[Federal Register Volume 59, Number 142 (Tuesday, July 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18095]


[[Page Unknown]]

[Federal Register: July 26, 1994]


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Part V





Office of Management and Budget





_______________________________________________________________________




Economic Classification Policy Committee; Standard Industrial 
Classification Replacement; Notice
OFFICE OF MANAGEMENT AND BUDGET

 
Economic Classification Policy Committee; Standard Industrial 
Classification Replacement

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice of Proposal to Replace the Standard Industrial 
Classification (SIC) with a New North American Industry Classification 
System (NAICS).

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SUMMARY: Under Title 44 U.S.C. 3504, the Office of Management and 
Budget (OMB) is seeking public comment on a proposal to develop a new 
industry classification system. The proposed system, to be developed in 
cooperation with Mexico's Instituto Nacional de Estadistica, Geografia 
e Informatica (INEGI) and Statistics Canada, would be known as the 
North American Industry Classification System (NAICS). NAICS would 
replace the current system known as the Standard Industrial 
Classification (SIC). The proposed NAICS would provide common industry 
definitions for Canada, Mexico, and the United States to facilitate 
economic analyses that cover the economies of the three North American 
countries. The concepts for the new system, as developed by Statistics 
Canada, Mexico's INEGI, and OMB's Economic Classification Policy 
Committee (ECPC), are contained in a joint, three-country statement, 
published as Part II of this notice.
    This notice: (1) Summarizes in Part I the background for the review 
of the U.S. industry classification system; (2) contains in Part II the 
proposed conceptual framework for the proposed NAICS, which would be a 
production-oriented economic classification; (3) details in Part III 
the process by which the ECPC would develop its recommended actions for 
the new industry classification system; and (4) outlines in Part IV a 
work plan that would initiate implementation of NAICS in 1997. While 
the ECPC is proposing a production-oriented concept for the NAICS, it 
is also committed to providing improved data for purposes that require 
market-oriented groupings including an expansion of the lists of 
commodities and services that will be available from the 1997 Economic 
Censuses. This market-oriented grouping system would be implemented 
after 1997.
    The ECPC is seeking comments on: (1) The usefulness and 
advisability of a common North American system for industry 
classifications, (2) the proposed conceptual framework for the new 
NAICS, and (3) the proposed next steps in the development of the 
classification system for detailed industries. The ECPC is also seeking 
proposals for: (1) new industries and for changing the boundaries of 
existing industries, and (2) market-oriented, or demand-based, 
groupings of economic data. The new NAICS remains tentatively scheduled 
for introduction in 1997.

DATES: To ensure consideration, all comments on the usefulness and 
advisability of a common North American system for industry 
classifications, the conceptual framework, and the replacement process 
must be in writing and should be received by October 3, 1994. All 
proposals for new industries and for changing the boundaries of 
existing industries as well as for market-oriented, or demand-based, 
groupings of economic data must be in writing and should be submitted 
as soon as possible, but should be received no later than November 7, 
1994.

ADDRESSES: Copies of all ECPC papers and documents mentioned in this 
notice are available by contacting Peggy L. Burcham, Economic 
Classification Policy Committee, Bureau of Economic Analysis (BE-42), 
U.S. Department of Commerce, Washington, D.C. 20230, telephone number 
(202) 606-9615, FAX (202) 606-5311.
    Please send written comments on the usefulness and advisability of 
a common North American system for industry classifications, the 
conceptual framework, or the replacement process to: Jack E. Triplett, 
Chairman, Economic Classification Policy Committee, Bureau of Economic 
Analysis (BE-42), U.S. Department of Commerce, Washington, D.C. 20230.
    Please send written proposals for new industries and for changing 
the boundaries of existing industries as well as for market-oriented, 
or demand-based, groupings of economic data to: Carole Ambler, 
Coordinator, Economic Classification Policy Committee, Bureau of the 
Census, U.S. Department of Commerce, Room 3685-3, Washington, D.C. 
20233, telephone number (301) 763-5268, FAX (301) 763-2324.

