[Senate Report 105-241]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 458
105th Congress                                                   Report
                                SENATE

 2d Session                                                     105-241
_______________________________________________________________________


 
                  QUARTERLY FINANCIAL REPORT PROGRAM

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2071

  TO EXTEND A QUARTERLY FINANCIAL REPORT PROGRAM ADMINISTERED BY THE 
                         SECRETARY OF COMMERCE





                  July 8, 1998.--Ordered to be printed


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOHN GLENN, Ohio
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas                DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI, New Jersey
DON NICKLES, Oklahoma                MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania
             Hannah S. Sistare, Staff Director and Counsel
             Kristine I. Simmons, Professional Staff Member
                 Leonard Weiss, Minority Staff Director
                 Debbie Cohen Lehrich, Minority Counsel
                       Lynn L. Baker, Chief Clerk



                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Summary and Purpose..............................................1
 II. Background.......................................................1
III. Legislative History..............................................2
 IV. Section-by-Section Analysis......................................2
  V. Estimated Cost of Legislation....................................2
 VI. Evaluation of Regulatory Impact..................................4
VII. Changes in Existing Law..........................................4


                                                       Calendar No. 458
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-241
_______________________________________________________________________


       REAUTHORIZATION OF THE QUARTERLY FINANCIAL REPORT PROGRAM

                                _______
                                

                  July 8, 1998.--Ordered to be printed

_______________________________________________________________________


Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 2071]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 2071) to extend a quarterly financial 
report program administered by the Secretary of Commerce, 
having considered the same, reports favorably on the bill and 
recommends that the bill do pass.

                         I. Summary and Purpose

    S. 2071 reauthorizes through 2005 the Quarterly Financial 
Report program administered by the Census Bureau for the 
Secretary of Commerce. The purpose is to ensure a continuation 
of this survey that documents financial conditions for 
manufacturing, retail, wholesale and mining corporations each 
calendar quarter.

                             II. Background

    Section 91 of Title 13, United States Code, requires the 
Secretary of Commerce to collect and publish quarterly 
statistics on business operations and organizations, including 
data on sales, expenses, profits, assets, liabilities, 
stockholders' equity, and related accounts generally used by 
businesses in income statements, balance sheets, and other 
measures of financial condition. To meet these requirements, 
the Census Bureau conducts the Quarterly Financial Report (QFR) 
program.
    The Quarterly Financial Report program has been authorized 
continually since 1947. It is a two-year (eight quarter) survey 
that documents financial conditions for manufacturing, retail, 
wholesale and mining corporations each calendar quarter. It is 
a principal economic indicator of U.S. economic performance and 
a primary source of data for current estimates of the Gross 
Domestic Product and national income accounts. The QFR data are 
used for the Federal Reserve Board's Flow of Funds Accounts and 
are the sole source of unconsolidated nonfinancial corporate 
data. While the reporting rules and timing of the QFR data 
collection are structured to satisfy the specific needs of the 
GDP and Flow of Funds, these data support a host of other 
Government and private sector uses as well. For example, 
companies may use QFR data to compare their own performance to 
the industry average or as a source of information for making 
investment decisions.
    In recent years, the Census Bureau has taken steps to 
reduce the burden of the QFR program on respondents. The 
current sample size of 8,000 companies for the 1998 QFR program 
is half the size of the 1988 program. Questions have been 
reduced by the use of short forms, and small companies that 
participate in the program do not have to participate again for 
up to ten years. The Bureau is also studying the use of 
electronic reporting methods to further reduce respondent 
burden. The Committee is encouraged by the Bureau's efforts to 
reduce the burden of the QFR program on respondents, and 
directs the Bureau to continue these efforts.
    The Secretary of Commerce's authority to conduct the 
Quarterly Financial Report program terminates on September 30, 
1998. S. 2071 would extend the authority to conduct this 
statistical program an additional seven years by changing the 
termination date specified in Title 13, United States Code, 
Section 91 note to September 30, 2005.

                        III. Legislative History

    S. 2071 was introduced by Senator Thompson on May 13, 1998. 
Senator Glenn was an original cosponsor.
    The Committee dispensed with hearings and proceeded to 
consider S. 2071 on June 17, 1998. No amendments were offered. 
S. 2071 was ordered reported unanimously by voice vote.

                    IV. Section-by-Section Analysis

       section 1. extension of quarterly financial report program

    This section amends Section 4(b) of Public Law 97-454 (13 
U.S.C. 91note), as amended, by striking ``September 30, 1998'', 
which is the date on which the current authorization expires, and 
inserting ``September 30, 2005''.

