[Federal Register Volume 66, Number 134 (Thursday, July 12, 2001)]
[Notices]
[Pages 36579-36581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17436]


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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 under the Paperwork Reduction 
Act (PRA) information collection requirements contained in its 
regulations (``regulations'') under the Comprehensive Smokeless Tobacco 
Health Education Act of 1986 (``Smokeless Tobacco Act'' of the 
``Act''). The FTC is seeking public comments on its proposal to extend 
through August 31, 2004 the current PRA clearance for information 
collection requirements contained in the regulations. That clearance 
expires on August 31, 2001.

DATES: Comments must be filed by August 13, 2001.

ADDRESSES: Send comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 10202, Washington, DC 20503, ATTN.: Desk Officer for the 
Federal Trade Commission, and to Secretary, Federal Trade Commission, 
Room H-159, 600 Pennsylvania Ave., NW., Washington, DC 20580. All 
comments should be captioned ``Smokeless Tobacco Regulations: Paperwork 
comment.''

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements should be addressed to 
Rosemary Rosso, Attorney, Division of Advertising Practices, Bureau of 
Consumer Protection, Federal Trade Commission, Washington, DC 20580, 
(202) 326-2174.

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. On May 4, 2001, the FTC sought 
comment on the information collection requirements associated with the 
instant regulations, 16 CFR Part 307 (Control Number: 3084-0082). See 
66 FR 22561. 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 Smokeless Tobacco Act 
regulations.\1\
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    \1\ The Commission seeks comment on the costs and burdens 
imposed by the existing smokeless tobacco regulations. In March 
2000, the Commission commenced a regulatory review of its smokeless 
tobacco regulations to determine whether there is a continuing need 
for the regulations and, if so, what revisions, if any, should be 
made. 65 FR 11944 (Mar. 7, 2000). In addition to comments sought on 
the costs and benefits of the existing regulations, the Commission 
requested comment on whether the regulations are effective in 
meeting the Smokeless Tobacco Act's format and display requirements 
and whether the current ``safe harbor'' approach is sufficiently 
enforceable. If the Commission determines that the regulations 
should be amended, it will commence a rulemaking proceeding. Should 
resulting amendments materially affect PRA burden, the Commission 
will notify OMB and seek amended clearance.

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[[Page 36580]]

    Description of the collection of information and proposed use: The 
Smokeless Tobacco Act requires that manufacturers, packagers, and 
importers of smokeless tobacco products include one of three specified 
health warnings on packages and in advertisements. The Act also 
requires that each manufacturer, packager, and importer of smokeless 
tobacco products submit a plan to the Commission specifying the method 
to rotate, display, and distribute the warning statement required to 
appear in advertising and labeling. The Commission is required by the 
Act to determine that these plans provide for rotation, display, and 
distribution of warnings in compliance with the Act and implementing 
regulations. With one exception, all of the affected companies have 
previously filed plans. However, the plan submission requirement 
continues to apply to a company that amends its plan, or to a new 
company that enters the market.