ELECTRONIC AVAILABILITY AND COMMENTS: This document is available on the 
Internet from the Census Bureau via GOPHER or HTTL under the listing 
``Federal Register Notice Soliciting Proposals on Restructuring the 
SIC.'' This document, as well as the March 31, 1993, Federal Register 
notice and the complete set of related ECPC issues papers and reports, 
is also available via File Transfer Protocol (FTP) from /pub/naics/
ftp.census.gov.
    Comments and proposals may be sent via electronic mail to the 
Census Bureau at [email protected] (do not use any capital letters in 
the address). Comments and proposals received at this address by the 
dates specified above will be included as part of the official record.
    For assistance in reaching the Census Bureau via electronic mail, 
FTP, GOPHER, or HTTL (e.g., MOSAIC, CELLO, LYNX), please contact your 
system administrator. You may also send an electronic message to 
[email protected] requesting the ``FAQ'' (Frequently Asked 
Questions). You will receive an electronic reply with information on 
how to access these services.

FOR FURTHER INFORMATION CONTACT: On the usefulness and advisability of 
a common North American system for industry classifications, the 
conceptual framework, or the replacement process: Jack E. Triplett, 
Chairman, Economic Classification Policy Committee, Bureau of Economic 
Analysis (BE-42), U.S. Department of Commerce, Washington, D.C. 20230, 
telephone number (202) 606-9603, FAX (202) 606-5311.
    On all proposals for new industries and for changing the boundaries 
of existing industries as well as for market-oriented, or demand-based, 
groupings of economic data: Carole Ambler, Coordinator, Economic 
Classification Policy Committee, Bureau of the Census, U.S. Department 
of Commerce, Room 3685-3, Washington, D.C. 20233, telephone number 
(301) 763-5268, FAX (301) 763-2324.

SUPPLEMENTARY INFORMATION:

Part I: Background

    The Standard Industrial Classification (SIC) is the principal 
system used to promote comparability of statistical data describing 
establishments in the U.S. economy. This coding scheme is employed by 
Federal agencies to collect, tabulate, and publish establishment data 
by industry. The last major revision of the SIC was in 1987. However, 
the basic structure of the SIC has remained substantially the same 
since its introduction more than 50 years ago.
    In a previous notice in the Federal Register (FR, March 31, 1993, 
pp. 16990-17004), the Office of Management and Budget announced the 
formation of the Economic Classification Policy Committee, chaired by 
the Bureau of Economic Analysis, U.S. Department of Commerce, with 
representatives from the Bureau of the Census, U.S. Department of 
Commerce, and the Bureau of Labor Statistics, U.S. Department of Labor. 
The ECPC reports to OMB which has responsibility for all economic 
classification systems, other than those for international trade.
    The ECPC is charged with a ``fresh slate'' examination of economic 
classifications for statistical purposes, including industrial 
classifications, product classifications, and product code groupings. 
The ECPC's charge includes: (1) Identifying the essential statistical 
uses of economic classifications; (2) identifying and developing, if 
needed, economic concepts, new structures, and statistical 
methodologies that address such statistical uses; (3) developing 
classification system(s) based on those concepts; (4) planning the 
implementation of the new classification system(s); and (5) ensuring 
that there is ample opportunity for widespread public participation in 
the process.
    The ECPC has prepared and circulated six issues papers on various 
aspects of economic classifications. ECPC Issues Paper No. 1, 
``Conceptual Issues,'' and ECPC Issues Paper No. 2, ``Aggregation 
Structures and Hierarchies,'' were published in the Federal Register 
with the original notice on March 31, 1993. Those two issues papers 
discuss economic concepts for industry classification systems. ECPC 
Issues Paper No. 1 makes the important distinction between 
classification systems that correspond to a production-oriented (or 
supply-based) economic concept, and those that correspond to a market-
oriented (or demand-based) economic concept. The paper also notes that 
two major purposes for grouped or aggregated data can be identified and 
that they correspond, in turn, to the two concepts--production-oriented 
and market-oriented--discussed in the paper. Production studies, for 
example, including the measurement of productivity, and comparisons of 
capital intensity and input usage across industries, require that 
establishments that have similar production processes be grouped 
together, and that different industries demarcate differences in 
production processes. Marketing studies, on the other hand, require 
groupings that correspond to markets, and that group products or 
commodities according to their use. The paper suggests that industry 
classifications of the future should conform to a consistent economic 
concept, and that the concept that is appropriate depends on the 
statistical purposes for which the data are collected.
    The comments that the ECPC received on ECPC Issues Papers Nos. 1 
and 2 display a wide range of views. Public responses indicated 
substantial support for examining economic concepts for 
classifications, though also some reservations. Of the respondents who 
favor a conceptual framework for economic classifications, some favor a 
production-oriented system and others a market-oriented system. 
Respondents expressed substantial concerns about costs and feasibility, 
as well as about potential disruptions that any new system would 
produce in time series. Though views on international compatibility 
were not sought in the Federal Register notice, respondents often 
volunteered that international comparability, particularly among North 
American countries, is important in their uses of economic statistics. 
(A report, ``Summary of Public Comments to ECPC Issues Papers Nos. 1 
and 2'' [1], is available from the ECPC.)
    Four additional ECPC issues papers have been distributed since the 
original Federal Register notice:

