[House Report 107-778]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-778

======================================================================



 
 CONFIDENTIAL INFORMATION PROTECTION AND STATISTICAL EFFICIENCY ACT OF 
                                  2002

                                _______
                                

 November 13, 2002.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Burton of Indiana, from the Committee on Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5215]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform, to whom was referred 
the bill (H.R. 5215) to protect the confidentiality of 
information acquired from the public for statistical purposes, 
and to permit the exchange of business data among designated 
statistical agencies for statistical purposes only, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Confidential Information Protection 
and Statistical Efficiency Act of 2002''.

SEC. 2. DEFINITIONS.

  As used in this Act:
          (1) The term ``agency'' means any entity that falls within 
        the definition of the term ``executive agency'' as defined in 
        section 102 of title 31, United States Code, or ``agency'', as 
        defined in section 3502 of title 44, United States Code.
          (2) The term ``agent'' means an individual--
                  (A)(i) who is an employee of a private organization 
                or a researcher affiliated with an institution of 
                higher learning (including a person granted special 
                sworn status by the Bureau of the Census under section 
                23(c) of title 13, United States Code), and with whom a 
                contract or other agreement is executed, on a temporary 
                basis, by an executive agency to perform exclusively 
                statistical activities under the control and 
                supervision of an officer or employee of that agency;
                  (ii) who is working under the authority of a 
                government entity with which a contract or other 
                agreement is executed by an executive agency to perform 
                exclusively statistical activities under the control of 
                an officer or employee of that agency;
                  (iii) who is a self-employed researcher, a 
                consultant, a contractor, or an employee of a 
                contractor, and with whom a contract or other agreement 
                is executed by an executive agency to perform a 
                statistical activity under the control of an officer or 
                employee of that agency; or
                  (iv) who is a contractor or an employee of a 
                contractor, and who is engaged by the agency to design 
                or maintain the systems for handling or storage of data 
                received under this Act; and
                  (B) who agrees in writing to comply with all 
                provisions of law that affect information acquired by 
                that agency.
          (3) The term ``business data'' means operating and financial 
        data and information about businesses, tax-exempt 
        organizations, and government entities.
          (4) The term ``identifiable form'' means any representation 
        of information that permits the identity of the respondent to 
        whom the information applies to be reasonably inferred by 
        either direct or indirect means.
          (5) The term ``nonstatistical purpose''--
                  (A) means the use of data in identifiable form for 
                any purpose that is not a statistical purpose, 
                including any administrative, regulatory, law 
                enforcement, adjudicatory, or other purpose that 
                affects the rights, privileges, or benefits of a 
                particular identifiable respondent; and
                  (B) includes the disclosure under section 552 of 
                title 5, United States Code (popularly known as the 
                Freedom of Information Act) of data that are acquired 
                for exclusively statistical purposes under a pledge of 
                confidentiality.
          (6) The term ``respondent'' means a person who, or 
        organization that, is requested or required to supply 
        information to an agency, is the subject of information 
        requested or required to be supplied to an agency, or provides 
        that information to an agency.
          (7) The term ``statistical activities''--
                  (A) means the collection, compilation, processing, or 
                analysis of data for the purpose of describing or 
                making estimates concerning the whole, or relevant 
                groups or components within, the economy, society, or 
                the natural environment; and
                  (B) includes the development of methods or resources 
                that support those activities, such as measurement 
                methods, models, statistical classifications, or 
                sampling frames.
          (8) The term ``statistical agency or unit'' means an agency 
        or organizational unit of the executive branch whose activities 
        are predominantly the collection, compilation, processing, or 
        analysis of information for statistical purposes.
          (9) The term ``statistical purpose''--
                  (A) means the description, estimation, or analysis of 
                the characteristics of groups, without identifying the 
                individuals or organizations that comprise such groups; 
                and
                  (B) includes the development, implementation, or 
                maintenance of methods, technical or administrative 
                procedures, or information resources that support the 
                purposes described in subparagraph (A).

SEC. 3. COORDINATION AND OVERSIGHT OF POLICIES.

  (a) In General.--The Director of the Office of Management and Budget 
shall coordinate and oversee the confidentiality and disclosure 
policies established by this Act. The Director may promulgate rules or 
provide other guidance to ensure consistent interpretation of this Act 
by the affected agencies.
  (b) Agency Rules.--Subject to subsection (c), agencies may promulgate 
rules to implement this Act. Rules governing disclosures of information 
that are authorized by this Act shall be promulgated by the agency that 
originally collected the information.
  (c) Review and Approval of Rules.--The Director shall review any 
rules proposed by an agency pursuant to this Act for consistency with 
the provisions of this Act and chapter 35 of title 44, United States 
Code, and such rules shall be subject to the approval of the Director.
  (d) Reports.--
          (1) The head of each agency shall provide to the Director of 
        the Office of Management and Budget such reports and other 
        information as the Director requests.
          (2) Each Designated Statistical Agency referred to in section 
        202 shall report annually to the Director of the Office of 
        Management and Budget, the Committee on Government Reform of 
        the House of Representatives, and the Committee on Governmental 
        Affairs of the Senate on the actions it has taken to implement 
        sections 203 and 204. The report shall include copies of each 
        written agreement entered into pursuant to section 204(a) for 
        the applicable year.
          (3) The Director of the Office of Management and Budget shall 
        include a summary of reports submitted to the Director under 
        paragraph (2) and actions taken by the Director to advance the 
        purposes of this Act in the annual report to the Congress on 
        statistical programs prepared under section 3504(e)(2) of title 
        44, United States Code.

