Statistical Policy Directive No. 8 North American Industry Classification System (NAICS)-Request for Comments on Possible Revisions for 2027, 104229-104232 [2024-30060]

Download as PDF Federal Register / Vol. 89, No. 245 / Friday, December 20, 2024 / Notices ddrumheller on DSK120RN23PROD with NOTICES1 III. EEA–C ITWG Interim Report— Chapter Content Each of the six account chapters in the Interim Report begins with an introduction of the account topic area, followed by an overview of the relevant conceptual history and an exploration of other countries’ or intergovernmental organizations’ relevant work in the account topic area that may be considered for application in the United States (e.g., ‘‘United Nations,’’ ‘‘Organisation for Economic Cooperation and Development,’’ or ‘‘European Union’’). Any relevant U.S. work is also described, in order to promote efficiency when the application of past U.S. or international approaches is feasible and desirable (section 2). Each account chapter then proposes a classification framework and guidance particular to that account (which is usually a set of accounts within that topic area (section 3); discusses current data gaps and limitations to be considered when attempting consistent national quantification within the proposed classification framework (section 4); and closes with a conceptual discussion of connections to other accounts, and guidance for using the proposed account in its current form (section 5). IV. Request for Information The National Strategy recommends that environmental-economic accounts be pragmatic and useful for a wide range of decision-making (Recommendation 1), comparable through time and across accounts (Recommendation 2), and align with international accounting standards as our national economic accounts do (Recommendation 3). The accounts have been developed thus far with beneficial input from 27 U.S. departments and agencies. In order to improve the utility of these accounts to users as the accounts are further developed over time, it is important to seek feedback across a broad range of perspectives. We therefore focus this request for public comment on the following questions. The questions posed below are those the EEA–C ITWG deemed most significant and relevant to its recommendations and do not indicate positions of OMB or the agencies participating in the EEA–C ITWG. The questions have been sorted into broad categories for ease of review. Responses should be concise, and if summarizing or depending on published works, please include citations and electronic links to reference materials, studies, research, and other empirical data that are not widely available. VerDate Sep<11>2014 20:12 Dec 19, 2024 Jkt 265001 1. Is the overall U.S. approach to environmental-economic accounting, as proposed through this initial set of classifications, consistent with the principles of environmental-economic accounting and economic statistics? Is there pertinent information or are there key priorities that the EEA–C ITWG should consider when improving the recommendations for classifications? Does the overall approach adhere to national economic accounting concepts, and reasonably balance these with the goals of simplicity, feasibility, and reproducibility? If noting a break from the Interim Report’s methods or current recommendations, please cite sources and be specific as to anticipated consequences of not making the change. 2. Are the specific approaches— framing of accounts, which account tables are recommended in each environmental-economic account type— taken in these six account chapters and any related supplemental materials clear, logical, and consistent with (a) the precepts of national economic accounting (SEEA–CF as supplemental to SNA); (b) the environmentaleconomic accounting needs of U.S. agencies and other domestic stakeholders; and (c) the need for international comparability of environmental-economic accounts? If there are concerns with any specific approaches, please note how the overall approach or specific accounting structures as recommended in the Interim Report may be improved, being as specific as possible. 3. Considering first what agencies can currently measure, what relevant categories or subcategories are missing from the initial set of accounts? Or, are there categories included in this draft that should not be included? Please name or describe them, and reasons for changing the proposal. Where metrics are discussed that may fill account table cells, comment on the appropriateness of these metrics, and whether specific changes may improve the usefulness of the accounts to specific stakeholders. 4. Are there additional, alternative, or forthcoming data sources that should be considered to (a) improve classifications in these chapters; or (b) facilitate how these accounts accurately measure the components and subcomponents of these accounts? Please explain why or why not, and how specific data sources would improve the utility of specific accounts. 