Issues Paper No. 3--Collectibility of Data
Issues Paper No. 4--Criteria for Determining Industries
Issues Paper No. 5--The Impact of Classification Revisions on Time 
Series
Issues Paper No. 6--Services Classifications

    ECPC Issues Paper No. 3 explains how establishment coding for 
industry classifications is done in the United States, and how the 
information available to statistical agencies for coding places limits 
on the industry definitions that can in practice be adopted. ECPC 
Issues Paper No. 4 describes the statistical measures that have been 
used in the past to determine industries (primarily size measures and 
specialization and coverage ratios) and discusses some problems with 
these measures. It also describes the new heterogeneity index that the 
ECPC has developed as a new statistical methodology that can be used, 
in conjunction with traditional information, to judge the conceptual 
appropriateness of industry definitions, according to the production-
oriented economic concept. ECPC Issues Paper No. 5 describes the 
fundamental trade-offs that must be made between retaining time-series 
comparability and making changes in the classification system to 
improve it and to keep it up to date. ECPC Issues Paper No. 6 contains 
a section describing how the economic concepts of ECPC Issues Paper No. 
1 can be applied to service industries, and also discusses some of the 
unique problems that arise in classifying service industries.

ECPC Research Activity

    The ECPC and Statistics Canada have reviewed the existing structure 
of detailed ``4-digit'' industries in the United States and Canada for 
conformance to economic concepts. The results of the U.S. review are 
contained in ECPC Report No. 1, ``Economic Concepts Incorporated in the 
Standard Industrial Classification Industries of the United States,'' 
and the Canadian results are contained in ``The Conceptual Basis of the 
Standard Industrial Classification,'' Standards Division, Statistics 
Canada. In addition, the ECPC has carried out an independent evaluation 
of U.S. industries using the new ``index of heterogeneity'' to assess 
whether establishments in existing 4-digit industries meet the 
conditions for the production-oriented classification concept, as 
presented in ECPC Issues Paper No. 1. All of these research reports are 
available from the ECPC on request.

International Comparability

    In the past, the U.S. SIC system was not necessarily compatible 
with the industry classification systems used in other countries. This 
incompatibility created problems for analyses that sought to compare 
industrial characteristics, trends, and developments across the 
economies of different countries, but such data uses were never given 
high priority in the design of the SIC system.
    A central aspect of the ECPC's new approach to industry 
classifications is active consultation with international statistical 
agencies, including the Statistical Office of the European Communities 
and the United Nations Statistical Office, and particularly with 
statistical agencies of the North American Free Trade Agreement 
signatories, Mexico's INEGI and Statistics Canada. Statistical agencies 
from the three North American countries have agreed to develop a North 
American Industry Classification System that would produce common 
industrial statistics for all three countries. A joint statement on 
NAICS concepts, prepared and released by these statistical agencies, 
follows (Part II). The conceptual framework and process proposed for 
the United States in Part III of this notice are consistent with this 
joint statement.

