[Federal Register Volume 67, Number 17 (Friday, January 25, 2002)]
[Notices]
[Pages 3709-3710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1889]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION


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

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

ACTION: Notice.

-----------------------------------------------------------------------

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 Funeral 
Industry Practices Rule (``Funeral Rule'' or ``Rule''). The FTC is 
seeking public comments on its proposal to extend through February 28, 
2005 the current PRA clearance for information collection requirements 
contained in the regulations. That clearance expires on February 28, 
2002.

DATES: Comments must be submitted on or before February 25, 2002.

ADDRESSES: Send written 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 ``Funeral Rule: Paperwork 
comment.''

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements should be addressed to 
Myra Howard, Attorney, Division of Marketing Practices, Bureau of 
Consumer Protection, Federal Trade Commission, Room H-238, 600 
Pennsylvania Ave., NW., Washington, DC 20580, (202) 326-2047.

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 November 21, 2001, the FTC 
sought comment on the information collection requirements associated 
with the Funeral Rule, 16 CFR part 453 (OMB Control Number: 3084-0025). 
See 66 FR 58492. No comments were received on any aspect of the notice, 
including staff's PRA burden estimates. 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 Funeral Rule ensures that consumers who are purchasing funeral 
goods and service have accurate information about the terms and 
conditions (especially prices) for such goods and services. The Rule 
requires the funeral providers disclose this information to consumers 
and maintain records to facilitate enforcement of the Rule.
    Estimated annual hours burden: The estimated burden associated with 
the collection of information required by the Rule is 22,300 hours for 
recordkeeping and 57,900 hours for disclosures, for a total of 80,000 
hours, rounded to the nearest thousand. This estimate is based on the 
number of funeral providers (approximately 22,300), the number of 
funerals annually (approximately 2.3 million), and the time needed to 
fulfill the information collection tasks required by the Rule.
    Recordkeeping: The Rule requires that funeral providers retain 
copies of price lists and statements of funeral goods and services 
selected by consumers. Based on a maximum average burden of one hour 
per provider per year for this task, the total burden for the 22,300 
providers is 22,300 hours. This estimate is unchanged from 1998.
    Disclosure: The Rule requires that funeral providers (1) maintain 
current price lists for funeral goods and services, (2) provide written 
documentation of the funeral goods and services selected by consumers 
making funeral arrangements, and (3) provide information about funeral 
prices in response to telephone inquiries.
    Maintaining current price lists requires that funeral providers 
revise their price lists from time to time through the year to reflect 
price changes. Based on a maximum average burden of two hours per 
provider per year for this task, the total burden for 22,300 providers 
is 44,600 hours. This estimate is unchanged from the FTC's prior 
estimate in 1998.
    The original rulemaking record indicated that 87 percent of funeral 
providers provided written documentation of funeral arrangements, even 
absent the Rule's requirements.\1\ Accordingly, the Rule imposes a 
disclosure burden on 2,899 providers (13 percent of 22,300 providers). 
These providers are typically the smallest funeral homes. The 
disclosure requirement can be satisfied through the use of a standard 
form (an example of which is available to the industry in the 
Compliance Guide to the Funeral Rule). Based on an estimation that 
these smaller homes arrange, on average, approximately 20 funerals per 
year and that it would take each of them about 3 minutes to record 
prices for each consumer on the standard form, FTC staff estimates that 
the total burden associated with this disclosure requirement is one 
hour per provider not already in compliance, for a total of 2,899 
hours.
---------------------------------------------------------------------------

    \1\ The original version of the Funeral Rule required that 
funeral providers retain a copy of and give each customer a separate 
``Statement of Funeral Goods and Services Selected.'' The 1994 
amendments to the Rule eliminated that requirement, allowing instead 
for such disclosures to be incorporated into a written contract, 
bill of sale, or other record of a transaction that providers use to 
memorialize sales agreements with customers.
---------------------------------------------------------------------------

