[Federal Register Volume 70, Number 103 (Tuesday, May 31, 2005)]
[Rules and Regulations]
[Pages 31258-31276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10683]



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Part IV





Federal Trade Commission





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16 CFR Part 460



Labeling and Advertising of Home Insulation: Trade Regulation Rule; 
Final Rule

  Federal Register / Vol. 70, No. 103 / Tuesday, May 31, 2005 / Rules 
and Regulations  

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FEDERAL TRADE COMMISSION

16 CFR Part 460


Labeling and Advertising of Home Insulation: Trade Regulation 
Rule

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``Commission'') amends its Trade 
Regulation Rule Concerning the Labeling and Advertising of Home 
Insulation (``R-value Rule'' or ``Rule'') to streamline and increase 
the benefits of the Rule to consumers and sellers, minimize its costs, 
and respond to the development and utilization of new technologies to 
make American homes more energy efficient and less costly to heat and 
cool. This document provides background on the R-value Rule and this 
proceeding; discusses the public comments the Commission received; and 
describes the amendments the Commission is making based on the record.

DATES: These amendments will become effective November 28, 2005. The 
incorporation by reference of certain publications listed in this rule 
is approved by the Director of the Federal Register as of November 28, 
2005.

ADDRESSES: Requests for copies of this document are available from: 
Public Reference Branch, Room 130, Federal Trade Commission, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. The complete record of 
this proceeding is also available at that address. Relevant portions of 
the proceeding, including this document, are available at http://www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889, 
Division of Enforcement, Bureau of Consumer Protection, Federal Trade 
Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Overview of the Rule
    A. Products Covered
    B. Parties Covered
    C. Basis for the Rule
    D. Requirements of the Rule
III. Procedural History
IV. Section-by-Section Description of Final Amendments
V. Discussion of Comments and Final Amendments
    A. Disclosing Thermal Performance of Non-Residential Insulations
    B. Performance of Insulations in Actual Use
    C. Disclosing R-values That Account for Factors Affecting R-
value
    1. Aging of Cellular Plastics Insulation
    2. Loose-fill and Stabilized Insulations
    a. Settling
    b. Self-supported Spray Applied Cellulose Insulations
    c. Initial Installed Thickness
    D. Other Testing Requirements
    1. Test Temperature Differential
    2. Tolerance
    3. Determining the Thermal Performance of Reflective Insulations
    E. Other Disclosure Issues
    1. Disclosures on Labels and Fact Sheets
    a. Disclosures for Batt, Blanket, and Boardstock Insulations
    b. Required Disclosures for Loose-fill Insulations
    i. R-value Disclosures
    ii. Initial Installed Thickness
    c. Disclosures for Urea-based Foam Insulations
    2. Disclosures in Advertising and Other Promotional Materials
    3. Disclosures by Installers or New Home Sellers
    4. Disclosures by Retailers
    F. Amendments to Update References to ASTM Standards
    G. Comments on New Products
    H. Effective Date of Amendments
VI. Regulatory Analysis and Regulatory Flexibility Act
VII. Paperwork Reduction Act
VIII. Final Rule Language

I. Introduction

    The R-value Rule specifies substantiation and disclosure 
requirements for thermal insulation products used in the residential 
market, and prohibits certain claims unless they are true.\1\ The 
primary disclosure required is the insulation product's ``R-value.'' R-
value is the numerical measure of the ability of an insulation product 
to restrict the flow of heat and, therefore, to reduce energy costs--
the higher the R-value, the better the product's insulating ability. To 
assist consumers, the Rule requires sellers (including insulation 
manufacturers, professional installers, new home sellers, and 
retailers) to disclose the insulation product's R-value and related 
information, before retail sale, based on uniform, industry-adopted 
standards.\2\ This information enables consumers to evaluate how well a 
particular insulation product is likely to perform, to determine 
whether the cost of the insulation is justified, and to make 
meaningful, cost-benefit based purchasing decisions among competing 
products.
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    \1\ The Commission promulgated the R-value Rule on August 29, 
1979 under section 18 of the Federal Trade Commission Act (``FTC 
Act''), 15 U.S.C. 57a. The Rule became effective on September 30, 
1980. See Final Trade Regulation Rule (``Statement of Basis and 
Purpose'' or ``SBP''), 44 FR 50218 (1979).
    \2\ Home insulation sellers should be aware that additional 
Commission rules or guides may also apply to them. For example, the 
Commission's Rules concerning Disclosure of Written Consumer Product 
Warranty Terms and Conditions, and the Pre-sale Availability of 
Written Warranty Terms, 16 CFR parts 701 and 702, specify 
requirements concerning warranties; the Commission's Guides for the 
Use of Environmental Marketing Claims, 16 CFR part 260, address the 
application of section 5 of the FTC Act, 15 U.S.C. 45, to 
environmental advertising and marketing claims (e.g., claims 
concerning the amount of recycled material a product contains). 
Further, section 5 of the FTC Act declares that unfair or deceptive 
acts or practices are unlawful, and requires that advertisers and 
other sellers have a reasonable basis for advertising and other 
promotional claims before they are disseminated. See Deception 
Policy Statement, Letter from the Commission to the Honorable John 
D. Dingell, Chairman, Committee on Energy and Commerce, U.S. House 
of Representatives (Oct. 14, 1983), reprinted in Cliffdale Assocs., 
Inc., 103 F.T.C. 110 (1984); Statement of Policy on the Scope of the 
Consumer Unfairness Jurisdiction, Letter from the Commission to the 
Honorable Wendell H. Ford, Chairman, Consumer Subcommittee, 
Committee on Commerce, Science, and Transportation, U.S. House of 
Representatives, and the Honorable John C. Danforth, Ranking 
Minority Member, Consumer Subcommittee, Committee on Commerce, 
Science and Transportation, U.S. Senate (Dec. 17, 1980), reprinted 
in International Harvestor Co., 104 F.T.C. 949 (1984); and Policy 
Statement Regarding Advertising Substantiation, 49 FR 30999 (1984), 
reprinted in Thompson Medical Co., 104 F.T.C. 839 (1984).
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II. Overview Of The Rule

A. Products Covered

    The R-value Rule covers all ``home insulation products.'' Under the 
Rule, ``insulation'' is any product mainly used to slow down the flow 
of heat from a warmer area to a cooler area, for example, from the 
heated inside of a house to the outside during the winter through 
exterior walls, attic, floors over crawl spaces, or basement. ``Home 
insulation'' includes insulation used in all types of residential 
structures. The Rule automatically covers new types or forms of 
insulation marketed for use in the residential market, whether or not 
the Rule specifically refers to them. The Rule does not cover pipe 
insulation, or any type of duct insulation except for duct wrap. The 
Rule does not cover insulation products sold for use in commercial 
(including industrial) buildings. It does not apply to other products 
with insulating characteristics, such as storm windows or storm doors.
    Home insulation includes two basic categories: ``mass'' insulations 
and ``reflective'' insulations. Mass insulations reduce heat transfer 
by conduction (through the insulation's mass), convection (by air 
movement within and through the air spaces inside the insulation's 
mass), and radiation. Reflective insulations (primarily aluminum foil) 
reduce heat transfer when installed facing an airspace by increasing 
the thermal resistance of the airspace and reducing radiative heat 
transfer. Within these basic categories,

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home insulation is sold in various types (``type'' refers to the 
material from which the insulation is made, e.g., fiberglass, 
cellulose, polyurethane, aluminum foil) and forms (``form'' refers to 
the physical form of the product, e.g., batt, dry-applied loose-fill, 
spray-applied, boardstock, multi-sheet reflective).

B. Parties Covered

    The Rule applies to home insulation manufacturers, professional 
installers, retailers who sell insulation to consumers for do-it-
yourself installation, and new home sellers (including sellers of 
manufactured housing). It also applies to testing laboratories that 
conduct R-value tests for home insulation manufacturers or other 
sellers who use the test results as the basis for making R-value claims 
about home insulation products.

C. Basis for the Rule

    The Commission issued the R-value Rule to prohibit, on an industry-
wide basis, specific unfair or deceptive acts or practices. When it 
issued the Rule, the Commission found that the following acts or 
practices were prevalent in the home insulation industry and were 
deceptive or unfair, in violation of section 5 of the FTC Act, 15 
U.S.C. 45: (1) Sellers had failed to disclose R-values, and caused 
substantial consumer injury by impeding the ability of consumers to 
make informed purchasing decisions; (2) the failure to disclose R-
values, which varied significantly among competing home insulation 
products of the same thickness and price, misled consumers when they 
bought insulation on the basis of price or thickness alone; (3) sellers 
had exaggerated R-values, often failing to take into account factors 
(e.g., aging, settling) known to reduce thermal performance; (4) 
sellers had failed to inform consumers about the meaning and importance 
of R-value; (5) sellers had exaggerated fuel bill savings that 
consumers could expect, and often failed to disclose that savings will 
vary depending on the consumer's particular circumstances; and (6) 
sellers had falsely claimed that consumers would qualify for tax 
credits through the purchase of home insulation, or that products had 
been ``certified'' or ``favored'' by federal agencies. (44 FR at 50222-
50224).

D. Requirements of the Rule

    The Rule requires that manufacturers and others who sell home 
insulation determine and disclose each product's R-value and related 
information (e.g., thickness, coverage area per package) on package 
labels and manufacturers' fact sheets. R-value ratings vary among 
different types and forms of home insulations and among products of the 
same type and form. The Rule requires that R-value claims to consumers 
about specific home insulation products be based on R-value test 
procedures that measure thermal performance under ``steady-state'' 
(i.e., static) conditions.\3\ Mass insulation products may be tested 
under any of the test methods the Rule specifies. The tests on mass 
insulation products must be conducted on the insulation material alone 
(excluding any airspace). Reflective insulation products must be tested 
according to tests that can determine the R-values of insulation 
systems (such as those that include one or more air spaces). The tests 
must be conducted at a mean temperature of 75 [deg]F.
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    \3\ Section 460.5 of the Rule requires that the R-values of home 
insulation products be based on one of the test procedures specified 
in the Rule. Most of the test procedures in the Rule specify 
American Society for Testing and Materials (``ASTM'') standards.
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    When it promulgated the Rule, the Commission found that certain 
factors, such as aging or settling, affect the thermal performance of 
home insulation products. (44 FR at 50219-50220, 50227-50228). To 
ensure that R-value claims take these factors into account, the Rule 
mandates that the required R-value tests for polyurethane, 
polyisocyanurate, and extruded polystyrene insulation products be 
conducted on test specimens that fully reflect the effect of aging, and 
for loose-fill insulation products on test specimens that fully reflect 
the effect of settling.
    Specific disclosures must be made: (1) By manufacturers on product 
labels and manufacturers' fact sheets; (2) by professional installers 
and new home sellers on receipts or contracts; and (3) by 
manufacturers, professional installers, and retailers in advertising 
and other promotional materials (including those on the Internet) that 
contain an R-value, price, thickness, or energy-saving claim, or 
compare one type of insulation to another. Manufacturers and other 
sellers must have a ``reasonable basis'' for any energy-saving claims 
they make.\4\
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    \4\ Although the Rule does not specify how energy-saving claims 
must be substantiated, the Commission explained that scientifically 
reliable measurements of fuel use in actual houses or reliable 
computer models or methods of heat flow calculations would meet the 
reasonable basis standard. (44 FR at 50233-50234). Sellers other 
than manufacturers can rely on the manufacturer's claims unless they 
know or should know that the manufacturer does not have a reasonable 
basis for the claims.
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III. Procedural History