Part II. The Conceptual Framework for the New North American 
Industry Classification System

    Statistics Canada, Mexico's Instituto Nacional de Estadistica, 
Geografia e Informatica (INEGI), and the Economic Classification Policy 
Committee (ECPC) of the United States, acting on behalf of the Office 
of Management and Budget (OMB), have agreed that a common industry 
classification system for the three North American countries is needed 
and should be put in place. They have further agreed that the new North 
American Industry Classification System (NAICS) should conform to the 
following principles.
    1. The uses of industrial statistics which include measuring 
productivity, unit labor costs, and the capital intensity of production 
require that information on outputs and inputs be used together. 
Moreover, statistical agencies in the three countries expect to be 
called upon to produce information on inputs and outputs, industrial 
performance, productivity, unit labor costs, employment, and other 
statistics in order to analyze the effects of the North American Free 
Trade Agreement. An industry classification system erected on a 
production-oriented, or supply-based, conceptual framework will assure 
maximum usefulness of industrial statistics for these and similar 
purposes. Therefore, the three countries agree that the new North 
American Industry Classification System should conform to a production-
oriented economic concept.
    2. The statistical agencies of the three countries also agree that 
market-oriented, or demand-based, groupings of economic data are 
required for many purposes, including studies of market share, demands 
for goods and services, import competition in domestic markets, and 
similar studies. Each country will provide product data compiled within 
the framework of its respective statistical system, to meet the need 
for such information. Recognizing the increasing international trade in 
goods and services, each country will work cooperatively to help 
improve commodity classification systems, including the Harmonized 
System (HS) of the Customs Cooperation Council and the United Nations 
provisional Central Product Classification (CPC) system for services, 
by coordinating efforts and keeping each agency informed of proposals 
for changes.
    3. The statistical agencies of the three countries envision the 
implementation of a production-oriented conceptual framework for 
economic classifications in the new North American Industry 
Classification System as a long-term goal. The conceptual framework 
will be used, both for 1997 and subsequently, in reviewing changes to 
the existing list of industries.
    4. Statistical agencies of the three countries agree to give 
special attention to developing production-oriented classifications for 
(a) new and emerging industries, (b) service industries in general, and 
(c) industries engaged in the production of advanced technologies, 
including, but not necessarily limited to, electronic components, 
telecommunications equipment, computer equipment, computer software, 
medical equipment, and advanced materials. For these industries, 
statistical agencies will actively seek out industry expertise in all 
three countries, in order to generate the information required to 
define industries in accordance with the agreed production-oriented 
economic concept.
    5. For industries in sectors of the economy outside of those 
sectors discussed in paragraph (4), statistical agencies of the three 
countries wish to maintain time series continuity, to the extent 
possible. However, changes in the economy and evolving user needs must 
be taken into account. Accordingly, proposals relating to all parts of 
the classification will be considered, so long as they are supported by 
reasoning and factual information that furthers the long-term goal of 
the North American Industry Classification System.
    6. Those sectors of the economy where Canada, Mexico, and the 
United States presently have incompatible industry definitions will 
require adjustments in order to produce a common North American 
Industry Classification System. The three countries' statistical 
agencies agree to a detailed review of their present industry 
definitions to determine where differences in industry definitions 
exist and to move toward full commonality and the implementation of 
production-oriented reasoning into the new classification system.
    7. In the interest of a wider range of international comparisons, 
the three countries agree to strive for a North American Industry 
Classification System that will be compatible with the 2-digit level of 
the current International Standard Industrial Classification of All 
Economic Activities (ISIC, Revision 3) of the United Nations.

Part III. U.S. Procedures and Soliciation of Proposals for 4-Digit 
Industries

    As indicated in Part II, the ECPC, acting on behalf of OMB, has 
agreed jointly with Mexico's INEGI and Statistics Canada to propose a 
new North American Industry Classification System that would be common 
to the three countries. The three countries have also proposed 
(paragraph 1 of Part II) that NAICS be based on a production-oriented, 
supply-based economic concept for industry classification. In addition, 
the United States is proposing to prepare a separate, market-oriented 
product grouping system that would produce data for market-oriented 
analyses. The present announcement solicits proposals from the public 
for both the NAICS industry system and the separate market-oriented 
product grouping system.

