Draft regulations covering our handling of proposals by independent Federal regulatory agencies to conduct or sponsor the collection of information were printed in the Federal Register February 11, 1974. We await comments from interested persons and organizations. The statute also requires the Comptroller General to review all existing information-gathering practices of independent regulatory agencies to insure that needed information is obtained with a minimum burden on business enterprises and persons required to provide information. We feel sure that we all endorse the statutory objective and that agency datagathering systems, generally, will have built in some general policy contraints supporting it. Typical constraints one might expect to find would include: 1. Controls to insure that data being sought is needed to accomplish a specific agency function and to determine that the data sought will actually serve the agency's purpose. 2. A requirement for reasonable efforts to search other governmental sources for usable data already being obtained that might be modified to serve the additional purpose. 3. Controls to insure that reasonable efforts are made to assess the impact, financial or otherwise, on the companies or persons who must provide the data so that the value of the data sought can be weighed against the cost of producing it. 4. A periodic internal examination of the data-gathering system to reassess the effectiveness with which it is working and the need for modification to the system. The existence and satisfactory functioning of these kinds of constraints should materially shorten the time required for our studies and permit us in our reports to advise the Congress on how well the agencies are meeting that objective. Our work plans envision our having teams "onsite" by late winter or early spring. We think it might be useful to get together to discuss our plans for this work and to explain procedures for handling and reporting. If you will please call my office, we will arrange a mutually agreeable time for these discussion. Sincerely yours, PHILLIP S. HUGHES, Assistant Comptroller General. FEDERAL TRADE COMMISSION, Washington, D.C., March 15, 1974. Re General Accounting Office Control No. B-190224. Hon. ELMER B. STAATS, Comptroller General of the United States, DEAR MR. STAATS: This is in response to your request for comments on the proposed General Accounting Office regulations to implement 44 U.S.C. § 3512. These regulations set forth procedures to implement GAO's authority to review the collection of information by independent Federal regulatory agencies to assure that such information is obtained with a minimum burden upon business enterprises and other persons required to furnish the information. The procedures that are proposed are similar in most instances to the procedures that have been utilized by the Office of Management and Budget in connection with its counterpart authority over Executive Branch agencies under the Federal Reports Act of 1942, 44 U.S.C. §§ 3501-3511. The authority of GAO, although similar in many ways to that of OMB, is, of course, significantly narrower in certain important respects. First, GAO does not possess the power to secondguess the applicant agency's determination with respect to the need for the information. Accordingly, GAO cannot decline to approve a request to obtain information where the request is grounded upon statutory authority and the agency has determined that the information-collection effort is reasonably necessary to carry out its duties. Second, if the submitting agency has not received from GAO any advice requiring action on matters within GAO's review authority within 45 days of receipt by GÃO of the agency's request, the agency may proceed immediately to collect the desired information. With these important differences in mind, the Commission offers the following specific comments on the regulations: 1. Collection of information or evidence in connection with law enforcement investigations. Both 44 U.S.C. § 3512 and its counterpart provisions in the Federal Reports Act of 1942, define in the same terms the class of "information" to which the law applies. It has been the Commission's consistent view that this definition does not and was never intended to apply to information or evidence collected for law enforcement purposes. In the Commission's opinion, this is true whether such information is collected under the Commission's subpoena power (FTC Act §9) or its power to order the filing of special reports under § 6(b) of the FTC Act. Section 6(b) of the Federal Trade Commission Act (15 U.S.C. 46) authorizes the Commission to require, by general or special orders, corporations engaged in interstate commerce to file with the Commission annual or special, or both annual and special, reports for the purpose of investigating alleged violations of laws administered by the Commission. When so used, a Section 6(b) order is a form of compulsory process analogous to the subpoena, depositions and other investigational powers granted to the Commission by Congress in Section 9 of the Federal Trade Commission Act (15 U.S.C. 49). A recent decision of the United States Court of Appeals for the Fifth Circuit discusses the compulsory nature of the Federal Trade Commission's orders under Section 6(b) of the FTC Act, Genuine Parts Co. v. Federal Trade Commission, et al., 313 