[Federal Register Volume 67, Number 70 (Thursday, April 11, 2002)]
[Notices]
[Pages 17691-17694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8811]


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FEDERAL TRADE COMMISSION


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

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

ACTION: Notice of disposition of comment.

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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 Funeral 
Industry Practices Rule (``Funeral Rule'' or ``Rule''). The FTC 
received a public comment on its PRA burden estimates, which were 
published previously in the Federal Register. The FTC is summarizing in 
this notice its reevaluation of those prior estimates in light of the 
public comment, and is seeking to extend through March 30, 2005 the 
current PRA clearance for information collection requirements contained 
in the Rule. That clearance expires on September 30, 2002.

DATES: Comments must be submitted on or before May 13, 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 Office 
for the Federal Trade Commission (comments in electronic form should be 
sent to [email protected]), and to the Secretary, Federal Trade 
Commission, Room H-159, 600 Pennsylvania Ave., NW., Washington, DC 
20580 (comments in electronic form should be sent to 
[email protected]). All comments should be captioned 
``Funeral Rule: Paperwork comment,'' as prescribed below.

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.

[[Page 17692]]


SUPPLEMENTARY INFORMATION: The Funeral Rule ensures that 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 that funeral providers disclose 
this information to consumers and maintain records to facilitate 
enforcement of the Rule.
    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. The 
FTC received one public comment, from the National Funeral Directors 
Association, which staff learned of only following its sending an 
information clearance request package to OMB for review (pursuant to 
OMB regulations that implemented the PRA, 5 CFR part 120), 
contemporaneous with its publishing a related notice to that effect in 
the Federal Register on January 25, 2002. See 67 FR 3709.
    OMB granted the FTC an interim extension on March 22, 2002 running 
through September 30, 2002, and requested that the FTC publish revised 
burden estimates resulting from the comment received and further staff 
consultations with other industry representatives. The FTC will also, 
upon request, make available its complete analysis/response to comments 
it transmitted to OMB on March 21, 2002.
    While the primary purpose of this notice is to summarize the 
revised burden estimates, FTC staff and OMB will consider additional 
comments before OMB acts on the FTC's request to extend the clearance 
for a three year period to March 30, 2005.\1\ These comments should be 
directed to the addresses shown above and submitted within 30 days 
following publications of this notice. If a comment contains nonpublic 
information, it must be filed in paper form, and the first page of the 
document must be clearly labeled ``confidential.'' Comments that do not 
contain any nonpublic information may instead be filed in electronic 
form (in ASCII format, WordPerfect, or Microsoft Word) as part of or as 
an attachment to e-mail messages directed to the following e-mail 
addresses for the FTC and OMB, respectively: 
[email protected] and [email protected]. Such comments 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Section 4.9(b)(6)(ii) of the Commission's Rules of Practice, 16 CFR 
section 4.9(b)(6)(ii)). The summary of staff's revised PRA analysis 
regarding the Rule follows:
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    \1\ The 3-year clearance is tied to the date the OMB clearance 
would have expired but for the interim extension.
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    Estimated annual hours burden: The estimated burden associated with 
the collection of information required by the Rule 22,300 hours for 
recordkeeping, 104,649 hours for disclosures, and 44,600 hours for 
associated training, for a total of 172,000 hours, rounded to the 
nearest thousand. This estimate is based on the number of funeral 
providers (approximately 22,300), the number of funerals and cremations 
annually (approximately 2.3 millions), the time needed to fulfill the 
information collection tasks required by the Rule, and miscellaneous 
other factors detailed below.
    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 staff's 
previously published estimate.
    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 2\1/2\ hours per 
provider per year for this task (1\1/2\ hours per year for a funeral 
director and 1 hour per year for an administrative assistant), the 
total burden for 22,300 providers is 55,750 hours. This estimate has 
been raised from the FTC's prior estimate of 44,600 hours (previously 
based on an assumed 2 hours per provider).
    Staff estimates that 13% of funeral providers prepare written 
documentation of funeral goods and services selected by consumers. 
Support for this estimate lies in the original rulemaking record, which 
indicated that 87 percent of funeral providers provided written 
documentation of funeral arrangements, even absent the Rule's 
requirements.\2\ Based on this estimate and the approximate total 
number of funeral homes, 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.
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    \2\ 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.
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    The Funeral Rule also requires funeral providers to answer 
telephone inquiries about the provider's offerings or prices. Prior 
industry data indicated that only about nine percent of funeral 
purchasers make telephone inquiries, with each call lasting an 
estimated three minutes. The follow-up industry input staff obtained, 
however, yielded different conclusions and estimates, though the input 
was mixed. Staff received estimates ranging from as low as 5 minutes of 
price-related discussion per telephone inquiry to a high of 12-15 
minutes per inquiry. Accordingly, in a balancing of this input, the FTC 
is revising its estimates to 10 minutes per inquiry. In addition, the 
combined responses received suggest a higher frequency of telephone 
inquiries about pricing than previously estimated, now increased to 
12%. It is reasonable to assume that, at least in large urban areas 
where a relatively greater number and concentration of funeral homes 
may be found, price competition and related inquiries would be the 
norm.\3\ With an industry volume of approximately 2,300,000 funerals 
and cremations per year, total burden hours relating to price-related 
disclosures would thus be 46,000 hours.
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    \3\ A slowly but steadily increasing minority of funeral homes 
advertise their prices (e.g., newspapers, other publications, and 
the Internet). These homes presumably will receive price-related 
inquiries less frequently than would those who do not advertise 
their prices.
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    Training: In addition to the recordkeeping and disclosure-related

