standard: "only after the agency has opened a case file or its equivalent with respect to a parucular party." Thus will ensure that generalized investigations not targeted to particular persons or companies do not fall within the exception.

Several public comments strongly endorse this section's provisions. especially the clarification of statutory intent in the last sentence. It should be stressed that the exceptions to coverage outlined in this section must be sinctly construed this secton does not permit generalized investigations of classes or categories of persons without necessary Paperwork Reduction Act clearance of paperwork requirements.

4. Section 1320.4 General Requirements. Two major issues of concern to the public and the agencies relate to this section: OMB authority to review reporting and recordkeeping requirements in current regulations that were adopted after public notice and comment and to require display of control numbers on such requirements. These issues will be addressed in turn, followed by other issues raised by the

comments.

(a) OMB authority to review reporting and recordkeeping requirements in current rules adopted after public notice and comment

Several agencies and members of the public have commented that OMB's authority to review collections of information does not extend to collection of information requirements contained in agency regulations, and that provisions of this rule implementing OMB authority over sucb requirements is inconsistant with a memorandum by the Office of Legal Counsel of the Department of Justice (OLC), dated June 22 1982 These comments are based on a misunderstanding of the Act and of the OLC memorandum.

The language and intent of the Paperwork Reduction Act compel the conclusion that OMB has the authority to review, and in appropriate circumstances to disapprove, paperwork requirements contained in agency regulations. Section 3504(h) of the Act clearly and unambiguously recognizes CMB authority to review, approve, and Cisapprove collection of information requirements in proposed rules. The argument that paperwork burdens are somehow outside the purview of the Act merely because they are imposed by means of agency rule is thus refuted by the Act itself.

It is not possible to argue that OMB clearance authority is confined to forms and similar instruments. The key terms defining jurisdiction of the Act

"information collection request"-are both defined expressly to include "reporting and recordkeeping requirements" in addition to "written report forms" and "application forms." 44 U.S.C. 3502(4). (11). Many reporting requirements are enforced by means of forms, but other reporting requirements and virtually all recordkeeping requirements are imposed by other means, including oral surveys. guidelines, directives, and-most significantly-regulations. Moreover, many forms are themselves specifically contained in regulations, either as part of the regulatory text or as an appendix. The only way all reporting and recordkeeping requirements can be covered by the Act is to cover these other methods for the collection of information including regulations. An exemption for regulations would result in a large and unwarranted loophole in the Act a loophole including all forms published in regulations, virtually all recordkeeping requirements, and most reporting requirements not involving ■ format set by the agency. Such a result would fly in the face of the announced congressional intention to eliminate virtually all exemptions from coverage in the old Federal Reports Act S. Rep. Nu. 96-930. at 13. (Indeed, since reporting and recordkeeping requirements were reviewed by OMB and GAO under the Federal Reports Act the contrary interpretation would actually create new exemptions from coverage and thus weaken-not strengthen-the Federal Reports Act) A distinction between reporting requirements in rules and those in forms-with only the latter coveredwould also breed confusion, especially for the public Many forms are published in the Code of Federal Regulations as part of a rule: others are crossreferenced in rules: others closely follow regulatory specifications. If reporung requirements in rules were exempt from OMB review and assignment of control numbers, then many forms would also be exempt-a result that would make it impossible for the public to have confidence in the public protection features of the Act Moreover, since only rules adopted after notice and comment procedures would be exempt-since other rules are not "collection of Information requirements" within the scope of Section 3504(h)-the public could not tell which rules were covered by the Act and which were not OMB does not believe that Congress could bave intended such a result

That OMB has authority to review reporting and recordkeeping requirements in current rules adopted

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evident from the history of the Kennedy Amendment to the Act. Prior to the Kennedy Amendment. the Act-which had already passed the House of Representatives--made no distinction whatever between paperwork burdens in forms and paperwork burdens in regulations. All were covered. Senator Kennedy and others, however, were concerned that OMB's authority over paperwork requirements in regulations could disrupt public participation nights under the informal rulemaking provisions of the Administrative Procedure Act He explained:

This legislation would permit the Director of OMB to overturn a rule which was adopted by an agency without providing any procedural nghis for the people affected by the rule or for the agency that promulgated the rule. Thus, even if an agency bas complied with all the appropriate procedural requirements for public notice and comment and has spent years compiling an adequate agency record, this legislation would permit OMB to overturn that agency decision without even requiring OMB to justify its deasion publicly. Daily Congressional Record S14689 (November 19, 1980).