SEC. 4. EFFECT ON OTHER LAWS.

  (a) Title 44, United States Code.--This Act, including amendments 
made by this Act, does not diminish the authority under section 3510 of 
title 44, United States Code, of the Director of the Office of 
Management and Budget to direct, and of an agency to make, disclosures 
that are not inconsistent with any applicable law.
  (b) Title 13 and Title 44, United States Code.--This Act, including 
amendments made by this Act, does not diminish the authority of the 
Bureau of the Census to provide information in accordance with sections 
8, 16, 301, and 401 of title 13, United States Code, and section 2108 
of title 44, United States Code.
  (c) Title 13, United States Code.--This Act, including amendments 
made by this Act, shall not be construed as authorizing the disclosure 
for nonstatistical purposes of demographic data or information 
collected by the Census Bureau pursuant to section 9 of title 13, 
United States Code.
  (d) Various Energy Statutes.--Data or information acquired by the 
Energy Information Administration under a pledge of confidentiality and 
designated by the Energy Information Administration to be used for 
exclusively statistical purposes shall not be disclosed in identifiable 
form for nonstatistical purposes under--
          (1) section 12, 20, or 59 of the Federal Energy 
        Administration Act of 1974 (15 U.S.C. 771, 779, 790h);
          (2) section 11 of the Energy Supply and Environmental 
        Coordination Act of 1974 (15 U.S.C. 796); or
          (3) section 205 or 407 of the Department of the Energy 
        Organization Act of 1977 (42 U.S.C. 7135, 7177).
  (e) Preemption of State Law.--Nothing in this Act shall preempt 
applicable State law regarding the confidentiality of data collected by 
the States.
  (f) Statutes Regarding False Statements.--Notwithstanding section 
102, information collected by an agency for exclusively statistical 
purposes under a pledge of confidentiality may be provided by the 
collecting agency to a law enforcement agency for the prosecution of 
submissions to the collecting agency of false statistical information 
under statutes that authorize criminal penalties (such as section 221 
of title 13, United States Code) or civil penalties for the provision 
of false statistical information, unless such disclosure or use would 
otherwise be prohibited under Federal law.
  (g) Construction.--Nothing in this Act shall be construed as 
restricting or diminishing any confidentiality protections or penalties 
for unauthorized disclosure that otherwise apply to data or information 
collected for statistical purposes or nonstatistical purposes, 
including, but not limited to, section 6103 of the Internal Revenue 
Code of 1986 (26 U.S.C. 6103).
  (h) Authority of Congress.--Nothing in this Act shall be construed to 
affect the authority of the Congress, including its committees, 
members, or agents, to obtain data or information for a statistical 
purpose, including for oversight of an agency's statistical activities.

              TITLE I--CONFIDENTIAL INFORMATION PROTECTION

SEC. 101. FINDINGS AND PURPOSES.

  (a) Findings.--The Congress finds the following:
          (1) Individuals, businesses, and other organizations have 
        varying degrees of legal protection when providing information 
        to the agencies for strictly statistical purposes.
          (2) Pledges of confidentiality by agencies provide assurances 
        to the public that information about individuals or 
        organizations or provided by individuals or organizations for 
        exclusively statistical purposes will be held in confidence and 
        will not be used against such individuals or organizations in 
        any agency action.
          (3) Protecting the confidentiality interests of individuals 
        or organizations who provide information under a pledge of 
        confidentiality for Federal statistical programs serves both 
        the interests of the public and the needs of society.
          (4) Declining trust of the public in the protection of 
        information provided under a pledge of confidentiality to the 
        agencies adversely affects both the accuracy and completeness 
        of statistical analyses.
          (5) Ensuring that information provided under a pledge of 
        confidentiality for statistical purposes receives protection is 
        essential in continuing public cooperation in statistical 
        programs.
  (b) Purposes.--The purposes of this title are the following:
          (1) To ensure that information supplied by individuals or 
        organizations to an agency for statistical purposes under a 
        pledge of confidentiality is used exclusively for statistical 
        purposes.
          (2) To ensure that individuals or organizations who supply 
        information under a pledge of confidentiality to agencies for 
        statistical purposes will neither have that information 
        disclosed in identifiable form to anyone not authorized by this 
        Act nor have that information used for any purpose other than a 
        statistical purpose.
          (3) To safeguard the confidentiality of individually 
        identifiable information acquired under a pledge of 
        confidentiality for statistical purposes by controlling access 
        to, and uses made of, such information.

SEC. 102. LIMITATIONS ON USE AND DISCLOSURE OF DATA AND INFORMATION.

  (a) Use of Statistical Data or Information.--Data or information 
acquired by an agency under a pledge of confidentiality and for 
exclusively statistical purposes shall be used by officers, employees, 
or agents of the agency exclusively for statistical purposes.
  (b) Disclosure of Statistical Data or Information.--
          (1) Data or information acquired by an agency under a pledge 
        of confidentiality for exclusively statistical purposes shall 
        not be disclosed by an agency in identifiable form, for any use 
        other than an exclusively statistical purpose, except with the 
        informed consent of the respondent.
          (2) A disclosure pursuant to paragraph (1) is authorized only 
        when the head of the agency approves such disclosure and the 
        disclosure is not prohibited by any other law.
          (3) This section does not restrict or diminish any 
        confidentiality protections in law that otherwise apply to data 
        or information acquired by an agency under a pledge of 
        confidentiality for exclusively statistical purposes.
  (c) Rule for Use of Data or Information for Nonstatistical 
Purposes.--A statistical agency or unit shall clearly distinguish any 
data or information it collects for nonstatistical purposes (as 
authorized by law) and provide notice to the public, before the data or 
information is collected, that the data or information could be used 
for nonstatistical purposes.
  (d) Designation of Agents.--A statistical agency or unit may 
designate agents, by contract or by entering into a special agreement 
containing the provisions required under section 2(2) for treatment as 
an agent under that section, who may perform exclusively statistical 
activities, subject to the limitations and penalties described in this 
Act.

