North American Industry Classification System-Revision for 2022; Update of Statistical Policy Directive No. 8, North American Industry Classification System: Classification of Establishments; and Elimination of Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises, 72277-72279 [2021-27536]

Agencies

• Management and Budget Office

[Federal Register Volume 86, Number 242 (Tuesday, December 21, 2021)]
[Notices]
[Pages 72277-72279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27536]


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OFFICE OF MANAGEMENT AND BUDGET


North American Industry Classification System--Revision for 2022; 
Update of Statistical Policy Directive No. 8, North American Industry 
Classification System: Classification of Establishments; and 
Elimination of Statistical Policy Directive No. 9, Standard Industrial 
Classification of Enterprises

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

ACTION: Notice of NAICS 2022 Final Decisions; Update of Statistical 
Policy Directive No. 8, North American Industry Classification System: 
Classification of Establishments; and Elimination of Statistical Policy 
Directive No. 9, Standard Industrial Classification of Enterprises.

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SUMMARY: The Office of Management and Budget (OMB) announces its final 
decisions to accept the recommendations of the Economic Classification 
Policy Committee (ECPC), as outlined in the July 2, 2021, Federal 
Register notice. OMB accepts the ECPC recommendations for the 2022 
revisions to the North American Industry Classification System (NAICS), 
as well as the recommendations to update OMB Statistical Policy 
Directive No. 8, North American Industry Classification System: 
Classification of Establishments and to eliminate OMB Statistical 
Policy Directive No. 9, Standard Industrial Classification of 
Enterprises. In large part, the series of revisions for NAICS are 
designed to address decreasing usefulness of employing the mode of 
delivery (online versus in store/print) as an industry delineation 
criterion in the Wholesale Trade, Retail Trade, and Information 
sectors. In short, the internet has developed from a specialized 
activity to a generic method of delivery for goods and services. 
Therefore, the 2022 revisions to NAICS reflect a deemphasis on the 
delivery method as an industry function used in NAICS classification. 
In addition, OMB has accepted the ECPC recommendations with respect to 
biobased products manufacturing and renewable chemicals manufacturing 
topic areas, including the decision to continue research and outreach 
in this important emerging area. There are four parts in the 
SUPPLEMENTARY INFORMATION section below, which provide more 
information. Part I summarizes the background of NAICS and this 
revision cycle. Part II contains a summary of public comments in 
response to the July 2, 2021, Federal Register notice. Part III 
includes a summary of the ECPC recommendations. Part IV outlines OMB's 
final decisions.

DATES: Effective Date for 2022 NAICS United States codes and 
Statistical Policy Directives: Federal statistical establishment data 
published for reference years beginning on or after January 1, 2022, 
should be published using the 2022 NAICS United States codes. 
Publication of NAICS United States, 2022 Manual is planned for January 
2022 on the NAICS website at www.census.gov/naics. The updated 
Statistical Policy Directive No. 8, North American Industry 
Classification System: Classification of Establishments, will be 
effective immediately and will be posted on the OMB Statistical 
Programs and Standards website at www.whitehouse.gov/omb/information-regulatory-affairs/statistical-programs-standards/. Statistical Policy 
Directive No. 9, Standard Industrial Classification of Enterprises, 
will be eliminated effective immediately.

ADDRESSES: Correspondence about the adoption and implementation of the 
2022 NAICS as shown in the July 2, 2021, Federal Register notice should 
be sent to: Office of the Chief Statistician, Office of Management and 
Budget, New Executive Office Building, Washington, DC 20503; email: 
[email protected].
    Inquiries about the content of industries or requests for 
electronic copies of the 2022 NAICS tables that cannot be satisfied by 
use of the NAICS website should be sent by email to: 
[email protected].
    Electronic Availability: Federal Register notices are available 
electronically at www.federalregister.gov/. This document and the July 
2, 2021, Federal Register notice are also available on the NAICS 
website at www.census.gov/naics. The revision for 2022 will result in a 
number of code and title changes for NAICS. For that reason, a full 
list of NAICS 2022 industry codes and titles will be posted on the 
NAICS website referenced above prior to publication of the NAICS United 
States, 2022 Manual for reference and implementation planning. The 
NAICS website referenced above also contains previous NAICS United 
States Federal Register notices, ECPC Issues Papers, ECPC Reports, the 
structures, industry definitions, and related documents for previous 
versions of NAICS United States.