Senator Kennedy's proposed accommodation of the Paperwork Reduction Act to the Administrative Procedure Act was to require OMB to participate in the rulemaking by filing public comments. Unless OMB filed such comments (and in the absence of certain other circumstances) it would not be permitted to disapprove the new paperwork requirement If OMB did participate in the process, however, its ultimate authority to approve or disapprove the new paperwork requirement under the statutory standards would be unimpaired. As observed by Senator Danforth (the only other Senator commenting on the Kennedy Amendment):

I am willing to accept the Kennedy amendment which is intended to clarify the authority of the Director of the OMB to review Federal rules and regulations to determine their impact on Federal paperwork. Essentially, as I understand it the purpose of the Kennedy amendment is to prevent OMB from undoing a collecton of information requirement specifically contained in an agency rule after that requirement has gone through the administrative rulemaking process if the OMB Director ignored the rulemaking process. This seems fair enough. Doily Congressional Record S14689-90 (November 19. 1980).

The Kennedy Amendment was passed by the Senate. and is now found in Section 3504(b) of the Act Neither the language of the Amendment nor any comment by a Member of Congress

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intended to affect OMB authority over any reporting or recordkeeping requirements other than those in proposed rules undergoing notice and comment rulemaking.

It should be clear from this history that OMB has full authority over paperwork requirements in regulations. limited only by Section 3504(h). Section 3504(h) itself. moreover, is solely a procedural limitation on OMB authority and does not diminish OMB's substantive review powers. Certainly. Section 3504(h) does not altogether exempt any class of collection of information from OMB review. It follows that OMB has authority over reporting and recordkeeping requirements in rules that were in effect when the Act was passed as well as in rules subsequently issued with or without public notice and comment. The purpose of 1320.14 of this rule is to provide procedural protections for collections of

information in current regulations, to ensure the public's right to participate in informal rulemaking proceedings. This resolution is fully in keeping with the spirit and intent of the Kennedy Amendment

Nor can it be argued that this result is inconsistent with interpretations of the Act by the OLC. Because of the difficulties of the issue. OMB and the Department of the Treasury consulted the OLC on the Act's application to reporting and recordkeeping requirements in current rules. In a memorandum dated June 22, 1982. OLC concluded that the information collection request approval procedures of Sections 3504(c)(1) and 3507 do not apply to such requirements. OLC also affirmed that OMB had been given "broad powers by the Act to initiate and review proposals for changes in existing regulations and to coordinate and improve agency information practices. whether contained in regulations or elsewhere." OLC provided further clarification of its views in a supplementary memorandum dated September 24, 1982 in which OLC commented on OMB interpretations and procedures. OLC concluded that "OMB does have authority to review and initiate proposals for change in existing regulations under Section 3504(b)(2) and. in accordance with the standards and limitations established by Sections 3504(h) and 3518(e), to disapprove collection of information requirements and proposed replacements for existing regulations."

Several commenters have argued that OMB review of reporting and recordkeeping requirements in regulations would amount to "regulatory

reform" rather than paperwork reduction. As they point out the legislative history is clear that Congress did not intend the Paperwork Reduction Act to be a "regulatory reform" bill. See H.R. Rep. No. 96-835, at 9; S. Rep. No. 96-930, at 89.

However, these comments misconstrue Congress point Congress did not mean that paperwork requirements should not be covered merely because they might be contained in regulations; it meant that OMB authority over paperwork should not be expanded to cover non-paperwork matters. i.e., substantive regulatory issues. This is clear from the statute itself, which explicitly grants OMB authority to disapprove a "collection of information requirement contained in an ogency rule." 44 U.S.C. 3504(h) . (emphasis added). The Statute also expressly states that "the authority of an agency under any other law to prescribe regulations・・・ for Federal information activities is subject to the authority conferred on the Director by this chapter." 44 U.S.C. 3518(a).