    On April 6, 1995, as part of its ongoing regulatory review program, 
the Commission solicited public comments about the economic impact of 
and current need for the R-value Rule.\5\ (60 FR 17492). At the same 
time, the Commission solicited comments on a petition (``Petition'') 
from Ronald S. Graves, who at that time was a Research Staff Member, 
Materials Analysis Group, Martin Marietta Energy Systems, Inc. (which 
operated Oak Ridge National Laboratory (``ORNL'') for the U.S. 
Department of Energy (``DOE'')). The Petition requested that the 
Commission approve an additional (fifth) ASTM R-value test procedure as 
an optional test procedure for determining the R-value of home 
insulation under the Rule.
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    \5\ The Commission previously reviewed the Rule in 1985 under 
the Regulatory Flexibility Act, 5 U.S.C. 610, to determine the 
economic impact of the Rule on small entities. Based on that review, 
the Commission determined that: There was a continuing need for the 
Rule; there was no basis to conclude that the Rule had a significant 
economic impact on a substantial number of small entities; there was 
no basis to conclude that the Rule should be amended to minimize its 
economic impact on small entities; the Rule did not generally 
overlap, duplicate, or conflict with other regulations; and 
technological, economic, and other changes had not affected the Rule 
in any way that would warrant amending the Rule. (50 FR 13246).
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    Based on the comments in response to the 1995 Notice, the 
Commission determined that there was a continuing need for the Rule, 
published its determination to retain it, and adopted the test method 
suggested by Mr. Graves and several technical, non-substantive 
amendments to allow the use of the most current testing procedures 
available and to streamline the Rule.\6\ (61 FR 13659, at 13659-13662, 
13665 (March 28, 1996)). In 1999, the Commission published an Advance 
Notice of Proposed Rulemaking (``ANPR'') proposing limited amendments 
and requesting comments on other issues related to the Rule. (64 FR 
48024 (Sept. 1, 1999)).
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    \6\ These amendments: (1) Revised Sec.  460.5 of the Rule to 
allow the use of an additional ASTM test procedure as an optional, 
but not required, test procedure to determine the R-value of home 
insulation; (2) revised Sec.  460.5 to require the use of current, 
updated versions of other ASTM R-value test methods cited in the 
Rule; (3) added an Appendix summarizing the exemptions from specific 
requirements of the Rule that the Commission previously granted for 
certain classes of persons covered by the Rule; and (4) revised 
Sec.  460.10 of the Rule to cross-reference the Commission's 
enforcement policy statement for foreign language advertising in 16 
CFR 14.9 and deleted the previous Appendix to the Rule because it 
merely repeated the text of 16 CFR 14.9.
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    Based on information obtained in response to the ANPR, on July 15, 
2003, the Commission published a Notice of

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Proposed Rulemaking (``NPR'') requesting comment on proposed amendments 
to the rule. (68 FR 41872). The proposed amendments were designed to: 
(1) Require disclosure of the same R-value information for all types of 
loose-fill insulation products; (2) specify the use of current ASTM or 
other recognized procedures for preparing R-value test specimens of 
spray-applied insulations and for conducting R-value tests of 
reflective insulation products; (3) require manufacturers of loose-fill 
insulation to provide installers with information about the initial 
installed thickness required to yield certain R-values; (4) delete 
specific disclosure requirements for urea formaldehyde insulation; (5) 
eliminate affirmative disclosure requirements for radio ads; and (6) 
exempt retailers from certain disclosure requirements (i.e., making 
available to consumers separate manufacturers' fact sheets) under 
certain circumstances.
    The NPR also discussed numerous additional issues raised by 
commenters in response to the ANPR. These issues included whether the 
Commission should revise the Rule to: (1) Cover additional products 
(i.e., residential pipe and duct insulations, and insulation sold for 
use in commercial buildings); (2) require the disclosure of in-use 
performance values, as opposed to values based on laboratory tests 
under static, uniform conditions, or of the performance of building 
systems; (3) adopt additional test specimen preparation requirements to 
account for various factors that affect R-values; (4) adopt additional 
or updated testing requirements; and (5) revise the disclosure 
requirements for manufacturers' labels and fact sheets, advertisements 
and other promotional materials, and for professional installers, new 
home sellers, and retailers. The NPR explained why the Commission did 
not propose amending the Rule to address these issues. The NPR also 
raised specific questions for comment to provide the Commission with 
additional information on the issues.

IV. Section-by-Section Description of Final Amendments

    The following is a brief summary of the amendments to the R-value 
Rule the Commission is adopting in response to the comments received. 
The Commission believes that these amendments will help to update and 
improve the Rule to ensure that it continues to prohibit, on an 
industry-wide basis, specific unfair or deceptive acts or practices the 
Commission has previously identified.

Section 460.1 (What This Regulation Does)

    Penalties: The Commission is amending the monetary penalty amount 
from $10,000 to $11,000 to reflect the current requirements of Sec.  
1.98 of the Commission's rules, which in turn, reflect statutory 
changes to the Commission's authority to obtain civil penalties (see 15 
U.S.C. section 45(m)(1)(A)). This is a technical, conforming change.

Section 460.5(a) (R-value Tests)

    Temperature Differential: The Commission is amending Sec.  460.5, 
R-value Tests, to specify that tests conducted under Sec.  460.5(a) 
must be done with a temperature differential of 50[deg] F plus or minus 
10[deg] F in addition to the mean temperature requirement currently in 
the Rule [see section V.D.1. of this document].
    Update Test Procedures: The Commission is updating references for 
many of the test procedures incorporated into the Rule. The affected 
procedures are listed in section V.F. of this document. In addition, 
the references to ASTM C 236-89 and ASTM C 976-90 have been eliminated 
and replaced with ASTM C 1363-97, ``Standard Test Method for the 
Thermal Performance of Building Assemblies by Means of a Hot Box 
Apparatus.''

Section 460.5(a)(3) (R-value Tests)

    Loose-Fill Settling: The Commission is amending Sec.  460.5(a)(3) 
to eliminate the obsolete reference to the Government Services 
Administration (``GSA'') specifications for measuring the settling of 
loose-fill insulation and to insert language indicating that industry 
members must take into account the effects of settling on the R-value 
for loose-fill mineral wool, self-supported spray-applied cellulose and 
stabilized cellulose products [see section V.C.2. of this document].

Section 460.5(a)(4) (R-value Tests)

    Tests for Spray-Applied Cellulose Insulation: The Commission is 
adding a new paragraph, Sec.  460.5(a)(4), which requires that tests 
for self-supported spray-applied cellulose be conducted at the settled 
density determined pursuant to ASTM C 1149-02 (``Self-supported Spray 
Applied Cellulosic Thermal Insulation'') [see section V.C.2. of this 
document].

Section 460.5(a)(5) (R-value Tests)

    Loose-Fill Initial Installed Thickness: A new provision (Sec.  
460.5(a)(5)) requires loose-fill insulation manufacturers to determine 
initial installed thickness for their product pursuant to ASTM C 1374-
03, ``Standard Test Method for Determination of Installed Thickness of 
Pneumatically Applied Loose-Fill Building Insulation,'' for R-values of 
13, 19, 22, 30, 38, 49, and any other R-values provided on the 
product's label pursuant to Sec.  460.12 [see section V.C.2.c. of this 
document].

Section 460.5(b) and Section 460.5(c) (R-value Tests)

    The sections applicable to reflective insulations have been 
reorganized and amended as follows:
    Tests for Single Sheet Aluminum Foil Systems: Section 460.5(c) is 
redesignated as Sec.  460.5(b) and amended to require that single sheet 
systems of aluminum foil be tested under ASTM C 1371-04a [see section 
V.D.3. of this document].
    Tests for Multiple Sheet Aluminum Foil Systems: Section 460.5(b) is 
redesignated as Sec.  460.5(c) and amended to indicate that aluminum 
foil systems with more than one sheet, and single sheet systems of 
aluminum foil that are intended for applications that do not meet the 
conditions specified in the tables in the most recent edition of the 
ASHRAE Handbook, must be tested with ASTM C 1363-97, ``Standard Test 
Method for the Thermal Performance of Building Assemblies by Means of a 
Hot Box Apparatus,'' in a test panel constructed according to ASTM C 
1224-03, ``Standard Specification for Reflective Insulation for 
Building Applications,'' and under the test conditions specified in 
ASTM C 1224-03. Further, to obtain the R-value from the results of 
those tests, sellers must use the formula specified in ASTM C 1224-03. 
This amendment eliminates the references to ASTM C 236-89 and ASTM C 
976-90 that are currently applicable to these products [see section 
V.D.3. of this document].

Section 460.5(d) (R-value Tests)

    Insulation Material With Foil Facings and Air Space: Section 
460.5(d)(1) is amended to eliminate references to ASTM C 236-89 and 
ASTM C 976-90 and replace them with ASTM C 1363-97, ``Standard Test 
Method for the Thermal Performance of Building Assemblies by Means of a 
Hot Box Apparatus'' [see section V.D.3. of this document].

Section 460.5(e) (R-value Tests)

    Incorporation by Reference: A new paragraph (e) is added to 
consolidate information regarding incorporation by reference approvals 
provided by the Office of the Federal Register [see section V.F. of 
this document].

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Section 460.8

    R-Value Tolerances for Manufacturers: The Rule's tolerance 
provision is amended to clarify that manufacturers of home insulation 
are prohibited from selling individual specimens of insulation with an 
R-value more than 10% below the R-value shown in a label, fact sheet, 
ad, or other promotional material for that insulation [see section 
V.D.2. of this document].

Section 460.12 (Labels)

    Labels for Batts and Blankets: The Commission is amending the 
paragraph at Sec.  460.12(b)(1) to indicate that it applies to batts 
and blankets of any type, not just to those made of mineral fiber [see 
section V.E.1.a. of this document].
    Loose-Fill Labels: The Commission is amending Sec.  460.12 to 
eliminate certain information requirements on charts for loose-fill 
cellulose insulation. The amendment requires charts for all forms of 
loose-fill insulation to show the minimum thickness, maximum net 
coverage area, number of bags per 1,000 square feet, and minimum weight 
per square foot at R-values of 13, 19, 22, 30, 38, and 49. The 
amendment also requires the labels for loose-fill insulation to display 
initial installed thickness information, determined pursuant to ASTM C 
1374, ``Standard Test Method for Determination of Installed Thickness 
of Pneumatically Applied Loose-Fill Building Insulation,'' which 
installers must use for loose-fill products [see section V.E.1.b. of 
this document].

Section 460.13 (Fact Sheets)

    Urea-Based Foam Insulations: Section 460.13 is amended to eliminate 
the requirements related to urea-based foam insulation [see section 
V.E.1.c. of this document].

Section 460.14 (How Retailers Must Handle Fact Sheets)

    Retailers' Responsibilities for Fact Sheets: The Commission is 
amending this section to exempt retailers from making fact sheets 
available to customers, if they display insulation packages (containing 
the same information required in fact sheets) on the sales floor where 
insulation customers are likely to notice them [see section V.E.4. of 
this document].

Section 460.17 (What Installers Must Tell Their Customers)

    Initial Installed Thickness: This section is amended to require 
installers to provide customers with initial installed thickness 
information for loose-fill insulation [see section V.C.2.c. of this 
document].

Sections 460.18 (Insulation Ads) and 460.19 (Savings Claims)

    Affirmative Disclosures for Radio Ads: The Commission is 
eliminating the affirmative disclosure requirements for radio ads in 
Sec. Sec.  460.18 and 460.19 [see section V.E.2. of this document].
    Urea-Based Foam Insulations: Section 460.18 is amended to eliminate 
paragraph (e) which addresses urea-based insulation [see section 
V.E.1.c. of this document].

Section 460.23(a) (Other Laws, Rules, and Orders)

    The Commission amends paragraph (a) to correct a typographical 
error.

V. Discussion of Comments and Final Amendments

    The Commission received 16 comments in response to the NPR.\7\ 
These comments and the final amendments are discussed below:
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    \7\ AFM Corporation; ASTM International; Advanced Foil Systems, 
Inc. (``AFS''); Cellulose Insulation Manufacturers Association 
(``CIMA''); ConsultMort, Inc. (``ConsultMort''); Expanded 
Polystyrene Molders Association (``EPSMA''); Extruded Polystyrene 
Foam Alliance (``XPSA''); U.S. Green Fiber (late-filed comment); 
Honeywell Chemicals; Insulation Contractors Association of America 
(``ICAA''); North American Insulation Manufacturers Association 
(``NAIMA'') (including initial comment and late-filed comment); 
Pactiv Building Products; Polyisocyanurate Insulation Manufacturers 
Association (``PIMA''); R&D Services, Inc. (including initial 
comment and late-filed comment); Rockwool International; and Spray 
Polyurethane Foam Alliance (``SPFA''). These comments are on the 
public record and are available online at www.ftc.gov/energy. Paper 
versions are also available for public inspection in accordance with 
the Freedom of Information Act, 5 U.S.C. 552, and the Commission's 
Rules of Practice, 16 CFR 4.11, at the Consumer Response Center, 
Public Reference Section, Room 130, Federal Trade Commission, 600 
Pennsylvania Avenue, NW., Washington, DC. The comments are organized 
under the Labeling and Advertising of Home Insulation Rule (``The R-
value Rule''), Matter No. R811001.
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A. Disclosing Thermal Performance of Non-Residential Insulations

Background
    In the NPR, the Commission indicated that it did not plan to extend 
the Rule to cover the sales of insulation products in the commercial 
market. (68 FR at 41876-41877). The Commission pointed out that 
professionals in the commercial field have greater knowledge than 
residential customers. In addition, there was no evidence indicating 
unfair and deceptive practices are prevalent in these markets. 
Accordingly, the Commission found that the potential benefits to 
commercial users would not justify the additional burdens that an 
extension of the Rule would impose.
Comments
    Two commenters urged the Commission to reconsider expanding the 
Rule's coverage to include insulation sold for commercial and 
industrial use. XPSA (pp. 4-5) recommended that the issue be reserved 
for a separate rulemaking in the future. XPSA believes that building 
professionals and architects mostly rely on manufacturers' claims and 
fact sheet information when preparing specifications involving 
foundation, wall or roof systems and do not necessarily understand the 
issue of long-term R-value. XPSA believes it is nearly impossible for 
an architect or specifier to keep up to date with the technical data 
underlying such R-value claims. Rockwool (p. 1) also supported the 
Rule's extension suggesting that the increased uniformity from such a 
change would be beneficial.
Discussion
    For reasons detailed in the NPR, the Commission continues to 
believe that it is not appropriate to extend the Rule to the commercial 
or industrial market. The Commission will continue to consider 
developments in the market and has not foreclosed the possibility of 
revisiting this issue in the future. The Commission will continue to 
address concerns in this area as they arise pursuant to its general 
authority under the FTC Act.