[[Page 72278]]


FOR FURTHER INFORMATION CONTACT: NAICS classification staff may be 
reached by email at [email protected].
    For information about this notice, contact Kerrie Leslie, Office of 
Management and Budget, 9215 New Executive Office Building, 725 17th St. 
NW, Washington, DC 20503, telephone (202) 395-1093.

SUPPLEMENTARY INFORMATION:
    I. Background: The North American Industry Classification System 
(NAICS) is a system for classifying establishments (individual business 
locations) by type of economic activity. Mexico's Instituto Nacional de 
Estad[iacute]stica y Geograf[iacute]a (INEGI), Statistics Canada, and 
the United States Office of Management and Budget (OMB), through its 
interagency Economic Classification Policy Committee (ECPC), jointly 
developed NAICS in 1997 and continue to collaborate on NAICS to make 
the industry statistics produced by the three countries comparable. 
NAICS helps ensure that establishment data produced across the Federal 
statistical system are comparable and can be used together in analysis.
    It is important to note that NAICS is designed and maintained 
solely for statistical purposes to improve and keep current this 
Federal statistical standard. Consequently, although the classification 
may also be used for various nonstatistical purposes (e.g., for 
administrative, regulatory, or taxation functions), the requirements of 
government agencies or private users that choose to use NAICS for 
nonstatistical purposes play no role in its development or revision.
    For the 2022 revision, Canada, Mexico, and the United States 
focused on new and emerging industries, as well as the continued 
usefulness of employing the mode of delivery (online versus in store/
print) as an industry delineation criterion in the Wholesale Trade, 
Retail Trade, and Information sectors.
    The July 2, 2021, Federal Register notice: (1) Summarized the 
background for the proposed revisions to NAICS 2017 in Part I; (2) 
contained a summary of public comments to the February 26, 2020, 
Federal Register notice (85 FR 11120) regarding priorities for changes 
to NAICS in 2022, the ECPC recommendation to update OMB Statistical 
Policy Directive No. 8, Standard Industrial Classification of 
Establishments, and the ECPC recommendation to withdraw OMB Statistical 
Policy Directive No. 9, Standard Industrial Classification of 
Enterprises in Part II; (3) included a list of title changes for NAICS 
industries that clarify, but do not change, the existing content of the 
industries in Part III; and (4) provided a comprehensive listing of 
changes for national industries and their links to NAICS 2017 
industries in Part IV.
    II. Summary of Comments Received: Twenty-nine public comments were 
received in response to the ECPC proposals presented in the July 2, 
2021, Federal Register notice (86 FR 35350). The public comments 
received are available for public view on www.regulations.gov. Comments 
received were supportive of proposed changes, suggested changes that 
the ECPC believed would be incompatible with the principles of NAICS or 
with other proposals that were recommended, or were outside the scope 
of the NAICS revision. Comments addressed numerous topic areas, 
including:
     Employing the mode of delivery (online versus in store/
print) as an industry delineation criterion. OMB received very little 
response in this topic area. One commenter supported the ECPC 
recommended changes and a couple others indicated slight opposition, 
citing decreased usefulness of some uses of the data.
    The following two areas received the most public comments
     Biobased products manufacturing and renewable chemicals 
manufacturing. Five commenters disagreed with the ECPC recommendations, 
which were to create a Compost Manufacturing industry, to not create 
any other new NAICS industries for biobased products manufacturers and 
renewable chemicals manufacturers, and to create numerous North 
American Product Classification System (NAPCS) product codes for these 
areas. Some of these commenters noted the requirement in the 2018 Farm 
Bill for the Department of Commerce and Department of Agriculture to 
work together toward developing NAICS codes for these topic areas.
     Cannabis. Five commenters advocated for more cannabis-
specific industry classifications, and one commenter requested 
alignment with Canada for these detailed industries.
    No comments were received on the proposed update to Statistical 
Policy Directive No. 8 or the elimination of Statistical Policy 
Directive No. 9.
    III. ECPC Recommendations: The ECPC reviewed the comments received 
in response to the July 2, 2021, Federal Register notice. ECPC review 
was guided by the NAICS classification principles and with 
consideration of impacts on trilateral NAICS agreements with Canada and 
Mexico, as these measures provide an important way in which to 
coordinate the measurement of business activity across the three 
countries. Detailed ECPC responses to each comment are available on the 
NAICS website at www.census.gov/naics.
    Ultimately, the ECPC made no changes to its recommendations to OMB 
for 2022 NAICS codes or titles. However, the ECPC did make some minor 
revisions to its recommendations for Corresponding Index Entries.\1\
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    \1\ A Corresponding Index Entry complements the definition of 
the NAICS industry by providing specific, illustrative examples to 
clarify the work that is captured in the NAICS industry.
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    IV. Final Decisions: OMB considered the comments submitted in 
direct response to the July 2, 2021, Federal Register notice and the 
recommendations from the ECPC. OMB believes that the approach taken by 
the ECPC for these revisions is responsive to the needs identified by 
Federal statistical agencies and stakeholders more broadly, while 
adhering to the longstanding principles governing updates to the NAICS. 
In addition, OMB agrees with the ECPC approach for nascent industries 
of introducing new product codes for NAPCS, in line with previous 
practice.
    Given the substantive comments received in opposition to the ECPC 
recommendations for biobased products manufacturing and renewable 
chemicals manufacturing, OMB is providing more explanation for its 
decision to accept these ECPC recommendations. OMB understands the 
importance of these growing topic areas; however, evidence to date 
suggests that further delineating the relevant industries at this time 
would risk the ability of Federal statistical agencies to publish 
industry data at this granular level given the small size of the 
potential industries. Further delineation would also jeopardize 
existing time series' continuity. Instead, creating new product codes 
for NAPCS allows Federal statistical agencies to begin collecting and 
publishing more granular information about products relevant to these 
topic areas, allowing Federal statistical agencies and stakeholders to 
track the size and scope of these growing topic areas, which will help 
inform any future relevant NAICS revisions. OMB believes creating new 
product codes for NAPCS is an important initial step, and notes that 
this approach aligns with past implementation for other nascent 
industries. OMB also appreciates and

