[Federal Register Volume 64, Number 40 (Tuesday, March 2, 1999)]
[Notices]
[Pages 10147-10151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5095]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Submission for OMB 
Review; Comment Request

AGENCY: Federal Trade Commission.

ACTION: Notice.

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SUMMARY: The Federal Trade Commission (FTC) has submitted to the Office 
of Management and Budget (OMB) for review and clearance under the 
Paperwork Reduction Act information collection requirements contained 
in its Appliance Labeling Rule (``Rule''), promulgated pursuant to the 
Energy Policy and Conservation Act of 1975 (``EPCA''). OMB 
provisionally extended the expiration for clearance from September 30, 
1998 to March 31, 1999. The FTC proposes that OMB extend its approval 
for the Rule an additional three years from the prior expiration date 
of September 30, 1998.

DATES: Comments must be submitted on or before April 1, 1999.

ADDRESSES: Send written comments to: Secretary, Federal Trade 
Commission,

[[Page 10148]]

Room H-159, 600 Pennsylvania Ave., NW, Washington, D.C. 20580. All 
comments should be identified as responding to this notice.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements should be addressed to 
James Mills, Attorney, Bureau of Consumer Protection, Division of 
Enforcement, Room 4616, Federal Trade Commission, 601 Pennsylvania 
Ave., NW, Washington, D.C. 20580 (202-326-3035).

SUPPLEMENTARY INFORMATION: The FTC has submitted a request to OMB to 
extend the existing clearance to collect information associated with 
the Appliance Labeling Rule. A Federal Register Notice with a 60-day 
comment period soliciting comments on this collection of information 
was published on December 29, 1998 (63 FR 71645). No comments were 
received.
    Description of the collection of information and proposed use: The 
Rule requires manufacturers of major household appliances 
(refrigerators, freezers, water heaters, clothes washers, dishwashers, 
window air conditioners, furnaces, central air conditions, and heat 
pumps) to disclose energy consumption and water usage data relating to 
those appliances. The Rule establishes testing, reporting, 
recordkeeping, and labeling requirements for these disclosures. The 
Rule's testing and disclosure requirements enable consumers purchasing 
appliances to compare the energy use of 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 the ranges of comparability for covered appliances for 
publication in the Federal Register. The Commission may use 
submissions, along with required records for testing data, for 
comparison purposes in enforcement actions involving alleged 
misstatements on labels or in advertisements.
    Estimated annual hours burden: Section 324 of EPCA and the 
Commission's Rule impose burdens for testing (620,713 hours); reporting 
(1,178 hours); recordkeeping (789 hours); labeling (91,735 hours); and 
retail catalog disclosures (de minimis). The total burden for these 
activities is 715,000 hours (rounded).
    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 trade association advice and figures. Because the burden of 
compliance falls almost entirely on manufacturers and importers (with a 
de minimis burden relating to 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 number of hours 
required to conduct the applicable test. The figures for numbers of 
basic models that staff received from the industry represent all of the 
basic models in a given product category.
    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. However, industry representatives 
state that manufacturers generally test each model at least once a 
year. Staff have conservatively assumed that this annual testing means 
all basic models were either replaced or subject to design changes 
during the year that necessitated testing under the Rule. The burden 
estimates in this Notice, which assume annual testing for all models, 
are accordingly conservative and likely are somewhat overstated to the 
extent manufacturers are actually carrying out annual tests for reasons 
unrelated to the Rule. The testing burden for the different categories 
of products covered by the Rule is estimated as follows:

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                                                                  Avg. number of                   Total annual
            Category of manufacturer                 Number of     units tested   Hours per unit  testing burden
                                                   basic models      per model        tested           hours
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Refrigerators, Refrigerator-freezers, and                    360               2          4                2,880
 Freezers.......................................
Dishwashers.....................................              78               2          1                  156
Clothes washers.................................             150               2          2                  600
Water heaters...................................             650               2         24               31,200
Room air conditioners...........................             520               2          8                8,320
Furnaces........................................           1,900               2          8               30,400
Central A/C.....................................           1,095               2         24               52,560
Heat pumps......................................             831               2         72              119,664
Pool heaters....................................              75               2         12                1,800
Fluorescent lamp ballasts.......................             975               4          3               11,700
Lamp products...................................           2,100              12         14              352,800
Plumbing fittings...............................           1,700               2          2                6,800
Plumbing fixtures...............................          22,000               1           .0833           1,833
                                                 ---------------------------------------------------------------
                                                                                                         620,713
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B. Reporting

    Reporting burden estimates are based on information from industry 
representatives. Manufacturers of some products, such as appliances and 
HVAC equipment (furnaces, boilers, central air conditioners, and heat 
pumps), indicate that, for them, the reporting burden is best measured 
by the estimated time required to report on each model manufactured, 
while others, such as makers of fluorescent lamp ballasts and lamp 
products, 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 to staff by manufacturers of the different product 
categories that use the latter methodology.

[[Page 10149]]

Appliances, HVAC Equipment, and Pool Heaters

    Staff estimate that the average reporting burden for these 
manufacturers is approximately two minutes per basic model. Based on 
this estimate, multiplied by a total of 5,659 basic models of these 
products, the annual reporting burden for the appliance, HVAC 
equipment, and pool heater industry is an estimated 188 hours (2 
minutes  x  5,659 models  60 minutes per hour).

Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Fixtures

    The total annual reporting burden for manufacturers of fluorescent 
lamp ballasts, lamp products, and plumbing fixtures 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 ballast........................................               6              20             120
Lamp products...................................................              15              50             750
Plumbing fixtures...............................................               1             120             120
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Total Reporting Burden Hours

    The total reporting burden for industries covered by the Rule is 
1,178 hours annually (188+120+750+120).