B. Performance of Insulations in Actual Use

Background
    In the ANPR, the Commission discussed earlier comments relating to 
seasonal factors and other variables that can affect the R-value of 
insulation products in actual use. (64 FR at 48027). Specifically, 
previous commenters identified factors that affect performance in 
attics during winter conditions and stated that the Rule does not 
sufficiently account for these factors. Some comments pointed to ORNL 
research that demonstrates a reduction in R-value of very low-density 
fibrous insulations installed in open or vented attics when the 
temperature difference between the heated area of a home and its cold 
attic becomes particularly great. This can occur during the most severe 
winter conditions in some portions of the United States. In the NPR, 
the Commission indicated that it did not plan to amend the Rule to 
address these concerns but explained that sellers may use advertising 
to distinguish their product's performance from others. (68 FR at 
41877-41879).

[[Page 31262]]

Comments
    Although the Commission did not specifically invite comments on 
this issue, two industry members submitted comments disagreeing with 
the Commission's position in the NPR. Both CIMA (p. 2) and Rockwool 
urged that the Rule be amended to account for the performance of 
insulation material in very cold climates. Rockwool acknowledged that 
the technical issues involved are very complex, but suggested that the 
Rule require insulations to be marked with a warning, ``Do not use 
below X [deg]F.'' Rockwool explained that this ``cut off'' temperature 
could be calculated by a simple equation or measured according to ASTM 
practice. CIMA suggested that the Commission specifically acknowledge 
the existence of this phenomenon and require manufacturers to provide 
cold weather design information for their products. According to CIMA, 
ASTM C 1373 (``Standard Practice for Determination of Thermal 
Resistance of Attic Insulation Systems Under Simulated Winter 
Conditions'') can be used to assess the effect of cold weather on 
actual installed R-value. CIMA indicated that the State of Minnesota 
requires insulation manufacturers to provide cold weather design 
information for their products.
    The Commission notes that, in response to the ANPR, NAIMA and PIMA 
opposed amendments to the Rule addressing the insulation performance at 
high temperature differentials. (See 68 FR 41877-41878). NAIMA 
contended that it would be impossible to specify new requirements to 
take these factors into account. It also believed that such disclosures 
would create consumer confusion rather than clarity. NAIMA asserted 
that past analysis on this issue suggests that very low temperatures 
rarely last long enough to result in significant energy loss or 
economic cost. Both NAIMA and PIMA indicated that ASTM C 1373 lacks 
application to a real home setting where conditions are variable and 
unpredictable.
Discussion
    As discussed in detail in the NPR, the Commission understands that 
there are variables for which the uniform test methods specified in the 
Rule may not account, such as the design characteristics and 
geographical location of the building, the specific application in 
which the product is installed, outside and inside temperatures, air 
and moisture movement, installation technique, and others. (68 FR at 
41877-41879). The Commission believes that accounting for variables 
(such as low temperature performance) in the Rule's requirements would 
significantly complicate both compliance and communication to 
consumers, without necessarily providing a commensurate level of 
benefit. Accordingly, the Commission again has concluded that the Rule 
should not be expanded to address on-site variables that might affect 
insulation performance.
    Manufacturers and other sellers may voluntarily provide to 
consumers additional, truthful, substantiated information voluntarily 
to consumers about the manner in which their products (or their 
competitors' products) perform in actual use. If a product exhibits 
better performance at high temperature differentials than competing 
products, the manufacturer may provide that information to consumers as 
long as the claims are truthful and substantiated and otherwise 
consistent with the Rule.

C. Disclosing R-Values That Account for Factors Affecting R-Value

1. Aging of Cellular Plastics Insulations
Background
    Certain types of cellular plastics insulations (polyurethane, 
polyisocyanurate, and extruded polystyrene boardstock insulations) are 
manufactured in a process that results in a gas other than normal air 
being incorporated into voids in the products. This gas gives the 
product an initial R-value that is higher than it would have if the 
product contained normal air. The aging process causes the R-value of 
these insulations to decrease over time as the gas is replaced by 
normal air through diffusion. The length of this process depends on 
whether the product is faced or unfaced, the permeability of the 
facing, the thickness of the product, and other factors.
    The current Rule addresses this aging process by requiring that R-
value tests be performed on specimens that ``fully reflect the effect 
of aging on the product's R-value.'' Section 460.5(a)(1) of the Rule 
allows the use of the ``accelerated aging'' procedure in paragraph 
4.6.4 of GSA Purchase Specification HH-I-530A (which was in effect at 
the time the Commission promulgated the Rule) as a permissible ``safe 
harbor'' procedure, but also allows manufacturers to use ``another 
reliable procedure.'' (See 44 FR at 50227-50228). The ``accelerated'' 
procedure was designed to age these insulations in a shorter period 
than they would age under normal usage conditions. Under the 
``accelerated aging'' method in the GSA specification, test specimens 
are aged for 90 days at 140 [deg]F dry heat.
    GSA amended its specification in 1982 to allow the use of an 
optional aging procedure (in addition to the ``accelerated'' method) 
under which test specimens are aged for six months (``180 days'') at 73 
[deg]F  4 [deg]F and 50%  5% relative humidity 
(with air circulation to expose all surfaces to the surrounding 
environmental conditions). An industry group, the Roof Insulation 
Committee of the Thermal Insulation Manufacturers Association (``RIC/
TIMA''), specified the use of similar conditions in a technical 
bulletin it adopted at about the same time. In response to GSA and RIC/
TIMA adopting the alternative 180-day aging procedure, the Commission's 
staff advised home insulation sellers that the alternative procedure 
appeared to be reliable and could be used to age cellular plastics 
insulations. The staff cautioned, however, that manufacturers of 
insulations faced with materials that significantly retard aging may 
need to age test specimens for a longer period of time, and that the 
staff would consider whether the alternative procedure was acceptable 
for specific products on a case-by-case basis.\8\
---------------------------------------------------------------------------

    \8\ See, e.g., staff opinion letter dated May 5, 1983, to 
Manville Corporation. GSA thereafter rescinded its specification 
(along with other insulation specifications) and now requires that 
federally purchased insulations comply with ASTM insulation material 
specifications.
---------------------------------------------------------------------------

    As discussed in the NPR, some industry members have urged the 
Commission to incorporate two relatively new ``slicing and scaling'' 
test procedures into the Rule. (See 68 FR 41879-41882). These 
procedures are ASTM C 1303-00 ``Estimating the Long-Term Change in the 
Thermal Resistance of Unfaced Rigid Closed Cell Plastic Foams by 
Slicing and Scaling Under Controlled Laboratory Conditions'' and CAN/
ULC-S 770 ``Standard for Determination of Long Term Thermal Resistance 
of Closed Cell Thermal Insulating Foams.'' Unlike the traditional 
accelerated aging tests, these newer procedures use specimens of 
reduced thickness (i.e., slices of material) to measure the effects of 
aging. The measurements for these slices are then coupled with a 
scaling factor to estimate the R-value of full thickness boards. 
According to ASTM C 1303-00, the test is designed to avoid problems 
identified with the accelerated aging tests, namely that elevated 
temperatures may not significantly accelerate the aging process and 
that these higher temperatures may damage the cellular structure of 
these foams. ASTM C 1303-00 applies only to unfaced, homogenous 
materials. Its Canadian counterpart,

[[Page 31263]]

CAN/ULC S770, applies to permeably-faced polyisocyanurate (polysio), 
polyurethane, and extruded polystyrene foam plastic insulations.
    The comments submitted in response to the Commission's ANPR 
identified disagreements within the industry regarding the 
incorporation of ASTM C 1303 in the Rule. Some critics believe the 
relatively narrow scope of the test was a continuing concern while 
others criticized its cost and efficacy. In contrast, supporters argued 
it would improve the accuracy of the R-values calculated for products 
it covers.
    In the NPR, the Commission did not propose to amend Sec.  
460.5(a)(1) of the Rule to require the use of ASTM C 1303 for 
homogeneous, unfaced, rigid closed cell polyurethane, polyisocyanurate, 
and extruded polystyrene insulations. Because ASTM C 1303 applies only 
to unfaced, homogenous material, the Commission observed that similar 
products (e.g., insulation boards with paper facing) would have to 
continue to be tested under the older approach (the 180-day accelerated 
aging test). In essence, because it was unclear whether C 1303 is 
sufficiently broad and adequately developed, the Commission concluded 
it did not warrant incorporation into the Rule. Nevertheless, the NPR 
sought comments on this issue asking, in particular, about the scope of 
these standards and their likely impact on products sold in the 
residential market.
    Although the Commission did not propose to incorporate ASTM C 1303 
into the Rule, it proposed to amend the Rule to require tests for aging 
other types of polyurethane, polyisocyanurate, and extruded polystyrene 
insulation. These tests include ASTM C 1029-96 (``Standard 
Specification for Spray-Applied Rigid Cellular Polyurethane Thermal 
Insulation''), ASTM C 591-94 (``Unfaced Preformed Rigid Cellular 
Polyisocyanurate Thermal Insulation''), and ASTM C 578-95 (``Standard 
Specification for Rigid, Cellular Polystyrene Thermal Insulation'').\9\ 
For all other polyurethane, polyisocyanurate, and extruded polystyrene 
insulation subject to aging but not specifically covered by one of the 
procedures listed above, the NPR proposed that industry members use the 
procedure in paragraph 4.6.4 of GSA Specification HH-I-530A or another 
reliable procedure. The Commission sought comment on whether 
incorporating these procedures into the Rule would be appropriate and 
whether these procedures raise concerns like those associated with ASTM 
C 1303, as discussed above.
---------------------------------------------------------------------------

    \9\ The Commission did not propose to require ASTM C 1289 
(``Faced Rigid Cellular Polyisocyanurate Thermal Insulation Board'') 
as suggested by some commenters. The current version of this test 
procedure, ASTM C 1289-02, requires the use of the Canadian test 
procedure for aging (S770), which appears in C 1289 as an annex. 
Because the Commission did not propose to include C 1303 (or S 770) 
in the Rule at this time, the Commission refrained from proposing to 
require the same or equivalent aging procedure through C 1289.
---------------------------------------------------------------------------

Comments
    The comments on aging tests for cellular plastic insulations reveal 
continued divisions among industry members. Some commenters urged the 
Commission to incorporate the newer slicing and scaling tests (i.e., 
ASTM C 1303-00 or Can/ULC-S 770), while others urged the Commission not 
to do so because of concerns with the adequacy and scope of the new 
procedures. As for the additional procedures (ASTM C 578, C 1029, and C 
591) proposed by the Commission, one commenter questioned their 
inclusion in the Rule because they contain the traditional accelerated 
aging tests (i.e., the 90 or 180-day tests).
    Commenters urging the inclusion of ASTM C 1303 or CAN/ULC S770 in 
the Rule contended that the older accelerated aging methods, presently 
required by the Rule, are outdated and fail to provide accurate 
information about the effects of aging on R-value.\10\ One commenter 
suggested that existing requirements have created inconsistencies in 
testing and data reporting.\11\ Some of these commenters supported the 
adoption of CAN/ULC S770 while others urged the use of ASTM C 1303. 
Those advocating CAN/ULC S770 believe it will reduce confusion and 
provide a uniform method for all cellular plastics manufacturers.\12\ 
Advocates of ASTM C 1303 argued that it is an appropriate method to use 
for plastics insulation, and its scientific basis has been established 
for decades.\13\
---------------------------------------------------------------------------