Burden Statement

    Estimated annual hours burden: 1,000 hours (rounded). The FTC is 
retaining its existing burden estimate of 1,000 hours. This amount is 
based on the burden previously estimated for fourteen smokeless tobacco 
companies to prepare and submit amended compliance plans, and to permit 
at least three new companies to submit initial compliance plans. Though 
staff's calculations underlying the estimate totaled 560 hours, staff 
then conservatively rounded up its estimate to 1,000 hours. Staff 
firmly believes that this prior rounded estimate will fully incorporate 
any incremental effects of an additional three companies submitting 
plans.
    Virtually all affected companies filed their plans long ago with 
the Commission. Additional annual reporting burdens would occur only if 
those companies opt to change the way they display the warnings 
required by the Smokeless Tobacco Act. Although it is not possible to 
predict whether any of these companies will seek to amend an existing 
approved plan (and possibly none will), staff conservatively assumes 
that each company will file one amendment per year. This estimate is 
conservative because, over the past three years, the Commission has 
reviewed only two minor amendments to plans and the Commission has not 
changed the relevant regulations.\2\ The estimated time to prepare the 
two amended plans was less than 20 hours each. The only major amendment 
of an approved plan, occurring more than three years ago, required only 
40 hours to prepare, which is considerably less time than individual 
companies spent preparing their initial plans. Commission staff 
believes it reasonable to assume that each company would consume no 
more than 40 hours to prepare an amended plan.
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    \2\ See note 1.
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    Commission staff is currently reviewing an initial plan from a 
smokeless tobacco manufacturer, for an estimated additional burden of 
approximately 150 hours.\3\ When the regulations were first proposed in 
1986, representatives of the Smokeless Tobacco Council, Inc. indicated 
that the six companies it represented would require approximately 700 
to 800 hours in total (133 hours apiece) to complete the initial 
required plans. Staff assumed that other, non-member companies would 
require more time, on average, to complete their plans. Staff 
conservatively estimated that this latter group of companies would each 
require approximately 150 hours, and it believes this estimate remains 
reasonable.
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    \3\ This company has been selling smokeless tobacco products for 
several years, but failed to submit a plan as required by the Act 
and the regulations. The company is in the process of obtaining 
approval of a complying rotational plan. Thus, most, if not all, of 
the 150 estimated burden hours likely will have been expended before 
August 31, 2001. However, erring on the conservative side, staff has 
included these hours in its burden estimate.
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    In addition to the estimates above, the Commission anticipates that 
in the next three years, up to two small importers, not currently 
participating in the domestic market, may submit initial plans, for an 
additional burden of approximately 80 hours. Over the past three years, 
two small importers submitted initial plans. Because these plans 
involved only a limited number of brands and no advertising, the 
estimated time to prepare the plans was very modest. Staff estimates 
that the companies spent no more than 40 hours each to prepare the 
plans.
    Based on these assumptions, the total annual hours burden should 
not exceed 1,000 hours. [(14 companies amending their plans  x  40 hrs. 
each) + (one manufacturing company submitting initial plan  x  150 
hours) + (2 importers submitting initial plans  x  40 hrs. each) = 790 
total hours, conservatively rounded up to one thousand hours.]
    Estimated annual labor cost burden: $103,000
    The total annualized labor cost to these companies should not 
exceed $103,000. This is based on the assumption that management or 
attorneys will account for 80% of the estimated 1,000 hours required to 
rewrite or amend the plans, at an hourly rate of $125, and that 
clerical support will account for the remaining time (20%) at an hourly 
rate of $15. [Management and attorneys' time (1,000 hrs.  x  0.80  x  
$125 = $100,000) + clerical time (1,000 hrs.  x  0.2  x  $15 = 
$3,000).]
    Estimated annual non-labor cost burden: $0 or minimal.
    The Commission knows of no recordkeeping cost burden associated 
with the plans for the display of the warnings. The companies may keep 
copies of their plans to ensure the labeling and advertising complies 
with the requirements of the Smokeless Tobacco Act. Such recordkeeping 
would require the use of office supplies, e.g., file folders and paper, 
all of which the companies should have on hand in the ordinary course 
of their business.
    While companies submitting initial plans may incur one-time capital 
expenditures for equipment used to print package labels in order to 
include the statutory health warnings or to prepare acetates for 
advertising, the warnings themselves disclose information completely 
supplied by the federal government. As such, the disclosure does not 
constitute a ``collection of information'' as it is defined in the 
regulations implementing the PRA, nor the extension, do the financial 
resources expended in relation to it constitute paperwork ``burden.'' 
See 5 CFR 1320.3(c)(2). Moreover, any expenditures relating to the 
statutory health warning requirements would likely be minimal in any 
event. As noted above, virtually all affected firms have already 
submitted approved plans. For these companies, there are no capital 
expenditures. After the Commission approves a plan for the display of 
the warnings required by the Smokeless Tobacco Act, the companies must 
make additional submissions to the Commission only if there is a change 
in the way that they choose to display the warnings. Once the companies 
have prepared plates to print the required warnings on their labels, 
there are no additional set-up costs associated with the display of the 
warnings in labeling. Similarly, once the companies have prepared 
acetates of the required warnings for advertising and promotional 
materials, there are no additional set-up costs associated with 
printing the warnings in those materials.
    Finally, capital expenditures for small importers are likely to be 
de minimis. Both firms that submitted plans over the past three years 
used stickers to place the warnings on their packages. The stickered 
warnings could be generated with office equipment and supplies such as 
computers and labels, all of

[[Page 36581]]

which the companies should have on hand in the ordinary course of their 
business. Because neither firm engaged in any advertising, no costs 
associated with advertising were incurred.

William E. Kovacic,
General Counsel.
[FR Doc. 01-17436 Filed 7-11-01; 8:45 am]
BILLING CODE 6750-01-M