F. Supp. 855 (N.D. Ga. 1970), affirmed 445 F. 2d 1382, 5th Cir. 1971. The Commission believes that the language, purpose and legislative history of both the Federal Reports Act and 44 U.S.C. § 3512 support its contention that the collection of information for law enforcement activities was not intended to be and is not properly subject to review. This question has never been resolved in court although it was for a long time pending before the Federal District Court in the District of Columbia in the case of Puritan Fashions Corp. v. Federal Trade Commission. In the interim pending the determination of the court, this agency's arrangement with OMB relating to information collection in law enforcement investigations involved the submission to OMB of only orders to file § 6(b) reports addressed to ten or more persons not themselves under investigation. Such submissions were treated as confidential by OMB and were handled within two working days. No submissions were made in the case of orders directed to persons under investigation. The Commission recognizes that § 10.6(c)(5) of the proposed regulations would exempt from the clearance requirement all "[d]emands for information through the exercise of an agency's subpoena power or similar authority." (Emphasis added.) While the underlined words could be construed to encompass § 6(b) reports used for law enforcement purposes, thereby obviating the concerns expressed above and on pp. 4-6 of this letter, the Commission believes that it would be useful in eliminating any question that might arise if § 10.6(c) (5) were amended to make clearer the inclusion of all compulsory process used for law enforcement investigations. If GAO should feel that a court resolution of this legal issue is desirable, the Commission requests in the interim that GAO agree to an arrangement similar to that described above with OMB. In relation to this particular question, the Commission has the following additional comments on the indicated sections of the proposed regulations: SUBPART A, SECTION 10.2 This section defines "collection of information" to mean "the soliciting or obtaining of facts on an identical item from 10 or more persons by use of report forms, application forms, schedules, questionnaires, letters, plans, guides for personal visit or telephone or telegraphic surveys, or similar methods; or the imposition of recordkeeping or similar requirements concerning an identical item and affecting 10 or more persons." (Emphasis added). The proposed regulation would require clearance of "guides for personal visit or telephone or telegraphic surveys." Theoretically, any guide for personal interview, prepared by a Commission attorney, designed to obtain answers to identical questions and intended to be used in interviewing more than 10 persons during the course of a legal investigation, would seem to require a clearance from GAO. Although a similar definition appeared in OMB's prior regulations, clearances were not sought by the Federal Trade Commission prior to the use of such guides for interviews as they would impose an unreasonable delay in legal investigative efforts. SUBPART A, SECTION 10.3 (b) (2) This section would require the requesting agency "to ascertain whether information sought is already available from another source, and if so, to arrange for use of such information; to minimize both substantive and procedural burdens imposed upon respondents; and to solicit and consider the views of persons who would be affected by or interested in the proposed plan or report form, including respondents, business and trade associations and other concerned organizations." The latter part of this section requiring the requesting agency to obtain views on the plan or report form before it is finalized from the person who will be affected by the project contains no qualifications and thus could be construed to apply to law enforcement investigations. In the Commission's opinion, it would be unworkable in a law enforcement proceeding, as it would, in effect afford those who are being investigated an opportunity to amend or change a questionnaire, before its use by the Federal Trade Commission, to obtain information as to whether there is a law violation. Congress surely never intended to subject to such review questionnaires in investigations to determine law violations. If GAO does not acquiesce in the general interpretation urged above, the Federal Trade Commission recommends that all of its requests for review, etc., in law enforcement proceedings, be accorded "restricted" status. Each Form 83 (or whatever form is ultimately utilized by GAO) would be stamped "restricted." Such status given by the Federal Trade Commission would mean that GAO would not (1) publish a listing of such requests for review; (2) request review or advice from the business advisory groups; and (3) require the Federal Trade Commission to obtain views on the form or questionnaire from those it intends to investigate. Of course, the "restricted" status would not be given to such questionnaires or report forms which basically were designed for statistical gathering functions, as opposed to law enforcement proceedings. For example, a "restricted" status would not be sought by the Federal Trade Commission with respect to the Line of Business Form or the Quarterly Financial Report Forms. SUBPART B, SECTION 10.7 (b) The proposed section is as