5. As the EEA–C ITWG moves to consider metrics that cannot yet be measured, but that may serve stakeholder needs, are there recommendations for specific categories and metrics not presently measurable PO 00000 Frm 00158 Fmt 4703 Sfmt 4703 104229 but that should be targeted for inclusion in the future, or general recommendations for how to expand on that list? If a metric or classification has not been considered to date in the United States nationally, is there an example of its feasibility (sub-nationally in the United States or elsewhere internationally)? V. Timing for Developing This New OMB Statistical Classification Guidance Following this public comment period, the EEA–C ITWG will review the comments and revise draft statistical classification guidance on the Phase I accounts. Then OMB will publish the EEA–C ITWG’s proposed recommendations for public comment in a subsequent Federal Register Notice. The EEA–C ITWG will then review the comments and develop final recommendations to the Chief Statistician of the United States at OMB on the statistical classification guidance on the Phase I accounts in a Final Report. The EEA–C ITWG will follow a similar process to make recommendations for the Phase II and III accounts (i.e., the remaining 10 environmental sector accounts) in the National Strategy. OMB will review the culminative recommendations and make decisions for Phases I–III. It is expected that OMB would be issuing final guidance in an EnvironmentalEconomic Accounting Classifications Manual in 2028. Karin A. Orvis, Chief Statistician of the United States. [FR Doc. 2024–30058 Filed 12–19–24; 8:45 am] BILLING CODE P OFFICE OF MANAGEMENT AND BUDGET Statistical Policy Directive No. 8 North American Industry Classification System (NAICS)—Request for Comments on Possible Revisions for 2027 Office of Information and Regulatory Affairs, Office of Management and Budget, Executive Office of the President. ACTION: Notice of Solicitation for Proposals to Revise Portions of the NAICS for 2027. AGENCY: The Office of Management and Budget (OMB), on behalf of the Economic Classification Policy Committee (ECPC), announces the review of the 2022 North American Industry Classification System (NAICS) for potential revisions to be made to the SUMMARY: E:\FR\FM\20DEN1.SGM 20DEN1 ddrumheller on DSK120RN23PROD with NOTICES1 104230 Federal Register / Vol. 89, No. 245 / Friday, December 20, 2024 / Notices structure and content of the NAICS for 2027 and solicits public comment. Details about these topics are available in the SUPPLEMENTARY INFORMATION section below. DATES: To ensure consideration of comments on this notice, they must be received no later than February 18, 2025. Because of delays in the receipt of regular mail related to security screening, respondents are encouraged to send comments electronically (see ADDRESSES, below. ADDRESSES: Submit comments through www.regulations.gov—a Federal EGovernment website that allows the public to find, review, and submit comments on documents that agencies have published in the Federal Register and that are open for comment. Simply type ‘‘USBC–2024–0032’’ (in quotes) in the Comment or Submission search box, click Go, and follow the instructions for submitting comments. Comments received by the date specified above will be included as part of the official record. Please include the Docket ID (USBC–2024–0032) and the phrase ‘‘2022 North American Industry Classification System (NAICS)— Revisions for 2027 Comments’’ at the beginning of your comments. Privacy Act Statement: OMB is issuing this solicitation of input on the 2027 NAICS revision pursuant to its authorities under 31 U.S.C. 1104(d) and 5 U.S.C. 3504(e). Submission of comments in response to this request is voluntary. Comments may be used to inform sound decision making on topics related to this request, including potential revisions to the NAICS. Please note that submissions received in response to this notice may be posted on www.regulations.gov or otherwise released in their entirety, including any personal information, business confidential information, or other sensitive information provided by the commenter. Do not include in your submissions any copyrighted material; information of a confidential nature, such as personal or proprietary information; or any information you would not like to be made publicly available. Comments and commenter information are maintained under the OMB Public Input System of Records, OMB/INPUT/01; the system of records notice is accessible at 88 FR 20913 (www.federalregister.gov/documents/ 2023/04/07/2023-07452/privacy-act-of1974-system-of-records) and includes a list of routine uses associated with the collection of this information. Electronic Availability: Federal Register notices are available electronically at VerDate Sep<11>2014 20:12 Dec 19, 2024 Jkt 265001 www.federalregister.gov. This document is also available on the NAICS website at www.census.gov/naics. This site contains previous NAICS United States Federal Register notices, ECPC Issues Papers, ECPC Reports, the structure and industry definitions for all NAICS United States versions, and related documents. Public Review Procedure: All comments and proposals received in response to this notice will be available for public inspection. OMB will publish all ECPC recommendations for changes to NAICS for 2027 resulting from this notice in the Federal Register for review and comment prior to final action. For general inquiries email: Statistical_Directives@omb.eop.gov. The NAICS classification staff may be reached by email at econ.naics2027@ census.gov. Please note: Communication through this email will not be included in the record for USBC–2024–0032. Comments should be submitted through https://www.federalregister.gov. SUPPLEMENTARY INFORMATION: 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, on behalf of the ECPC, announces the review and potential revision of the structure and content of the 2022 NAICS. OMB solicits public comment on all aspects of the NAICS, with an emphasis