    \10\ AFM (p. 1); Rockwool (p. 1); and EPSMA (pp. 1-2).
    \11\ EPSMA (pp. 1-2).
    \12\ EPSMA (pp. 1-2); Honeywell (pp. 2-3); and AFM (p. 1). AFM 
stated, however, that the Rule should not require this procedure for 
foam plastics or non-permeable faced insulations because these 
materials do not exhibit aging.
    \13\ Rockwool (pp. 1-2); and R&D (pp. 1-2). According to R&D, 
the new test stems from twenty years of expensive government and 
industrial research. R&D recommended that the Commission specify a 
time period or product life span for reporting R-values pursuant to 
the test. R&D also noted that although the test is expensive, it has 
to be conducted only once for a specific product design.
---------------------------------------------------------------------------

    One commenter recommended that the Commission designate CAN/ULC 
S770 as an ``alternate method'' for all permeably faced and unfaced 
foam insulation. Like other advocates of the Canadian test, this 
commenter believes the procedure provides a significant, technically 
supported improvement over the 180-day test. Polyisocyanurate 
manufacturers currently use this test for permeably faced 
polyisocyanurate boards, some of which are sold in the residential 
market. In addition, the Canadian test is now an annex to ASTM C1289-02 
(``Standard Specification for Faced Rigid Cellular Polyisocyanurate 
Thermal Insulation Board'') for permeably-faced polyisocyanurate 
insulation products. Accordingly, this commenter supports the 
incorporation of ASTM C 1289 into the Rule.\14\
---------------------------------------------------------------------------

    \14\ PIMA urged the Commission to adopt the Canadian test 
despite its limited coverage to unfaced products. In contrast, XPSA 
(pp. 4-5) opposed the adoption of the current version ASTM C 1289 
due to its incorporation of CAN/ULC S770. PIMA (p. 18) did not 
support adding ASTM C 1303 to the Rule because this test method, 
which is limited to unfaced material, does not apply to most 
insulation products used in the market today. PIMA explained that 
polyiso products always have facings, either permeable (organic or 
glass facers) or impermeable (aluminum foil facers or facers with 
gas barriers).
---------------------------------------------------------------------------

    Several commenters opposed any amendments that would require use of 
C 1303 or S770 either as a requirement or as an ``alternative method.'' 
These commenters agreed with the Commission's decision not to adopt 
these tests at this time.\15\ They noted ongoing efforts to reexamine 
these newer tests and recommended that the FTC retain existing 
requirements until ASTM C 1303 and Canadian standard CAN/ULC S770 gain 
broader acceptance and are widely considered to be technically 
sound.\16\ One commenter (ConsultMort) opposed the incorporation of 
ASTM C 1303 because it applies only to unfaced homogeneous materials, 
does not take into account all relevant factors, and does not establish 
a specific time frame for making product comparisons. The slicing and 
scaling methods, in ConsultMort's view, are better left to research, 
engineering and systems design professionals who are

[[Page 31264]]

qualified to consider the exceptions referenced in these procedures.
---------------------------------------------------------------------------

    \15\ NAIMA (p. 3); XPSA (pp. 4-5); ConsultMort; and Pactiv (pp. 
1-2). SPFA (pp. 1-2) cautioned against the improper use of the ASTM 
C-1303 and S770 procedures for spray polyurethane foam because there 
is no data to indicate these methods accurately predict aged R-
values for that product.
    \16\ See discussion in NPR at 68 FR 41881. Pactiv (pp. 1-2) 
stated that an ASTM Task Group is working to resolve various 
technical issues associated with ASTM C 1303. Pactiv also said that 
the CAN/ULC S770 Task Group has revised S770 to provide information 
about a positive bias associated with the method. Pactiv concluded 
that there is still significant work to be done on both tests. XPSA 
(pp. 2-3) also stated that bias issues related to S770 are under 
examination by industry members and emphasized that such issues 
should be fully addressed before the test is incorporated into the 
Rule.
---------------------------------------------------------------------------

    Several commenters addressed the new tests' potential impact on the 
R-values of products commonly sold in the residential market. According 
to one commenter, ASTM C 1303 and CAN/ULC S770 cover products that 
encompass only a small percentage of residential products.\17\ Another 
commenter reported that the various tests yield minimal differences in 
values for permeably faced polyiso boards at up to one inch thickness, 
but differences are apparent in thicker products.\18\ The comments also 
suggested that the costs for performing C 1303 or S770 are significant, 
running about $5,000 to $6,000 per sample and that only two or three 
third-party test laboratories are capable of performing them.\19\
---------------------------------------------------------------------------

    \17\ XPSA (pp. 2-3). Pactiv (pp. 1-2).
    \18\ PIMA (p. 17).
    \19\ XPSA (p. 2); and Pactiv (p. 2). PIMA (p. 17), however, 
asserted that C 1303 is twice as expensive to perform as S770.
---------------------------------------------------------------------------

    Several commenters also addressed the other aging tests the 
Commission proposed. These procedures, ASTM C 578, C 1029, and C 591, 
incorporate the traditional accelerated aging tests. NAIMA supported 
their incorporation, contending they are sufficiently developed to 
justify their incorporation and reflect testing improvements that will 
provide consumers with accurate information.\20\ R&D Services (pp. 1-
2), however, took issue with the three proposed tests. It stated that 
none of them are adequate for determining the long-term thermal 
resistance of the products covered because, in part, the time period 
for aging in these tests is not sufficient. In addition, R&D argued 
that C 1029 does not have specific controls on aging and testing. R&D 
also commented that ASTM C 1289, a test which applies to 
polyisocyanurate boards, is not adequate for determining long-term 
thermal resistance for these products if they have permeable facers.
---------------------------------------------------------------------------

    \20\ NAIMA (pp. 3-4) also noted that because the GSA 
Specification HH-I-530A referenced in the Rule is no longer 
available, the Commission should not continue to use it as an R-
value test standard.
---------------------------------------------------------------------------

Discussion
    The Commission has considered the comments received on the issue of 
aging and determined not to amend the Rule with respect to this issue. 
Accordingly, the Commission is not adding any new tests governing the 
aging of cellular plastics to the Rule. The comments demonstrate that 
significant disagreement continues to exist regarding the newer long-
term aging tests (ASTM C 1303 and CAN/ULC S770). The Commission 
understands that these tests are intended to address limitations with 
the traditional methods. The Commission does not believe, however, that 
requiring the use of these new methods is appropriate at this time. The 
comments highlight many concerns about the tests, including accuracy 
issues (potential bias in test results) and the need for more 
development with regard to the tests' specificity. In addition, several 
commenters suggested that their incorporation would have limited impact 
on the claimed R-value for products commonly sold in the residential 
market because the tests would make a difference in reported R-values 
for only a portion of the cellular plastic boards available. The 
Commission understands that the existing requirements do not specify 
uniform procedures under which cellular plastics insulation products 
must be tested. As a result, the Rule allows manufacturers of different 
products to base their R-values on different aging procedures and 
therefore they may not be fully comparable. The Commission recognizes 
that new slicing and scaling methods have the potential to improve the 
accuracy of required R-value disclosures. It is premature, however, to 
mandate the use of these tests as legal requirements until ongoing work 
on them is completed and existing problems are resolved. At the same 
time, the Commission does not find that these newer tests (ASTM C1303 
and CAN/ULC S770) are ``unreliable'' under the Rule (despite the need 
for improvements). Therefore, industry members already using them may 
continue to do so, and others may use them if they choose. The 
Commission will continue to monitor efforts in this area as more 
research is conducted and the existing standards are further developed 
and may revisit this matter in the future.\21\
---------------------------------------------------------------------------

    \21\ The Commission understands that GSA Specification HH-I-530A 
may have limited availability. the R-value Rule, however, only 
references one paragraph which states: ``4.6.4 Thermal conductivity. 
The thermal conductivity of insulation board shall be determined by 
the guarded hot plate method described in ASTM C 177 or by the heat 
flow method described in ASTM C 518. Tests shall be conducted on a 
1-inch thick product at a mean temperature of 75 degrees F (23.8 
degrees C) after 30 days and 90 days of conditioning at 140 degrees 
F (60 degrees C) dry heat.''
---------------------------------------------------------------------------

    In addition, the Commission has decided not to include the three 
additional test procedures contained in the proposed rule, ASTM C 
578,\22\ C 1029, and C 591 for particular product types. Incorporation 
of the proposed tests would codify the traditional aging methods for 
specific products covered by these tests. This could limit the ability 
of manufacturers of these products to use newer, improved tests in the 
future. Accordingly, the Commission has determined not to amend the 
Rule with regard to aging tests at this time.
---------------------------------------------------------------------------

    \22\ The 2003 version of ASTM C 578 directs the use of a 90 or 
180 day aging period but also states that ASTM C 1303 may be used if 
the blowing agent is intended to be retained for longer than 180 
days.
---------------------------------------------------------------------------

    Similarly, the Commission has decided not to amend the Rule to 
require ASTM C 1289 for polyisocyanurate boards, which includes a 
version of CAN/ULC S770 as an annex. Although some industry members 
currently use this procedure for certain product types (namely, 
permeably faced polyisocyanurate boards), the Commission believes it 
would be inappropriate to require its use under the Rule (whether by 
itself or as part of another test or standard) and sees little benefit 
from identifying it as an alternative method in the Rule text at this 
time.
2. Loose-Fill and Stabilized Insulations
    In the original rulemaking proceeding, the Commission determined 
that all dry-applied loose-fill insulation products tend to settle 
after installation in open (or unconfined) areas such as attics. (44 FR 
at 50228). Settling reduces the product's thickness, increases its 
density, and affects its total R-value. The amount of settling depends 
on several factors, including the raw materials and manufacturing 
process used, and the installer's application techniques (which affect 
the insulation's initial thickness and density).
    To ensure that claims made to consumers are based on long-term 
thickness and density after settling, Sec.  460.5(a)(2) of the Rule 
requires that the R-value of dry-applied loose-fill home insulations be 
determined at their ``settled density.'' Manufacturers of dry-applied 
loose-fill cellulose insulation for attic applications must test and 
disclose the R-value (as well as coverage area and related information) 
at the long-term, settled density determined according to paragraph 8 
of ASTM C 739, commonly referred to as the ``Blower Cyclone Shaker'' 
(``BCS'') test.\23\ Due to the lack of a consensus-based test procedure 
for the settled density of loose-fill mineral-fiber insulation, the 
Rule requires that industry members base the R-values for this product 
type on long-term thickness and density after settling, but does not 
specify how to determine a specimen's density. Since the Commission 
promulgated the Rule, new forms of

[[Page 31265]]

home insulation products have been introduced including ``stabilized'' 
cellulose and self-supported spray-applied cellulosic insulation.
---------------------------------------------------------------------------

    \23\ ``Standard Specification for Cellulosic Fiber Loose-Fill 
Thermal Insulation'' (ASTM C 739).
---------------------------------------------------------------------------

a. Settling
    In the NPR, the Commission addressed several issues related to the 
settling of loose-fill insulation in attics and stated it intended to 
retain the requirement that industry members use the BCS test to 
determine the settled density of cellulose loose-fill. (68 FR 41882-
41886). The Commission proposed to update the current reference to ASTM 
C 739 in Sec.  460.5(a)(2) to reflect the most current version (which 
is now the 2003 version). The Commission also stated that manufacturers 
who can demonstrate that the BCS procedure is inappropriate for their 
products can apply for an exemption that would allow them to determine 
their product's settled density under a more appropriate method (the 
exemption procedures are found in the Appendix to 16 CFR part 460).
    Section 460.5(a)(2) of the Rule does not specify procedures for 
determining the settled density of loose-fill mineral fiber insulation 
products but instead requires that R-values for dry-applied loose-fill 
mineral fiber insulations be based on tests that take the adverse 
effects of settling into account. The Commission indicated in the ANPR 
that ORNL studies conducted during the 1980's demonstrate that certain 
loose-fill mineral fiber insulation products can settle following 
installation, resulting in a reduction of R-value. (64 FR at 48033). 
The settling results differed in amount and effect, depending on the 
type of mineral fiber insulations studied (e.g., fiberglass versus rock 
wool products).
    In the NPR, the Commission did not propose any specific test for 
measuring the settling of this insulation type because there is no 
consensus standard available. In its comments on the NPR, R&D (p. 3) 
asserted that a settled density test for fiberglass and rock wool 
insulations is needed to address the settling that is known to occur. 
The Commission understands R&D's concerns and reiterates that industry 
members must have a reasonable basis for their R-value claims and take 
into account the effects of settling when applicable. Although the 
Commission cannot require industry members to develop consensus 
standards, it will monitor practices and R-value claims related to 
settling.
    The NPR proposed, however, to amend the Rule to eliminate the 
reference to an unnamed, future GSA procedure in Sec.  460.5(a)(3) 
because GSA never issued such a procedure. The Commission also proposed 
to amend the Rule to specify that tests for self-supported, spray-
applied cellulose insulation and stabilized cellulose must be done on 
samples that fully reflect the effect of settling on the products' R-
value. The Commission received four comments favoring these amendments 
and none opposing. The Commission has incorporated these amendments 
into the final rule (see Sec.  460.5(a)(3)).
b. Self-Supported Spray Applied Cellulose Insulation
Background
    Self-supported spray applied cellulose insulations are generally 
sprayed onto walls, and are able to support themselves as applied. Such 
insulations are most often used on exposed walls. In the NPR, the 
Commission proposed to require the use of ASTM C 1149 (``Standard 
Specification for Self-Supported Spray Applied Cellulosic Thermal 
Insulation'') for this type of insulation. The procedures in paragraph 
5.1 of ASTM C 1149 require the use of the manufacturer's recommended 
equipment, procedures, and maximum thickness when preparing test 
specimens. The Commission solicited comments regarding this proposed 
requirement.
Comments
    The Commission received four comments favoring the proposed 
requirement related to self-supported spray applied cellulose 
insulation. Three commenters \24\ supported the incorporation of ASTM C 
1149 into the Rule but suggested replacing the term ``settled density'' 
with the term ``density'' because the former term is not applicable to 
this product. NAIMA (p. 4) agreed with the proposal to require ASTM C 
1149 but urged the Commission also to address the impact of settling on 
wet cellulose.\25\ It also suggested moisture problems may degrade the 
settled density of the cellulose insulation and, thus, affect R-value. 
NAIMA strongly recommended that the Commission require each cellulose 
manufacturer to provide consumers with reliable drying guidelines since 
this issue directly impacts R-value and settled density.
---------------------------------------------------------------------------

