The Senate Judiciary Committee deserves praise for something it didn't do last week. In reporting a bill to amend the Freedom of Information Act, the committee did not accept certain changes that were recommended by the Reagan administration and approved by one of its own subcommittees last October. Instead, members gave thoughtful reconsideration to these proposals and wound up with a greatly improved bill.

The FOIA has been on the books for 16 years. It allows ordinary citizens to file a request for information contained in government records; with certain exceptions, that request must be granted. It's the exceptions that cause the problem. Clearly no one wants spies to be able to obtain plans of American missile defenses or businessmen to copy the trade secrets of a competitor. But the Reagan administration sought to broaden these exemptions significantly and unnecessarily.

First, the administration wanted a blanket exemption for all material involving foreign intelligence, which the bureaucracy had labeled "classified." The committee bill limits that exemption to such material only if it is properly classified; the courts, and not the bureaucracy, will determine whether the classification is proper.

Next, the administration sought to exempt all material having anything to do with "terrorism," leaving the executive branch itself to define that word. The committee, fearing that some legitimate political activity might be so classified, refused the broad exemption and gave the courts responsibility to look at each request for information individually.

Finally, the business community wanted a broad exemption for all business records whether or not they contained trade secrets or confidential financial data. The committee decided that a great deal of business information involves such matters as health and safety and should be available to the public. Instead of a blanket exemption, therefore, the committee bill provides procedural safeguards. When a request for information that affects a specific business is filed, that business must be given notice of the request, an opportunity to object and the right to sue to prevent disclosure.

Sens. Orrin Hatch (R-Utah) and Patrick Leahy (D- Vt.) led the committee deliberations on this bill, and they convinced every one of their colleagues to reject the blanket exemption requests. The Freedom of Information Act is an important tool for citizens of a democracy. It has led to disclosures in product safety, the environment and nuclear power, abusive and corrupt government practices, foreign affairs and a host of other matters where disclosure led to reform. It is quintessentially American to believe that the people control the government and that they have a right to know what the government is doing. The Judiciary Committee bill preserves that right.