                    V. Estimated Cost of Legislation

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 24, 1998.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs, U.S. Senate, Washington, 
        DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2071, a bill to 
extend a quarterly financial report program administered by the 
Secretary of Commerce.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
(for federal costs), and May Eyles (for the private-sector 
impact).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 2071--A bill to extend a quarterly financial report program 
        administered by the Secretary of Commerce

    Summary: S. 2071 would extend, until September 30, 2005, 
the requirement for the Bureau of the Census to produce its 
Quarterly Financial Report (QFR). Assuming appropriation of the 
necessary amounts, CBO estimates that preparation and 
publication of this report would cost about $16 million over 
the 1999-2003 period.
    S. 2071 would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply. The bill 
contains no intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would not affect the 
budgets of state, local, or tribal governments.
    S. 2071 would impose a private-sector mandate because it 
would extend the Secretary's authority to require certain 
businesses to file report and answer inquiries about business 
operations, organizations, practices, management, and 
relationships to other businesses.
    Estimated cost to the Federal Government: For the purposes 
of this estimate, CBO assumes that S. 2071 will be enacted by 
the end of fiscal year 1998, and that the estimated amounts 
necessary to implement the bill will be appropriated by the 
start of each fiscal year. Estimated outlays are based on 
historical spending patterns for the Bureau of the Census and 
information provided by the agency. The estimated budgetary 
impact of S. 2071 is shown in the following table. The costs of 
this legislation fall within budget function 370 (commerce and 
housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal years, in millions of dollars--  
                                                                 -----------------------------------------------
                                                                   1998    1999    2000    2001    2002    2003 
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending Under Current Law:                                                                                     
    Budget Authority \1\........................................       3       0       0       0       0       0
    Estimated Outlays...........................................       3       1   (\2\)       0       0       0
Proposed Changes:                                                                                               
    Estimated Authorization Level...............................       0       3       4       4       4       4
    Estimated Outlays...........................................       0       2       3       3       4       4
Spending Under S. 2071:                                                                                         
    Estimated Authorization Level \1\...........................       3       3       4       4       4       4
    Estimated Outlays...........................................       3       3       3       3       4       4
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year.                                                    
\2\ Less than $500,000.                                                                                         

    Basis of estimate: The Quarterly Financial Report provides 
current statistics on the financial performance and conditions 
of domestic manufacturing, mining and trade corporations, based 
on an extensive sample of such corporations. In 1998, the 
Bureau of the Census plans to spend approximately $3 million on 
the QFR, and most of the costs are for personnel. Assuming that 
the bureau would maintain the current level of effort over the 
1999-2003 period, the cost to the government would range 
between $3 million and $4 million a year.
    Pay-as-you-go considerations: None.
    Estimated impact on State, local, and tribal governments: 
The bill contains no intergovernmental mandates as defined in 
UMRA and would not affect the budgets of state, local, or 
tribal governments.
    Estimated impact on the private sector: S. 2071 would 
extend the Secretary's authority to require certain businesses 
to file reports and answer inquires about business operations, 
organizations, practices, management, and relationships to 
other businesses.
    CBO estimates that direct costs of this private-sector 
mandate would fall well below the statutory threshold ($100 
million in 1996, adjusted for inflation). Based on information 
from the Census Bureau, we expect that the costs to the private 
sector would be approximately $1 million per year, about the 
same as they are now.
    Estimate prepared by: Federal Costs: Mark Hadley; Impact on 
the Private Sector: Matt Eyles.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirement of paragraph 11(b) of Rule XXVI 
of the Standing Rules of the Senate, the Committee has 
considered the regulatory and paperwork impact of S. 2071. The 
legislation continues a survey in which approximately 8,000 
companies participate for a two-year period. The Committee 
recognizes the reporting burden that the Quarterly Financial 
Report program places on respondents. The Census Bureau has 
taken steps to reduce the burden of this survey, including 
reducing the sample size, reducing the number of questions and 
excusing small companies which have participated in the program 
from participating again for up to ten years. Currently the 
Bureau is studying ways to further reduce burden through the 
use of electronic or Internet reporting. The Committee directs 
the Census Bureau to continue these efforts to reduce the 
burden of the QFR program on respondents to the greatest extent 
possible.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic and existing law in which no change 
is proposed is shown in roman):

 Public Law 97-454.--An Act To amend title 13, United States Code, to 
  transfer responsibility for the quarterly financial report from the 
 Federal Trade Commission to the Secretary of Commerce, and for other 
purposes (13 U.S.C. 91 note)

           *       *       *       *       *       *       *


    Section 4.

           *       *       *       *       *       *       *

    (b) This Act, including the amendments made by this Act, 
shall cease to have effect after [September 30, 1998] September 
30, 2005.

                                
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