    \24\ R&D (p. 2); CIMA (p. 1); and PIMA (p. 8).
    \25\ In initial comments and a late-filed comment (March 26, 
2004), NAIMA submitted information suggesting that insulation 
installed in walls without proper drying times may lead to faster 
corrosion, more mold, and lower R-values.
---------------------------------------------------------------------------

Discussion
    The Commission has reviewed the comments and has decided to amend 
the Rule by adding Sec.  460.5(a)(4) to require the use of ASTM C 1149 
(``Standard Specification for Self-Supported Spray Applied Cellulosic 
Thermal Insulation'') for deriving the R-value of such insulation. The 
Commission agrees with the commenters that this is an appropriate 
method to apply to these products. The term ``settled'' has been 
eliminated from this part as it does not apply to this material. The 
Commission has also considered NAIMA's concerns regarding moisture and 
has decided not to amend the Rule with regard to this issue. The 
Commission is not willing to prescribe detailed requirements in this 
area absent further information and the opportunity for other industry 
members to address specific proposals on this issue. Further, if 
moisture damage is a problem if the material is not properly installed, 
manufacturers should provide installation instructions as a matter of 
good practice.\26\
---------------------------------------------------------------------------

    \26\ In the NPR, the Commission did not propose any specific 
test methods for determining the long-term density of stabilized 
cellulose insulation, a product usually used in attic applications. 
(68 FR 41884-41885). One commenter, R&D (p. 3), suggested that the 
Commission require the use of ASTM C 1497-01 (``Standard 
Specification for Cellulosic Fiber Stabilized Thermal Insulation'') 
for determining the R-value for stabilized cellulose insulation. 
Because the Commission did not seek comment on this method, we 
decline to include it in the final amendments. The Commission, 
however, agrees with R&D that this test appears to be an appropriate 
method to apply in deriving R-values for this type of insulation.
---------------------------------------------------------------------------

c. Initial Installed Thickness
Background
    As discussed in the NPR, the Commission is aware of industry 
concerns about the installation of loose-fill insulation. (68 FR 41891-
41893). For loose-fill insulations, the Rule currently requires: (1) 
That each manufacturer determine the R-value of its home insulation 
product at settled density and construct coverage charts showing the 
minimum settled thickness, minimum weight per square foot, and coverage 
area per bag for various total R-values; and (2) that installers 
measure the area to be covered and install the number of bags (and 
weight of insulation material) indicated on the product's coverage 
chart for the total R-value desired. The Insulation Contractors 
Association of America (``ICAA'') has long believed that the Rule's 
requirements make it very difficult for contractors to ensure that they 
have installed the correct amount of insulation. (68 FR at 41891-
41893). In the NPR, the Commission

[[Page 31266]]

recognized that contractors may fail to install sufficient insulation 
either because they apply material at the minimum settled thickness by 
mistake or they simply provide an inadequate amount. (68 FR at 41892). 
In other instances, some installers inappropriately or inadvertently 
``fluff'' their insulation by applying it with more air at a lower 
density. This practice increases thickness, at least initially, but 
reduces the necessary density and total R-value. It has been difficult 
for consumers to determine whether the correct insulation amount has 
been installed because they cannot rely on the installed thickness 
alone to assure they obtain the contracted-for R-value.
    To address these concerns, the Commission proposed to require a 
relatively new procedure, ASTM C 1374 (``Standard Test Method for 
Determination of Installed Thickness of Pneumatically Applied Loose-
Fill Building Insulation''). This procedure was specifically developed 
to aid manufacturers in determining a product's initial installed 
thickness, which in turn ensures that, long-term, consumers receive the 
claimed R-value. The Commission proposed to incorporate this procedure 
into the Rule and sought comments on the test. Specifically, the 
Commission proposed to:
     Amend Sec.  460.5(a) to add a new subsection (5) that 
would require manufacturers of loose-fill insulation to determine the 
initial installed thickness of their product at certain R-values using 
ASTM C 1374 (``Standard Test Method for Determination of Installed 
Thickness of Pneumatically Applied Loose-Fill Building Insulation'').
     Amend Sec.  460.12 (Labels) to require this initial 
installed thickness information on product labels.
     Amend Sec.  460.5(a) to require manufacturers of loose-
fill insulation to determine the blowing machine adjustments and feed 
rates necessary to achieve the initial installed thicknesses and 
indicate such information on the product label.
     Amend Sec.  460.17 to require installers to comply with 
the initial installed thickness directions on product labels and to use 
the blowing machine adjustments and feed rates specified by the 
manufacturer.
    Under the proposal, manufacturers would provide initial installed 
thickness information on labels and fact sheets pursuant to Sec. Sec.  
460.12 and 460.13. Pursuant to Sec.  460.17, installers would have to 
follow the initial installed thickness information on the label to 
ensure the appropriate amount of insulation has been installed. They 
also would have to follow the manufacturer's instructions for blowing 
machine settings. The Rule would continue to require installers to show 
fact sheets to consumers (Sec.  460.15) and provide the consumer with 
initial installed thickness and R-value information for specific jobs 
(Sec.  460.17). To improve the clarity of existing language in the 
Rule, the Commission also sought comment on changing the term ``minimum 
thickness'' in Sec.  460.12(b)(2) to ``minimum settled thickness.''
    Although the Commission proposed to add disclosure requirements for 
initial installed thickness information, it indicated specifically that 
it did not plan to eliminate any of the existing disclosure 
requirements related to loose-fill, such as bag count and coverage 
area. The Commission indicated that this information is necessary to 
provide consumers and inspectors with an additional means to verify 
that installers have provided an appropriate amount of material. Under 
the proposed rule, loose-fill cellulose insulation manufacturers would 
continue to conduct their R-value tests at the settled density using 
ASTM C 739, as specified by Sec.  460.5(a)(2). Manufacturers of other 
loose-fill material also would have to continue to conduct R-value 
tests based on samples that fully reflect the effect of settling on the 
product's R-value (see Sec.  460.5(a)(3)). The Commission sought 
comments on questions related to the efficacy of ASTM C 1374, and the 
costs and benefits of the Commission's proposal.
Comments
    The comments demonstrated general support for the Commission's 
proposed amendments with regard to initial installed thickness 
information, although several commenters raised specific concerns with 
regard to blowing machine settings and other issues.\27\ ICAA (pp. 11-
23) strongly supported the amendment stating that the changes will 
benefit all parties because they will help alleviate the problems 
installers face in providing the correct amount of insulation.\28\ 
These include differences in ``as designed'' models and ``as built'' 
homes in large developments, resulting in the actual job site space 
differing from the ``contracted for'' space; increasingly complex new 
home plans that make measurements difficult; and problems in obtaining 
adequate measurements in some retrofit applications.\29\
---------------------------------------------------------------------------

    \27\ ICAA (p. 15); NAIMA (p. 4); PIMA (p. 8), and CIMA (pp. 1-
2). In a late-filed comment (July 8, 2004), U.S. Green Fiber (p. 3), 
the largest cellulose insulation manufacturer, indicated that the 
addition of ASTM C 1374 would be ``positive'' and recommended its 
incorporation into the Rule. Green Fiber also described a procedure 
it intends to follow in complying with ASTM C 1374. Given the late 
timing of Green Fiber's comment, the Commission has not addressed 
the procedure outlined in its letter.
    \28\ ICAA stated that there are no other test procedures that 
should be incorporated into the Rule in lieu of (or in addition to) 
ASTM C 1374 at this time. ICAA wrote that ASTM members are working 
on an update to the procedure that will involve only very slight, 
non-substantive modifications. (ICAA, p. 19).
    \29\ ICAA also suggested that, because the actual net weight in 
bags sometimes differs from the minimum net weight printed on the 
packaging, the amendment would allow customers to receive the 
contracted R-value regardless of bag weight deviations.
---------------------------------------------------------------------------

    ICAA (pp. 21-23) also indicated that incorporation of ASTM C 1374 
into the Rule is unlikely to increase significantly, if it at all, the 
costs consumers will pay for loose-fill insulation. ICAA (p. 22) 
emphasized that the ASTM C 1374 amendment will not cause installers to 
use more loose-fill material or cause an increase in installation time 
on any given job because installers will now have an explicit thickness 
target for each attic, and therefore the overall variance (both overage 
and underage) may be reduced. ICAA also believes the proposal will not 
hinder the installers' ability to provide consumers coverage area 
information required by the Rule because contractors will continue to 
measure coverage area to estimate the volume and cost associated with 
each job.
    R&D (pp. 3-4), while agreeing generally that the initial installed 
thickness information would be beneficial, stated that the Rule should 
continue to require installers to provide the minimum pounds per square 
foot to insure at least a minimum settled thickness. R&D also raised 
some specific concerns about ASTM C 1374, cautioning that ``there is no 
assurance that results from C 1374 will be consistent with the existing 
procedure for determining the settled density and R-value of loose-fill 
cellulose insulation.'' R&D's comments raise the possibility that the 
initial installed thickness results from ASTM C 1374 may not 
necessarily be consistent with, for instance, the settled density 
results for cellulose yielded from ASTM C 739. In other words, the 
instructions for initial installed thickness for a certain R-value 
could potentially fail to prescribe the insulation amount suggested by 
the label's area and bag count (i.e., weight) information. Despite this 
uncertainty, R&D supported the inclusion of initial installed thickness 
information in the Rule as a

[[Page 31267]]

``recommendation'' by manufacturers and urged the Commission to require 
manufacturers to provide initial installed thickness information that 
is consistent with the results obtained from settled density tests.\30\
---------------------------------------------------------------------------

    \30\ R&D supplemented its initial letter in a late filed comment 
(March 23, 2004) stating that ASTM C 1374 should ``be identified as 
a guide for determining installed thickness'' and not the sole 
criterion for installers to follow.
---------------------------------------------------------------------------

    Several commenters raised concerns with the blowing machine setting 
requirements of the Rule. For instance, CIMA stated that because 
contractors use more than a hundred different blowing machines and a 
machine's performance changes with age and usage, it would be difficult 
for manufacturers to provide required blowing machine settings for all 
of them.\31\ It suggested that the Commission allow manufacturers to 
select one blowing machine deemed to be ``representative'' and publish 
settings for just that machine. Otherwise, CIMA asserted, 
manufacturers, particularly smaller ones, would incur significant 
financial burdens if they have to provide blower settings for many 
machines.\32\ ICAA interpreted the Commission's proposal as requiring 
the disclosure of blowing machine settings that conform to the 
reporting requirements of ASTM C 1374, section 11.1.4 which requires 
the manufacturer to provide information only about the machine settings 
used to conduct the test. ICAA suggested that the Commission delete 
reference to blowing machine settings in Sec.  460.17 (installer 
requirements) because it is inconsistent with ASTM C 1374. ICAA also 
suggested modifying the proposed language in 460.17, applicable to 
initial installed thickness, to read: ``For loose-fill, you must follow 
the manufacturer's label instructions for initial installed 
thickness.''
---------------------------------------------------------------------------