on new and emerging industries. However, in soliciting comments about revising NAICS, the ECPC does not intend to open the entire classification structure for substantial change in 2027. The ECPC will consider public comments and proposals for changes or modifications that are consistent with the principles guiding the development of NAICS as outlined in the ‘‘BACKGROUND’’ section below. This is the first Federal Register Notice requesting public comment in the process leading up to the potential 2027 NAICS revision. More information on the NAICS, including information on past revision processes, is available at www.census.gov/naics. I. Background The Chief Statistician of the United States at OMB coordinates the Federal statistical system by developing and overseeing the implementation of Government-wide principles, policies, standards, and guidelines concerning the presentation and dissemination of statistical information. These coordination efforts promote the efficiency and effectiveness of the Federal statistical system. More information on the Federal statistical system, including its structure and PO 00000 Frm 00159 Fmt 4703 Sfmt 4703 policies that govern it, is available at www.statspolicy.gov. One such standard for statistical data classification established by OMB is Statistical Policy Directive No. 8: North American Industry Classification System: Classification of Establishments (NAICS). NAICS is a system for classifying establishments (individual business locations) by type of economic activity. Its purposes are (1) to facilitate the collection, tabulation, presentation, and analysis of data relating to establishments; and (2) to promote uniformity and comparability in the presentation and analysis of statistical data describing the North American economy. The OMB-Recognized Statistical Agencies and Units use NAICS to collect and publish data by industry, and NAICS is also widely used by State agencies, trade associations, private businesses, and other organizations. Mexico’s Instituto Nacional de Estadı́stica y Geografı́a (INEGI), Statistics Canada, and the United States Office of Management and Budget, through the ECPC, collaborate on NAICS to make the industry statistics produced by the three countries comparable. NAICS is an industry classification system developed in accordance with a single principle of aggregation: producing units that use similar production processes should be grouped together in the classification. NAICS also reflects changes in technology and in the growth and diversification of services in recent decades. Industry statistics presented using NAICS 2022 are extensively comparable with statistics compiled according to the latest revision of the United Nations’ International Standard Industrial Classification of All Economic Activities (ISIC, Revision 5). For the three North American countries, NAICS provides a consistent framework for the collection, tabulation, presentation, and analysis of industry statistics used by government policy analysts, academics and researchers, the business community, and the public. Please note that NAICS is designed and maintained solely for statistical purposes, in order to improve and keep current the statistical rigor of 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. E:\FR\FM\20DEN1.SGM 20DEN1 Federal Register / Vol. 89, No. 245 / Friday, December 20, 2024 / Notices Four principles guide NAICS development: (1) NAICS is erected on a productionoriented conceptual framework. This means that producing units that use the same or similar production processes are grouped together in NAICS. (2) NAICS gives special attention to developing production-oriented classifications for (a) new and emerging Sector ........................ Subsector .................. 2-digit ............... 3-digit ............... Industry Group ......... 4-digit ............... NAICS Industry ........ 5-digit ............... National Industry ..... 6-digit ............... industries, (b) service industries in general, and (c) industries engaged in the production of advanced technologies. (3) Time series continuity is maintained to the extent possible. (4) The system strives for compatibility with the two-digit level (see below) of the International Standard Industrial Classification of All recognizes the potential costs involved when adopting, implementing, and tracking the impacts of industry classification revisions in statistical programs. The ECPC also recognizes the economic, statistical, and policy implications that arise when the industry classification system does not NAICS version The ECPC solicits and welcomes comments across all of the NAICS sectors, and also seeks comments concerning the following items: new and emerging industries and recommended revisions for measuring elements of the bioeconomy. ddrumheller on DSK120RN23PROD with NOTICES1 II. New and Emerging Industries NAICS is a dynamic industry classification. Every five years, the classification is reviewed to determine the need to identify new and emerging industries. The ECPC is soliciting public comments on the advisability of revising NAICS for new and emerging industries in 2027 and soliciting proposals for these new industries. When developing proposals for new and emerging industries, please note that there are two separate but related economic classifications in the United States. NAICS, the industry classification, is the subject of this notice, while the North American Product Classification System (NAPCS) is product