Ms. ABZUG. Our witness today will be David F. Linowes, Chairman of the Privacy Protection Study Commission. Mr. Linowes will be accompanied by Vice Chairman Willis Ware; Carole Parsons, Executive Director of the Commission; Ronald Plesser, General Counsel of the Commission; and Louis Higgs, Deputy Executive Director of the Commission.

It is a pleasure to have you with us.

If you wish, you may summarize your statement orally and we will include the entire statement in the record.

STATEMENT OF DAVID F. LINOWES, CHAIRMAN OF THE PRIVACY PROTECTION STUDY COMMISSION; ACCOMPANIED BY WILLIS WARE, COMMISSIONER; CAROLE PARSONS, EXECUTIVE DIRECTOR; LOUIS HIGGS, DEPUTY EXECUTIVE DIRECTOR; AND RONALD PLESSER, GENERAL COUNSEL

Mr. LINOWES. We submitted a complete statement of some 19 or 20 pages which we would like to have inserted in the record.

Ms. ABZUG. Without objection, the statement will be inserted. Mr. LINOWES. I have abbreviated that to some nine and a half pages which, with your permission, I think perhaps I would like to read. Ms. ABZUG. Please proceed.

Mr. LINOWES. I am David F. Linowes, as you indicated, Chairman of the Privacy Protection Study Commission.

My purpose in being here today is to testify on behalf of the Commission's request for amendment of section 9 of the Privacy Act of 1974 to remove the current $750,000 fiscal year limitation on Commission expenditures and to increase the Commission's total authorization from $1,500,000 to $2 million, as you earlier indicated.

I hope that as a result of my appearance today you will agree with us that the adoption of these measures is necessary if the Commission is to fulfill the formidable mandate the Congress gave it in section 5 of the Privacy Act.

I would like to speak first to the matter of the fiscal year expenditure limitation. Section 9 of the Privacy Act prohibits the Commission from expending more than $750,000 in any one fiscal year. Since the current fiscal year does not end until September 30, 1976, that means that we are prohibited from spending more than $750,000 over a 15-month period, even though the Congress has now appropriated a total of $1 million for the Commission in fiscal year 1976. Moreover, the fiscal year expenditure limitation has deprived us of any discretion to allocate funds from one fiscal year to another, even though our Commission's life is but 2 years.

I understand that it is not unusual for a limited-duration commission such as ours to be free to allocate the total amount of its authorized funds during the course of its life, and we also have found no legislative history, formal or informal, which indicates that the Congress wanted to deprive the Commission of the ability to do so. We, therefore, hope that you will agree that the fiscal year limitation in section 9 should be eliminated.

Section 9 of the Privacy Act also places a total authorization limit of $1.5 million on the Commission. This simply is not enough to accomplish the work that Congress has set out for the Commission.

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Accordingly, in addition to a deletion of the fiscal year expenditure limitation, we are seeking an increase in our authorization from the current $1.5 million to $2 million for the entire 2-year period. This would allow us to receive the $250,000 fiscal year 1976 supplemental recently appropriated for us by H.R. 13172, Second Supplemental Appropriations Act of 1976, without prejudice to our $750,000 appropriation request for fiscal year 1977.

In addition, it would allow us to request a fiscal year 1977 supplemental of approximately $100,000 which we know we need to complete our study program, and also would provide us with funding to cover two likely items:

(1) the need to publish an edited version of the transcripts of particular Commission hearings should Congress or others request it; and

(2) the need to provide for additional meetings of the Commission and selected experts in March and April 1977, should that be required for the Commission to complete its deliberations.

At this point I would like to say a few words about the Commission's mandate and the program it has undertaken to fulfill that mandate. The principal charge to the Commission is to make a thoroughgoing study of the "data banks, automated data processing programs, and information systems of governmental, regional, and private organizations," and as a result of such study to recommend to the President and the Congress the extent, if any, to which the principles and requirements of the Privacy Act of 1974 should be applied to organizations to which they do not now apply.

