statistical purposes, and will prohibit further release of the information in identifiable form by user agencies.

The effort to provide the legal basis for the directory use should be made regardless of plans to reorganize the statistical activities of the Federal Government. It is very important that the legislation authorizing access to the Directory be done now, because attempting to reconcile various systems at the same time a reorganization is being implemented will certainly make it very difficult to keep several continuing statistical programs running smoothly.

The procedures for developing samples, the cost to agencies and clarification of which specific agencies can participate, and so forth, have not yet been developed since they may be affected by the legislation. The Census Bureau has written a set of working papers which outline the format, content, updating procedures and sources, scope, frequency of updating, and so forth, in detail.

One possibility for sample selection is to preselect several nonduplicative samples. Any particular agency which needs a sample without any special sampling characteristics would designate the particular standard error which is acceptable for their purposes. The Bureau of the Census could then provide the agency one or more segments of the preselected samples necessary to achieve those desired results. This arrangement would minimize the burden on the individual respondent by assigning establishments to one and only one of the preselected samples. (Although they might be also selected in a specialized sampling procedure.) In some cases it might make sense to utilize a particular segment more thoroughly for one or two years and then reduce the likelihood of selecting those establishments for the next two or three years. This procedure would allow for data collected in one survey to be available for summarization by characteristics collected on another survey from the identical sample. Every effort should be made to minimize the total respondent burden, even though that may mean a larger than average burden for selected establishments in one year, with a lower level in succeeding years.

Impact of the Industrial Directory on

Other Data Collection Programs

Currently, both BLS and the Census Bureau collect employment, payroll and hours worked data. This duplication is now necessary because of lack of comparability in the identity of particular establishments which cannot be reconciled under current laws. The Bureau of Labor Statistics collects monthly data which could be summarized to an

annual level to make it comparable to other Census statistics.

When the Industrial Directory is operating and the reconciliation of the definitions of establishments with other agencies is complete, the collection of employment information by the Census Bureau could be reduced or minimized, and Bureau of Labor Statistics data could be used for the basic data in many cases. This would require a greater degree of cooperation and a change in the BLS confidentiality arrangement with their respondents and the cooperating States.

Additional size codes for characteristics such as number of hospital beds, number of classrooms, acres in farms, or kilowatt generating capacity could also be incorporated to maximize the directory's usefulness in specialized programs.

In these and other areas, there may be data such as receipts, production data and capital expenditures which could be transferred to Census to minimize duplication and collecting burden.

Enhancement of Industrial Directory Use

The annual Economic Data Program is based on the wealth of data backing up the Industrial Directory. The data used to determine the size codes for payroll, employment, sales receipts, and many other items can be related by Census to the establishments in the Directory. That data could be used to link establishment or company data from other agencies and summarize the individual data to disclosable levels to provide a wealth of statistics for various other agency uses.

For instance, a business survey collecting certain characteristics but not certain economic data could provide those characteristics which they collected to the Census Bureau. The data could temporarily supplement the industrial directory background data and summary economic tabulations based on business survey characteristics could be developed from Census data. This use of the Directory and its wealth of background information would require complex disclosure analysis programs, but, nevertheless, could provide very useful statistical data for other agency uses. It should be reiterated that individual company or establishment data would not be available to the using agency.

Possible Further State Use of the Industrial Directory

A possible use of the Directory beyond the uses proposed in this statement would be to widen the

scope of its clientele by including State statistical agencies not now directly coordinating with Federal statistical programs, if the State had stringent confidentiality legislation. For such later extension a State should have confidentiality legislation following Federal confidentiality laws such as title 13 before it could be allowed broader access to the Directory. In no case would information on establishments or companies that are not operating in the State be provided to State agencies. Canada has developed model confidentiality legislation and several provinces have enacted that legislation to provide as high or higher level of protection and penalties for unauthorized disclosure or use of the information.'

Appendix

A statement developed by the Industrial Directory technical group follows.

Establishment List Statement

Nature of This Statement

This statement represents a Government-wide consensus of the broad conceptual base from which each agency can make advance plans to participate efficiently and effectively in the SSEL program. However, this statement is not intended to be a detailed or technical "blueprint" of specifications from which the participating agencies can prepare their operational procedures for implementation. The use of the list in Federal statistical programs will be coordinated by the Office of Federal Statistical Policy and Standards.

More specifically, this statement is intended to provide (a) sufficient information about the proposed list program and its use by statistical agencies other than the Census Bureau and their participation in the program, so that the agency's policy officials and legal counsel may fully review the SSEL proposal and its implications for the agency, (b) sufficent information so that the agency can approve (or modify) the proposed role to be played by the agency;

and (c) sufficient "lead" time for the agency officials to initiate any legislative, administrative, operational, or program content changes that may be required to utilize the SSEL in the agency's statistical programs. This statement is also intended to inform Congress and the public of the future development of the SSEL program and the basis and purpose of the proposed legislation.