    \31\See also R&D (pp. 3-4) and ICAA (pp. 17-18, and 20).
    \32\ R&D explained the costs arise from the significant capital 
investment in installation equipment required, and that a 
prescriptive requirement for blowing machine settings could double 
the cost of creating a coverage chart.
---------------------------------------------------------------------------

Discussion
    The Commission has decided to amend the Rule as proposed, with 
modifications to respond to the comments. The final rule indicates that 
manufacturers must provide blowing machine settings for the machine 
used in conducting the test (consistent with ASTM C 1374). This should 
address comments about the financial burden of testing with multiple 
blowing machines. Manufacturers, of course, may provide additional 
information (e.g., settings for additional types of machines) to aid 
installers.
    ASTM C 1374 provides a way to derive initial installed thickness 
measurements from the weight information (i.e., bag count) on a 
manufacturer's package label (see sections 5.5 and 8.2) of the test 
method.\33\ The test method itself does not require the generation of 
specific information about product density, settled thickness, weight, 
or R-value. It assumes that manufacturers have already developed this 
information before they conduct the initial installed thickness 
procedure. The data generated by ASTM C 1374 simply adds to existing 
information on the label by providing installers with guidance on the 
insulation amounts they should install.
---------------------------------------------------------------------------

    \33\ For instance, section 5.5 of the Test Method states: ``The 
material blown for a given R-value as part of the installed 
thickness test equals the installed mass/unit area times the test 
chamber area. This mass can be calculated from information provided 
on the package label at the R-value prescribed.'' Section 8.2 states 
in part: ``From product label information, calculate the mass of 
insulation required to fill the test chamber for the R-value 
selected * * * .''
---------------------------------------------------------------------------

    The Commission has considered R&D's concern about possible 
inconsistencies between results yielded from a procedure for initial 
thickness and another for settled density. Because the record does not 
demonstrate that such inconsistencies will necessarily occur, this 
concern appears to reflect a potential issue rather than a proven 
flaw.\34\ Other commenters, representing loose-fill manufactures and 
installers, supported the test method's use for labeling purposes. As 
proposed in the NPR, the Commission is retaining other information 
requirements (bags per square feet, etc.).\35\ This information will 
help contractors to install appropriate amounts even if inconsistencies 
arise between the initial and settled thickness information. This other 
information (e.g., bag count) also provides installers, consumers,\36\ 
and inspectors an additional means to verify that the appropriate 
amount of material has been installed. It may also discourage 
unscrupulous installers from intentionally altering the blowing machine 
settings to ``fluff'' material (i.e., increase thickness at the expense 
of density and total R-value). Although initial installed thickness 
will provide important guidance to installers, they still will have to 
pay attention to area measurements and bag counts to ensure they 
install the correct thickness and amount.
---------------------------------------------------------------------------

    \34\ The test method itself directs manufacturers to derive the 
initial installed thickness information using given R-values for the 
mass of material indicated on the package label (not the thickness). 
(See ASTM C 1374-03, section 5.5.) If experience demonstrates that 
there are significant inconsistencies between the results of the two 
tests, the Commission may consider revisiting this requirement.
    \35\ The NPR indicated that manufacturers will continue to 
provide information currently required on loose-fill labels such as 
minimum settled thickness, maximum new coverage area, number of bags 
per 1,000 square feet, and minimum weight per square foot at various 
R-values. (68 FR at 41893).
    \36\ Initial installed thickness information should make it 
easier for consumers to verify they have received adequate 
insulation because they can now use a ruler to measure the installed 
thickness. Consumers also will continue to receive information 
regarding minimum settled thickness.
---------------------------------------------------------------------------

    To avoid possible confusion, the Commission has not included in 
Sec.  460.17 the proposed requirement that installers follow 
manufacturers' instructions for initial installed thickness 
information. In light of the comments, the Commission is concerned that 
such specific language may lead some installers to follow only the 
initial installed thickness information and ignore other important data 
on the bag label. Under the final rule, Sec.  460.17 continues to 
direct installers to ``use the data the manufacturer gives you'' to 
``figure out the R-value of the insulation.'' This language is 
sufficient to direct installers to follow the manufacturers' 
instructions including information about coverage area, weight, and 
initial installed thickness.\37\
---------------------------------------------------------------------------

    \37\ As indicated in the NPR (68 FR at 41893, n. 97), the 
Commission has decided to change the term ``minimum thickness'' in 
Sec.  460.12(b)(2) to ``minimum settled thickness.'' This will 
improve the clarity of the existing language in the Rule.
---------------------------------------------------------------------------

D. Other Testing Requirements

1. Test Temperature Differential
Background
    In the NPR, the Commission indicated that it did not propose to 
amend the Rule with regard to the required mean test temperature 
(75[deg]) for R-value tests. (68 FR at 41887). The current Rule, 
however, does not require a specific temperature differential (i.e., 
the temperature difference between the hot and cold surface during 
testing) in conducting the Sec.  460.5(a) tests. In the NPR, the 
Commission proposed to require that tests be conducted with a 
temperature differential of 50 [deg]F plus or minus 10 [deg]F because 
the thermal properties of a specimen may change both with mean 
temperature and with the temperature difference across the test 
specimen.
Comments
    The comments generally supported requiring the performance of tests 
using

[[Page 31268]]

a temperature differential of 50 [deg]F plus or minus 10 [deg]F. \38\ 
PIMA (p. 5) supported the proposal but noted that the Rule allows 
reflective insulation testing at a temperature differential of 30 
[deg]F. Given the need for consistency in R-value test conditions, PIMA 
questioned the Commission's decision to exempt aluminum foil 
insulations from this standardized condition. Honeywell (pp. 1-2) also 
supported the proposal but recommended that the Rule require testing at 
a mean temperature of 40 [deg]F, in addition to the mean temperature of 
75 [deg]F, to insure that consumers will use an adequate insulation 
amount in cold temperature regions.\39\
---------------------------------------------------------------------------

    \38\ NAIMA (p. 3) (Commission proposal is consistent with ASTM 
Standard Practice C 1058, ``Selecting Temperatures for Evaluating 
and Reporting Thermal Properties of Thermal Insulation'' and 
industry practice). See also, XPSA (pp. 3-4) and Pactiv (p. 1).
    \39\ Honeywell described past research suggesting that mean 
temperature has an effect on the thermal conductivity of rigid 
polyurethane foams. Honeywell noted that the European Union 
specifies a mean temperature of 50 [deg]F to represent more 
adequately insulation requirements of their geographic region, which 
is similar to that of the northern regions of the U.S.
---------------------------------------------------------------------------

Discussion
    The Commission has decided to amend Sec.  460.5(a), as proposed, to 
require that tests be conducted with a temperature differential of 50 
[deg]F plus or minus 10 [deg]F. This amendment will help ensure the 
comparability of R-value claims for competing home insulations. The 
Commission is not, however, revising the Rule's mean test temperature 
requirement, which is not intended to be representative of any 
particular geographical region, season, or actual performance 
conditions. Indeed, when the Commission initially promulgated the 
requirement, it concluded that requiring sellers to test and disclose 
R-values at a mean temperature representative of any specific 
geographical region, or season of the year, would yield R-value results 
that would be inappropriate for other regions or seasons. (44 FR at 
50219 and 50227). Further, it concluded that requiring sellers to test 
and disclose R-values separately for different regions or seasons would 
yield multiple disclosures that could confuse consumers and perhaps 
discourage them from using R-values in making purchasing decisions. 
Although useful information may be derived by testing material at a 
lower mean temperature, the Commission believes that testing at 
additional mean temperatures could unduly complicate the testing and 
reporting of R-values. Manufacturers, of course, may take low 
temperature performance into account in advertising their products. 
(See 68 FR at 41878-41879).
    The Commission also has decided not to alter the temperature 
differential requirements in the Rule for reflective insulations (see 
Sec.  460.5(b) and (c) of the amended Rule) as PIMA suggested. The 
Rule's temperature differential requirements for reflective insulations 
are consistent with well-established procedures mentioned in the Rule 
itself. For single sheet reflective products, Sec.  460.5(b) references 
tables in the American Society of Heating, Refrigerating and Air-
Conditioning Engineers, Inc. (ASHRAE) Fundamentals Handbook that do not 
contain R-values for temperature differentials greater than 30 
[deg]F.\40\ For multi-sheet reflective insulations, Sec.  460.5(c) 
requires the use of ASTM 1224 which itself mandates a 30 [deg]F 
differential (see 9.7.3). It would not be appropriate to issue 
amendments inconsistent with these industry consensus standards without 
additional information about any technical problems caused by such 
changes or the practical benefit, if any, such amendments will provide 
for consumers.
---------------------------------------------------------------------------

    \40\ See 2001 ASHRAE Fundamentals Handbook, Ch. 25, Table 3.
---------------------------------------------------------------------------

2. Tolerance
Background
    In the ANPR (64 FR at 48037-48038), the Commission proposed to 
clarify that the 10% tolerance provision in Sec.  460.8 applies to 
manufacturer claims and not to claims made by other sellers or 
installers who rely on R-value data provided by the manufacturer. Under 
the tolerance provision, the actual R-value of any insulation sold to 
consumers cannot be more than 10 percent below the R-value shown on a 
label, fact sheet, ad, or other promotional material for the product. 
The Commission solicited comments on whether it should amend the 
tolerance provision, and the benefits and burdens such an amendment 
would confer on consumers and insulation sellers. In addition, the 
Commission sought comments on whether the Rule should be changed with 
regard to sampling procedures.
    After analyzing the comments received in response to the ANPR, the 
Commission proposed to amend Sec.  460.8 of the Rule to clarify that 
the tolerance provision applies to manufacturers and the manufacturing 
process (not to installation). (68 FR at 41887). The Commission also 
proposed to amend Sec.  460.8 to require that the mean R-value of 
sampled specimens of a production lot meet or exceed the R-value shown 
in a label, fact sheet, ad or other promotional material for that 
insulation. For the purposes of the proposed amendment, the Commission 
defined the term ``production lot'' as a definite quantity of the 
product manufactured under uniform conditions of production. In 
addition, the Rule would continue to specify that no individual 
specimen of that insulation may have an R-value more than 10% below the 
R-value shown in a label, fact sheet, ad, or other promotional material 
for that insulation.\41\
---------------------------------------------------------------------------

    \41\ The Commission did not propose a specific sampling 
procedure, stating that there was no clear indication that 
manufacturers' implementation of the tolerance provision results in 
the selection of test specimens that are not representative of 
ongoing production. (68 FR at 41888).
---------------------------------------------------------------------------

Comments
    The Commission received five comments on the tolerance issue. No 
commenters opposed the Commission's proposal to clarify that the 
tolerance provision applies to manufacturers and not installers. Two 
commenters supported the proposal to require that the mean R-value of 
sampled specimens of a production lot meet or exceed the labeled R-
value.\42\ Rockwool, in contrast, believes the proposal allows too many 
sampled specimens to fall below the stated R-value.
---------------------------------------------------------------------------

    \42\ XPSA (p. 4) and Pactiv (p. 2). XPSA indicated that this 
change will give flexibility to manufacturers and would not require 
a new, costly testing schedule.
---------------------------------------------------------------------------

    NAIMA (pp. 5-6) generally supported the proposal to clarify that 
manufacturers should meet 100 percent of labeled R-value and that the 
mean R-values should meet or exceed the labeled R-value, but stated 
that the proposed rule language could lead to confusion. NAIMA warned 
that manufacturers, in attempting to meet the new requirement, would 
adjust their manufacturing process to yield mean R-values above the 
labeled R-value because normal production processes yield normal 
variations that may cause a failure to meet the literal requirements of 
the proposed language.\43\ According to NAIMA, the Commission's 
proposal would necessitate product design changes that would render 
most insulation more expensive for consumers.
---------------------------------------------------------------------------

    \43\ In addition, PIMA (pp. 10-11) explained that the precision 
and bias of commonly used R-value test methods, such as ASTM C 518, 
are in the 3-5% range. It also stated that the 
Commission has not adequately defined the term ``production lot'' 
and should designate sampling procedures.
---------------------------------------------------------------------------

    PIMA (pp. 10-11) urged the Commission to retain the current 
language in the Rule which ``is well