This is also clear from the legislative history. The Senate Report, for example.

states:

The Committee intends that the Director of OMB continue efforts to oversee the information management and burden aspects of government regulations. This emphasis has great promise for minimizing the explosion of paperwork demands on the public because new regulations are causing the greatest growth in information requirement. However, the Committee dos not intend that

"regulatory reform” issues which go beyond the scope of information management and burden be assigned to the Office. S. Rep. No. 96-930. at 8-9 (emphasis added).

The limitations on OMB's "regulatory reform" power under the Act are implemented not by exempting reporting and recordkeeping requirements in regulations from coverage, but by an explicit substantive restriction on OMB's authority in Section 3518(e) (corresponding to § 1320.20(e) of this rule). As stated in the Senate Report

Section 2518(e)... results from concern that the authority of this Act might be used to increase the power of OMB over substantive policy....This bill has provisions to guard against that. Section 3518(e) provides that the bill does not affect in any way the powers of the President or OMB respecting the substance of agency policies. Thus S. 1411 draws an important distinction between paperwork management and substantive decisions. S. Rep. No. 96-830, at 56.

It is therefore incorrect to argue that Congress' intention that the Act not be a "regulatory reform" statute means that OMB should have no authority to review

(b) Control Numbers. One of the major subjects of comment on paragraph (a) of this section, and on related provisions elsewhere in the rule, is the requirement for display of OMB control numbers on collection of information requirements contained in agency rules adopted after public notice and comment. Most public comments addressing the issue have strongly supported the control number requirement. As frequently pointed out, the control number provides a simple and effective way for the public to tell whether a paperwork burden an agency seeks to impose has been cleared as the Act requires.

Several commenters have opposed applying control numbers to collection of information requirements contained in rules adopted after public notice and comment These comments do not seem to be based on policy considerations, since they offer no practical or programmatic reasons why OMB should depart from the longstanding requirement of control numbers on such collections. Rather, the comments have argued that OMB lacks the legal authority to require control numbers on such collections.

The main line of argument taken by these comments is that the statutory control number requirement of Section 3507(1) applies specifically to

"information collection requests.” This argument is beside the point As noted in the Supplementary Information to the Notice of Proposed Rulemaking. OMB acknowledges that the statutory control number requirement on its face. applies to information collection requests. and that Section 3504(b)—the section of the Act addressing the clearance of

collection of information requirements in proposed rules does not address the question of control numbers, either to require them of to forbid them. The application of control numbers to collection of information requirements is, however, fully consistent with statutory purposes, and within OMB's regulatory authority under the Act.

The Paperwork Reduction Act vests the Director of OMB with the authority to "develop and implement Federal information policies. principles. standards, and guidelines and [to] provide direction and oversee the review and approval of information collection requests. [and] the reduction of the paperwork burden." 44 U.S.C. 3504(a). That authority must be "exercised consistent with applicable law." Ibid. The Director's information policy functions also include

"developing and implementing uniform and consistent information resources management policies and overseeing the development of information

managemen: principles. standards, and guidelines and promoting their use." 44 U.S.C. 3504(b)(1): "initiating and reviewing proposals for changes in ⚫ agency procedures to improve information practices." 44 U.S.C 3304(b)(2); and "evaluating agency information management practices to determine their adequacy and efficiency, and to determine compliance of such practices with the polícies. principles. standards, and guidelines promulgated by the Director." 44 U.S.C. 3504(b)(5). Finally, the Director is granted broad regulatory authority by Section 3516: "The Director shall promulgate rules, regulations, or procedures necessary to exercise the authority provided by this chapter." The control number requirement for collection of information requirements has been made pursuant to these authorities, and not because it is directly mandated by the Act ⚫

The agencies' obligation to comply with the Director's decisions under these authorities is expressly set out. Section 3518(a) states: "Except as otherwise provided in this chapter. the authority of ar agency under any other law to prescribe policies. rules, regulations, and procedures for Federal information activities is subject to the authority conferred on the Director by this Chapter." Moreover, Section 3506(a) provides that "[e]ach agency shall be responsible for complying with the information policies, principles. standards, and guidelines prescribed by the Director."