follows: "(b) GAO shall take such measures as it deems necessary and appropriate to conduct reviews for clearance and to promote the purposes of 44 U.S.C. 3512, including requesting additional information and other cooperation from the agency and directly consulting with or soliciting the views of persons affected by or having an interest in the proposal." (Italics added.) This section again raises the question of the propriety of GAO soliciting the views of persons affected or having an interest in a Federal Trade Commission investigation. As written, the proposed regulation would also pertain to Federal Trade Commission investigations. (See, comments relative to Subpart A, Section 10.3(b) (2)). The Commission would not oppose the proposed regulation, with an appropriate caveat, which would limit the application of the section to questionnaires, etc. for information gathering purposes, as distinguished from a questionnaire for law enforcement purposes. SUBPART C, SECTION 10.9 (C) (7) This section, like others, could be construed to apply to law enforcement investigations. As previously indicated, the Commission is of the opinion that information-gathering activities pursuant to law enforcement investigations were not intended to be subject to review. Formerly, under the arrangement with OMB, such costs were required only in regard to collection of information for statistical purposes, e.g., the QFR or the proposed Line of Business type of report. However, if the Act is interpreted as covering some law enforcement information-gathering activities, then the Commission recommends that GAO adopt the same procedure as was utilized with OMB. In all matters involving a law enforcement investigation, the following paragraph served as a substitute for costs in processing, etc. of the questionnaire : "The information sought will be for administrative use only; therefore, no separate cost estimate is required. Publication of the collected information is not anticipated, except as may become necessary in connection with enforcement proceedings." 2. Review of requests for information pursuant to continuing statistical programs. Subsections 10.5 (b) and (c) of Subpart B provide that collection of information may not continue for more than one year from the date on which it commenced and that renewal plans must be submitted for review even though no changes are proposed. In effect, these provisions would require the Federal Trade Commission to go back to GAO at least 45 days before the ending of a year (from clearance date) in such continuing programs as the Quarterly Financial Reports Program and the Pre-Merger Notification Program. In the Commission's opinion, such a requirement is unnecessary and imposes an undesirable burden on the agency. The Commission recommends instead that the regulations provide for a longer period of continuous clearance for programs which are expected to continue indefinitely or for an extended period of years, or, at a minimum, for a greatly simplified and expedited review procedure. 3. Subpart B, Section 10.6 (b) (2). This provision states: "(b) Plans or forms for the collection of information shall be submitted for clearance irrespective of whether they are: "(2) established or implemented through a rulemaking or similar proceeding..." This provision appears to assert GAO's authority to require review of any information collection plan or recordkeeping requirement established or implemented through the Commission's trade regulation rule and other substantive rulemaking authority. Any such requirement levied by the Commission in this manner constitutes the establishment of a legal requirement which the Commission has the authority to establish. For GAO to claim a right to review such a requirement amounts to an assertion that GAO has the authority to secondguess the Commission's interpretation and enforcement of the laws for which it is responsible. The Commission is of the opinion that nothing in the language, purpose or legislative history of either 44 U.S.C. § 3512 or the other provisions of the Federal Reports Act supports such authority in GAO and recommends that it therefore be deleted. 4. Requiring submitting agencies to determine availability from other Federal agencies prior to submission to GAO. Subpart A, Section 10.3 (b) (2) requires agencies, prior to submitting proposals to GAO for review, to "take all necessary and appropriate measures . . . to ascertain whether information sought is already available from another source. . . ." The Commission believes that subparagraph (c) (2) and (d) of 44 U.S.C. § 3512 clearly place this responsibility upon GÃO and that the above-quoted provision amounts to an unauthorized effort on the part of GAO to shift this responsibility to the regulatory agencies. The Commission therefore recommends that this provision be deleted. The Federal Trade Commission looks forward to a cooperative effort with GAO to implement the new statute. We appreciate the opportunity you have afforded us to comment on the proposed regulations. By direction of the Commission. CHARLES A. TOBIN, Secretary. Senator METCALF. That will conclude the hearing. The subcommittee will be in recess on this part of the inquiry until May 20, at which time we will reconvene in this room at 10. [Whereupon, at 12:04 p.m., the subcommittee recessed, to reconvene at 10 a.m., Monday, May 20, 1974.] 33-456-74- -19 |