SEC. 103. FINES AND PENALTIES.

  Whoever, being an officer, employee, or agent of an agency acquiring 
information for exclusively statistical purposes, having taken and 
subscribed the oath of office, or having sworn to observe the 
limitations imposed by section 102, comes into possession of such 
information by reason of his or her being an officer, employee, or 
agent and, knowing that the disclosure of the specific information is 
prohibited under the provisions of this Act, willfully discloses the 
information in any manner to a person or agency not entitled to receive 
it, shall be guilty of a class E felony and imprisoned for not more 
than 5 years, or fined not more than $250,000, or both.

                    TITLE II--STATISTICAL EFFICIENCY

SEC. 201. FINDINGS AND PURPOSES.

  (a) Findings.--The Congress finds the following:
          (1) Federal statistics are an important source of information 
        for public and private decision-makers such as policymakers, 
        consumers, businesses, investors, and workers.
          (2) Federal statistical agencies should continuously seek to 
        improve their efficiency. Statutory constraints limit the 
        ability of these agencies to share data and thus to achieve 
        higher efficiency for Federal statistical programs.
          (3) The quality of Federal statistics depends on the 
        willingness of businesses to respond to statistical surveys. 
        Reducing reporting burdens will increase response rates, and 
        therefore lead to more accurate characterizations of the 
        economy.
          (4) Enhanced sharing of business data among the Bureau of the 
        Census, the Bureau of Economic Analysis, and the Bureau of 
        Labor Statistics for exclusively statistical purposes will 
        improve their ability to track more accurately the large and 
        rapidly changing nature of United States business. In 
        particular, the statistical agencies will be able to better 
        ensure that businesses are consistently classified in 
        appropriate industries, resolve data anomalies, produce 
        statistical samples that are consistently adjusted for the 
        entry and exit of new businesses in a timely manner, and 
        correct faulty reporting errors quickly and efficiently.
          (5) The Congress enacted the International Investment and 
        Trade in Services Act of 1990 that allowed the Bureau of the 
        Census, the Bureau of Economic Analysis, and the Bureau of 
        Labor Statistics to share data on foreign-owned companies. The 
        Act not only expanded detailed industry coverage from 135 
        industries to over 800 industries with no increase in the data 
        collected from respondents but also demonstrated how data 
        sharing can result in the creation of valuable data products.
          (6) With title I of this Act, the sharing of business data 
        among the Bureau of the Census, the Bureau of Economic 
        Analysis, and the Bureau of Labor Statistics continues to 
        ensure the highest level of confidentiality for respondents to 
        statistical surveys.
  (b) Purposes.--The purposes of this title are the following:
          (1) To authorize the sharing of business data among the 
        Bureau of the Census, the Bureau of Economic Analysis, and the 
        Bureau of Labor Statistics for exclusively statistical 
        purposes.
          (2) To reduce the paperwork burdens imposed on businesses 
        that provide requested information to the Federal Government.
          (3) To improve the comparability and accuracy of Federal 
        economic statistics by allowing the Bureau of the Census, the 
        Bureau of Economic Analysis, and the Bureau of Labor Statistics 
        to update sample frames, develop consistent classifications of 
        establishments and companies into industries, improve coverage, 
        and reconcile significant differences in data produced by the 
        three agencies.
          (4) To increase understanding of the United States economy, 
        especially for key industry and regional statistics, to develop 
        more accurate measures of the impact of technology on 
        productivity growth, and to enhance the reliability of the 
        Nation's most important economic indicators, such as the 
        National Income and Product Accounts.

SEC. 202. DESIGNATION OF STATISTICAL AGENCIES.

  For purposes of this title, the term ``Designated Statistical 
Agency'' means each of the following:
          (1) The Bureau of the Census of the Department of Commerce.
          (2) The Bureau of Economic Analysis of the Department of 
        Commerce.
          (3) The Bureau of Labor Statistics of the Department of 
        Labor.

SEC. 203. RESPONSIBILITIES OF DESIGNATED STATISTICAL AGENCIES.

  The head of each of the Designated Statistical Agencies shall--
          (1) identify opportunities to eliminate duplication and 
        otherwise reduce reporting burden and cost imposed on the 
        public in providing information for statistical purposes;
          (2) enter into joint statistical projects to improve the 
        quality and reduce the cost of statistical programs; and
          (3) protect the confidentiality of individually identifiable 
        information acquired for statistical purposes by adhering to 
        safeguard principles, including--
                  (A) emphasizing to their officers, employees, and 
                agents the importance of protecting the confidentiality 
                of information in cases where the identity of 
                individual respondents can reasonably be inferred by 
                either direct or indirect means;
                  (B) training their officers, employees, and agents in 
                their legal obligations to protect the confidentiality 
                of individually identifiable information and in the 
                procedures that must be followed to provide access to 
                such information;
                  (C) implementing appropriate measures to assure the 
                physical and electronic security of confidential data;
                  (D) establishing a system of records that identifies 
                individuals accessing confidential data and the project 
                for which the data were required; and
                  (E) being prepared to document their compliance with 
                safeguard principles to other agencies authorized by 
                law to monitor such compliance.