Common Industry Classification System for North America

    1. Under NAICS, the industry classification systems of Canada, 
Mexico, and the United States would move toward full commonality. Many 
respondents to the ECPC's March 31, 1993, Federal Register notice, 
supported far greater international comparability of industrial 
statistics, especially within North America (see ``Summary of Public 
Comments to ECPC Issues Papers Nos. 1 and No. 2,'' pp. 12-13) [1]. The 
three countries' statistical agencies intend to produce comparable 
industry data at the most detailed practical level, limited only by 
differences among the economies of the three countries.

Production-Oriented Concept

    2. The three countries' statistical agencies have agreed that 
industries in NAICS would be based on a production-oriented conceptual 
framework. As described in ECPC Issues Paper No. 1, ``Conceptual 
Issues,'' part 1.2, when an industry is defined on a production-
oriented concept, the producing units are grouped according to 
similarities in their production processes. Producing units within the 
industry's boundaries share a basic production process; they use 
closely similar technology. Producing units in no other industry share 
precisely the same combination of technologies or production processes. 
In the language of economics, producing units within an industry share 
the same production functions; producing units in different industries 
have different production functions. The boundaries between industries 
thus demarcate, in principle, differences in production processes and 
production technologies. (For additional information on the production-
oriented concept, see ECPC Report No. 1, ``Economic Concepts 
Incorporated in the Standard Industrial Classification Industries of 
the United States,'' and ECPC Report No. 2, ``The Heterogeneity Index: 
A Quantitative Tool to Support Industrial Classification.'' For the 
application of the production-oriented concept to service industries, 
see ECPC Issues Paper No. 6, ``Services Classifications.'')
    The reasoning behind the three statistical agencies' decision may 
be summarized as follows. An industry is a grouping of economic 
activities. Though it inevitably groups the products of the economic 
activities that are included in the industry definition, it is not 
solely a grouping of products. Put another way, an industry groups 
producing units. Accordingly, an industry classification system 
provides a framework for collecting data on inputs and outputs 
together.
    The uses of economic data that require that data on inputs and 
outputs be used together, and be collected on the same basis, include 
production analyses, productivity measurement, and studying input usage 
and input intensities. The North American statistical agencies are 
proposing the production-oriented concept as the framework for industry 
statistics because (1) an industry classification system groups 
producing units, not products or services; and (2) groupings of 
producing units permit the collection of data on inputs and outputs on 
a comparable basis which is required for production-oriented analysis, 
but do not facilitate a comprehensive collection of data on the total 
output of any particular product or service, which is required for 
market-oriented analysis. Thus, the efficient organizing concept of an 
industry classification system is production-oriented rather than 
market-oriented.

Market-Oriented Groupings

    3. Part II of this notice also specifies (paragraph 2) that market-
oriented, or demand-based, groupings of economic data are required for 
many purposes; some of these purposes may not be well served by a 
production-oriented industry classification system. The distinction 
between market-oriented and production-oriented economic groupings is 
developed in ECPC Issues Paper No. 1; additional information is 
contained in ECPC Reports Nos. 1 and 2 and ECPC Issues Paper No. 6.
    The ECPC is committed to a program that will provide improved data 
for purposes that require market-oriented groupings. This program 
consists of two parts.
    (a) The ECPC has committed to expanding the lists of commodities 
and services that will be available from the 1997 Economic Censuses. 
The ECPC has formed several ``Product Codes Task Forces.'' These task 
forces have been charged with improving the basic lists of products and 
commodities, and for constructing new detailed codes that will be 
compatible across U.S. statistical agencies, and will also mesh to the 
extent possible with international detailed commodity or product 
systems. The ECPC is also committed to developing new mechanisms that 
will identify more quickly new products and services as they enter into 
commerce, and will work with other government agencies that have 
expertise on these matters and that have similar concerns.
    (b) Improved product code data will, in turn, provide the basic 
commodity information for statistical agencies or users to develop 
market-oriented, demand-based economic groupings. The expanded product 
codes will permit aggregations for products that are close substitutes 
or complements but which may cut across the production processes of 
individual industries (see ECPC Issues Papers Nos. 1 and 6, and ECPC 
Report No. 1).

