FR Doc 04-24655

[Federal Register: November 4, 2004 (Volume 69, Number 213)]
[Notices]
[Page 64289-64293]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04no04-45]

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FEDERAL TRADE COMMISSION

Agency Information Collection Activities; Proposed Collection;
Comment Request; Extension

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The proposed information collection requirements described
below will be submitted to the Office of Management and Budget
(``OMB'') for review, as required by the Paperwork Reduction Act
(``PRA''). The FTC is seeking public comments on its proposal to extend
through September 30, 2007 the current PRA clearance for information
collection requirements contained in its Appliance Labeling Rule
(``Rule''), promulgated pursuant to the Energy Policy and Conservation
Act of 1975 (``EPCA''). That clearance was scheduled to expire on
September 30, 2004. On September 14, 2004, the OMB granted the FTC's
request for a short-term extension to November 30, 2004 to allow for
this second opportunity to comment.

DATES: Comments must be submitted on or before December 6, 2004.

ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Appliance Labeling Rule: Paperwork comment,
R611004'' to facilitate the organization of comments. A comment filed
in paper form should include this reference both in the text and on the
envelope, and should be mailed or delivered to the following address:
Federal Trade Commission/Office of the Secretary, Room H-159 (Annex U),
600 Pennsylvania Avenue, NW., Washington, DC 20580. If the comment
contains any material for which confidential treatment is requested, it
must be filed in paper (rather than electronic) form, and the first
page of the document must be clearly labeled ``Confidential.'' \1\ The
FTC is requesting

[[Page 64290]]

that any comment filed in paper form be sent by courier or overnight
service, if possible, because U.S. postal mail in the Washington area
and at the Commission is subject to delay due to heightened security
precautions. Comments filed in electronic form (except comments
containing any confidential material) should be sent to the following
e-mail address: PaperworkComment@ftc.gov.
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\1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be
accompanied by an explicit request for confidential treatment,
including the factual and legal basis for the request, and must
identify the specific portions of the comment to be withheld from
the public record. The request will be granted or denied by the
Commission's General Counsel, consistent with applicable law and the
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments will be
considered by the Commission, and will be available to the public on
the FTC Web site, to the extent practicable, at http://www.ftc.gov. As

a matter of discretion, the FTC makes every effort to remove home
contact information for individuals from the public comments it
receives before placing those comments on the FTC Web site. More
information, including routine uses permitted by the Privacy Act, may
be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm
.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or
copies of the proposed information collection requirements should be
addressed to Hampton Newsome, Attorney, Bureau of Consumer Protection,
Division of Enforcement, Room NJ-2122, Federal Trade Commission, 600
Pennsylvania Ave., NW., Washington, DC 20580 (202-326-2889).

SUPPLEMENTARY INFORMATION: On July 21, 2004, the FTC sought comment on
the information collection requirements associated with the Appliance
Labeling Rule, 16 CFR part 305 (Control Number 3084-0069). See 69 FR
43587. No comments were received. Pursuant to the OMB regulations that
implement the PRA (5 CFR part 1320), the FTC is providing this second
opportunity for public comment while seeking OMB approval to extend the
existing paperwork clearance for the rule.
The Appliance Labeling Rule establishes testing, reporting,
recordkeeping, and labeling requirements for manufacturers of major
household appliances. The requirements relate specifically to the
disclosure of information relating to energy consumption and water
usage. The Rule's testing and disclosure requirements enable consumers
purchasing appliances to compare the energy use or efficiency of
competing models. In addition, EPCA and the Rule require manufacturers
to submit relevant data to the Commission regarding energy or water
usage in connection with the products they manufacture. The Commission
uses this data to compile ranges of comparability for covered
appliances for publication in the Federal Register. These submissions,
along with required records for testing data, may also be used in
enforcement actions involving alleged misstatements on labels or in
advertisements.