Pursuant to these authorities. the Director has concluded that all collections of information including those mandated by regulations, must display a currently valid OMB control number. Among the reasons for the Director's decision are the following First. application of the control number requirement to all Federal collections of information is consistent

The Director's responsibility to ensure all collections of information display a control number corresponds to the requirement of Section 3507) which states an agency shall not engage in a collection of information without obtaining a control number from the Director. S. Rep. No. 96-930. at 42 (emphasis added).

Prior to adoption of the Kennedy Amendment (now Section 3504(b)), the Act did not distinguish between "information collection requests" and "collection of information requirements." All were covered: all were subject to the control number requirement. This requirement was for the benefit of the public, as well as for the improved management of the paperwork process. The control number would show "that the Director of OMB is the accountable individual in the government to be sure that the information is needed, is not duplicative of information already collected, and is collected efficiently." S. Rep. No. 96-930. at 9. The Kennedy Amendment was not intended to disturb this.

The purpose of the Amendment, as clearly stated by its proponent and the only other speaker on the floor, was to ensure procedural fairness in public notice and comment rulemaking procedures by denying OMB the authority to disapprove a requirement without having first participated in the rulemaking by filing comments. See 120 Cong. Rec. S14689-90 (1980). Congress expressly preserved OMB's ultimate authority to disapprove a collection of information requirement in a rule. There is no basis for concluding that Congress intended to make such disapproval any less legally enforceable than it was before the Kennedy Amendment was adopted. Nor is there any basis for concluding that Congress intended to take away the public's means of telling whether or not a collection of information had undergone the clearance process and been approved by OMB. The decision of the Director to require control numbers on collection of information requirements contained in rules adopted after public notice and comment thus promotes the purposes of the Act.

Second experience has shown that assignment of control numbers to reporting and recordkeeping requirements contained in regulations is workable, useful, and easily

administered Dozens of agencies, including the Commodities Futures Trading Commission. the Department of Agriculture, the Department of the Treasury (Bureau of Alcohol. Tobacco. and Firearms), the Environmental Protection Agency, the Nuclear

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and Exchange Commission, the Federal
Communications Commission. the Equal
Employment Opportunity Commission
the Pension Benefit Guaranty
Corporation. the Department of Labor.
the Department of Health and Human
Services, the Federal Maritime
Commission, the National Credit Union
Administration, and the Department of
the Interior, have routinely submitted
reporting and recordkeeping
requirements in regulations to OMB for
review and assignment of control
numbers. The assignment of control
number to paperwork requirements in
regulations by OMB and GAO was the
practice under the Federal Reports Act
This practice was presumably known to
Congress when it enacted the

Paperwork Reduction Act, and there is no evidence that it intended the practice to be changed. OMB believes that altering this established and smoothlyfunctioning administrative practice would be disruptive.

Third, the control number is an important mechanism for inventorying the paperwork burden, monitoring agency efforts to reduce the burden. coordinating the clearance process with the Information Collection Budget, and keeping track of individual requirements for purposes of periodic review. The Act requires extensive monitoring and inventorying of paperwork requirements. Control numbers are a convenient mechanism for carrying out these statutory responsibilities.

Fourth. the presence of control numbers will alert the public that the Act applies to paperwork requirements in regulations, and will make OMB accountable to the public for reducing burden. As the Senate Report notes. control numbers enable the public to play a "policing role in monitoring agency compliance with the legislation." S. Rep. No. 96-930. at 17. Public comment and participation is a key means of identifying ways to reduce unnecessary paperwork burdens.

Fifth. adherence by the agencies to the control number requirement will eliminate the risk that courts will find reporting and recordkeeping requirements not bearing control numbers unenforceable under Section 3512 of the Act. Although the Office of Legal Counsel memorandum of June 22. 1982 concluded, in effect, that OMB control numbers are not explicity required by the Act itself, that opinion is not binding on the courts. Agency compliance with the requirement will reduce the risk of judicial disruption of regulatory schemes that depend on collection of information by means of