[[Page 72279]]

agrees with the ECPC about the importance of continued research and 
stakeholder engagement on these topic areas toward maintaining a 
relevant and objective statistical classification standard.
    Therefore, OMB has decided to accept all ECPC recommendations 
outlined in the July 2, 2021 Federal Register notice, making no changes 
to the scope and substance of those recommendations.
    Under the authority of the Budget and Accounting Procedures Act of 
1950 (31 U.S.C. 1104(d)) and the Paperwork Reduction Act of 1995 (44 
U.S.C. 3504(e)), OMB hereby announces its final decisions for adoption 
of NAICS revisions for 2022; for its update of Statistical Policy 
Directive No. 8, North American Industry Classification System: 
Classification of Establishments; and for elimination of Statistical 
Policy Directive No. 9, Standard Industrial Classification of 
Enterprises.

Sharon I. Block,
Associate Administrator, Office of Information and Regulatory Affairs.

Statistical Policy Directive No. 8

North American Industry Classification System: Classification of 
Establishments

    The North American Industry Classification System (NAICS) is to be 
used to classify reporting establishments by types of industrial 
activity in which they are engaged. Details are presented in the North 
American Industry Classification System, United States, issued by the 
Office of Management and Budget, as amended and revised in the future. 
Revisions are considered every five years in calendar years ending with 
2 and 7.
1. Use for Federal Nonstatistical Program Purposes
    NAICS shall not be used in the administration of any regulatory, 
administrative, or tax program unless the Secretary (Administrator) has 
first determined that the use of such industry definition is 
appropriate to the implementation of the program's objectives. If the 
term ``North American Industry Classification System'' (NAICS) is to be 
used in the operative text of a statute or regulation to define 
industry (or trade or commerce), language similar to the following 
should be used to assure sufficient flexibility: ``An industry or 
grouping of industries shall mean a North American Industry 
Classification System industry or grouping of industries as defined by 
the Office of Management and Budget subject to such modifications with 
respect to individual industries or groupings of industries as the 
Secretary (Administrator) may determine to be appropriate for the 
purpose of this Act (regulation).'' The use, interpretation, and 
application of NAICS for nonstatistical purposes is controlled by and 
defined by the agencies or regulations that use the statistical 
standard for those nonstatistical purposes.
2. Titles and Descriptions
    The North American Industry Classification System, United States, 
Manual includes titles and descriptions of the industries and an 
alphabetic index of illustrative activities classified to industries. 
It is available online at: www.census.gov/naics.

[FR Doc. 2021-27536 Filed 12-20-21; 8:45 am]
BILLING CODE 3110-01-P