Reports to Congress Under the Paperwork Reduction Act of 1995
II. THE FISCAL YEAR 1996 INFORMATION COLLECTION BUDGET (ICB)
- The Information Collection Budget and Paperwork Burden
- Information Collection Burden in FY 1995 and FY 1996 and Estimated Burden in FY 1997
- Examples of Information Collection Burden Reduction Accomplishments for FY 1996
- Information Collection Burden Reduction Planned Initiatives for FY 1997
- Paperwork Reduction Act Violations
Information Collection Budget and Paperwork
When people speak of the burden imposed by information collection requirements (i.e., "paperwork"), they often think of taking a pen to paper and filling out a form. But paperwork burden is a much more complex concept, and it is important to consider all aspects of the burden imposed on respondents by information collections.
For example, even when filling out a simple form, the effort required (or time spent) to collect or otherwise generate the information needed to fill out the form often greatly exceeds the time spent answering the questions or checking the boxes. Taxpayers usually spend much more time calculating and documenting their deductions than actually entering them on their tax forms. Similarly, a firm reporting its inventory of certain chemicals will inevitably spend a great deal of time monitoring those levels.
Moreover, one can not speak meaningfully of burdens without also speaking of benefits. Sometimes those benefits are not immediately obvious. When a person selects food products at a store, does the consumer realize that the nutritional information on the container is the result of an information collection requirement? What would be the effect if no one had to certify the safety of, e.g., meat and poultry, or if no one had to provide the proof needed to qualify for federal benefits or guaranteed loans?
These types of questions also illustrate why it is not particularly informative to look at the aggregate number of hours spent filling out government forms. As noted below, the total paperwork burden for FY 1995 is a little under 7 billion hours. One could divide that by the U.S. population and calculate that, on average, each person spends roughly 26 hours annually attributable to Federal information collection requirements. Yet the information requirements come in many different varieties and for many different ends.
In some cases, the collection represents a legal obligation to report information to the government to verify compliance with government requirements. The most familiar example of this would be the filing of tax forms, which accounts for roughly 80% of the total burden, but there are many other examples. Nuclear power plants must submit information documenting that operators are properly trained and medically qualified for duty. Many firms are required to prepare and/or submit information demonstrating that they do not discriminate against potential employees on the basis of race, sex, or national origin, and many firms are required to submit information confirming compliance with limits on air or water pollution.
Some reporting requirements are for those who wish to obtain some benefit or other service from the government. Application forms and other supporting documentation for those wishing to receive Medicare reimbursement or food stamps would fall in this category, as would applications for a passport, a student loan, or a small business loan.
Other reporting requirements are for statistical purposes. The most wellknown and comprehensive statistical program is the decennial census, but there are many other such collections. The Bureau of Labor Statistics collects and reports data on the occurrence of work related injuries and illnesses. The Bureau of Justice Statistics collects, analyzes, publishes, and disseminates statistical information on crime, criminal offenders, victims of crime, and the operations of the justice systems at all levels of government. The National Highway Traffic Safety Administration and the Federal Highway Administration collect information on motor vehiclerelated accidents and fatalities, and highway safety.
With growing frequency new requirements involve reporting information not to the government, but to third parties. The Paperwork Reduction Act of 1995 explicitly included thirdparty reporting requirements within its scope and its definition of aggregate burden. As a result of this change, many preexisting thirdparty requirements that had not previously been counted in the information collection budget are now included. This produced a dramatic increase in the information collection budget, although the change in definition did not increase the actual burden of the requirements themselves.
Thirdparty requirements take many forms. Nutritional labeling on food products, as well as drug labeling, are among the more common examples that Americans see on a daytoday basis. Even the clothing labels that many take for granted come from an information collection requirement. Other such requirements are not as obvious, although still valuable. EPA, for instance, requires many firms to disclose publicly their releases of hundreds of potentially toxic substances, allowing nearby residents to know what is happening in their local environment.
Some thirdparty requirements benefit specific segments of the population. For example, employers are required to inform employees about the nature of hazardous substances with which the worker comes into contact. This requirement takes the form of information distributed to employees about the possible hazards of a substance, and can obligate the employer to hold training sessions where the employee is advised on how to safely handle such material.