SEC. 204. SHARING OF BUSINESS DATA AMONG DESIGNATED STATISTICAL 
                    AGENCIES.

  (a) In General.--A Designated Statistical Agency may provide business 
data in an identifiable form to another Designated Statistical Agency 
under the terms of a written agreement among the agencies sharing the 
business data that specifies--
          (1) the business data to be shared;
          (2) the statistical purposes for which the business data are 
        to be used;
          (3) the officers, employees, and agents authorized to examine 
        the business data to be shared; and
          (4) appropriate security procedures to safeguard the 
        confidentiality of the business data.
  (b) Responsibilities of Agencies Under Other Laws.--The provision of 
business data by an agency to a Designated Statistical Agency under 
this title shall in no way alter the responsibility of the agency 
providing the data under other statutes (including section 552 of title 
5, United States Code (popularly known as the Freedom of Information 
Act), and section 552b of title 5, United States Code (popularly known 
as the Privacy Act of 1974)) with respect to the provision or 
withholding of such information by the agency providing the data.
  (c) Responsibilities of Officers, Employees, and Agents.--Examination 
of business data in identifiable form shall be limited to the officers, 
employees, and agents authorized to examine the individual reports in 
accordance with written agreements pursuant to this section. Officers, 
employees, and agents of a Designated Statistical Agency who receive 
data pursuant to this title shall be subject to all provisions of law, 
including penalties, that relate--
          (1) to the unlawful provision of the business data that would 
        apply to the officers, employees, and agents of the agency that 
        originally obtained the information; and
          (2) to the unlawful disclosure of the business data that 
        would apply to officers, employees, and agents of the agency 
        that originally obtained the information.
  (d) Notice.--Whenever a written agreement concerns data that 
respondents were required by law to report and the respondents were not 
informed that the data could be shared among the Designated Statistical 
Agencies, for exclusively statistical purposes, the terms of such 
agreement shall be described in a public notice issued by the agency 
that intends to provide the data. Such notice shall allow a minimum of 
60 days for public comment.

SEC. 205. LIMITATIONS ON USE OF BUSINESS DATA PROVIDED BY DESIGNATED 
                    STATISTICAL AGENCIES.

  (a) Use, Generally.--Business data provided by a Designated 
Statistical Agency pursuant to this title shall be used exclusively for 
statistical purposes.
  (b) Publication.--Publication of business data acquired by a 
Designated Statistical Agency shall occur in a manner whereby the data 
furnished by any particular respondent are not in identifiable form.

SEC. 206. CONFORMING AMENDMENTS.

  (a) Department of Commerce.--Section 1 of the Act of January 27, 1938 
(15 U.S.C. 176a) is amended by striking ``The'' and inserting ``Except 
as provided in the Confidential Information Protection and Statistical 
Efficiency Act of 2002, the''.
  (b) Title 13.--Chapter 10 of title 13, United States Code, is 
amended--
          (1) by adding after section 401 the following:

``Sec. 402. Providing business data to Designated Statistical Agencies

  ``The Bureau of the Census may provide business data to the Bureau of 
Economic Analysis and the Bureau of Labor Statistics (`Designated 
Statistical Agencies') if such information is required for an 
authorized statistical purpose and the provision is the subject of a 
written agreement with that Designated Statistical Agency, or their 
successors, as defined in the Confidential Information Protection and 
Statistical Efficiency Act of 2002.''; and
          (2) in the table of sections for the chapter by adding after 
        the item relating to section 401 the following:

``402. Providing business data to Designated Statistical Agencies.''.

                                CONTENTS

                                                                   Page
  I. Purpose..........................................................7
 II. Background and Need for the Legislation..........................7
III. Committee Actions................................................9
 IV. Committee Hearings and Testimony.................................9
  V. Section-by-Section Analysis of the Bill.........................10
 VI. Committee Oversight Findings....................................14
VII. Budget Analysis and Projections.................................14
VIII.Cost Estimate of the Congressional Budget Office................14

 IX. Performance Goals and Objectives................................15
  X. Statement of Constitutional Authority...........................15
 XI. Committee Recommendation........................................15
XII. Congressional Accountability Act................................16
XIII.Unfunded Mandates Reform Act....................................16

XIV. Federal Advisory Committee Act..................................16
 XV. Changes in Existing Law.........................................16

                               I. Purpose

    H.R. 5215, the ``Confidential Information Protection and 
Statistical Efficiency Act of 2002,'' introduced by 
Representative Stephen Horn (R-CA), would remove statutory 
barriers that now prevent the Census Bureau, the Bureau of 
Labor Statistics and the Bureau of Economic Analysis from 
sharing and comparing business-related statistical data. 
Allowing these agencies to share this business-related 
information would substantially enhance the accuracy of 
economic statistics. H.R. 5215 would also ensure that the 
confidential data that individuals and businesses provide to 
Federal agencies for statistical purposes are subject to 
uniform and rigorous protections against unauthorized use.