More detailed criteria for determining qualifying agencies and guidelines for assuring adherence to the confidentiality standards will be developed by an interagency task force.

The Proposed "Standard Statistical Establishment List" Program for Federal Statistical Agencies

A. Introductory Note:

This section outlines the principal elements required of a Federal "Standard Statistical Establishment List" (SSEL) program to assure its effective use by participating statistical agencies. It summarizes the scope and contents, objectives, sources, uses, confidentiality requirements, and other essential elements needed to develop and maintain a viable Federal Government-wide statistical resource "list." The proposal is essentially to be implemented within the context of the existing decentralized Federal Statistical System. It necessarily includes some aspects that may require significant and innovative changes for both source and user agencies in the present framework of their statistical programs' content, operational techniques and/or confidentiality practices.

The objective of these changes is to improve data quality and reduce costs in the overall Federal statistical system and to reduce the burden on the public of responding to Federal requests for information.

B. Historical Background:

In October 1968, the Office of Management and Budget (OMB) designated the Census Bureau as the "focal agency" for the establishment list of U.S. business enterprises and their establishments for the use of statistical agencies. The availability of such a central list facility, it was believed, will improve significantly the comparability among important economic data series published by the various statistical agencies for ostensibly identical industries, sizes of operations, and geographic areas.

Existing classification differences were the result of differences in definition and coverage of the business

enterprises and establishments that constituted the reporting units for each agency. Several "matching" studies conducted in the past have indicated that these data discrepancies occur, to a large extent, because each statistical agency was obliged, under existing laws governing confidentiality, to compile and maintain its own files of businesses. Since these agencies independently assigned their industry, area, and size codes to the reporting units included in their respective surveys, the results were often inconsistent among agencies and burdensome on respondent companies. The routine exchanges of such classifying information among the statistical agencies to reconcile or eliminate these data discrepancies has not been possible in most instances due in part to the wide variety of data confidentiality provisions under which these agencies operate.

To assist the Census Bureau staff in the initial development of the Government-wide statistical establishment list system and use by the Census itself, funding for the project has been provided, starting in fiscal year 1972. In addition, an interagency task force (first led by the Statistical Policy Division in OMB and now led by the Office of Federal Statistical Policy and Standards) was set up in 1972 to promote the interchanges of ideas between Census and the major participating source and user agencies in solving the operational and legal problems inherent in creating a viable Federal list system.

C. Scope and Content:

The SSEL, when fully operational, will consist of a computerized file of all U.S. business firms and their establishments. It will have for each organizational unit: the name, mailing and actual address, tax identification mumber, physical location code, Standard Industrial Classification or Enterprise Standard Industrial Classification code, product class codes or merchandise line codes when these codes are available from existing surveys, central administrative office or auxiliary code, legal-form-oforganization code, and standard size class codes for employment, payroll, and total receipts or business receipts. Individual establishments on the List will be identified with the legal entity of which they are part. In addition, establishments of multilocation enterprises can be identified because the establishment identification code contains the company or enterprise code.

The frequency of updating and verifying the accuracy of these list records will vary, of course, depending upon the size and industry characteristics of the particular entities involved and the availability of list-type information from existing administrative

and statistical data records of various source agencies participating in this project.2

D. Objectives of the Proposed Program:

Although the major objectives of this program have been stated in a variety of ways, with differing emphasis by various groups over the past three decades, the following requirements are considered to be fundamental in developing policies, in setting goals, and in seeking support and cooperation for the program by participating statistical agencies, other governmental bodies, the business community, and the general public. To succeed in obtaining this broad base of support, the proposed program must show that it is likely to achieve the following objectives.

AS A MINIMUM:

(1) Improve significantly the comparability among published economic data series which purport to represent the same industry, size, or geographical location of firms or establishments. At present, differences arise due to the need of different agencies to classify and tabulate data independently without reference to a government-wide source of classification codes.

(2) Reduce the duplicative data collection costs to government and the duplicative reporting burden on the business community. Both costs are now largely unavoidable because of the need for most statistical agencies to develop and update their own list files.

(3) Provide a current file of the business universe organized within an accessible statistical framework so that scientific statistical samples (e.g., stratified by industry, area, size, or other available economic characteristics) can be drawn. It should provide flexibility so that samples can be selected from the fully consolidated enterprise, unconsolidated legal entity, or individual establishment level. At present some agencies cannot develop adequate samples since they do not have access to a complete list of firms with the data necessary from which to construct the sample.

