Supporting Statement

SUPPORTING STATEMENT
U.S. Department of Commerce Bureau of Industry and Security
The Effect of Imports of Laminations for Stacked Cores for Incorporation into
Transformers, Stacked Cores for Incorporation into Transformers, Wound Cores for
Incorporation into Transformers, Electrical Transformers, and Transformer Regulators on
the National Security
[herein referred to as Electrical Steel and Transformer products]
OMB Control No. 0694-0120
A.

Justification

1.

Explain the circumstances that make the collection of information necessary.

On May 4, 2020, the Secretary of Commerce initiated an investigation to determine the effect of
imports of electrical steel and transformer related products on U.S. national security requirements.
In support of this investigation, the Bureau of Industry and Security (BIS), Office of Technology
Evaluation (OTE) is conducting a survey and assessment focused on the imports, distribution and
production of electrical steel and transformer goods by U.S. companies and the corresponding
impacts on the national defense.

The resulting data will be used to support this investigation conducted under Section 232 of the
Trade Expansion Act of 1962, as amended. The Section 232 investigation was self-initiated by the
U.S. Department of Commerce. The investigation must be completed by January 29, 2021.
The principal goal of this survey effort is to assist BIS in determining whether electrical steel and
transformer products are imported into the U.S. in such quantities or under such circumstances as
to threaten to impair the national security of the U.S. The surveys will also assist in determining the
health and competitiveness of the companies affiliated with the demand, distribution and
production of said products to assess their capabilities to support the national defense.

Information collected will include organizational data, information on mergers and acquisitions,
production and inventories, imports and exports, sales, employment, capital expenditures, R&D,
investment, financial performance, customers, suppliers, demand trends and other topic areas. The
resulting aggregate data will provide BIS detailed information that is otherwise not available and is
needed to effectively conduct its analysis.
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During the design and development of the survey instrument, BIS gathered input primarily from
the interagency but also from industry, their corresponding associations and experts in academia.

BIS has authority under Section 705 of the Defense Production Act of 1950, as amended, and
Section 232 of the Trade Expansion Act of 1962, as amended, to conduct assessments and collect
information on the capabilities and capacity of the U.S. industrial base and domestic industries to
meet national defense requirements. These industrial base assessments are normally undertaken in
partnership with the U.S. Department of Defense and other agencies and typically focus on
manufacturing capability, workforce, financial performance, foreign sourcing and dependencies,
inventories, R&D, and economic issues affecting key industrial sectors or critical technologies.

The attached survey questionnaire, which covers a five-year period, is the key source of
information needed for a national security analysis of this type.
Pursuant to the abovementioned statutes and relevant delegations thereunder, BIS remains the focal
point for national security investigations and assessments among civilian federal agencies. This
includes mandatory data collection authority to carry out these responsibilities.

2. Explain how, by whom, how frequently, and for what purpose the information will be
used. If the information collected will be disseminated to the public or used to support
information that will be disseminated to the public, then explain how the collection complies
with all applicable Information Quality Guidelines.
BIS intends to survey 200 organizations with facilities in the United States.

This survey is a one-time only request. Quantitative data obtained from the survey responses will
be held in a database for analysis, with public releases consisting only of aggregate, nonproprietary
results with no business confidential information.

This survey-based data is needed to assess the status of the organizations involved in the
importation, distribution and production of electrical steel and transformer products, and learn how
U.S. national security, including the national defense, may be threatened by imports of said
products. Expository responses are also used to complement the statistical, quantitative
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information.

Through its analysis of the survey results, BIS will be better able to determine whether or not to
recommend further actions be taken by the President to adjust imports of electrical steel and
transformer related products if they are found to threaten to impair the national security.

3. Describe whether, and to what extent, the collection of information involves the use of
automated, electronic, mechanical, or other technological techniques or other forms of
information technology.
To lessen the burden on respondents, BIS is asking organizations to submit Excel-based survey
responses. Each participant will receive a personalized letter which outlines the collection
requirements and scope of information. The letter will contain directions to the BIS website where
the respondent can gain access to the instrument. This approach was used successfully for the 2019
Titanium Sponge, 2019 Uranium, and 2018 Automotive 232 investigations. All three survey were
reviewed and approved by OMB.