                II. Background and Need for Legislation

    Accurate statistical data are essential to making informed 
public and private decisions in a host of important areas, 
including the Nation's economy and its many facets. The 
Nation's core economic indicators--the Gross Domestic Product 
and other key statistical aggregates--form the cornerstone of 
Federal budgetary and monetary policy. Yet increasing data 
anomalies and inconsistencies raise questions about the 
accuracy of the Nation's economic statistics. For example, the 
Department of Commerce recently had to make a historically 
large $200 billion revision to its calculation of the Nation's 
Gross Domestic Product because the Department lacked access to 
the data it needed to produce timely and accurate estimates.
    Such serious data inconsistencies call into question the 
accuracy with which Federal agencies track industry output, 
employment and productivity trends. During the last economic 
census in 1997, the Bureau of Labor Statistics reported payroll 
data in the information technology sector that was 13 percent 
higher than the data reported by the Census Bureau. In 
addition, there was a 14 percent disparity in the payroll data 
reported by the two agencies for the motor freight, 
transportation and warehousing industries.
    The Census Bureau, the Bureau of Labor Statistics and the 
Bureau of Economic Analysis each have a critical need for the 
same statistical information, but they are prohibited by law 
from sharing it. This Act would remove the statutory barriers 
that now prevent these three agencies from sharing and 
comparing statistical data. This increased data sharing would 
largely eliminate the anomalies that now exist in Federal 
statistics data and thereby greatly enhance their quality. The 
Act would also eliminate much of the duplicative data 
collection that now occurs, which will ease the reporting 
burdens on businesses.
    Some key features of the bill's data-sharing provisions are 
the following:
          The provisions apply only to the three agencies 
        previously mentioned--the Census Bureau, the Bureau of 
        Labor Statistics and the Bureau of Economic Analysis.
          The provisions apply only to the sharing of business 
        data. They do not extend to household, demographic or 
        other data provided by individuals to the Federal 
        Government.
          The enhanced data sharing can be used only for 
        statistical purposes.
          The data sharing will be closely controlled under 
        written agreements that specify which data are to be 
        shared, the statistical purposes for which the data can 
        be used, and the individuals who are authorized to 
        receive the data. The agreements must include 
        appropriate security safeguards.
    In addition, H.R. 5215 would enhance the protection of data 
that both businesses and individuals provide to the Federal 
Government on a confidential basis. In contrast to the Act's 
limited data-sharing authorities, its confidentiality 
protections are very broad. They apply to all Federal agencies 
that collect data for statistical purposes from businesses or 
individuals under a pledge of confidentiality.
    The bill provides one uniform set of confidentiality 
protections to supplant the ad hoc statutory protections that 
now exist. The bill also establishes statutory protections in 
some areas where no such protections currently exist. The 
bill's enhanced confidentiality protections would improve the 
quality of Federal statistics by encouraging greater 
cooperation on the part of respondents. Even more important, 
these protections ensure that the Federal Government does not 
abuse the trust of those who provide data under a pledge of 
confidentiality.
    The key features of the confidentiality provisions in H.R. 
5215 are the following:
          The bill provides a clear and consistent standard for 
        the use of confidential statistical information.
          The bill specifically prohibits the Federal 
        Government from using such information for any non-
        statistical purpose. The bill defines a prohibited non-
        statistical purpose as the use of data in an 
        identifiable form for any administrative, regulatory, 
        law enforcement, adjudicative or other purpose that 
        affects the rights, privileges or benefits of the 
        person or organization supplying the information.
          The bill prohibits data that are acquired for 
        exclusively statistical purposes under a pledge of 
        confidentiality from being disclosed under the Freedom 
        of Information Act.
          The bill imposes criminal penalties on Federal 
        employees or agents who willfully disclose information 
        in violation of the bill's requirements.
    The Administration strongly supports H.R. 5215. This bill 
is similar to another bill that Representative Horn introduced 
during the 106th Congress, H.R. 2885, the ``Statistical 
Efficiency Act of 1999.'' That bill received strong bipartisan 
support and passed the House under suspension of the rules. 
H.R. 5215 differs from its predecessor by narrowing the data-
sharing provisions and broadening the confidentiality 
protections.

                         III. Committee Actions

    Representative Horn introduced H.R. 5215 on July 25, 2002, 
for himself and Representatives Tom Sawyer (D-OH) and Carolyn 
Maloney (D-NY). The bill was referred to the Committee on 
Government Reform and then was subsequently referred to the 
Subcommittee on Government Efficiency, Financial Management and 
Intergovernmental Relations.
    On September 17, 2002, the Subcommittee on Government 
Efficiency, Financial Management and Intergovernmental 
Relations met in open session. The subcommittee reported the 
bill as amended by voice vote to the Committee on Government 
Reform. The full committee met on October 9, 2002, and 
favorably reported the bill, as amended, by voice vote to the 
House of Representatives.
    At subcommittee, an amendment was adopted to clarify that 
the bill would not prevent certain non-government researchers 
from continuing to access statistical data they now receive on 
a limited basis in a form that does not identify individual 
respondents. Specifically, this amendment revised the 
definition of ``identifiable form'' in section 2(4) of the bill 
to mean ``any representation of information that permits the 
identity of the respondent to whom the information applies to 
be reasonably inferred by either direct of indirect means.'' As 
well, the subcommittee amendment, adopted in the nature of a 
substitute, added provisions to section 3 of the bill that 
strengthened Office of Management and Budget and congressional 
oversight of implementation of the bill.
    At the full committee, Committee Ranking Minority Member 
Henry Waxman (D-CA) offered two amendments, which were adopted. 
The first amendment provided that nothing in the bill prohibits 
Congress from obtaining data or information for a statistical 
purpose, including for oversight of an agency's statistical 
activities. The second amendment clarified the provisions of 
the bill dealing with notice to the public when information is 
being collected for a non-statistical purpose.