In some cases, a requirement is not for reporting of information at all, but for the retention of information by the individual or company for a specified period of time -- record keeping. Once again, taxes are a good example -- documentation used to claim tax deductions must be kept by the taxpayer. There are many other examples. Meat inspectors must keep records of the results of tests for pathogens like E. coli bacteria. Employers must keep records of employees' medical histories under a number of occupational safety and health regulations.
Also, some requirements are not requirements at all, but are fully voluntary. Customer satisfaction surveys are one important form of information collection.
Recently, government agencies submitted to OIRA their plans for reducing and minimizing the burdens they impose on the public through information collections. In these Information Streamlining Plans, the agencies have reflected the many factors involved in making meaningful burden reductions. These factors include the various forms of information collections described above, the recent statutory requirements mandating new collections, and the complex nature of defining (or calculating) burden. The agency plans have also reflected the tendency toward electronic reporting -- taking the "paper" out of paperwork -- in many cases allowing for a reduction in burden by taking advantage of a much more efficient means of gathering, analyzing and transmitting required information.
Under the PRA, OIRA is charged not only with the responsibility for assuring a proper weighing of the burdens imposed by each collection on the public against the legitimate needs and usefulness of the information for the Federal agencies, but also with the task of developing an annual Information Collection Budget (ICB). The ICB is the vehicle through which OIRA, in consultation with each agency, sets "annual agency goals to reduce information collection burdens imposed on the public." In addition, the ICB serves as a management tool. Agency officials can use the ICB in their internal planning and control processes to review all of the collections of information their staff plans to implement during the forthcoming year. OMB uses the ICB in conjunction with management reviews of other agency activities to assess information collection priorities and to help maintain the lowest necessary level of paperwork burden on the public, consistent with the Federal Government's need for information.
Collection Burden in FY 1995 and FY 1996 and Estimated Burden in
Since enactment of the original Paperwork Reduction Act of 1980, which established paperwork burden reduction goals, agencies have made progress in reducing paperwork burden. More recently, as part of the Administration's regulatory reform efforts, President Clinton directed the Federal agencies to increase their use of electronic means of information collection and, where feasible, to decrease the frequency of reporting by the public by onehalf. As a result, many initiatives have already been undertaken. For instance, during the 1997 tax season, the Internal Revenue Service (IRS) offered Telefile to most single filers who do not claim dependents, allowing over 4 million taxpayers who had previously filed the 1040EZ paper form to file their tax returns using a touchtone phone. In addition, as of September 30, 1996, agencies have taken 131 actions to reduce the frequency of reporting by the public, resulting in 3,380,000 hours of burden reduction
The PRA set an annual governmentwide goal for the reduction of the total information collection burden of 10% during each of fiscal years 1996 and 1997 and 5% during each of fiscal years 1998 through 2001. The baseline is the total burden of information collections as of the end of FY 1995. There have in fact been many achievements in streamlining Federal information requirements; agencies have lessened the "hassle factor," simplified content, and worked to identify and collect only information that is actually needed and used in the administration of programs. As demonstrated below in the information collection burden reduction accomplishments for FY 1996 and the planned initiatives for FY 1997, electronic submission of information and overall improved management of existing collected information reduced, and will continue to reduce, the time that the public spends to provide information for government needs.
Table 3 reports the total information collection burden of the Federal government as a whole, as well as for each individual department or agency, for FY 1995 and FY 1996, and it represents the specific agency goals estimated for FY 1997. As seen in Exhibit 6, the Department of the Treasury, including the IRS, continues to account for the great majority -- 80% -- of the Federal information collection burden in FY 1996. Because the Treasury Department accounts for such a large percentage of the total information collection burden imposed by the Federal government, it is useful to present the exhibit excluding the Treasury Department.