In addition, section 5 of the Privacy Act requires the Commission to report on five specifically enumerated information policy issues and suggests further that the Commission include in its inquiry interstate transfers of information about individuals; information systems that affect individual rights other than the right to personal privacy; uses made of the social security number and other standard universal identifiers; the matching and analysis of statistical data with personal information gleaned from other, nonstatistical sources; and the personal data recordkeeping practices of organizations in the fields of medicine, insurance, education, employment, travel, hotel, and entertainment reservations, credit banking, consumer reporting, cable television, and electronic funds transfer.

The Commission early in its life identified a number of priority inquiries. These were organized into three programs: a recordkeeping practices assessment program; a crosscutting policy issues program; and a trend assessments program. A detailed description of these three programs is included in the written testimony that I have submitted to this subcommittee. Hence, I will only briefly describe them

now.

The recordkeeping practices assessment program consists of 14 priority inquiries, which are the factfinding foundations of the Commission's entire program. These projects respond to specific suggestions the Congress made to our Commission in section 5 of the Privacy Act.

As you may know, the Commission has so far held public hearings in 5 of the 14 practices assessment areas. The Commission was pleased to have the distinguished chairwoman of this subcommittee as a witness at our February 1976 hearings on the recordkeeping practices of credit card issuers.

We begin a sixth round of hearings-on primary health care providers and third-party payers-in Los Angeles tomorrow at 10 a.m. These will be followed by at least 1 additional day of hearings on medical records in Washington and by hearings on credit reporting and consumer investigative agencies, also in Washington, the first week in August.

Originally, we had scheduled hearings on education records, public assistance and social services records, and records used by research and statistical agencies and organizations for this summer as well.

Now, however, because of the money shortage, we have had to slow down our preparations for these hearings to the point where unless the $250,000 fiscal year 1976 supplemental is made available very soon, we will have to put them all off until after October 1, which means, in effect, that some of them may have to be canceled. We would regret this.

We have currently allocated approximately $159,000-$91,000 for staff and $68,000 for support costs-to the recordkeeping practices assessment program during fiscal year 1976; $129,000 of the requested $250,000 supplemental appropriation is needed this year for this program-$99,000 for staff and $30,000 for support costs.

Given the $250,000 supplement, the Commission will spend in fiscal year 1976 approximately $288,000 total for staffing and support costs for these 14 projects. In fiscal year 1977 we expect to spend an additional $126,000 on them for staffing and $51,000 for hearings support costs. Thus, the total allocation for the Commission's inquiry into recordkeeping practices over the 2-year period will be approximately $465,000.

The Commission has identified a number of crosscutting information policy issues that will arise repeatedly in its inquiry and that in the name of both economy and consistency of treatment should be isolated for special examination. It is these issues that will be explored in the context of our second program, the crosscutting policy issues program.

The program plan approved by the Commission at its January meeting organized 12 of these crosscutting issues into three categories.

The first category is "Common Practices and Standards," which will include, for example, an examination of the need for a strengthened policy on the use of standard universal identifiers, and the criteria and procedures that should be applied in determining when Government agencies should be given access to records about individuals held by third parties.

The second category is entitled "Compliance Mechanisms." It includes a comparative analysis of Federal and State fair information. practices statutes and their respective implementation problems. Also included in this category is an examination of the incentives and costs associated with efforts by private organizations, including some major corporations, to bring their recordkeeping practices into conformity with the requirements of recent fair information practices legislation. The third category of our crosscutting issues program is called "Impact on Other Social Policy Objectives." This category includes the required study of the impact of information systems on Federal-State relations and on the principle of separation of powers. Also included here is an examination of conflicts between the Federal Privacy and Freedom of Information Acts.

These 12 projects will be managed by current members of our research and legal staffs, but the bulk of the work will be done by teams of outside experts and several part-time professionals who will be retained on a consulting basis.

Because of the priority placed on the practices assessment projects and the partial dependence of the crosscutting analytical projects on the results they produce, we have only allocated $23,000 from our current fiscal year 1976 budget for the planning of these projects.

In order to initiate each of these projects in fiscal year 1976, we need $97,000 more than the $23,000 currently allocated to the program. With the $250,000 supplemental, in other words, the Commission would spend approximately $120,000 for these 12 projects in fiscal year 1976.