Emphasis on New Industries, Service Industries, and Advanced Technology

    4. The ECPC will emphasize the development of improved industry 
classifications for (1) new and emerging industries, (2) service 
industries, in general, and (3) industries engaged in the production of 
advanced technologies. For these areas of the economy, the ECPC is 
committed to a proactive stance, and intends to identify and seek out 
industry expertise in these areas, as well as the expertise of data 
users on the topics mentioned above. ECPC Issues Paper No. 6 provides 
an explicit discussion of the problems to be surmounted in the 
classification of service industries.
    The ECPC will consider proposals for changes to all parts of the 
classification system, including industries that are not targeted for 
special emphasis, so long as they further the proposed long-term goals 
of a production-oriented classification concept for the NAICS, and a 
common NAICS for all three North American countries. The ECPC is 
mindful that many users wish to maintain time series continuity to the 
extent possible (see ECPC Issues Paper No. 5, ``The Impact of 
Classification Revisions on Time Series''), and will attempt to 
minimize changes that are not necessary either (a) to meet requests of 
users or (b) for North American comparability.

Classification Unit

    5. The ECPC recommends that the establishment remain the unit to be 
classified. The Standard Industrial Classification Manual, 1987, 
defines an establishment as a production entity that produces goods or 
services at or from one location for which data are available or can be 
meaningfully compiled (see ECPC Issues Paper No. 1, section 1.6, and 
ECPC Issues Paper No. 3, ``Collectibility of Data''). In those sectors 
of the economy where the establishment concept does not adequately 
portray economic activity, alternative classification units will be 
considered.

Format for Industry Proposals

    6. Proposals for new or revised 4-digit industries should be 
consistent with the production-oriented conceptual framework 
incorporated into the principles of NAICS. When formulating proposals, 
please note that an industry classification system groups the economic 
activities of establishments or producing units, which means that 
products and activities of the same producing unit cannot be separated 
in the industry classification system.
    Proposals must be in writing and should include the following 
information:
    (a) Specific detail about the economic activities to be covered by 
the proposed industry, especially its production processes, specialized 
labor skills, and any unique materials used. This detail should 
demonstrate that the proposal groups establishments that have similar 
production processes in accordance with the NAICS production-oriented 
industry concept (see Part II of this notice, ECPC Issues Paper No. 1, 
ECPC Reports Nos. 1 and 2, and for application of the production-
oriented concept to service industries, ECPC Issues Paper No. 6).
    (b) Specific indication of the relationship of the proposed 
industry to existing U.S. SIC 4-digit industries.
    (c) Documentation of the size and importance of the proposed 
industry in the United States.
    (d) As noted below, information about the proposed industry in 
Canada and Mexico would be helpful, if available.

Format for Market-Oriented Proposals

    7. The ECPC will also accept proposals at this time for the 
alternative market-oriented product grouping system to be implemented 
after 1997. Such proposals must be in writing and should demonstrate 
that the proposed grouping includes products that are close 
substitutes, or that make up a marketing category, or otherwise meet 
the requirements for a market-oriented grouping system, as specified in 
ECPC Issues Paper No. 1 and Report No. 1.
    Please note that proposals for the market-oriented system, unlike 
proposals for the industry system, may cut across the activities of 
establishments or producing units.