C. Recordkeeping

    EPCA and the Commission's 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 in Section 
B., above, 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 fixtures.

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. The total number of tests performed for these product 
categories, based on the number of basic models within each category 
and the average number of units tested per model, is 11,318. Staff 
estimate total recordkeeping burden of approximately 189 hours for 
these manufacturers, based on an estimated average of one minute per 
record stored (whether in electronic or paper format), multiplied by 
11,318 tests performed annually 
(1  x 11,31860 minutes per hour).

Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Fixtures

    The total annual recordkeeping burden for manufacturers of 
fluorescent lamp ballasts, lamp products, and plumbing fixtures 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 fixtures...............................................              .5             120              60
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Total Recordkeeping Burden Hours

    The total recordkeeping burden for industries covered by the Rule 
is 789 hours annually (189+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 labeling is 377 hours per year [5,659 (all 
basic models)  x  four 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 six seconds per unit, the annual burden for 
affixing labels to appliances, HVAC equipment, and pool heaters is 
74,222 hours [six (seconds)  x  44,533,465 (the number of total 
products shipped in 1997) divided by 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 have 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

[[Page 10150]]

satisfy the fact sheet requirement. Thus, the drafting burden for fact 
sheets for HVAC equipment is approximately 96 hours annually [3,826 
(all basic models)  x .5 hours  x .05 (proportion of equipment for 
which fact sheets are required)].
    The Rule allows manufacturers to prepare a compendium of fact 
sheets 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 377 hours for preparation plus 74,222 hours for 
affixing, or 74,599 hours. The total annual fact sheet burden is 96 
hours for preparation and 96 hours for distribution, or 192 hours. The 
total annual burden for labels and fact sheets for the appliance, HVAC, 
and pool heater industries is, therefore, estimated to be 74,791 hours 
(74, 599 x 192).

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 manufactures to reformat their labels to include 
the ``E'' symbol. Thus the burden imposed by the Rule for labeling 
fluorescent lamp ballasts is de minimis.

Lamp Products

    The burden imposed for labeling of lamp products is also de 
minimis, 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 manufactures 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 Fixtures

    The statute and the Rule require that manufacturers disclose the 
water flow rate for plumbing fixtures. Manu- 
facturers 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 fixtures 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 
91,735 hours (74,791+16,944) annually.

E. Retail Sales Catalogs Disclosures

    The Rule requires that sellers offering covered products through 
retail sales catalogs (i.e., those publications from which a consumer 
can actually order merchandise) 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.
    Staff estimate that there are approximately 100 sellers who offer 
covered products through retail catalogs. While the Rule initially 
imposed a burden on catalog sellers by requiring that they draft 
disclosures and incorporate them into the layouts of their catalogs, 
catalog sellers now have substantial experience with the Rule and its 
requirements. Energy and water consumption information has obvious 
relevance to consumers, so sellers are likely to disclose much of the 
required information with or without the Rule. Accordingly, given the 
small number of catalog sellers, their experience with incorporating 
energy and water consumption data into their catalogs, and the 
likelihood that many of the required disclosures would be made in the 
ordinary course of business, staff believe that any burden the Rule 
imposes on catalog sellers is de minimis.
    Estimated annual cost burden: $16,479,000 ($13,351,000 in labor 
costs and $3,128,000 in non-labor costs).
    Labor Costs: Staff have derived labor costs by applying appropriate 
estimated hourly cost figures to the burden hours described above. In 
calculating the cost figures, staff have estimated that test procedures 
are conducted by skilled technical personnel at an hourly rate of 
$20.00, and that recordkeeping and reporting, as well as labeling, 
marking, and preparation of fact sheets, are, on average, done by 
clerical personnel at a rate of $10.00 per hour.
    On this basis, the total annual labor costs for the five different 
categories of burden under the Rule, as applied to all the products 
covered by the Rule, is $13,351,000 (rounded), which is derived as 
follows:
    1. $12,414,260 for testing all products covered by the Rule, based 
on 620,713 hours [620,713 x $20.00 per hour].
    2. $11,780 for complying with the reporting requirements of the 
Rule, based on 1,178 hours [1,178 x $10.00 per hour].
    3. $7,890 for complying with the recordkeeping requirements of the 
Rule, based on 789 hours [789 x $10.00 per hour].
    4. $917,350 for complying with the labeling, marking, and fact 
sheet requirements of the Rule, based on 91,735 hours [91,735 x $10.00 
per hour].
    5. De minimis for retail catalog disclosures, for the reasons 
previously noted with respect to burden hours.
    Capital or other non-labor costs: $3,127,500 ($2,500 for reporting 
requirements and $3,125,000 for labeling requirements), rounded to 
$3,128,000.
    In considering how to estimate the capital or other non-labor costs 
associated with compliance with the Rule, staff have 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 have 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.
    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 44,533,465 units shipped

[[Page 10151]]

and 109,500 fact sheets prepared,\1\ at an average cost of seven cents 
for each label or fact sheet, the total (rounded) labeling cost is 
$3,125,000.
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    \1\ The units shipped total is based on combined actual or 
estimated industry figures for 1997 across all of the product 
categories, except for fluorescent lamp ballasts, lamp products, and 
plumbing fixtures. 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 
(8,759,907), five percent amounts to 437,995 HVAC units. Because 
manufacturers generally list more than one unit on a fact sheet, 
staff have estimated that manufacturers independently preparing them 
will use one sheet for every four of these 437,995 units. Thus, 
staff estimate that HVAC manufacturers produce approximately 109,500 
fact sheets.
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Debra A. Valentine,
General Counsel.
[FR Doc. 99-5095 Filed 3-1-99; 8:45 am]
BILLING CODE 6750-01-M