[[Page 31269]]

understood.'' NAIMA suggested, however, that the proposed rule specify 
that manufacturers must use valid statistical tests in their 
manufacturing process. In NAIMA's opinion, this would remove the 
potential for manufacturers to make inappropriate assumptions about lot 
size, sample size, or sampling frequency.
    Rockwool International (pp. 1-2) explained that manufacturers 
interpret the existing Rule to allow the production to be run with a 
mean R-value equal to labeled R-value. As a result 50% of what is 
delivered to the market is equal or better than labeled, while the rest 
is below labeled R-value. Rockwool explained that the change ``will 
raise the fraction of what is at labeled R-value or better to 
approximately 75% of what is put on the market and approximately 25% 
will be below labeled R-value.'' Rockwool indicated that, ultimately, 
the tolerance rules reflect a policy decision but, in its view, it is 
reasonable to require that at least 90% of the production to be equal 
to or better than labeled R-value.
Discussion
    The Commission is amending Sec.  460.8 to clarify that the 
tolerance limit applies to manufacturers and the manufacturing process 
(not to installation). The Rule will continue to allow professional 
installers and new home sellers to rely on the manufacturer's 
installation instructions, unless they have reason to believe that the 
instructions are inaccurate or not based on the proper tests. The 
amendment clarifies that the tolerance is not intended to allow 
installers or new home sellers to deviate from the manufacturer's 
installation instructions.\44\
---------------------------------------------------------------------------

    \44\ For instance, the 10% tolerance provision does not apply to 
the thickness at which loose-fill insulation is installed. Under the 
current Rule, loose-fill insulation must be installed at a settled 
thickness equal to or greater than the minimum settled thickness 
specified by the manufacturer.
---------------------------------------------------------------------------

    The Commission has decided not to include specific language in the 
Rule related to the mean R-value of sampled specimens in a production 
lot. As the comments indicate, the proposed language has created 
significant confusion. The proposed change was meant to clarify 
existing requirements and foster consistency in the tolerance 
provision's application, not to change the underlying tolerance 
requirement or cause changes to existing industry practices. The 
Commission's proposal sought to explain that the mean R-value of 
products must meet or exceed the labeled R-value. According to NAIMA, 
this is the way most manufacturers currently interpret the Rule. The 
Commission did not intend to require changes in existing production 
processes due to complications caused by normal variation. Although 
NAIMA has suggested language to clarify the Commission's intent, such 
language could also lead to confusion. In addition, any requirement 
related to the mean of samples in production lots would be difficult to 
implement and enforce without mandated sampling procedures. Given that 
the Commission is not amending the Rule in this regard, we note that 
the tolerance provision is designed to take the place of detailed 
quality control standards in the Rule. It does not give industry 
members a license to inflate their R-values above the amount determined 
through R-value testing. Rather, the testing sections impose two 
separate bases for potential liability. First, industry members will be 
liable if their stated R-values do not reflect the results of tests 
performed in accordance with the Rule. Second, if the Commission tests 
the manufacturer's product, the tested R-value must be within 10 
percent of the R-value represented to consumers. If the product is not 
within this 10 percent tolerance, the manufacturer may be liable even 
if the stated R-value accurately reflects the manufacturer's test 
results. In that event, failure to pass the tolerance test indicates 
that the manufacturer's quality control procedures are insufficient to 
reasonably assure consumers that they are receiving the represented R-
value. (See 45 FR at 68923).
3. Determining the Thermal Performance of Reflective Insulations
Background
    There are two basic forms of reflective insulation products in the 
residential market: (1) Traditional single sheet and multi-sheet 
reflective insulations; and (2) single-sheet radiant barrier reflective 
insulations. Traditional reflective insulation products normally are 
installed in closed cavities, such as walls. The Rule requires that 
manufacturers of traditional reflective insulation products use 
specific test procedures to determine the R-values of their products, 
and that manufacturers and other sellers disclose R-values to consumers 
for specific applications. (See 64 FR at 48038-48039). Section 460.5(c) 
of the current Rule requires the use of ASTM E 408 for single sheet 
systems. For reflective systems with more than one sheet, Sec.  
460.5(b) requires use of ASTM C 236 and ASTM C 976.
    In the NPR, the Commission proposed to reorganize Sec. Sec.  
460.5(b), (c), and (d) and make substantive changes to existing 
requirements. (68 FR at 41888-90). Proposed Sec.  460.5(b) would 
require that single sheet systems of aluminum foil (i.e., reflective 
material) be tested with ASTM C 1371, ``Standard Test Method for 
Determination of Emittance of Materials Near Room Temperature Using 
Portable Emissometers'' or E 408 (as currently required). ASTM C 1371 
tests the emissivity of the foil. To get the R-value for a specific 
emissivity level, air space, and direction of heat flow, the amendment 
would continue to refer industry members to the tables in the most 
recent edition of the ASHRAE Handbook, if the product is intended for 
applications that meet the conditions specified in the tables. Industry 
members would have to use the R-value for 50 [deg]F, with a temperature 
differential of 30 [deg]F.
    In new Sec.  460.5(c), the Commission proposed requiring that 
aluminum foil systems with more than one sheet, and single sheet 
systems of aluminum foil (i.e., reflective insulation) that are 
intended for applications that do not meet the conditions specified in 
the tables in the most recent edition of the ASHRAE Handbook, be tested 
with (i) ASTM C 1363-97, ``Standard Test Method for the Thermal 
Performance of Building Assemblies by Means of a Hot Box Apparatus,'' 
(ii) in a test panel constructed according to ASTM C 1224-03, 
``Standard Specification for Reflective Insulation for Building 
Applications,'' and (iii) under the test conditions specified in ASTM C 
1224-03. To get the R-value from the results of those tests, the 
amendment would require the use of the formula specified in ASTM C 
1224-03. The tests must be done at a mean temperature of 75 [deg]F, 
with a temperature differential of 30 [deg]F.
    Finally, the Commission proposed to amend Sec.  460.5(d)(1) to 
insert a reference to ASTM C 1363-97, ``Standard Test Method for the 
Thermal Performance of Building Assemblies by Means of a Hot Box,'' in 
place of ASTM C 236-89 (Reapproved 1993), ``Standard Test Method for 
Steady-State Thermal Performance of Building Assemblies by Means of a 
Guarded Hot Box,'' and ASTM C 976-90, ``Standard Test Method for 
Steady-State Thermal Performance of Building Assemblies by Means of a 
Calibrated Hot Box.''
Comments
    Five commenters generally supported the proposed amendments.\45\ 
R&D (p. 4),

[[Page 31270]]

however, expressed concern that the proposed requirements for single 
sheet systems of aluminum foil are overly restrictive. Because the 
ASHRAE Handbook of Fundamentals references only four thicknesses for 
each heat flow direction, R&D urged the Commission to acknowledge that 
the footnotes in the Handbook allow for ``interpolation and moderate 
extrapolation'' from the data for those specified thicknesses.
---------------------------------------------------------------------------

    \45\ SPFA (p. 1), PIMA (pp. 9-10), NAIMA (pp. 4-5), and Pactiv 
(p. 2) supported the Commission's proposals without elaboration. AFS 
noted that ASTM E-408 is not in use anymore and recommended that the 
Commission eliminate references to the test. AFS indicated that ASTM 
C 1371 is the appropriate, updated test to use for measuring surface 
emittance.
---------------------------------------------------------------------------

Discussion
    The Commission has determined to amend the Rule as proposed because 
the amendments account for recent improvements in the applicable test 
procedures. In response to R&D's concerns, the Commission notes that, 
in issuing these amendments, it does not intend to restrict the use of 
the tables only to those values specifically printed in the tables 
themselves. Rather, the Commission recognizes that explanatory 
information in the footnotes to the ASHRAE handbook allow for 
``interpolation and moderate extrapolation'' and would expect industry 
members to use this guidance in complying with the Rule.\46\
---------------------------------------------------------------------------

    \46\ The Commission has decided to retain ASTM E 408 in the 
Rule. Although it may not be widely used and has largely been 
displaced by C 1371 (for measurements of emittance using portable 
emissometers), the commenters have not identified any negative 
impact from retaining this procedure in the Rule.
---------------------------------------------------------------------------

E. Other Disclosure Issues

1. Disclosures on Labels and Fact Sheets
a. Disclosures for Batt, Blanket, and Boardstock Insulations
Background
    Subsections 460.12(b)(1) and (4) of the Rule require manufacturers 
to label all packages of ``mineral fiber batts and blankets'' and all 
boardstock insulations with a chart showing the R-value, length, width, 
thickness, and square feet of insulation in the package, and Sec.  
460.13(c)(1) requires that they include the chart on manufacturer-
provided fact sheets. As indicated in the ANPR, NAIMA recommended 
amending Sec.  460.12(b)(1) to apply to all batt and blanket insulation 
products by deleting the reference to ``mineral fiber.'' (64 FR at 
48041).
    In the NPR, the Commission agreed that all types of batt and 
blanket insulations should be labeled with the same basic R-value and 
coverage area information, and that manufacturers' fact sheets for 
these insulation products should include these disclosures. Therefore, 
the Commission proposed deleting the phrase ``mineral fiber'' from 
Sec.  460.12(b)(1). (68 FR at 41890-41891).\47\
---------------------------------------------------------------------------

    \47\ Section 460.12(b) refers to ``mineral fiber'' batts and 
blankets because, when the Rule was promulgated, the batt and 
blanket insulation products being sold in the residential market 
were mineral fiber insulation products, primarily fiberglass. Since 
then, the market has expanded to include other types of batt and 
blanket insulations.
---------------------------------------------------------------------------

Comments
    Both PIMA (p. 11) and NAIMA (p. 7) supported the Commission's 
proposal to delete ``mineral fiber'' from Sec.  460.12(b)(1) and to 
clarify that the coverage chart disclosure requirement applies to all 
types of batts and blanket insulation.
Discussion
    For the reasons explained in the NPR and because no negative 
comments were received, the Commission has decided to amend Sec.  
460.12(b)(1) to require that all types of batt and blanket insulations 
to be labeled with the same basic R-value and coverage area 
information. This amendment also requires that manufacturers' fact 
sheets for these insulation products include these disclosures.
b. Required Disclosures for Loose-fill Insulations
i. R-value Disclosures
Background
    Section 460.12(b) of the Rule requires that labels on loose-fill 
insulation packages disclose the minimum net weight of the insulation 
in the package and include a coverage chart disclosing minimum 
thickness (after settling), maximum net coverage area, minimum weight 
per square foot, and, for loose-fill cellulose insulation only, number 
of bags per 1,000 square feet for each of several specified total R-
values for installation in open attics. The Rule specifies different 
total R-values for which the disclosures must be made for loose-fill 
cellulose insulations and other types of loose-fill insulations. To 
install an adequate amount of insulation, professional installers must 
calculate the number of square feet to be insulated and install the 
number of bags indicated on the manufacturer's coverage chart that are 
necessary for the desired R-value (commonly referred to as the ``bag 
count''). In the NPR, the Commission proposed to amend Sec. Sec.  
460.12(b)(2) and (3) to require the same coverage charts for all types 
of loose-fill insulation (not just cellulose) at R-values of 11, 13, 
19, 22, 24, 32, and 40.
Comments
    In general, commenters supported the Commission's proposal to 
require the same R-value information on labels and fact sheets for all 
types of loose-fill insulation. ICAA (pp. 9-10) said disclosures based 
on specified R-values would make it easier for contractors and ``do-it-
yourself'' consumers to compare various products and would enhance 
competition in the market. ICAA and R&D (p. 3) believe any costs 
associated with this amendment will be small and will have little or no 
financial impact on manufacturers. ICAA and NAIMA (p. 5) suggested that 
the disclosure requirement for loose-fill insulations include R-values 
of 30, 38, and 49 because these values reflect DOE's most common R-
value insulation recommendations.\48\
---------------------------------------------------------------------------

    \48\ See also R&D (p. 3) (specifying a minimum number of R-
values that must be included in a coverage chart is appropriate, but 
voluntary disclosure of other R-values on the coverage chart should 
be allowed).
---------------------------------------------------------------------------

    Because the proposed values differ from those traditionally used by 
cellulose manufacturers and specified in ASTM C 739 (``Standard 
Specification for Cellulosic Fiber Loose-Fill Thermal Insulation''), 
CIMA (p. 1) said that some cellulose insulation manufacturers would 
have to develop new coverage charts. To minimize the costs associated 
with developing these new charts, CIMA urged the Commission to give 
manufacturers a reasonable amount of time to comply with this change.
Discussion
    After reviewing the comments, the Commission has determined to 
consolidate Sec.  460.12(b)(2) and (3) into Sec.  460.12(b)(2) and to 
require R-value disclosures at 13, 19, 22, 30, 38, and 49. The 
Commission agrees with NAIMA and ICAA's suggestions to include other 
values DOE most commonly recommends for different regions of the 
country.\49\ Some of the proposed values, such as 24, 32, and 40, have 
not been included in the final rule because they do not appear in the 
DOE recommendations. Manufacturers, however, may include voluntarily 
these and other R-values on their labels.
---------------------------------------------------------------------------