    The Funeral Rule also requires funeral providers to answer 
telephone inquiries about the provider's offerings or prices. Industry 
data indicate that only about nine percent of funeral purchasers make 
telephone inquiries, with each call lasting an estimated three minutes. 
Only about half of that additional time is attributable to disclosures 
required solely by the Rule, since many providers would provide the 
requested information even without it. Thus, assuming that the average 
purchaser makes two calls per funeral to compare prices, the estimated 
burden is 10,350 hours [(\1/2\  x  3 minute call  x  2 calls/funeral) 
x  207,000 funerals (nine percent of 2,300,000 funerals/year)]. This 
burden likely will decline over time as consumers increasingly rely on 
the Internet for funeral price information.
    In sum, the disclosure total is 57,849 hours (44,600 + 2,899 + 
10,350). The total estimated hours burden associated with the Rule for 
both recordkeeping and disclosure requirements is 80,000, rounded to 
the nearest thousand (22,300 hours for recordkeeping + 57,849 hours for 
disclosure).
    Estimated annual cost burden: $3,900,000, rounded ($3,560,000 in 
labor costs and $340,000 in non-labor costs).
    Labor costs: Labor costs are derived by applying appropriate hourly 
cost figures to the burden hours described above. The hourly rates used 
below are averages.

[[Page 3710]]

    Clerical personnel, at an hourly rate of $10, can perform the 
recordkeeping tasks required under the Rule. Based on the estimated 
hour burden of 22,300 hours, the estimated cost burden for 
recordkeeping is $223,000 ($10  x  22,300 hours).
    The two hours required of each provider, on average, to update 
price lists should consist of approximately 1.5 hours of managerial or 
professional time, at $75 per hour, and .5 hours of clerical time, at 
$10 per hour, for a total of $117.50 per provider. Thus, the estimated 
total cost burden for maintaining price lists is $2,620,250 ($117.50 
x  22,300 providers).
    The cost of providing written documentation of the goods and 
services selected by the consumer is 2,899 hours of managerial or 
professional time at approximately $75 per hour, or $217,425.
    The cost of responding to telephone inquiries about offerings or 
prices is 10,350 hours of managerial or professional time at $75, or 
$776,250.
    The total labor cost of the three disclosure requirements imposed 
by the Funeral Rule is $3,613,925 ($2,620,250 + $217,425 + $776,250). 
The total labor cost for recordkeeping and disclosures is $3,837,000 
($223,000 for recordkeeping + $3,613,925 for disclosures), rounded to 
the nearest thousand.
    Capital or other non-labor costs: The Rule imposes minimal capital 
costs and no current start-up costs. The Rule first took effect in 1984 
and the revised Rule took effect in 1994, so funeral providers should 
already have in place capital equipment to carry out tasks associated 
with Rule compliance. Moreover, most funeral homes already have access, 
for other business purposes, to the ordinary office equipment needed 
for compliance, so the Rule likely imposes minimal additional capital 
expense.
    Compliance with the Rule, however, does entail some expense to 
funeral providers for printing and duplication of price lists. Based on 
a rough estimate of 300 pages per year per provider for copies of the 
various price lists, at 5 cents per page, and 22,300 providers, the 
total cost burden associated with printing and copying is $334,500. In 
addition, the estimated 2,899 providers not already providing written 
documentation of funeral arrangements apart from the Rule will incur 
additional printing and copying costs. Assuming that those providers 
use the standard two-page form shown in the Compliance Guide, at 5 
cents per page, at an average of 20 funerals per year, the added cost 
burden would be $5,798. Thus, estimated non-labor costs are $340,000, 
rounded to the nearest thousand.
    The cost of training associated with Rule compliance is generally 
included in continuing education requirements for licensing and 
voluntary certification programs. Moreover, the FTC has provided its 
Compliance Guide to all funeral providers at no cost, and additional 
copies are available on the FTC web site or by mail. Accordingly, the 
Rule imposes no additional training costs.

William E. Kovacic,
General Counsel.
[FR Doc. 02-1889 Filed 1-24-02; 8:45 am]
BILLING CODE 6750-01-M