classification. The NAPCS product system described below complements the NAICS industry 20:12 Dec 19, 2024 identify and account for important economic developments. Balancing the costs of change against the potential for more accurate and relevant economic statistics requires significant input from data producers, data providers, and data users. Date published .................................................................... .................................................................... .................................................................... .................................................................... .................................................................... .................................................................... VerDate Sep<11>2014 Economic Activities (ISIC, Rev. 5) of the United Nations. The ECPC is committed to maintaining the principles of NAICS as it develops recommendation for further refinements. NAICS uses a hierarchical structure to classify establishments from the broadest level to the most detailed level using the following format: Sectors represent the highest level of aggregation. There are 20 sectors in NAICS. Subsectors represent the next, more detailed level of aggregation. There are 96 subsectors in NAICS 2022. Industry groups are more detailed than subsectors. There are 308 industry groups in NAICS 2022. NAICS industries, in most cases, represent the lowest level of three-country comparability. There are 689 five-digit industries in NAICS 2022. National industries are the most detailed level and represent the national level detail. There are 1,012 national industries in NAICS United States 2022. To ensure the accuracy, timeliness, and relevance of the classification, NAICS is reviewed every five years to determine what, if any, changes are required. The 2027 review will be the sixth since OMB adopted the NAICS as an official standard statistical classification in 1997. The ECPC 1997 2002 2007 2012 2017 2022 Jkt 265001 104231 Federal Register April 9, 1997 ..................................................... January 16, 2001 ............................................. May 16, 2006 ................................................... August 17, 2011 ............................................... August 8, 2016 ................................................. December 21, 2021 ......................................... system and provides an alternate way of classifying output. NAICS classifies units according to their production function. NAICS industries group units undertaking similar activities using similar resources but does not necessarily group all similar products or outputs. NAPCS, on the other hand, classifies the outputs of units, or in other words their products or transactions, within a demand-based conceptual framework. For example, the hypothetical product of a flu shot can be provided by a doctor’s office, a hospital, or a walk-in clinic. Because these three units are classified to three different NAICS industries, data users who want information about all flu shots provided must be able to identify the individual products coming out of the units, which NAPCS is designed to do. Thus, in many cases, the need for specific statistical data can be met by aggregating product data across industries as NAPCS does, rather than by creating a new industry. This cross-sector measurement level is particularly true with NAICS, which groups establishments into industries based on PO 00000 Frm 00160 Fmt 4703 Sfmt 4703 62 66 71 76 81 86 FR FR FR FR FR FR 17288. 3826. 28532. 51240. 52584. 72277. their primary production function. NAPCS was initiated in 1999, followed by a lengthy development and collaborative harmonizing efforts. The first NAPCS revision cycle began in 2022, concurrent with the NAICS. This cycle will continue on the same 5-year revision cycle as NAICS. Proposals for new industries in NAICS for 2027 will be evaluated within the context of the industry and product classification systems to determine the most appropriate resolution. For a detailed description of the NAPCS initiative, see the April 16, 1999, Federal Register notice (64 FR 18984), available at www.census.gov/ naics/napcs. Proposals for new industries will be evaluated using a variety of criteria. As previously mentioned, each proposal will be evaluated based on the application of the production function concept, its impact on comparability within North America and with other regions, and its impact on time series. For any proposals that cross threecountry levels of agreement, negotiations with Canada and Mexico, E:\FR\FM\20DEN1.SGM 20DEN1 ddrumheller on DSK120RN23PROD with NOTICES1 104232 Federal Register / Vol. 89, No. 245 / Friday, December 20, 2024 / Notices our partners in NAICS, will also influence the ECPC’s recommendations on those proposals. In addition, other criteria may affect recommendations for adoption. From a practical standpoint, industries must be of appropriate size. At the national level, this is generally not a major concern, but there are a variety of statistical programs that produce industry data at the regional, State, metropolitan area, or even county or local level. A proposed industry must include a sufficient number of establishments 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. Proposed changes must be such that they can be applied by agencies within their normal processing operations. Any recommendations for change by the ECPC for consideration will also