Burden Statement

Estimated annual hours burden: 467,000 hours.
The estimated hours burden imposed by Section 324 of EPCA and the
Commission's Rule include burdens for testing (360,721 hours);
reporting (1,324 hours); recordkeeping (767 hours); labeling (101,333
hours); and retail catalog disclosures (2,550 hours). The total burden
for these activities is 467,000 hours (rounded to the nearest
thousand), which is the same as staff's previous estimate in its 2001
submission to OMB.
The following estimates of the time needed to comply with the
requirements of the Rule are based on census data, Department of Energy
figures and estimates, general knowledge of manufacturing practices,
and industry input and figures. Because compliance burden falls almost
entirely on manufacturers and importers (with a de minimis burden for
retailers), burden estimates are calculated on the basis of the number
of domestic manufacturers and/or the number of units shipped
domestically in the various product categories.

A. Testing

Under the Rule, manufacturers of covered products must test each
basic model they produce to determine energy usage (or, in the case of
plumbing fixtures, water consumption). The burden imposed by this
requirement is determined by the number of basic models produced, the
average number of units tested per model, and the time required to
conduct the applicable test.
Manufacturers need not subject each basic model to testing
annually; they must retest only if the product design changes in such a
way as to affect energy consumption. The staff estimates that the
frequency with which models are tested every year ranges roughly
between 10% and 50% and that the actual percentage of basic models
tested varies by appliance category. In addition, it is likely that
only a small portion of the tests conducted is attributable to the
Rule's requirements. Given the lack of specific data on this point,
staff has conservatively assumed that all of the tests conducted are
attributable to the Rule's requirements and will use the high end of
the range noted above. Accordingly, the burden estimates are based on
the assumption that 50% of all basic models are tested annually. Thus,
the estimated testing burden for the various categories of products
covered by the Rule is as follows: \2\:
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\2\ The following numbers reflect estimates of the basic models
in the market. The actual numbers will vary from year to year. Since
2001, the staff has not identified any changes in the number of
basic models that would yield a significant increase in the total
burden hours for testing. The average number of units tested per
model and the hours per unit tested are based on information from
industry sources. However, the staff has identified an inadvertent
error in its July 21, 2004 Federal Register Notice which failed to
reflect the final calculation of burden hours submitted to OMB in
2001. Accordingly, the average number of tests for refrigeration
products, dishwashers, clothes washers, and room air conditioners
has been changed from two to four in the table.

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Percentage of
Number of basic models tested Avg. number of Hours per unit Total annual
Category of manufacturer models (FTC required) units tested per tested testing burden
(percent) model hours
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Refrigerators, Refrigerator-freezers, and Freezers............ 3,075 50 4 4 24,600
Dishwashers................................................... 393 50 4 1 786
Clothes washers............................................... 500 50 4 2 2,000
Water heaters................................................. 650 50 2 24 15,600
Room air conditioners......................................... 1,092 50 4 8 17,472
Furnaces...................................................... 1,900 50 2 8 15,200
Central A/C................................................... 1,270 50 2 24 30,480

[[Page 64291]]

Heat pumps.................................................... 903 50 2 72 65,016
Pool heaters.................................................. 250 50 2 12 3,000
Fluorescent lamp ballasts..................................... 975 50 4 3 5,850
Lamp products................................................. 2,100 50 12 14 176,400
Plumbing fittings............................................. 1,700 50 2 2 3,400
Plumbing fixtures............................................. 22,000 50 1 .0833 917
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360,721
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B. Reporting

Reporting burden estimates are based on information from industry
representatives. Manufacturers of some products indicate that, for
them, the reporting burden is best measured by the estimated time
required to report on each model manufactured, while others state that
an estimated number of annual burden hours by manufacturer is a more
meaningful way to measure. The figures below reflect these different
methodologies as well as the varied burden hour estimates provided by
manufacturers of the different product categories that use the latter
methodology.
Appliances, HVAC Equipment, and Pool Heaters
Staff estimates that the average reporting burden for these
manufacturers is approximately two minutes per basic model. Based on
this estimate, multiplied by a total of 10,033 basic models of these
products, the annual reporting burden for the appliance, HVAC
equipment, and pool heater industry is an estimated 334 hours (2
minutes x 10,033 models / 60 minutes per hour).
Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Products
The total annual reporting burden for manufacturers of fluorescent
lamp ballasts, lamp products, and plumbing products is based on the
estimated average annual burden for each category of manufacturers,
multiplied by the number of manufacturers in each respective category,
as shown below:

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Annual burden Total annual
Category of manufacturer hours per Number of reporting
manufacturer manufacturers burden hours
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Fluorescent lamp ballasts................................. 6 20 120
Lamp products............................................. 15 50 750
Plumbing products......................................... 1 120 120
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Total Reporting burden Hours

The total reporting burden for industries covered by the Rule is
1,324 hours annually (334 + 120 + 750 + 120).

C. Recordkeeping

EPCA and the Appliance Labeling Rule require manufacturers to keep
records of the test data generated in performing the tests to derive
information included on labels and required by the Rule. As with
reporting, burden is calculated by number of models for appliances,
HVAC equipment, and pool heaters, and by number of manufacturers for
fluorescent lamp ballasts, lamp products, and plumbing products.
Appliances, HVAC Equipment, and Pool Heaters
The recordkeeping burden for manufacturers of appliances, HVAC
equipment, and pool heaters varies directly with the number of tests
performed. Staff estimates total recordkeeping burden to be
approximately 167 hours for these manufacturers, based on an estimated
average of one minute per record stored (whether in electronic or paper
format), multiplied by 10,033 tests performed annually (1 minute x
10,033 basic models / 60 minutes per hour).\3\
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\3\ The amount of annual tests performed is derived by
multiplying the number of basic models within the relevant product
categories by the average number of units tested per model within
each category (the underlying information may be drawn from the
table in Section A.).
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Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Products
The total annual recordkeeping burden for manufacturers of
fluorescent lamp ballasts, lamp products, and plumbing products is
based on the estimated average annual burden for each category of
manufacturers (derived from industry sources), multiplied by the number
of manufacturers in each respective category, as shown below:

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Annual burden Total annual
Category of manufacturer hours per Number of recordkeeping
manufacturer manufacturers burden hours
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Fluorescent lamp ballasts................................. 2 20 40
Lamp products............................................. 10 50 500
Plumbing products......................................... .5 120 60
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[[Page 64292]]

Total Recordkeeping Burden Hours

The total recordkeeping burden for industries covered by the Rule
is 767 hours annually (167 + 40 + 500 + 60).

