[Federal Register Volume 66, Number 106 (Friday, June 1, 2001)]
[Notices]
[Pages 29807-29811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-13707]


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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, 2004 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''). The clearance expires on September 30, 2001.

DATES: Comments must be submitted on or before July 31, 2001.

ADDRESSES: Send written comments to: Secretary, Federal Trade 
Commission, Room H-159, 600 Pennsylvania Ave., NW., Washington, DC 
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 collection requirements should be 
addressed to Hampton Newsome, Attorney, Bureau of Consumer Protection, 
Division of Enforcement, Room 4616, Federal Trade Commission, 600 
Pennsylvania AVe., NW., Washington, DC 20580 (202-326-2889).

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal 
agencies must obtain approval from OMB for each collection of 
information they conduct or sponsor. ``Collection of information'' 
means agency requests or requirements that members of the public submit 
reports, keep records, or provide information to a third party. 44 
U.S.C. 3502(3) and 5 CFR 1320.3(c). As required by section 
3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for 
public comment before requesting that OMB extend the existing paperwork 
clearance for the Rule (OMB Control Number 3084-0069).
    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.

[[Page 29808]]

    The Appliance Labeling Rule (16 CFR part 305) establishes testing, 
reporting, recordkeeping, and labeling requirements for manufacturers 
of major household appliances (refrigerators, refrigerator-freezers, 
freezers, water heaters, clothes washers, dishwashers, room air 
conditioners, furnaces, central air conditioners, heat pumps, pool 
heaters, certain lighting products, and certain plumbing products). 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: 445,000 hours.
    The estimated hours burden imposed by Section 324 of EPCA and the 
Commission's Rule include burdens for testing (338,292 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 445,000 hours (rounded to the nearest 
thousand). This estimate is lower than previous estimates because of 
revised assumptions regarding the number of basic models subjected to 
FTC-required testing each year (see discussion below).
    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. Previously, staff based its burden 
estimate on the assumption that manufacturers generally test each model 
at least once a year. Staff then conservatively assumed that this 
annual testing meant that all basic models were either replaced or 
subject to design changes during the year that necessitated testing 
under the Rule. Based on input from industry representatives for most 
manufacturer categories, however, staff's now believes 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 will conservatively assume 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:

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                                                   Percentage of  Avg. number of                   Total annual
    Category of manufacturer         Number of     models tested   units tested   Hours per unit  testing burden
                                   basic models   (FTC required)     per model        tested           hours
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Refrigerators, Refrigerator-               3,075              50               2               4          12,300
 freezers, and Freezers.........
Dishwashers.....................             393              50               2               1             393
Clothes washers.................             500              50               2               2           1,000
Water heaters...................             650              50               2              24          15,600
Room air conditioners...........           1,092              50               2               8           8,736
Furnaces........................           1,900              50               2               8          15,200
Central A/C.....................           1,270              50               2              24          30,480
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 fixtures...............           1,700              50               2               2           3,400
Plumbing fittings...............          22,000              50               1           .0833             917
                                                                                                 ---------------
                                                                                                         338,292
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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 annul 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 pf the different product categories 
that use the latter methodology.
Appliances, HVAC 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

[[Page 29809]]

basic models of these products, the annual reporting burden for the 
airplane, 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 Projects

    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  x  10,033 
 60 minutes per hour).\1\
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    \1\ 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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    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 labeling is 669 hours per year [10,033 (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 
83,522 hours [six (seconds)  x  50,113,098 (the number of total 
products shipped in 2000) 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 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\2\ 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 (all basic models)

[[Page 29810]]

 x  .5 hours  x  .05 (proportion of equipment for which fact sheets are 
required)].
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    \2\ These associations include the Air-Conditioning and 
Refrigeration Institute, the Gas Appliance Manufacturers 
Association, and the Hydronics Institute.
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    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 668 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 
(84,191 + 198).

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 of 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 (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 of the retailer 
consists of incorporating the information into the catalog 
presentation.
    In the past, staff has estimated that there are 100 sellers who 
offer covered products through paper 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, paper 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 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 
websites 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 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: ($7,826,750 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 $10.00.
    Based on the above estimates and assumptions, the total annual 
labor costs for the five different catagories of burden under the rule, 
applied to all the products covered by it, is $7,827,000 (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.......................................         338,292  Skilled clerical/$20............      $6,765,840
Reporting.....................................           1,324  Clerical/$10....................          13,240

[[Page 29811]]

 
Recordkeeping.................................             934  Clerical/$10....................           9,340
Labeling, marking, and fact sheet preparation.         101,333  Clerical/$10....................       1,013,330
Catalog disclosures...........................           2,550  Clerical/$10....................          25,500
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                                                                                                       7,827,250
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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 so for 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,\3\ 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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    \3\ The units shipped total is based on combined actual or 
estimated industry figures for calendar year 2000 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 (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.

John D. Grubert,
Acting General Counsel.
[FR Doc. 01-13707 Filed 5-31-01; 8:45 am]
BILLING CODE 6750-01-M