take into account the cost of making the changes. These costs can be considerable and the availability of funding to make changes is critical. The budgetary environment will be considered when the ECPC makes recommendations. As mentioned above, certain proposals may be more adequately addressed through the identification and collection of product data. Proposals for new or revised 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 producing units, which means that the activities of similar producing units cannot be separated in the industry classification system. Proposals must include the following information: (1) Specific economic activities to be covered by the proposed industry, the proposed industry’s production processes, its specialized labor skills, and any unique equipment and materials used. This detail should demonstrate that the proposed industry will group establishments with similar production processes that are unique and clearly separable from the production processes of other industries. (2) Relationship of the proposed industry to existing NAICS United States 2022 six-digit national industries and whether the proposed industry would impact trilateral NAICS levels (as VerDate Sep<11>2014 20:12 Dec 19, 2024 Jkt 265001 specified by ‘‘T’’ superscripts in the 2022 NAICS structure). (3) Documentation of the size and recent and projected growth of the proposed industry in the United States. (4) Information about the size and importance of the proposed industry in Canada and Mexico, if available. Proposals will be collected, reviewed, and analyzed by the ECPC. As necessary, proposals for change will be negotiated with our partners in Canada and Mexico. When this process is complete, OMB will publish a Federal Register notice that contains the ECPC recommendations for revisions for additional public comment prior to a final OMB determination of any changes to NAICS for 2027. III. Improve Measures of Emerging/ Innovative Industrial Activity, Including the Bioeconomy Consistent with Executive Order 14081, Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy, the Interagency Technical Working Group on Developing, Recommending and Assessing Current Industry and Product Classifications for the Emerging Bioeconomy submitted a report to OMB with recommendations for revisions to NAICS for advancing measurement in this area.1 In this report, the Working Group stated that there has been sustained growth and diversification in biotechnology, biomanufacturing, and the related use of biological resources to supplement, and in some industries, replace more traditional production methods. The report also discussed several challenges with measuring this part of the economy, and included recommendations for revisions to both the NAICS and NAPCS. As mentioned above, especially in this area, some proposals may be more adequately addressed through the identification and collection of product versus industry data. The ECPC is soliciting public comments regarding the recommendations included in the report, to support development of related final ECPC recommendations to OMB. In particular, ECPC is interested in the following issues: What impact might these potential changes to the NAICS have on existing industry 1 Interagency Tech. Working Grp. on Developing, Recommending and Assessing Current Indus. & Product Classifications for the Emerging Bioeconomy, Measuring the Bioeconomy: Recommended Revisions to the NAICS and NAPCS (Sept. 12, 2023), available at www.usda.gov/sites/ default/files/documents/OCE-Measuring-theBioeconomy.pdf. PO 00000 Frm 00161 Fmt 4703 Sfmt 4703 measurements, for example economic output and employment, continuity of time series measures? What methodologies should compilers of Federal economic data apply to differentiate bioeconomic processes from current production processes to enable measurement? What potential bioeconomy measurement strategies might be considered other than revisions to and inclusion in the NAICS? IV. Errors and Omissions in NAICS No significant errors or omissions have been identified in NAICS 2022. Any errors or omissions that are identified in NAICS in the future will be corrected and posted on the official NAICS website at www.census.gov/ naics. V. Timing for the 2027 NAICS Revision Process Following this public comment period, the ECPC will review the comments and develop any proposed revisions for the 2027 NAICS. Then OMB will publish ECPC’s proposed revisions for public comment in a subsequent Federal Register Notice. The ECPC will then review the comments and develop final recommendations to the Chief Statistician of the United States at OMB on the proposed revisions for the 2027 NAICS. OMB will consider the final recommendations from the ECPC and will publish the updated classification for 2027 NAICS in calendar year 2026. The NAICS 2027 will be available on the Census Bureau website in January 2027. Karin A. Orvis, Chief Statistician of the United States. [FR Doc. 2024–30060 Filed 12–19–24; 8:45 am] BILLING CODE P NUCLEAR REGULATORY COMMISSION [NRC–2024–0172] Information Collection: Human Performance Test Facility Nuclear Regulatory Commission. ACTION: Proposed information collection; request for comment. AGENCY: The U.S. Nuclear Regulatory Commission (NRC) invites public comment on this proposed information collection. The information collection is entitled, ‘‘Human Performance Test Facility.’’ DATES: Submit comments by February 18, 2025. Comments received after this SUMMARY: E:\FR\FM\20DEN1.SGM 20DEN1