D. Labeling

EPCA and the Rule require that manufacturers of covered products
provide certain information to consumers, through labels, fact sheets,
or permanent markings on the products. The burden imposed by this
requirement consists of (1) the time needed to prepare the information
to be provided, and (2) the time needed to provide it, in whatever
form, with the products. The applicable burden for each category of
products is described below:
Appliances, HVAC Equipment, and Pool Heaters
EPCA and the Rule specify the content, format, and specifications
for the required labels, so manufacturers need only add the energy
consumption figures derived from testing. In addition, most larger
companies use automation to generate labels, and the labels do not
change from year to year. Given these considerations, staff estimate
that the time to prepare labels for appliances, HVAC equipment, and
pool heaters is no more than four minutes per basic model. Thus, for
appliances, HVAC equipment, and pool heaters, the approximate annual
drafting burden involved in preparing labels is 669 hours per year
[10,033 (basic models) x 4 minutes (drafting time per basic model) / 60
(minutes per hour)].
Industry representatives and trade associations have estimated that
it takes between 4 and 8 seconds to affix each label to each product.
Based on an average of 6 seconds per unit, the annual burden for
affixing labels to appliances, HVAC equipment, and pool heaters is
83,522 hours [6 (seconds) x 50,113,098 (the number of total products
shipped) / 3,600 (seconds per hour)].
The Rule also requires that HVAC equipment manufacturers disclose
energy usage information on a separate fact sheet or in an approved
industry-prepared directory of products. Staff has estimated the
preparation of these fact sheets requires approximately 30 minutes per
basic model. Manufacturers producing at least 95 percent of the
affected equipment, however, are members of trade associations that
produce approved directories (in connection with their certification
programs independent of the Rule) that satisfy the fact sheet
requirement. Thus, the drafting burden for fact sheets for HVAC
equipment is approximately 102 hours annually [4,073 (basic models) x
.5 hours x .05 (proportion of equipment for which fact sheets are
required)].
The Rule allows manufacturers to prepare a directory containing
fact sheet information for each retail establishment as long as there
is a fact sheet for each basic model sold. Assuming that six HVAC
manufacturers (i.e., approximately 5% of HVAC manufacturers), produce
fact sheets instead of having required information shown in industry
directories, and each spends approximately 16 hours per year
distributing the fact sheets to retailers and in response to occasional
consumer requests, the total time attributable to this activity would
also be approximately 96 hours.
The total annual labeling burden for appliances, HVAC equipment,
and pool heaters is 669 hours for preparation plus 83,522 hours for
affixing, or 84,191 hours. The total annual fact sheet burden is 102
hours for preparation and 96 hours for distribution, or 198 hours. The
total annual burden for labels and fact sheets for the appliance, HVAC,
and pool heater industries is, therefore, estimated to be 84,389 hours.
Fluorescent Lamp Ballasts
The statute and the Rule require that labels for fluorescent lamp
ballasts contain an ``E'' within a circle. Since manufacturers label
these ballasts in the ordinary course of business, the only impact of
the Rule is to require manufacturers to reformat their labels to
include the ``E'' symbol. Thus, the burden imposed by the Rule for
labeling fluorescent lamp ballasts is minimal.
Lamp Products
The burden attributable to labeling lamp products is also minimal,
for similar reasons. The Rule requires certain disclosures on packaging
for lamp products. Since manufacturers were already disclosing the
substantive information required under the Rule prior to its
implementation, the practical effect of the Rule was to require that
manufacturers redesign packaging materials to ensure they include the
disclosures in the manner and form prescribed by the Rule. Because this
effort is now complete, there is no ongoing labeling burden imposed by
the Rule for lamp products.
Plumbing Products
The statute and the Rule require that manufacturers disclose the
water flow rate for plumbing fixtures. Manufacturers may accomplish
this disclosure by attaching a label to the product, through permanent
markings imprinted on the product as part of the manufacturing process,
or by including the required information on packaging material for the
product. While some methods might impose little or no additional
incremental time burden and cost on the manufacturer, other methods
(such as affixing labels) could. Thus, staff estimate an overall
blended average burden associated with this disclosure requirement of
one second per unit sold. Staff also estimate that there are
approximately 9,000,000 covered fixtures and 52,000,000 fittings sold
annually in the country. Therefore, the estimated annual burden to
label plumbing products is 16,944 hours [61,000,000 (units) x 1
(seconds) / 3,600 (seconds per hour)].

Total Burden for Labeling

The total labeling burden for all industries covered by the Rule is
101,333 hours (84,389 + 16,944) annually.

E. Retail Sales Catalogs Disclosures

The Rule requires that sellers offering covered products through
retail sales catalogs disclose in the catalog energy (or water)
consumption for each covered product. Because this information is
supplied by the product manufacturers, the burden on the retailer
consists of incorporating the information into the catalog
presentation.
Paper catalog sellers now have substantial experience with the Rule
and its requirements and it is likely that many of the required
disclosures would be made in the ordinary course of business. Thus,
staff believe that any incremental burden the Rule imposes on these
paper catalog sellers would be minimal.
Staff estimates that there are an additional 150 new online sellers
of covered products who are subject to the Rule's catalog disclosure
requirements. Many of these sellers may not have the experience the
paper catalog sellers have in incorporating energy and water
consumption data into their catalogs. Staff estimates that these online
sellers each require approximately 17 hours per year to incorporate the
data into their online catalogs. This estimate is based on the
assumption that entry of the required information takes 1 minute per
covered product and an assumption that the average online catalog
contains approximately 1,000 covered products (based on a sampling of
Web sites of affected retailers). Given that there is a great variety
among sellers in the volume of products they offer online, it is very
difficult to estimate such volume with precision. In addition, this
analysis assumes that information for all 1,000