The statistical information requested in the survey tracks closely with categories adopted in the
industry. Almost all responding organizations will have the solicited information stored and be able
to retrieve it in the form requested. Other limited questions will require thought and discussion
internally for proper responses. These questions do not lend to computer automation but only
require brief responses in the text boxes provided.

4.

Describe efforts to identify duplication.

The information sought in the survey is unique and not available from any other source, either
public or private. Only basic organization data requested by BIS is submitted to the U.S. Census
Bureau. However, by law, the Census Bureau may only use such data for Census purposes and may
not disclose the individual organization data for any other purpose.

5. If the collection of information involves small businesses or other small entities, describe
the methods used to minimize burden.
Participants in this collection are importers, distributors and producers of electrical steel and
transformer products. The survey is designed to minimize burden on all respondents. If for any
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reason the respondent cannot complete the survey in Excel, BIS will work closely with the
respondent to facilitate an alternate format for submittal. Based on previous survey data collections,
BIS expects nearly all participant organizations to respond electronically.

6. Describe the consequences to the Federal program or policy activities if the collection is
not conducted or is conducted less frequently.
For the assessment of U.S. importers, distributors and producers of electrical steel and transformer
related products, a mandatory survey is the only method available for BIS to carry out its
responsibilities under the Defense Production Act of 1950, as amended. Without the survey
instrument, BIS could not obtain company specific information on several necessary fields of
information, such as production and inventory, financial performance, capital expenditures,
investments in R&D, customer and supplier data and employment, among others.

The resulting database will allow BIS to benchmark industry performance, identify impacts of
imports on the electrical steel and transformer supply chain, as well as determine the resulting
impact on the national security. Furthermore, if industry was not surveyed in such detail, the
investigation would not determine the effects of electrical steel and transformer imports on the
national defense.

7. Explain any special circumstances that require the collection to be conducted in a
manner inconsistent with OMB guidelines.
Not applicable.

8. Provide information of the PRA Federal Register notice that solicited public comments
on the information collection prior to this submission. Summarize the public comments
received in response to that notice and describe the actions taken by the agency in response to
those comments. Describe the efforts to consult with persons outside the agency to obtain
their views on the availability of data, frequency of collection, the clarity of instructions and
recordkeeping, disclosure, or reporting format (if any), and on the data elements to be
recorded, disclosed, or reported.
The PRA Federal Register notice requirement is not applicable to this particular collection because
this collection falls within the scope of the BIS generic authority entitled, “Request for
Investigation Under Section 232 of the Trade Expansion Act,” as approved under OMB Control
No. 0694-0120. This authority is renewed by OMB every three years (last renewed on June 29,
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2018, expiring on June 30, 2021) to support ongoing BIS national security investigation needs.

BIS developed the survey in consultation with industry and multiple government experts for one
month. The following is a partial list of those individuals who provided input and advice:
U. S. Government:
Andrew David, ITC, International Trade Analyst

(202) 205-3368

Andrew Moyseowicz, ITA, International Trade Specialist

(202) 482-0188

Ari Sulby, DOS, Senior Trade Enforcement Officer

(202) 647-4367

Matthew Zolnowski, OSD, Industrial Policy

(703) 509-2871

Michael Coe, DOE, Director of Transmission Development

(202) 287-5166

Karl Tsuji, ITC, Industry Analyst

(202) 205-3434

Robert Kolasky, DHS, Assistant Director

(202) 365-3424

Tom Rasmussen, DLA, Director

(571) 767-5476

9. Explain any decisions to provide payments or gifts to respondents, other than
remuneration of contractors or grantees.
This survey will not involve any payment or gifts to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for
assurance in statute, regulation, or agency policy.
The survey instrument, cover letter and fact sheet all provide assurance to the respondents that the
information collected through the survey will be deemed business confidential and will be treated
in accordance with Section 705 of the DPA (50 U.S.C.A. app. Section 2061 et. seq.). This
particular section prohibits the publication or disclosure of such information unless the President of
the United States determines that its withholding is contrary to the national defense.

