to