Agencies

[Federal Register Volume 89, Number 245 (Friday, December 20, 2024)]
[Notices]
[Pages 104229-104232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30060]


-----------------------------------------------------------------------

OFFICE OF MANAGEMENT AND BUDGET


Statistical Policy Directive No. 8 North American Industry 
Classification System (NAICS)--Request for Comments on Possible 
Revisions for 2027

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

ACTION: Notice of Solicitation for Proposals to Revise Portions of the 
NAICS for 2027.

-----------------------------------------------------------------------

SUMMARY: The Office of Management and Budget (OMB), on behalf of the 
Economic Classification Policy Committee (ECPC), announces the review 
of the 2022 North American Industry Classification System (NAICS) for 
potential revisions to be made to the

[[Page 104230]]

structure and content of the NAICS for 2027 and solicits public 
comment.
    Details about these topics are available in the SUPPLEMENTARY 
INFORMATION section below.

DATES: To ensure consideration of comments on this notice, they must be 
received no later than February 18, 2025. Because of delays in the 
receipt of regular mail related to security screening, respondents are 
encouraged to send comments electronically (see ADDRESSES, below.

ADDRESSES: Submit comments through www.regulations.gov--a Federal E-
Government website that allows the public to find, review, and submit 
comments on documents that agencies have published in the Federal 
Register and that are open for comment. Simply type ``USBC-2024-0032'' 
(in quotes) in the Comment or Submission search box, click Go, and 
follow the instructions for submitting comments. Comments received by 
the date specified above will be included as part of the official 
record. Please include the Docket ID (USBC-2024-0032) and the phrase 
``2022 North American Industry Classification System (NAICS)--Revisions 
for 2027 Comments'' at the beginning of your comments.
    Privacy Act Statement: OMB is issuing this solicitation of input on 
the 2027 NAICS revision pursuant to its authorities under 31 U.S.C. 
1104(d) and 5 U.S.C. 3504(e). Submission of comments in response to 
this request is voluntary. Comments may be used to inform sound 
decision making on topics related to this request, including potential 
revisions to the NAICS. Please note that submissions received in 
response to this notice may be posted on www.regulations.gov or 
otherwise released in their entirety, including any personal 
information, business confidential information, or other sensitive 
information provided by the commenter. Do not include in your 
submissions any copyrighted material; information of a confidential 
nature, such as personal or proprietary information; or any information 
you would not like to be made publicly available. Comments and 
commenter information are maintained under the OMB Public Input System 
of Records, OMB/INPUT/01; the system of records notice is accessible at 
88 FR 20913 (www.federalregister.gov/documents/2023/04/07/2023-07452/privacy-act-of-1974-system-of-records) and includes a list of routine 
uses associated with the collection of this information.
    Electronic Availability: Federal Register notices are available 
electronically at www.federalregister.gov. This document is also 
available on the NAICS website at www.census.gov/naics. This site 
contains previous NAICS United States Federal Register notices, ECPC 
Issues Papers, ECPC Reports, the structure and industry definitions for 
all NAICS United States versions, and related documents.
    Public Review Procedure: All comments and proposals received in 
response to this notice will be available for public inspection. OMB 
will publish all ECPC recommendations for changes to NAICS for 2027 
resulting from this notice in the Federal Register for review and 
comment prior to final action.
    For general inquiries email: [email protected]. 
The NAICS classification staff may be reached by email at 
[email protected]. Please note: Communication through this 
email will not be included in the record for USBC-2024-0032. Comments 
should be submitted through https://www.federalregister.gov.

SUPPLEMENTARY INFORMATION: 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, on behalf of the ECPC, 
announces the review and potential revision of the structure and 
content of the 2022 NAICS. OMB solicits public comment on all aspects 
of the NAICS, with an emphasis on new and emerging industries. However, 
in soliciting comments about revising NAICS, the ECPC does not intend 
to open the entire classification structure for substantial change in 
2027. The ECPC will consider public comments and proposals for changes 
or modifications that are consistent with the principles guiding the 
development of NAICS as outlined in the ``BACKGROUND'' section below.
    This is the first Federal Register Notice requesting public comment 
in the process leading up to the potential 2027 NAICS revision. More 
information on the NAICS, including information on past revision 
processes, is available at www.census.gov/naics.

I. Background

    The Chief Statistician of the United States at OMB coordinates the 
Federal statistical system by developing and overseeing the 
implementation of Government-wide principles, policies, standards, and 
guidelines concerning the presentation and dissemination of statistical 
information. These coordination efforts promote the efficiency and 
effectiveness of the Federal statistical system. More information on 
the Federal statistical system, including its structure and policies 
that govern it, is available at www.statspolicy.gov.
    One such standard for statistical data classification established 
by OMB is Statistical Policy Directive No. 8: North American Industry 
Classification System: Classification of Establishments (NAICS). NAICS 
is a system for classifying establishments (individual business 
locations) by type of economic activity. Its purposes are (1) to 
facilitate the collection, tabulation, presentation, and analysis of 
data relating to establishments; and (2) to promote uniformity and 
comparability in the presentation and analysis of statistical data 
describing the North American economy. The OMB-Recognized Statistical 
Agencies and Units use NAICS to collect and publish data by industry, 
and NAICS is also widely used by State agencies, trade associations, 
private businesses, and other organizations.
    Mexico's Instituto Nacional de Estad[iacute]stica y 
Geograf[iacute]a (INEGI), Statistics Canada, and the United States 
Office of Management and Budget, through the ECPC, collaborate on NAICS 
to make the industry statistics produced by the three countries 
comparable. NAICS is an industry classification system developed in 
accordance with a single principle of aggregation: producing units that 
use similar production processes should be grouped together in the 
classification. NAICS also reflects changes in technology and in the 
growth and diversification of services in recent decades. Industry 
statistics presented using NAICS 2022 are extensively comparable with 
statistics compiled according to the latest revision of the United 
Nations' International Standard Industrial Classification of All 
Economic Activities (ISIC, Revision 5). For the three North American 
countries, NAICS provides a consistent framework for the collection, 
tabulation, presentation, and analysis of industry statistics used by 
government policy analysts, academics and researchers, the business 
community, and the public.
    Please note that NAICS is designed and maintained solely for 
statistical purposes, in order to improve and keep current the 
statistical rigor of 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.