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products is entered into the catalog. This is a conservative assumption
because the number of incremental additions to the catalog from year to
year is likely to be much lower after initial start-up efforts have
been completed. The total catalog disclosure burden for all industries
covered by the Rule is 2,550 hours (150 sellers x 17 hours annually).
Estimated annual cost burden: ($8,353,641 in labor costs and
$3,519,422 in capital or other non-labor costs).
Labor Costs: Staff derived labor costs by applying appropriate
estimated hourly cost figures to the burden hours described above. In
calculating the cost figures, staff assumes that test procedures are
conducted by skilled technical personnel at an hourly rate of $20.00,
and that recordkeeping and reporting, and labeling, marking, and
preparation of fact sheets, generally are performed by clerical
personnel at an hourly rate of $10.75.
Based on the above estimates and assumptions, the total annual
labor costs for the five different categories of burden under the Rule,
applied to all the products covered by it, is $8,353,641 (rounded to
the nearest thousand), derived as follows:

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Burden hours Total annual
Activity per year Wage category hourly rate labor cost
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Testing..................................... 360,721 Skilled technical/$20......... $7,214,420
Reporting................................... 1,324 Clerical/$10.75............... 14,233
Recordkeeping............................... 767 Clerical/$10.75............... 8,245
Labeling, marking, and fact sheet 101,333 Clerical/$10.75............... 1,089,330
preparation.
Catalog disclosures......................... 2,550 Clerical/$10.75............... 27,413
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8,353,641
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Capital or Other Non-Labor Costs: $3,519,000 (rounded), determined
as follows:
Staff has examined the five distinct burdens imposed by EPCA
through the Rule--testing, reporting, recordkeeping, labeling, and
retail catalog disclosures--as they affect the 11 groups of products
that the Rule covers. Staff has concluded that there are no current
start-up costs associated with the Rule. Manufacturers have in place
the capital equipment necessary--especially equipment to measure energy
and/or water usage--to comply with the Rule.
Under this analysis, testing, recordkeeping, and retail catalog
disclosures are activities that incur no capital or other non-labor
costs. As mentioned above, testing has been performed in these
industries in the normal course of business for many years as has the
associated recordkeeping. The same is true regarding compliance
applicable to the requirements for paper catalogs. Manufacturers and
retailers who make required disclosures in catalogs already are
producing catalogs in the ordinary course of their businesses;
accordingly, capital cost associated with such disclosure would be
minimal or nil. Staff recognizes that there may be initial costs
associated with posting online disclosure, and it invites further
comment to reasonably quantify such costs.
Manufacturers that submit required reports to the Commission
directly (rather than through trade associations) incur some nominal
costs for paper and postage. Staff estimates that these costs do not
exceed $2,500. Manufacturers must also incur the cost of procuring
labels and fact sheets used in compliance with the Rule. Based on
estimates of 50,113,098 units shipped and 128,650 fact sheets
prepared,\4\ at an average cost of seven cents for each label or fact
sheet, the total (rounded) labeling cost is $3,516,922.
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\4\ The units shipped total is based on combined actual or
estimated industry figures across all of the product categories,
except for fluorescent lamp ballasts, lamp products, and plumbing
products. Staff has determined that, for those product categories,
there are little or no costs associated with the labeling
requirements. The fact sheet estimation is based on the previously
noted assumption that five percent of HVAC manufacturers produce
fact sheets on their own. Based on total HVAC units shipped
(10,291,965), five percent amounts to 514,598 HVAC units. Because
manufacturers generally list more than one unit on a fact sheet,
staff has estimated that manufacturers independently preparing them
will use one sheet for every four of these 514,598 units. Thus,
staff estimates that HVAC manufacturers produce approximately
128,650 fact sheets.

William E. Kovacic,
General Counsel.
[FR Doc. 04-24655 Filed 11-3-04; 8:45 am]

BILLING CODE 6750-01-P