[[Page 17693]]

tasks noted above, funeral homes may also have training requirements 
specifically attended to the Rule. While staff believes that annual 
training burdens associated with the Rule should be minimal,\4\ it has 
in light of the comment received provided for training in its revised 
estimates. It estimates that, industry-wide, funeral homes should incur 
no more than 44,600 hours in Rule-associated training each year. This 
is based on an assumption that an ``average'' funeral home consists of 
approximately five employees (full-time and part-time employment 
combined), but with no more than four of them having tasks specifically 
associated with the Funeral Rule.\5\ Allowing for the input staff 
received regarding the time necessary, if at all, for annual training 
specific to the Rule, staff estimates that each of the four employees 
(directors and a clerical employee) per firm would each require \1/2\ 
hour, at most, per year, for such training. Thus, total estimated time 
for training is 44,600 hours (4 employees per firm at \1/2\ hour each 
for 22,300 firms).
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    \4\ 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.
    \5\ According to one nonpublic survey by an industry 
association, approximately 70% of its members that responded were 
from funeral homes with 1-5 employees. Moreover, according to a 
recent NFDA survey, the median number of full-time employees within 
member homes was 3, as was the case for part-time employees. 
National Funeral Directors Association 2001 Compensation Survey, 
October 2001. Assuming that 3 part-time employees equates to 1.5 
full-time employee work-years, that, combined with 3 full-time 
employees, adds up to almost 5 full-time employees per firm. But, 
this composition also includes employees whose tasks are not 
directly associated with Rule compliance. The NFDA survey responses 
indicate that funeral home employee categories, beyond management 
and professional positions (i.e., owner or managing and non-owner/
non-managing funeral directors), consist of: (a) driver; (b) 
receptionist; (c) maintenance worker; (d) clerical; and (e) 
bookkeeper. Of those categories, the ones reported as applicable in 
the greatest frequency among reporting firms were drivers, 
maintenance, and clerical. However, besides management, the only 
pertinent employee category with regard to compliance with the Rule 
would be the clerical category. Extrapolating from that input, staff 
estimates that an ``average''-size firm would include no more than 
one clerical employee. Depending on size and/or other factors, a 
funeral home may be run by as few as one owner/manager funeral 
director to multiple directors of various compensation levels. The 
NFDA survey, for example, lists as director sub-categories ``owner/
manager,'' ``mid-level manager,'' ``funeral director/embalmer,'' 
``funeral director only,'' among others. Staff believes that a 
fairly representative composition of a five-person home (but with 
only four persons having tasks associated with the Rule) would 
include an owner/manager, funeral director/embalmer, and ``funeral 
director only'' (along with one clerical employee).
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    Estimated annual cost burden: $5,071,000, rounded ($3,027,970 in 
labor costs and $2,043,115 in non-labor costs).
    Labor costs: Labor costs are derived by applying appropriate hourly 
cost figures to the burden hours described above. Staff's estimates 
below include, where applicable, apportionments of $30, $20, and $15 
per hour for various funeral director positions and $12.50 per hour for 
clerical tasks.\6\ The hourly rates used below are averages.
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    \6\ According to the National Compensation Survey, Wages in the 
United States, 2000, U.S. Department of Labor, Bureau of Labor 
Statistics, the national average hourly wage of a funeral director 
is $24.03. The NFDA survey, however, lists several sub-categories of 
funeral home directors, including ``owner/manager,'' ``mid-level 
manager,'' ``funeral director/embalmer,'' and ``funeral director 
only.'' See National Funeral Directors Association 2001 Compensation 
Survey. Staff believes that a fairly representative composition of a 
five-person home would include these three sub-categories of 
directors. Based on data within the NFDA survey, their upper-tier 
median hourly wages are $33.65, $19.63, and $15.14, respectively. 
For simplicity, however, staff has rounded those amounts to $30, 
$20, and $15 in its estimates. Moreover, except where otherwise 
indicated under its cost estimates, staff will conservatively assume 
the activities described are performed by a director who is also an 
owner and/or manager, and thus apply the $30 per hour estimate.
    The mean hourly wage of administrative support personnel for 
various degrees of potentially applicable sub-categories (copy and 
office machine operators, stock and inventory clerks, general office 
clerks, and administrative clerks ``not elsewhere classified'') 
ranges from $8.86-$12.22 per hour. These figures include straight 
wages, ``hazard'' pay, and cost-of-living adjustments. Allowing for 
other incidental benefits excluded and this additional industry 
assessment, staff believes that a representative clerical hourly 
wage to be $12.50.
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    1. Recordkeeping: $278,750 (22,300 funeral homes  x  1 hour per 
year  x  $12.50 per hour).
    2. Maintaining and updating price lists: $1,282,250 [(1\1/2\ hours 
per year  x  $30 per hour per funeral director) + (1 hour per year  x  
$12.50 per administrative assistant)  x  22,300 funeral homes].
    3. Completing statement of funeral goods and services selected: 
$86,970 (2,899 hours  x  $30 per hour).
    4. Disclosing prices over the phone: $1,380,000 (46,000 hours  x  
$30 per hour).
    Capital or other non-labor costs:
    1. Copying or printing price lists: $1,150,000 (4,600,000 funeral 
price lists at 25 cents per page).
    In light of the comment received, staff's sampling of industry 
sources, and its consultation with a national copying chain, staff 
revises its estimate to 25 cents per page. Moreover, the commenter 
suggested a 2 to 1 correlation between the number of copies of price 
lists a funeral home prints and distributes in a given year and the 
volume of its funeral ``calls'' (i.e., funerals and cremations). 
Applied to an industry volume of 2,300,000 funerals per year results in 
a total of 4,600,000 price lists used per year. At 25 cents per page, 
the revised estimate now increases to $1,150,000.
    2. Printing statement of funeral goods and services selected: 
$28,990 (2,899 funeral homes  x  20 funerals or cremations per year  x  
2 pages per form  x  25 cents per page)
    Staff will continue to conservatively assume that some funeral 
homes (13%) would not prepare such statements absent the Rule. 
Nonetheless, as noted above, staff has revised upward the estimated 
cost per page to 25 cents. Accordingly, its revised estimate of total 
cost to prepare the statement of funeral goods and services is $28,990.
    3. Training: $864,125 [$30+$20+$15+12.50 (hourly wage of 3 funeral 
directors at varying levels and one clerical employee per home)  x  \1/
2\ hour per year per employee for Rule-related training  x  22,300 
funeral homes].
    The changes in staff's estimates are summarized in the tables 
below.