[[Page 104231]]

    Four principles guide NAICS development:
    (1) NAICS is erected on a production-oriented conceptual framework. 
This means that producing units that use the same or similar production 
processes are grouped together in NAICS.
    (2) NAICS gives 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.
    (3) Time series continuity is maintained to the extent possible.
    (4) The system strives for compatibility with the two-digit level 
(see below) of the International Standard Industrial Classification of 
All Economic Activities (ISIC, Rev. 5) of the United Nations.
    The ECPC is committed to maintaining the principles of NAICS as it 
develops recommendation for further refinements.
    NAICS uses a hierarchical structure to classify establishments from 
the broadest level to the most detailed level using the following 
format:

Sector.....................  2-digit..............  Sectors represent
                                                     the highest level
                                                     of aggregation.
                                                     There are 20
                                                     sectors in NAICS.
Subsector..................  3-digit..............  Subsectors represent
                                                     the next, more
                                                     detailed level of
                                                     aggregation. There
                                                     are 96 subsectors
                                                     in NAICS 2022.
Industry Group.............  4-digit..............  Industry groups are
                                                     more detailed than
                                                     subsectors. There
                                                     are 308 industry
                                                     groups in NAICS
                                                     2022.
NAICS Industry.............  5-digit..............  NAICS industries, in
                                                     most cases,
                                                     represent the
                                                     lowest level of
                                                     three-country
                                                     comparability.
                                                     There are 689 five-
                                                     digit industries in
                                                     NAICS 2022.
National Industry..........  6-digit..............  National industries
                                                     are the most
                                                     detailed level and
                                                     represent the
                                                     national level
                                                     detail. There are
                                                     1,012 national
                                                     industries in NAICS
                                                     United States 2022.
 

    To ensure the accuracy, timeliness, and relevance of the 
classification, NAICS is reviewed every five years to determine what, 
if any, changes are required. The 2027 review will be the sixth since 
OMB adopted the NAICS as an official standard statistical 
classification in 1997. The ECPC recognizes the potential costs 
involved when adopting, implementing, and tracking the impacts of 
industry classification revisions in statistical programs. The ECPC 
also recognizes the economic, statistical, and policy implications that 
arise when the industry classification system does not identify and 
account for important economic developments. Balancing the costs of 
change against the potential for more accurate and relevant economic 
statistics requires significant input from data producers, data 
providers, and data users.

------------------------------------------------------------------------
        NAICS version            Date published       Federal Register
------------------------------------------------------------------------
1997........................  April 9, 1997.......  62 FR 17288.
2002........................  January 16, 2001....  66 FR 3826.
2007........................  May 16, 2006........  71 FR 28532.
2012........................  August 17, 2011.....  76 FR 51240.
2017........................  August 8, 2016......  81 FR 52584.
2022........................  December 21, 2021...  86 FR 72277.
------------------------------------------------------------------------

    The ECPC solicits and welcomes comments across all of the NAICS 
sectors, and also seeks comments concerning the following items: new 
and emerging industries and recommended revisions for measuring 
elements of the bioeconomy.

II. New and Emerging Industries

    NAICS is a dynamic industry classification. Every five years, the 
classification is reviewed to determine the need to identify new and 
emerging industries. The ECPC is soliciting public comments on the 
advisability of revising NAICS for new and emerging industries in 2027 
and soliciting proposals for these new industries.
    When developing proposals for new and emerging industries, please 
note that there are two separate but related economic classifications 
in the United States. NAICS, the industry classification, is the 
subject of this notice, while the North American Product Classification 
System (NAPCS) is product classification. The NAPCS product system 
described below complements the NAICS industry system and provides an 
alternate way of classifying output.
    NAICS classifies units according to their production function. 
NAICS industries group units undertaking similar activities using 
similar resources but does not necessarily group all similar products 
or outputs. NAPCS, on the other hand, classifies the outputs of units, 
or in other words their products or transactions, within a demand-based 
conceptual framework. For example, the hypothetical product of a flu 
shot can be provided by a doctor's office, a hospital, or a walk-in 
clinic. Because these three units are classified to three different 
NAICS industries, data users who want information about all flu shots 
provided must be able to identify the individual products coming out of 
the units, which NAPCS is designed to do. Thus, in many cases, the need 
for specific statistical data can be met by aggregating product data 
across industries as NAPCS does, rather than by creating a new 
industry. This cross-sector measurement level is particularly true with 
NAICS, which groups establishments into industries based on their 
primary production function. NAPCS was initiated in 1999, followed by a 
lengthy development and collaborative harmonizing efforts. The first 
NAPCS revision cycle began in 2022, concurrent with the NAICS. This 
cycle will continue on the same 5-year revision cycle as NAICS.
    Proposals for new industries in NAICS for 2027 will be evaluated 
within the context of the industry and product classification systems 
to determine the most appropriate resolution. For a detailed 
description of the NAPCS initiative, see the April 16, 1999, Federal 
Register notice (64 FR 18984), available at www.census.gov/naics/napcs.
    Proposals for new industries will be evaluated using a variety of 
criteria. As previously mentioned, each proposal will be evaluated 
based on the application of the production function concept, its impact 
on comparability within North America and with other regions, and its 
impact on time series. For any proposals that cross three-country 
levels of agreement, negotiations with Canada and Mexico,