(4) Provide, wherever existing and possible, both primary industry codes and economic activity codes such as merchandise line codes and

2 The year of the latest SIC code update is available for establishment records, along with a source code indicating a reliability category (e.g. the SIC or size class indicator was obtained from a detailed, data oriented survey, and therefore has a "high" reliability.)

product class codes, so that such information can be used in developing more efficient sampling frames for particular uses. Some agencies do not (and should not) collect such data direct from businesses.

(5) Develop as an integral by-product of the SSEL system, an annual publication program presenting the statistical information compiled as part of the List operation. This publication substitutes for the County Business Patterns program, based on the Social Security Administration's (SSA) Reporting Unit concept, and is issued as a joint project of the SSA and the Bureau of the Census. The new publication will provide those agencies using the SSEL file, and all other interested data users. with equivalent benchmark "control totals" of the universe for their individual programs.

(6) Assure list accessibility to those Federal statistical agencies that can ensure, on the basis of legal or administrative regulation, and with the protection afforded by the proposed bill, the confidentiality of the data collected from business respondents in any statistical surveys conducted with lists derived from the statistical establishment list files. In addition, the program must provide for effective implementation by these user statistical agencies of the confidentiality guidelines and disclosure avoidance procedures required by such use of the list files.

E. Source of Input:

To minimize costs and maximize the use of existing statistical programs and computer technology, the development of the initial file proceeded as a "piggyback" extension of the 1972 Economic Censuses operations and its subsequent annual, quarterly, and monthly industry and trade surveys including the Agricultual Census, as well as the Bureau's Company Organization Survey and supplemental classification questionnaires. As such, the primary information sources of the initial file consisted of the Internal Revenue Service (IRS) 1972 business income tax return files, the IRS-SSA 1972 quarterly employer payroll tax and business "birth" files, augmented by the 1972 Economic Censuses and reports of all multiunit firms and large single-unit firms.

To maintain this initial file on a current, accurate, and minimum-cost basis, supplemental and/or substitute sources of information will be explored. Data from the IRS Business Master File will be

incorporated into the file annually. Those statistical agencies with major responsibilities for collecting current economic data from broad segments of the business universe (e.g., Labor Department's Bureau of Labor Statistics and Agriculture Department's Economics, Statistics, and Cooperatives Service), as well as those agencies in the Department of Health, Education, and Welfare covering specific segments of the services sector of the economy (e.g., Office of Education, National Center for Health Statistics, etc.), will be likely sources as well as users. This coordination of statistical information will enable user programs to obtain the latest changes without having to request the identical information from respondents through additions to their individual programs. Reconciliation of establishment definitions and codes will be done where there are discrepancies that are important to the agencies involved.

F. Users of the List File:

Users of the list will be limited to Federal statistical agencies (and their cooperating State agency counterparts) that conduct statistical surveys and that can assure by legal or administrative regulation that the individual reports submitted by the respondent companies are confidential and will not be used for investigation, taxation, enforcement, or judicial proceedings.

G. Confidentiality Requirements:

The list file will be confidential and must be used only for statistical purposes. Any individual company or establishment information collected as a result of using the file for sampling frames or mailing lists must also be confidential and only be released in a form that will not identify data pertaining to the particular establishments or companies.

The list can be used to support Federal/State coordinated statistical programs if legal or administrative protection for the list information and data collected using the list can be provided at the State level as well. List information for establishments not within a State or enterprises not operating in a State will not be available to that particular State.

H. Uses of the List:

Agencies may want samples drawn for their purposes by the Bureau of the Census where ad

› Where States have laws allowing or requiring publication of directories, the list could be used only under the McGranery decision. That is, SIC codes could be matched and corrected, but additional information will not be available.

more detailed

ditional information such as a employment break, the amount of a particular commodity produced, or the amount of a particular commodity class sold will be beneficial to sample design. Such specialized samples can be provided on a reimbursable basis, but only the list information will be furnished to the agency.

The total establishment list will be made available to eligible agencies, but in most cases only a portion will be needed. In many cases only various segments and/or samples required for their particular purposes will be needed by the agencies (for instance, all establishments and companies with over 20 employees in particular industry divisions and a sample of the smaller ones).

Items of information that are not needed by an agency will not be provided.

I. Maintenance of The List:

The list will be updated for creation or dissolution of firms or establishments (“births" and "deaths") on

a continuous basis, but will be available to users on the basis of the latest available information, for instance, on all establishments owned or operated at any time during a specific calendar year.

All information in the list will be updated whenever new information is available, but at a minimum all employer firms, (both multiestablishment and single establishment) will be updated annually from one or more previously described sources or input. Single establishment firms having no paid employees will be updated at least every five years.

J. Charges For List Use:

All costs of updating and maintaining the list will be borne by the Census Bureau.

Charges to agencies will be based on the actual cost of providing the list or sample information. Costs of more frequent updating or for specialized processing of the SSEL will have to be negotiated.