Exhibit 7 illustrates the share that various agencies and departments contribute to the information collection burden when Treasury is not included. The Department of Labor is the second largest agency in terms of information collection burden, accounting for 18% of the nonTreasury burden. The Defense Department is third, accounting for more than 11% of the burden excluding Treasury. The Federal Trade Commission and the Securities and Exchange Commission are fourth and fifth, respectively. The rest of the top ten are the Department of Health and Human Services, the Department of Agriculture, the Environmental Protection Agency, the Department of Transportation, and the Department of Education, ranking sixth through ten, respectively.
of Information Collection Burden Reduction
Accomplishments for FY 1996
Specific instances where agencies have made significant reductions in their FY 1996 burden from their FY 1995 baseline appear below:
Department of Agriculture. The Food and Consumer Service published a final rule that established a new system to help schools use nutrientbased menu planning for meals in the National School Lunch and School Breakfast Programs. The rule eliminated regulatory requirements for edit checks and the maintenance of records to prove the nonprofit status of schools. As a result, paperwork burden was reduced by almost 16 million hours.
Department of Commerce. The National Oceanic and Atmospheric Administration (NOAA) eliminated almost 130,000 hours of reporting and record keeping requirements imposed on fishermen that accidentally kill or injure marine mammals by streamlining the Marine Mammal Protection Act (MMPA) regulations. Commercial fishermen participating in fisheries with interactions with marine mammals are no longer required to keep a daily log of these interactions. Participants now report only if and when any incidental mortality or serious injury takes place during commercial fishing operations.
Department of Defense. DoD has significantly reduced the data delivery burdens imposed on its contractors. As part of contract performance, contractors are required to supply large amounts of information, including drawings, maintenance manuals, test reports, parts lists, software documentation, and cost and scheduling data. DoD has reduced the number of these data item descriptions in its master catalog by 400 (of 1300), reducing the burden on contractors by over 30 million hours.
Department of Education. Program changes within the Federal Family Education Loan Program, such as the phaseout of the Federal Insured Student Loan program and the elimination of Teach Out Requirements (that had obligated vocational schools to designate backup schools where students could finish their schooling in the event of the vocational school's closure), have reduced burden by nearly 3.5 million hours.
Department of Labor. The Benefits Accuracy Measurement (BAM) program provides estimates of the accuracy of benefit payments in the Unemployment Insurance program and identifies the sources of mispayments so that their causes can be eliminated. DOL has reduced average sample sizes and permitted States more flexibility in how they verify information pertinent to the sampled payments, resulting in a burden decrease of almost 60 thousand hours.
Department of Transportation. During FY 1996, the DOT amended its regulations governing the filing of international passenger tariffs. Although air carriers had been permitted to file tariff information electronically since 1989, they were still required to file some 42,000 pages of paper annually pertaining to tariff rules (e.g., length of stay requirements). The regulatory revisions now permit much of this information to be filed electronically. As a result, the annual information collection burden on air carriers has been reduced by approximately 380 thousand hours.
Department of the Treasury. The IRS made several changes to the 1040 form and instructions that reduced the paperwork burden of individual taxpayers by almost 60 million hours. These changes included producing a separate, streamlined set of instructions for use by 10 million taxpayers that file the simplest 1040 returns and eliminating a net of 20 lines from the 1040 form and instructions.
Environmental Protection Agency. The Office of Water efforts to reduce reporting focused on the National Pollutant Discharge Elimination System (NPDES) Monitoring Report. Guidance was developed to reduce existing monitoring and reporting requirements for facilities that consistently comply with their permit limits, consistently discharge higher quality water than required by their permits, or implement strong facility management plans. The burden associated with the NPDES Monitoring Report will be reduced by about 4.7 million hours once the program is fully implemented.
Federal Deposit Insurance Corporation. The FDIC eliminated its Forms 3320/14 and 3320/19, which were part of its acquisition services information requirements, thereby streamlining the procurement process and reducing the paperwork burden on firms wishing to do business with the FDIC.
Securities and Exchange Commission. The SEC has reduced the paperwork burden it imposes on the public by 25 percent since FY 1995. This reduction has been achieved, in part, with the elimination of 44 rules and 4 forms that the Commission's Task Force on Disclosure Simplification found were no longer necessary or appropriate for the protection of investors. The rules and forms that the Commission eliminated included Regulation F and accompanying Form 1F, which had been used by investors and issuers to claim a conditional limited exemption from Securities Act registration for assessments levied on certain stock. This exemption was made obsolete by the availability of other exemptions. Also eliminated was Form 10C, which required issuers to report to the Commission changes in corporate name and other information that is typically reflected in an issuer's financial statements.