Evaluation Criteria

    8. Proposals submitted to the ECPC requesting the creation of, or a 
revision to, a 4-digit industry will be evaluated using production-
oriented criteria. ECPC Issues Paper No. 4, ``Criteria for Determining 
Industries,'' describes some measures that may be used, e.g., the 
specialization ratio and the heterogeneity measure (see also ECPC 
Report No. 2, ``The Heterogeneity Index: A Quantitative Tool to Support 
Industry Classification''). Other measures of the similarity among 
establishments will be considered and developed where necessary. For 
example, a coefficient of variation measure may be applied where 
applicable. However, all these statistical measures will supplement, 
not supplant, industry expertise and expert judgments about industry 
production processes and similarities.
    Some specific measures employed previously in the U.S. SIC, 
particularly the formula for ``economic significance,'' will not be 
used in NAICS (see ECPC Issues Paper No. 4) though size and importance 
of a proposed industry will be considered. The coverage ratio, 
previously used in the U.S. SIC, is more relevant for a product-
grouping system than an industry system and therefore will not be used 
in NAICS.
    Proposed industries must also include a sufficient number of 
companies so that Federal agencies can publish industry data without 
disclosing information about the operations of individual firms. The 
ability of government agencies to classify, collect, and publish data 
on the proposed basis will also be taken into account (see ECPC Issues 
Paper No. 3). Proposed changes must be such that they can be applied by 
agencies within their normal processing operations.

Other Considerations

    9. Persons or organizations submitting proposals should note that 
it is not always necessary to revise the 4-digit industries to obtain 
more detailed statistical information. If statistical information is 
needed for specific products rather than establishments, it may be more 
appropriate to seek changes in the detail of data collected and 
published by individual statistical agencies than to change the 
industry classification. Also, proposals for grouped data that fall 
under the market-oriented economic concept will be considered when the 
new U.S. market-oriented grouping system is developed after 1997.
    All proposals for new industries and for changes in the boundaries 
of present industries will be reviewed for North American 
compatibility. The existing Canadian and Mexican industry 
classification systems [2, 3] will be subject to a similar review. 
Proposals will be exchanged with Statistics Canada and INEGI, and 
reviewed jointly in the preparation of NAICS. It would be helpful, 
although not required, if written proposals for new industries in NAICS 
present any available information on whether the proposed industry 
exists in Canada or Mexico, and whether the proposal can also be 
implemented in those countries.

Part IV. Work Plan

    Within the framework presented in Parts II and III above, the ECPC 
intends to begin the detailed development of the proposed economic 
classification system, the North American Industry Classification 
System. This notice requests specific proposals for NAICS. Public 
comments and input from committees of government agencies that collect, 
compile, and use data that are classified by economic classifications 
will form part of the basis for the development of the new 
classification structure in NAICS. The specific milestones for 
additional activities of the ECPC are as follows:
    (1) Publish Federal Register notice of proposed ECPC economic 
classification recommendations for public comment. (January 1996)
    (2) Publish Federal Register notice of final ECPC economic 
classification recommendations for public comment. (June 1996)
    (3) Publish Federal Register notice of final OMB decisions. 
(October 1996)
    (4) Begin implementation of NAICS. (January 1997)

PUBLIC REVIEW PROCEDURE: All comments and proposals received in 
response to this notice will be available for public inspection at the 
Bureau of Economic Analysis (BE-42), U.S. Department of Commerce, 1441 
L St., N.W., Washington, D.C. 20230. Please telephone BEA at (202) 606-
9615 to make an appointment to enter the building. All proposals 
recommended by the ECPC will be published in the Federal Register for 
review and comment prior to final action by OMB. Those making proposals 
will be notified directly of action taken by the ECPC; others will be 
advised through the Federal Register.

References

    [1] Economic Classification Policy Committee, ``Summary of Public 
Comments to ECPC Issues Papers Nos. 1 and 2,'' October 1993. Available 
from Economic Classification Policy Committee, Bureau of Economic 
Analysis (BE-42), U.S. Department of Commerce, Washington, D.C. 20230, 
telephone number (202) 606-9615, FAX (202) 606-5311.
    [2] Instituto Nacional de Estadistica, Geografia e Informatica, 
Clasificacion Mexicana de Actividades Y Productos, 1994, Censos 
Economicos, 1994, 280 pages.
    [3] Statistics Canada, Standard Industrial Classification, 1980, 
Ottawa, Ontario, December 1980, pp. iii-xxviii, 3-551.
Sally Katzen,
Administrator, Office of Information and Regulatory Affairs.
[FR Doc. 94-18095 Filed 7-25-94; 8:45 am]
BILLING CODE 3110-01-P