                  IV. Committee Hearings and Testimony

    The Subcommittee on Government Efficiency, Financial 
Management, and Intergovernmental Relations chaired by 
Representative Horn, held a hearing on H.R. 5215 on September 
17, 2002. At that hearing, the subcommittee explored how the 
data-sharing provisions of the bill would improve the accuracy 
and consistency of Federal statistics, and how the 
confidentially provisions of the bill would enhance 
confidentiality protections for individuals and businesses who 
provide data to Federal agencies on a confidential basis.
    The subcommittee heard testimony from the following 
witnesses: Representative Thomas C. Sawyer (D-OH ); the 
Honorable Randall S. Kroszner, Member, Council of Economic 
Advisers; the Honorable Kathleen B. Cooper, Under Secretary for 
Economic Affairs, Department of Commerce; the Honorable 
Kathleen P. Utgoff, Commissioner, Bureau of Labor Statistics, 
Department of Labor; Dr. Maurine Haver, Chair, Statistics 
Committee of National Association for Business Economics; Dr. 
William D. Nordhaus, Sterling Professor of Economics, Yale 
University; and Dr. Ralph Rector, Research Fellow and Project 
Manager, The Heritage Foundation. All of the witnesses strongly 
supported the bill.

               V. Section-by-Section Analysis of the Bill


Section 1--Short title

    This section provides that the Act may be cited as the 
``Confidential Information Protection and Statistical 
Efficiency Act of 2002.''

Section 2--Definitions

    Paragraph (1) of section 2 defines ``agency'' to mean 
executive agencies as defined in section 102 of title 31, 
United States Code or in section 3502 of title 44, United 
States Code.
    Paragraph (2) defines ``agent'' to mean any private 
researcher, individual, consultant or contractor who is 
operating under a contract with an executive agency to perform 
exclusively statistical activities under the control of an 
officer or employee of that agency. This definition also 
includes persons who contract with an agency to design or 
maintain the systems for handling or storing confidential data. 
Agents must agree in writing to comply with all provisions of 
law that affect information acquired by the agency with which 
they have a contract.
    Paragraph (3) defines ``business data'' as operating and 
financial data and information about businesses, tax-exempt 
organizations and government entities.
    Paragraph (4) defines ``identifiable form'' as any 
representation of information that permits the identity of the 
respondent to whom the information applies to be reasonably 
inferred by either direct or indirect means.
    Paragraph (5) defines ``nonstatistical purpose'' as the use 
of data in any form that is not a statistical purpose including 
any administrative, regulatory, law enforcement, adjudicatory 
or other purpose that affects the rights, privileges or 
benefits of a particular identifiable respondent. This term 
also includes disclosures under the Freedom of Information Act 
(5 U.S.C. 552) of data that are acquired for exclusively 
statistical purposes under a pledge of confidentiality.
    Paragraph (6) defines ``respondent'' as a person or 
organization that is requested or required to supply 
information to an agency, is the subject of information 
requested or required to be supplied to an agency, or provides 
that information to an agency.
    Paragraph (7) defines ``statistical activities'' as the 
collection, compilation, processing or analysis of data for the 
purpose of describing or making estimates concerning the 
economy, society or the natural environment. The definition 
includes the development of methods or resources that support 
those activities.
    Paragraph (8) defines ``statistical agency or unit'' as an 
agency or organizational unit of the executive branch whose 
activities are predominantly the collection, compilation, 
processing or analysis of information for statistical purposes.
    Paragraph (9) defines ``statistical purpose'' as the 
description, estimation or analysis of the characteristics of 
groups without identifying the individuals or organizations 
that comprise such groups. The definition includes the 
development, implementation or maintenance of methods, 
technical or administrative procedures, or information 
resources that support such purposes.

Section 3--Coordination and oversight of policies

    Subsection (a) requires the Director of the Office of 
Management and Budget (OMB) to coordinate and oversee the 
disclosure and confidentiality policies under the Act. The 
Director is authorized to issue rules or other guidance to 
ensure consistent interpretation of the Act.
    Subsection (b) authorizes agencies to promulgate rules to 
implement the Act. The agency that originally collected the 
information would promulgate rules governing authorized 
disclosures of that information.
    Subsection (c) requires the Director of OMB to review and 
approve any agency rules under the Act for consistency with the 
Act and the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
    Subsection (d) requires the designated statistical agencies 
(the Census Bureau, the Bureau of Economic Analysis and the 
Bureau of Labor Statistics) to report annually to the Director 
of the Office of Management and Budget (OMB), the House 
Committee on Government Reform and the Senate Committee on 
Governmental Affairs on their actions to implement the business 
data-sharing provisions of the Act. The reports shall include 
copies of written agreements to share business data for the 
applicable year. The OMB shall include a summary of the agency 
reports and any actions taken by the OMB to advance the 
purposes of this title, in its annual report to Congress on 
statistical programs under 44 U.S.C. 3504(e)(2).