Collection Burden Reduction Planned
Initiatives for FY 1997
The following highlights of planned initiatives for FY 1997 illustrate the agencies' efforts to continue to reduce burden on the public.
Department of Agriculture. USDA plans to reduce the required number of acreage reports and certifications of compliance, which is expected to reduce burden by almost 1.5 million hours.
Department of Commerce. After having streamlined its grant procedures, the Economic Development Administration (EDA) intends in FY 1997 to consolidate three application forms into a single application for all programs under the Public Works and Economic Development Act. In addition to reducing burden by almost 40 thousand hours, EDA's associated regulations are more user-friendly and more consistently applied among its regional offices.
Department of Defense. Defense FAR Supplement Part 239 prescribes the policies and procedures for DoD to follow during the exchange or sale of Federal information processing services, security and privacy for computer systems, automatic data processing equipment, and telecommunications services. During FY 1997, DoD is deleting DFARS language containing references to an obsolete cost principle pertaining to automatic data processing equipment leasing costs and removing corresponding contractor documentation and Government oversight requirements. As a result, burden is being reduced by about 106 thousand hours.
Department of Health and Human Services. Increased electronic claims and the elimination of the physician attestation on individual claims will reduce the burden resulting from the Medicare/Medicaid Health Insurance Common Claim Form by roughly 4 million hours.
Department of Interior. The Office of Surface Mining Reclamation and Enforcement intends to issue a rule on Valid Existing Rights that will reduce the amount of information reported by respondents, reducing their burden per response from 210 hours to 14 hours. The Bureau of Land Management (BLM) will review the information collections associated with onshore oil and gas operations to eliminate duplicative requests of lessees and operators and ensure maximum use of existing information. BLM's efforts are expected to reduce reporting burden by over 6 thousand hours.
Department of Justice. In FY 1997, the Justice Department will begin a pilot test to automate the Arrival Departure Record (I94) and determine the feasibility of expanding the automated collection system nationwide and consolidating the I94, I94T, and I94W. Justice estimates that, if fully implemented, the automation and consolidation of this collection will reduce burden by almost 700 thousand hours.
Department of Transportation. In FAA's Antidrug Program for Personnel Engaged in Specified Aviation Activities, requirements are being simplified for submitting antidrug plans and MIS reports, and some requirements for plan amendments are being eliminated. These change will result in a reduction of 65 thousand hours.
Department of Treasury. The IRS will raise the threshold for record keeping requirements for businesses required to report travel, gift, or entertainment expenses. Businesses will have to maintain receipts for expenses of $75 or more, instead of $25, which will exclude many business lunches and dinners. By easing this record keeping requirement, IRS will reduce the burden on business taxpayers by almost 13 million hours.
Department of Veterans Affairs. VA collects information from veterans and their spouses to determine eligibility for medical and other benefits. VA plans to revise the collections to eliminate certain data elements (for example, simplifying the Financial Worksheet) and expects the burden to decrease by about 700 thousand hours.
Environmental Protection Agency. EPA has proposed regulations designed to reduce reporting frequency, shorten records retention, and streamline reporting requirements in its stationary source air programs. The proposed revisions to existing standards would reduce record keeping and reporting burdens by approximately 1 million hours per year.
Federal Deposit Insurance Corporation. As a result of a change in the statutory requirements relating to the Fair Lending Monitoring System, the FDIC will reduce by more than 50 percent the number of financial institutions required to file under this authority. The statutory change increased the asset size of institutions required to file under this provision, thereby exempting many smaller institutions and reducing the annual burden estimate by approximately 50 percent.
Federal Communications Commission. The FCC's Common Carrier Bureau will no longer require or allow nondominant interexchange carriers to file tariffs for their interstate, domestic, or interexchange services. The Bureau's elimination of this requirement will reduce burden by almost 290 thousand hours in FY 1997.