[[Page 104232]]

our partners in NAICS, will also influence the ECPC's recommendations 
on those proposals.
    In addition, other criteria may affect recommendations for 
adoption. From a practical standpoint, industries must be of 
appropriate size. At the national level, this is generally not a major 
concern, but there are a variety of statistical programs that produce 
industry data at the regional, State, metropolitan area, or even county 
or local level. A proposed industry must include a sufficient number of 
establishments 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. 
Proposed changes must be such that they can be applied by agencies 
within their normal processing operations. Any recommendations for 
change by the ECPC for consideration will also take into account the 
cost of making the changes. These costs can be considerable and the 
availability of funding to make changes is critical. The budgetary 
environment will be considered when the ECPC makes recommendations. As 
mentioned above, certain proposals may be more adequately addressed 
through the identification and collection of product data.
    Proposals for new or revised 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 
producing units, which means that the activities of similar producing 
units cannot be separated in the industry classification system.
    Proposals must include the following information:
    (1) Specific economic activities to be covered by the proposed 
industry, the proposed industry's production processes, its specialized 
labor skills, and any unique equipment and materials used. This detail 
should demonstrate that the proposed industry will group establishments 
with similar production processes that are unique and clearly separable 
from the production processes of other industries.
    (2) Relationship of the proposed industry to existing NAICS United 
States 2022 six-digit national industries and whether the proposed 
industry would impact trilateral NAICS levels (as specified by ``T'' 
superscripts in the 2022 NAICS structure).
    (3) Documentation of the size and recent and projected growth of 
the proposed industry in the United States.
    (4) Information about the size and importance of the proposed 
industry in Canada and Mexico, if available.
    Proposals will be collected, reviewed, and analyzed by the ECPC. As 
necessary, proposals for change will be negotiated with our partners in 
Canada and Mexico. When this process is complete, OMB will publish a 
Federal Register notice that contains the ECPC recommendations for 
revisions for additional public comment prior to a final OMB 
determination of any changes to NAICS for 2027.

III. Improve Measures of Emerging/Innovative Industrial Activity, 
Including the Bioeconomy

    Consistent with Executive Order 14081, Advancing Biotechnology and 
Biomanufacturing Innovation for a Sustainable, Safe, and Secure 
American Bioeconomy, the Interagency Technical Working Group on 
Developing, Recommending and Assessing Current Industry and Product 
Classifications for the Emerging Bioeconomy submitted a report to OMB 
with recommendations for revisions to NAICS for advancing measurement 
in this area.\1\ In this report, the Working Group stated that there 
has been sustained growth and diversification in biotechnology, 
biomanufacturing, and the related use of biological resources to 
supplement, and in some industries, replace more traditional production 
methods. The report also discussed several challenges with measuring 
this part of the economy, and included recommendations for revisions to 
both the NAICS and NAPCS. As mentioned above, especially in this area, 
some proposals may be more adequately addressed through the 
identification and collection of product versus industry data.
---------------------------------------------------------------------------

    \1\ Interagency Tech. Working Grp. on Developing, Recommending 
and Assessing Current Indus. & Product Classifications for the 
Emerging Bioeconomy, Measuring the Bioeconomy: Recommended Revisions 
to the NAICS and NAPCS (Sept. 12, 2023), available at www.usda.gov/sites/default/files/documents/OCE-Measuring-the-Bioeconomy.pdf.
---------------------------------------------------------------------------

    The ECPC is soliciting public comments regarding the 
recommendations included in the report, to support development of 
related final ECPC recommendations to OMB. In particular, ECPC is 
interested in the following issues: What impact might these potential 
changes to the NAICS have on existing industry measurements, for 
example economic output and employment, continuity of time series 
measures? What methodologies should compilers of Federal economic data 
apply to differentiate bioeconomic processes from current production 
processes to enable measurement? What potential bioeconomy measurement 
strategies might be considered other than revisions to and inclusion in 
the NAICS?

IV. Errors and Omissions in NAICS

    No significant errors or omissions have been identified in NAICS 
2022. Any errors or omissions that are identified in NAICS in the 
future will be corrected and posted on the official NAICS website at 
www.census.gov/naics.

V. Timing for the 2027 NAICS Revision Process

    Following this public comment period, the ECPC will review the 
comments and develop any proposed revisions for the 2027 NAICS. Then 
OMB will publish ECPC's proposed revisions for public comment in a 
subsequent Federal Register Notice. The ECPC will then review the 
comments and develop final recommendations to the Chief Statistician of 
the United States at OMB on the proposed revisions for the 2027 NAICS. 
OMB will consider the final recommendations from the ECPC and will 
publish the updated classification for 2027 NAICS in calendar year 
2026. The NAICS 2027 will be available on the Census Bureau website in 
January 2027.

Karin A. Orvis,
Chief Statistician of the United States.
[FR Doc. 2024-30060 Filed 12-19-24; 8:45 am]
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