                      Changes in FTC Cost Estimates
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                                             Prior FTC     Revised  FTC
                Activity                   estimate ($)    estimate ($)
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1. Recordkeeping of Price Lists.........        $223,000        $278,750
2. Maintaining and Updating Price Lists.       2,620,250       1,282,250
3. Completing Statement of Funeral Goods         217,425          86,970
 and Services Selected..................
4. Disclosing Prices Over the Phone.....         776,250       1,380,000
5. Copying or Printing of Price Lists...         334,500       1,150,000
6. Printing Statement of Funeral Goods             5,798          28,990
 and Services Selected..................

[[Page 17694]]

 
7. Training Licensed and Non-Licensed               0.00         864,125
 Funeral Home Staff.....................
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    Total...............................       4,177,223       5,071,085
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                     Changes in FTC Hours Estimates
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                                             Prior FTC      Revised FTC
                Activity                      stimate        estimate
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1. Recordkeeping of Price Lists.........          22,300          22,300
2. Maintaining and Updating Price Lists.          44,600          55,750
3. Completing Statement of Funeral Goods           2,899           2,899
 and Services Selected..................
4. Disclosing Prices Over the Phone.....          10,350          46,000
5. Copying or Printing of Price Lists...  ..............  ..............
6. Printing Statement of Funeral Goods    ..............  ..............
 and Services Selected..................
7. Training Licensed and Non-Licensed                  0          44,600
 Funeral Home Staff.....................
                                         -------------------------------
    Total...............................          80,149         171,549
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William E. Kovacic,
General Counsel.
[FR Doc. 02-8811 Filed 4-10-02; 8:45 am]
BILLING CODE 6750-01-M