Section 4--Effect on other laws

    Subsection (a) provides that the Act does not diminish the 
authority of the OMB or agencies under 44 U.S.C. 3510 to share 
information if the disclosure is consistent with any applicable 
law.
    Subsection (b) provides that the Act does not diminish the 
authority of the Bureau of the Census to provide information in 
accordance with sections 8, 16, 301, and 401 of title 13 and 
section 2108 of title 44, of the United States Code.
    Subsection (c) provides that the Act shall not be construed 
as authorizing the disclosure of demographic data or 
information collected by the Census Bureau pursuant to 13 
U.S.C. 9 for non-statistical purposes.
    Subsection (d) provides that the data or information 
acquired by the Energy Information Administration under a 
pledge of confidentiality and designated by the Energy 
Information Administration to be used for exclusively 
statistical purposes shall not be disclosed in identifiable 
form for non-statistical purposes under various provisions of 
law.
    Subsection (e) provides that the Act does not preempt 
applicable State law regarding the confidentiality of data 
collected by the States.
    Subsection (f) allows an agency to provide information, 
which the agency collected under a pledge of confidentiality 
for exclusively statistical purposes, to a law enforcement 
agency for the prosecution under applicable statutes of anyone 
who provides false statistical information. The subsection 
further provides that such disclosures are permissible unless 
Federal law would otherwise prohibit the disclosure.
    Subsection (g) provides that nothing in the Act shall be 
construed to restrict or diminish any confidentiality 
protections or penalties for unauthorized disclosure that 
otherwise apply to data or information collected for 
statistical purposes or non-statistical purposes, including 
section 6103 of the Internal Revenue Code.
    Subsection (h) provides that nothing in the Act shall be 
construed to affect the authority of Congress, including its 
committees, members or agents, to obtain data or information 
for a statistical purpose, including oversight of an agency's 
statistical activities.

              Title I--Confidential Information Protection


Section 101--Findings and purposes

    This section contains congressional findings and purposes 
with respect to the provisions of title I.

Section 102--Limitations on use and disclosure of data and information

    Subsection (a) provides that data or information acquired 
by an agency under a pledge of confidentiality and for 
exclusively statistical purposes shall be used by officers, 
employees or agents of the agency exclusively for statistical 
purposes.
    Subsection (b) provides that data or information acquired 
by an agency under a pledge of confidentiality for exclusively 
statistical purposes shall not be disclosed by an agency in 
identifiable form, other than for an exclusively statistical 
purpose, except with the informed consent of the respondent. 
The subsection further provides that such a disclosure is 
authorized only when the head of the agency approves the 
disclosure and no other law prohibits the disclosure. Finally, 
the subsection provides that section 102 does not restrict or 
diminish any confidentiality protections in law that otherwise 
apply to data or information acquired by an agency under a 
pledge of confidentiality for exclusively statistical purposes.
    Subsection (c) provides that a statistical agency or unit 
shall clearly distinguish any data or information it collects 
for non-statistical purposes (as authorized by law) and provide 
notice to the public, before the data or information is 
collected, that the data or information could be used for non-
statistical purposes.
    Subsection (d) provides that a statistical agency or unit 
may designate agents to perform exclusively statistical 
activities, subject to the limitations and penalties described 
in the Act. Such designations must be made by contracts or 
agreements that contain the provisions required by section 2(2) 
of the Act.

Section 103--Fines and penalties

    This section provides fines and penalties for any officer, 
employee or agent of an agency who acquires information for 
exclusively statistical purposes and willfully discloses the 
information to a person or agency not entitled to receive it.

                    Title II--Statistical Efficiency


Section 201--Findings and purposes

    Section 201 contains congressional findings and purposes 
with respect to the provisions of title II.

Section 202--Designation of Statistical Agencies

    This section provides that, for purposes of title II, the 
term ``Designated Statistical Agency'' means the Bureau of the 
Census, the Bureau of Economic Analysis and the Bureau of Labor 
Statistics.

Section 203--Responsibilities of Designated Statistical Agencies

    This section imposes responsibilities on the heads of the 
three Designated Statistical Agencies. The agency heads shall 
identify opportunities to eliminate duplication and otherwise 
reduce reporting burdens and costs imposed on the public in 
providing information for statistical purposes. They shall 
enter into joint statistical projects to improve the quality 
and reduce the cost of statistical programs. Finally, they 
shall protect the confidentiality of individually identifiable 
information acquired for statistical purposes by adhering to 
safeguard principles, including those principles specified in 
section 203.

Section 204--Sharing of business data among Designated Statistical 
        Agencies

    Subsection (a) authorizes a Designated Statistical Agency 
to provide business data in an identifiable form to another 
Designated Statistical Agency under the terms of a written 
agreement among the agencies that are sharing the business 
data. The agreement must specify: the business data to be 
shared; the statistical purposes for which the business data 
are to be used; the officers, employees and agents authorized 
to examine the business data to be shared; and appropriate 
security procedures to safeguard the confidentiality of the 
business data.
    Subsection (b) states that the provision of business data 
by an agency to a Designated Statistical Agency under this 
title shall not alter the status of the data or the 
responsibilities of that agency under other statutes, including 
the Freedom of Information Act (5 U.S.C. 552) and the Privacy 
Act of 1974 (5 U.S.C. 552b).
    Subsection (c) provides that examination of business data 
in identifiable form shall be limited to the officers, 
employees and agents authorized to examine the individual 
reports in accordance with written agreements pursuant to the 
Act. This subsection further provides that officers, employees, 
and agents of a Designated Statistical Agency who receive data 
pursuant to this title shall be subject to the same laws and 
penalties relating to the unlawful provision or disclosure of 
the business data that apply to the officers, employees, and 
agents of the agency that originally obtained the data.
    Subsection (d) provides that when a written agreement 
concerns data that respondents were required by law to report 
and the respondents were not informed that the data could be 
shared among the Designated Statistical Agencies for 
exclusively statistical purposes, the terms of the agreement 
shall be described in a public notice issued by the agency that 
intends to provide the data. The notice shall allow a minimum 
of 60 days for public comment.