In our fiscal year 1977 budget request, we allocated $90,000 for completion of these projects. Out of the $100,000 we project we will need as a fiscal year 1977 supplemental, we would allocate an additional $16,000. Thus, the total investment for the analysis of these major policy issues over the 2-year period will be approximately $226,000.

Finally, the Commission recognized early that its recommendations must take into account future trends in recordkeeping practices, and particularly trends in the application of new technologies to personal data recordkeeping. This was a point the distinguished chairwoman made when she was good enough to testify before our Commission.

Thus, our third program is a trend assessment program. The Commission has already initiated a preliminary study aimed at projecting the state of the art in computer technology applications to the 1985-90 period.

In addition to this trend assessment project, the Commission would also like to undertake a small number of exploratory studies aimed at informing it of significant problem areas not currently on our list of priority inquiries.

The trend assessment program is currently allocated $6,000 for initiation of the technological trend assessment study; $24,000 of the $250,000 supplement is needed to continue work on the technological trend assessment study and to initiate four of the small exploratory studies.

In fiscal year 1977 we have allocated $20,000 to complete the technological trend assessment study, and out of the anticipated fiscal year 1977 supplemental request of $100,000, we would allocate an additional $23,000 for the initiation of a study of the attitudes and experiences of people who have attempted to avail themselves of the rights guaranteed them by extant fair information practices statutes. Thus, the Commission's total effort for this program is budgeted at $73,000.

The Commission's total program is clearly an ambitious one. In our view, however, it is the minimum necessary to fulfill our statutory mandate. And we are anxious to be permitted to so proceed without being forced to consider cutting back these plans.

To briefly recapitulate, in fiscal year 1976, given the $250,000 supplemental appropriation, the Commission will initiate and conduct 14 factfinding projects, 12 policy-issue inquiries, and 5 background studies. We propose expending some $438,000 that is directly attrib

utable to these projects. Our administrative costs for the operation of the Commission and support of these programs add up to $374,000. In addition, the startup and program planning costs for the period June-December 1975-that is, prior to the first of January 1976were $188,000.

In fiscal year 1977, assuming approval of the Commission's currently outstanding appropriation request of $750,000, we will complete the factfinding projects, issues analysis projects, and background studies just described. We plan to expand $287,000 for the completion of these activities. An additional $463,000 is earmarked for maintaining the core staff capability necessary to complete these projects, to synthesize the results and to assist the Commission in making its decisions, and to prepare and reproduce its final report to the Congress and the President.

The projected $100,000 fiscal year 1977 supplemental appropriation request would provide $39,000 for the three programs, as described above, and an additional $61,000 for production of reports on specific topics in addition to the final report.

In sum, we clearly project the need for an additional $350,000 to conduct our program as described. However, our fiscal year 1977 budget, even including the anticipated $100,000 supplemental request, contains no funds for editing and publishing the transcripts of the Commission's public hearings.

They are already much in demand, and the cost of reproducing them on request must be borne by the Commission on what amounts to a nonreimbursable basis.

Nor does our fiscal year 1977 budget include funds for additional meetings of the Commission and experts during the February-April 1977 period. These could well be required for the Commission to complete its deliberations. It is for these items that we are requesting a margin of $150,000 which brings our total authorization request up to $2 million, or $500,000 more than section 9 currently provides.

Madam Chairwoman and members of the subcommittee, this concludes my presentation of the facts that support the Privacy Commission's request for removal of the fiscal year limitation on Commission expenditures and for an increase in the Commission's authorization ceiling to $2 million. I am confident that the Commission has built the capacity to do its job well, and on time, if the necessary resources are made available to us.

Needless to say, I and the Commission staff members present will be pleased to answer any questions you may have.

MS. ABZUG. Thank you very much for your testimony.

Have other study commissions published their hearings?

Mr. LINOWES. We have transcripts which have been made available, yes. Have other commissions? I misunderstood your question.

To my knowledge, I have been aware of other study commissions. I cannot name which ones. Perhaps our Executive Director would be better informed on that.

Miss PARSONS. It is done from time to time but not always, certainly. The only reason that we foresee this as something which might well be something we would want to do is that there has been quite a bit of interest expressed in having copies of our transcripts already. Ms. ABZUG. From whom? From what sources?