The survey will be administered and housed on a secure U.S. Department of Commerce server.
Submitted surveys will not be shared with non-government entities, other than in aggregate form.
The U.S. Department of Commerce will protect the confidentiality of such information pursuant to
the appropriate disclosure exemptions under the Freedom of Information Act (FOIA), should it be
the subject of a FOIA request. OTE has a lengthy record of protecting business confidential
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information collected under the above statute.

11. Provide additional justification for any questions of a sensitive nature, such as sexual
behavior and attitudes, religious beliefs, and other matters that are commonly considere d
private.
This survey instrument will not collect information that could be construed as being of a sensitive
nature, such as information concerning sexual behavior and attitudes, religious beliefs, and other
matters that are commonly considered sensitive or private.

12.

Provide an estimate in hours of the burden of the collection of information.

BIS estimates that the total burden on respondents by this survey of importers, distributors and
producers of electrical steel and transformer related products will be approximately 2,000 hours.
This estimate is based on the distribution of similar surveys in both scope and sample size in
previous 232 collections, with an average of 10 hours needed for completion in this instance.

This burden estimate is subject to variations among respondents due to discrepancies in the level of
participation in the sector, record keeping, company size, and other variables.
The estimate is based on BIS’s overall past experience with 232s, as well as specific feedback from
industry participants in information collections such as microelectronics, strategic materials, NASA
human spaceflight, and others.
The estimated total cost to respondents of this particular information collection is calculated as
$75,000. This estimate is made by assuming an average hourly respondent work rate of $35
multiplied by 2,000 total burden hours.

13. Provide an estimate of the total annual cost burden to the respondents or recordkeepers resulting from the collection (excluding the value of the burden hours in Question 12
above).
Not applicable.

14.

Provide estimates of annualized cost to the Federal government.
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The estimated cost to the Federal Government for the survey is $344,528 over the six month
period. Much of this incurred expense is the survey itself, which includes preparation, collecting,
inspection and verification of the responses, compiling the information and analyzing the data.
Other costs will be incurred in field testing the survey, summarizing the analysis and findings,
preparing the final report, and report printing and distribution.

The direct employee costs were calculated by multiplying estimated aggregate hours spent on the
project (26 weeks) by the annual pay of one GS-15, Step 10 ($170,800x.5= $85,400); one GS-14,
Step 10 ($157,709x.5=$78,854); one GS-13, Step 10 ($133,465x.5=$66,732); and one GS-12, Step
10 ($112,240x.5=$56,120). The direct employee costs are $287,107 over the six month period.
Indirect or overhead costs associated with the project are calculated as 20 percent of the above
mentioned direct employee costs, or .2x$287,107=$57,421 over the 6 month period. A review of
ledgers from previous years indicates costs for maintenance, telephone, computers, and office
rental charges represent 20 percent of total employee costs.

15.

Explain the reasons for any program changes or adjustments.

Because this collection of information falls within BIS’s generic authority entitled, “Request for
Investigation Under Section 232 of the Trade Expansion Act,” (OMB Control No. 0694-0120), no
increase in burden hours is required.

This collection also constitutes the first collection in FY2020, meaning a balance of 12,260 burden
hours is available. The survey on electrical steel and transformer products is estimated to take 10
hours on average per survey with a sample of 200 respondents, meaning 2,000 hours will be
needed to conduct the collection. The remaining balance (12,260 less 2,000) will be 10,260 hours if
this survey instrument is approved under the aforementioned authority.
16. For collections whose results will be published, outline the plans for tabulation and
publication.
Survey data will be aggregated before publishing to protect company confidentiality. The
instrument will be distributed in June 2020. The analysis will begin in July 2020 and a draft report
prepared in August 2020. The final Section 232 report is planned to go to the President by
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September 2020. The public version of the report will be available after completion of the
President’s review and final determination of the report’s findings and conclusions.
17. If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons why display would be inappropriate.
Not applicable. BIS will display the expiration date of this collection authority on all survey and
instructional instruments the public receives.
18.

Explain each exception to the certification statement.

Not applicable.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

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