Section 205--Limitations on use of business data provided by Designated 
        Statistical Agencies

    Subsection (a) states that business data provided by a 
Designated Statistical Agency pursuant to title II shall be 
used exclusively for statistical purposes.
    Subsection (b) provides that business data acquired by a 
Designated Statistical Agency shall not be published in a 
manner that would allow the identification of a particular 
respondent.

Section 206--Conforming amendments

    Subsection (a) pertains to the Department of Commerce. It 
amends a provision prohibiting disclosure of confidential 
information by the Bureau of Foreign and Domestic Commerce to 
permit disclosure pursuant to the Act.
    Subsection (b) adds a new provision to title 13 of the 
United States Code to permit the Bureau of the Census to 
provide business data to the Bureau of Economic Analysis and 
the Bureau of Labor Statistics pursuant to agreements entered 
into under the provisions of the Act.

                    VI. Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                  VII. Budget Analysis and Projections

    Clause 3(c)(2) of rule XIII, of the Rules of the House of 
Representatives, is inapplicable because the bill does not 
provide new budget authority, new spending authority, new 
credit authority, or an increase or decrease in revenues or tax 
expenditures.

         VIII. Cost Estimate of the Congressional Budget Office

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 8, 2002.
Hon. Dan Burton,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5215, the 
Confidential Information Protection and Statistical Efficiency 
Act of 2002.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Ken 
Johnson, and Christina Hawley Sadoti.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 5215--Confidential Information Protection and Statistical 
        Efficiency Act of 2002

    H.R. 5215 would allow the Census Bureau, the Bureau of 
Economic Analysis (BEA), and the Bureau of Labor Statistics 
(BLS) to undertake joint statistical projects and share 
business data, subject to certain confidentiality restrictions. 
The bill also would create new criminal fines for any employee 
from those agencies that purposefully discloses data in 
violation of the bill's confidentiality provisions.
    Enacting H.R. 5215 could result in the collection of 
additional criminal fines. Such fines are deposited in the 
Crime Victims Fund and spent in subsequent years. However, CBO 
estimates that any increase in revenues and direct spending 
would be negligible.
    CBO also expects that allowing the Census Bureau and BLS to 
share business data could generate cost savings for the two 
agencies. Under current law, statistical agencies cannot 
exchange such data, and therefore sometimes collect duplicative 
information. For example, the Census Bureau and BLS together 
typically spend about $150 million a year to collect and 
process data for their own independent lists of business 
establishments. Under H.R. 5215, these agencies could create 
one master list and potentially reduce total data collection 
and maintenance costs. Based on information from the two 
agencies, the Office of Management and Budget, and the General 
Accounting Office, CBO estimates that, after an implementation 
period of two or three years, the Census Bureau and BLS could 
achieve savings of up to $10 million annually, assuming that 
appropriations for the two agencies are reduced accordingly.
    H.R. 5215 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contacts for this estimate are Ken Johnson, 
and Christina Hawley Sadoti. The estimate was approved by Peter 
H. Fontaine, Deputy Assistant Direct for Budget Analysis.

                  IX. Performance Goals and Objectives

    H.R. 5215 does not authorize funding. Therefore, clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives is inapplicable.

                X. Statement of Constitutional Authority

    Pursuant to rule XIII, clause 3(d)(1), the Committee finds 
that clauses 1 and 18 of Article I, Section 8 of the U.S. 
Constitution grant Congress the power to enact this law.

                      XI. Committee Recommendation

    On October 9, 2002, a quorum being present, the Committee 
on Government Reform ordered the bill, as amended, favorably 
reported by voice vote to the House of Representatives for 
consideration.

                 XII. Congressional Accountability Act

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(B)(3) of the Congressional Accountability Act (Public Law 
104-1).

                   XIII. Unfunded Mandates Reform Act

    The Committee finds that the legislation does not impose 
any Federal mandates within the meaning of section 423 of the 
Unfunded Mandates Reform Act (Public Law 104-4).

                  XIV. Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize establishment of an advisory committee within the 
definition of 5 U.S.C. App., section 5(b).

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

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, 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, existing law in which no change is 
proposed is shown in roman):

                        ACT OF JANUARY 27, 1938

AN ACT To make confidential certain information furnished to the Bureau 
       of Foreign and Domestic Commerce, and for other purposes.

  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That any 
statistical information furnished in confidence to the Bureau 
of Foreign and Domestic Commerce by individuals, corporations, 
and firms shall be held to be confidential, and shall be used 
only for the statistical purposes for which it is supplied. 
[The] Except as provided in the Confidential Information 
Protection and Statistical Efficiency Act of 2002, the Director 
of the Bureau of Foreign and Domestic Commerce shall not permit 
anyone other than the sworn employees of the Bureau to examine 
such individual reports, nor shall he permit any statistics of 
domestic commerce to be published in such manner as to reveal 
the identity of the individual, corporation, or firm furnishing 
such data.

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                              ----------                              


TITLE 13, UNITED STATES CODE

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               CHAPTER 10--EXCHANGE OF CENSUS INFORMATION

Sec.
401. Exchange of census information with Bureau of Economic 
Analysis.
402. Providing business data to Designated Statistical Agencies.

           *       *       *       *       *       *       *


Sec. 402. Providing business data to Designated Statistical Agencies

  The Bureau of the Census may provide business data to the 
Bureau of Economic Analysis and the Bureau of Labor Statistics 
(``Designated Statistical Agencies'') if such information is 
required for an authorized statistical purpose and the 
provision is the subject of a written agreement with that 
Designated Statistical Agency, or their successors, as defined 
in the Confidential Information Protection and Statistical 
Efficiency Act of 2002.

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