Securities and Exchange Commission. The SEC will be issuing rules to implement provisions of the Investment Advisers Supervision Coordination Act that would result in a shift of regulatory responsibilities from the Commission to the States. Since fewer investment advisers would register with the Commission, the burden associated with the Investment Advisers Act of 1940 will be reduced by over 4 million hours, although they will be subject to new regulatory burdens imposed by the States.
Paperwork Reduction Act Violations Top of Page
Department of Treasury/Bureau of Alcohol, Tobacco, and Firearms (ATF)
Title: Firearms Transaction Record, Part I, Over-the-Counter, and Firearms Transaction Record, Part II, Non-Over-the-Counter (ATF F 4473, Parts I and II (5300.9))
Violation: Unauthorized Collection
How Discovered by OMB: In February 1997, the public notified OMB that ATF had revised Form 4473, Part I, without OMB approval.
OMB Action: ATF's submission of the revised forms to OMB, requesting an extension without change. were designated by OMB as improperly submitted.
Agency Response: ATF resubmitted the forms to obtain OMB approval of the revisions. Treasury has assured OMB that ATF will reexamine its internal procedures to ensure future compliance with the PRA.
Department of Labor
Title: Minimum Wage Toll-Free Survey
Violation: Unauthorized collection.
How discovered by OMB: OMB discovered this violation by reading news releases. Congressional staff also discovered the violation.
OMB Action: OMB notified the DOL of the violation.
Agency Response: The DOL submitted a paperwork package that was later withdrawn. The survey is no longer in use.
Department of Commerce/Patent and Trademark Office (PTO)
Title: Trademark Processing
This is the basic application form and subsequent forms used to process trademark applications.
Violation: Expiration of ongoing collection
How discovered by OMB: The Department notified OMB that the collection would expire on September 30, 1995.
OMB Action: OMB notified the agency that it was in violation of the PRA once it allowed the collection to expire because trademark applications and others continue to be processed daily by the PTO.
Agency Response: The Department published the first notice required by the PRA in the Federal Register on February 21, 1996, and is working to bring the collection back into compliance.
Department of Agriculture
Title: Various Information Collections
Violation: Expiration of ongoing collections
How Discovered by OMB: OMB discovered this violation in the course of preparing for a meeting on USDA's Information Streamlining Plan
OMB Action: OMB raised the issue with USDA and discussed the organizational problems that led to the incidents.
Agency Response: USDA has committed to bringing these collections into compliance with the PRA.
Department of Labor
Title: Annual Report (5500 Form)
Violation: The DOL made substantive modifications to the 5500 form without prior OMB review and approval.
How discovered by OMB: OMB discovered the violation during review of the emergency paperwork clearance.
OMB Action: OMB commented on the violation in the terms of clearance for the emergency approval.
Agency Response: DOL agreed not to commit this violation again.
Department of Labor
Title: Paperwork associated with the rule on Guidelines, Federal Transit Law --Section 5333 (b)
Violation: Unauthorized collection.
How discovered by OMB: OMB discovered this violation during the review of the rule.
OMB Action: OMB notified the DOL of the violation.
Agency Response: Since the information is originally collected by the Department of Transportation, it was agreed among OMB, DOL and DOT that DOT would submit a paperwork clearance package for the Federal financial assistance applications.
Department of Labor
Title: Office of Federal Contract Compliance Programs: Affirmative Action Plan Scheduling Letter
Violation: Changed the form without OMB approval.
How discovered by OMB: The public alerted OMB to the violation.
OMB Action: OMB requested an action from DOL (some form of announcement to inform the public).
Agency Response: DOL sent memo to regions stating which forms had OMB approval and reminded them about the PRA.
Department of Labor
Title: Variety of lapsed clearances within the Employment and Training Administration (ETA)
Violation: Expiration of ongoing collections.
How Discovered by OMB: OMB discovered these violations when ETA submitted numerous reinstatement requests for clearance.
OMB Action: OMB notified DOL and requested a list of all ETA expired collections with information on their status.
Agency Response: DOL submitted a list of expired collections and is working to come into compliance.
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