    \49\ See ``U.S. Department of Energy Recommended Total R-Values 
for New Construction Houses in Six Insulation Zones,'' http://www.eere.energy.gov/consumerinfo/energy_savers/pdfs/rvalue_map.pdf. See also ``Insulation Fact Sheet,'' DOE/CE-0180, Oct. 2002.
---------------------------------------------------------------------------

    The commenters provided differing opinions about the costs of such 
changes. Although the Commission has altered the final rule to be more 
consistent with commonly used R-values, the Commission recognizes that

[[Page 31271]]

the amendment may require manufacturers to change their labels and 
complete any necessary calculations for these new values. Accordingly, 
the Commission is making the effective date of the amendments announced 
in this document 180 days after publication in the Federal Register.
ii. Initial Installed Thickness
    As discussed in section V.C.2.c. of this document, the Commission 
has amended the Rule to require manufacturers to provide information on 
bag labels and fact sheets related to the ``initial installed 
thickness'' of loose-fill insulation. This requirement necessitates 
changes to Sec.  460.12 (Labels) to require this new information on 
product labels.
c. Disclosures for Urea-Based Foam Insulations
    In the NPR, the Commission proposed to delete the Rule's disclosure 
requirements related to urea-based foam insulations (Sec. Sec.  
460.13(d) and 460.18(e)) (e.g., ``Foam insulation shrinks after it is 
installed. This shrinkage may significantly reduce the R-value you 
get''). Earlier comments recommended that the Commission revise the 
required statement to refer to ``urea-based foam insulation'' because 
the reference to ``foam insulation'' implies that all foam-type 
insulation products (including other types of cellular plastics 
insulations) shrink after installation, resulting in lower R-values 
than claimed. Because there is no indication that urea-based foam 
insulation is being sold, the Commission proposed to eliminate the 
provision completely.
    NAIMA (p. 7) and PIMA (pp. 12-13) supported eliminating the Rule's 
requirements for urea-based foam insulation because the product is no 
longer available. Both, however, recommended that the Commission ensure 
that procedures are in place to reinstate this product category under 
the Rule should the product reappear. Given that commenters identified 
no reasonable expectation that such products will reappear on the 
market, the Commission has decided to amend the Rule as proposed. If 
necessary, ordinary rulemaking procedures can be used to address the 
issue if the product reappears.
2. Disclosures in Advertising and Other Promotional Materials
    In the NPR (68 FR at 41894), the Commission proposed to eliminate 
current disclosure requirements for radio ads in Sec. Sec.  460.18 and 
460.19.\50\ Three comments supported the Commission's proposal and none 
opposed.
---------------------------------------------------------------------------

    \50\ XPSA (p. 4), NAIMA (pp. 7-8), and PIMA (p. 13). PIMA 
suggested that the FTC also consider issuing materials to educate 
consumers about the Rule and the information they need when 
purchasing home insulation. Over the years the Commission has 
developed a variety of consumer education items for insulation and 
other energy-related consumer products. Many of these materials can 
be found at www.ftc.gov/energy. The Commission plans to continue its 
efforts in this area as appropriate.
---------------------------------------------------------------------------

    The Commission has decided to amend the Rule as proposed. There is 
no indication that the absence of requirements for television ads, 
which are exempt from the affirmative disclosure requirements pursuant 
to Sec. Sec.  460.18(f) and 460.19(g), has had an adverse impact on 
consumers over the years. Similarly, the Commission expects that the 
elimination of radio disclosure requirements will have little impact on 
consumers. In addition, the lengthy disclosures required by Sec. Sec.  
460.18 and 460.19 are arguably more burdensome for radio than 
television because the disclosures must necessarily displace 
significant portions of the ad's message or increase the duration of 
the ad and hence the advertiser's cost. Required information on fact 
sheets, labels, and print ads will continue to provide consumers with 
critical performance information when they shop for insulation or use 
installers.
3. Disclosures by Installers or New Home Sellers
    As discussed in detail in section V.C.2.c. above, the Commission is 
amending Sec.  460.17 to require loose-fill installers to provide 
information to customers about initial installed thickness in addition 
to information currently required by the Rule (i.e., coverage area, R-
value, minimum settled thickness, and bag count).\51\ In response to 
comments, the Commission has decided not to include proposed language 
in Sec.  460.17 about blowing machine settings and the specific 
requirement related to initial installed thickness instructions (see 
section V.C.2.c.). Existing rule language should provide sufficient 
direction to installers (Sec.  460.17 already requires installers to 
use manufacturer data to determine the installed insulation R-value). 
In its comments, CIMA (p. 2) urged the Commission to require installers 
to post ``attic cards'' for use by homeowners and building inspectors. 
Attic cards contain information about the installed insulation and are 
usually posted in the attic near the access opening for later reference 
by code inspectors and home owners. In the NPR, the Commission 
addressed this issue and suggested that requirements related to initial 
installed thickness information on the bag label would be a more direct 
approach to addressing the issue. (68 FR at 41895). Because the 
Commission is now requiring disclosures on customer receipts of initial 
installed thickness, the Commission has determined that the additional 
burden imposed by an attic card requirement is not warranted.
---------------------------------------------------------------------------

    \51\ The final rule language clarifies that installers must 
provide information on initial and settled thickness. As the 
Commission stated in the proposed notice, it did not intend to 
eliminate any existing disclosure requirements (which include 
settled thickness information) (see 68 FR at 41893).
---------------------------------------------------------------------------

4. Disclosures by Retailers
Background
    In the years since the Commission promulgated the Rule, the nature 
of retail sales to do-it-yourself consumers has changed. Now insulation 
packages are usually available to consumers before purchase. Section 
460.14 of the Rule requires retailers who sell insulation to do-it-
yourself consumers to make the manufacturers' fact sheets available to 
consumers before purchase in any manner the retailer chooses, as long 
as consumers are likely to notice the fact sheets. The ANPR explained 
that the purpose of this requirement is to ensure that consumers have 
the information about home insulation they need to make cost-based 
purchasing decisions. (64 FR at 48048). When the Commission promulgated 
the Rule, bulky insulation packages were not normally available on the 
retail sales floor, so the consumer would not see the disclosures on 
labels before purchase. Today, retailers often sell home insulation 
directly from warehouse-type sales floors where consumers select the 
packages themselves. The NPR solicited comments on whether to amend the 
Rule to exempt retailers from making separate fact sheets available at 
the point of purchase if all the required fact sheet disclosures are 
made on the insulation package and if the insulation packages are 
available on the sales floor for the consumer to inspect before 
purchase. (68 FR at 41896).
Comments
    NAIMA (p. 7) supported the Commission's proposed amendment to 
exempt retailers from providing fact sheets when the very same 
information may be found on the bag label. It suggested, however, that 
the Rule clearly require manufacturers to supply retailers with the 
relevant fact sheets when labels lack the data required to

[[Page 31272]]

appear on fact sheets. PIMA (p. 12) also supported the proposed change 
as long as the retailer is responsible for determining whether the 
package labels contain the necessary information.
Discussion
    The Commission has determined to amend the Rule as proposed. This 
amendment does not change the manufacturers' responsibility to prepare 
and disseminate fact sheets (see Sec.  460.13). Rather, it simply gives 
individual retailers an option not to make fact sheets available to 
consumers if the retailer determines the package labels contain the 
information that would otherwise be in the fact sheets and the packages 
are displayed in a way that customers can obtain the required 
information prior to purchase. If a retailer does not want to take the 
time to compare the labels with the fact sheets, it can always make the 
fact sheets available to customers as provided by the Rule.

F. Amendments To Update References to ASTM Standards

    In addition to the amendments discussed herein, the Commission 
proposed to amend certain Rule provisions to update referenced ASTM 
Standards that ASTM has reviewed and updated since the Rule was amended 
in 1996. Several commenters expressed support for this proposal (see 
PIMA, p. 10, ASTM, and NAIMA, p. 3 and 5). ASTM provided information on 
the latest version of all the standards mentioned in the Rule. 
Therefore, the Commission is updating the references to all the ASTM 
procedures referenced in the Rule. These procedures include: ASTM C 
177-04, ``Standard Test Method for Steady-State Heat Flux Measurements 
and Thermal Transmission Properties by Means of the Guarded-Hot-Plate 
Apparatus;'' ASTM C 518-04, ``Standard Test Method for Steady-State 
Thermal Transmission Properties by Means of the Heat Flow Meter 
Apparatus;'' ASTM C 578-03, ``Standard Specification for Rigid, 
Cellular Polystyrene Thermal Insulation;'' ASTM C 591-01, ``Standard 
Specification for Unfaced Preformed Rigid Cellular Polyisocyanurate 
Thermal Insulation;'' ASTM C 739-03, ``Standard Specification for 
Cellulosic Fiber Loose-Fill Thermal Insulation;'' ASTM C 1029-02, 
``Standard Specification for Spray-Applied Rigid Cellular Polyurethane 
Thermal Insulation;'' ASTM C 1045-01, ``Standard Practice for 
Calculating Thermal Transmission Properties from Steady-State 
Conditions;'' ASTM C 1114-00, ``Standard Test Method for Steady-State 
Thermal Transmission Properties by Means of the Thin-Heater 
Apparatus;'' ASTM C 1149-02, ``Standard Specification for Self-
Supported Spray Applied Cellulosic Thermal Insulation;'' ASTM C 1224-
03, ``Standard Specification for Reflective Insulation for Building 
Applications;'' ASTM C 1363-97, ``Standard Test Method for the Thermal 
Performance of Building Assemblies by Means of a Hot Box Apparatus'' 
(in place of ASTM C 236-89 and ASTM C 976-90); ASTM C 1371-04a, 
``Standard Test Method for Determination of Emittance of Materials Near 
Room Temperature Using Portable Emissometers;'' ASTM C 1374-03, 
``Standard Test Method for Determination of Installed Thickness of 
Pneumatically Applied Loose-Fill Building Insulation;'' and ASTM E 408-
71 (Reapproved 2002), ``Standard Test Methods for Total Normal 
Emittance of Surfaces Using Inspection-Meter Techniques.''
    The Commission has also added a new paragraph (e) in Sec.  460.5 to 
consolidate information regarding incorporation by reference approvals 
from by the Office of the Federal Register.\52\
---------------------------------------------------------------------------

    \52\ As indicated in the NPR, the Commission is also amending 
Sec.  460.23 to correct a typographical error.
---------------------------------------------------------------------------

G. Comments on New Products

    A few comments raised issues about the Rule's coverage of some new 
products in the market such as a low-density foam for home insulation 
called ``polyicynene'' and a weather resistant cellulose product with 
an aluminum facing called ``Thermo-ply.'' PIMA urged the Commission to 
reference polyicynene and Thermo-ply in the Rule to remove any doubt 
that these products are subject to FTC regulation.
    The Commission is aware that new insulation product types 
frequently appear. The requirements of the R-value Rule apply to any 
material (unless specifically exempted) ``mainly used to slow down heat 
flow.'' (See Sec.  460.2). To the extent that the products identified 
by the commenters meet this definition, manufacturers and other 
industry members selling such products must meet all applicable 
requirements of the Rule.\53\ The fact that the Rule does not 
specifically mention a particular type of insulation does not exempt 
such products from the Rule's coverage. Therefore, no amendments are 
needed to address these new products at this time.
---------------------------------------------------------------------------

    \53\ For instance, for foamed-in-place insulations (such as 
polyicynene), sellers must show the R-value of the product at 3\1/2\ 
inches (see Sec.  460.13(c)(1)).
---------------------------------------------------------------------------

H. Effective Date of Amendments

    As discussed above in section V.E.1.b., some commenters have 
indicated that any compliance costs associated with these amendments 
would be reduced if the Rule provides industry members with sufficient 
time to make necessary changes to their testing, labeling, or other 
practices. The Commission agrees with these commenters and has decided 
to make the effective date of these amendments 180 days after 
publication, rather than the standard 30 days usually provided.

VI. Regulatory Analysis and Regulatory Flexibility Act Requirements

    Under section 22 of the FTC Act, 15 U.S.C. 57b, the Commission must 
issue a regulatory analysis for a proceeding to amend a rule only when 
it (1) estimates that the amendment will have an annual effect on the 
national economy of $100,000,000 or more; (2) estimates that the 
amendment will cause a substantial change in the cost or price of 
certain categories of goods or services; or (3) otherwise determines 
that the amendment will have a significant effect upon covered entities 
or upon consumers.
    Several commenters addressed the economic impact of the proposed 
Rule. In general, the commenters indicated that the amendments would 
have a beneficial effect but did not indicate that the amendments would 
have an annual impact of more than $100,000,000, cause substantial 
change in the cost of goods, or otherwise have a significant effect 
upon covered entities or consumers. ICAA (pp. 24-32), which focused on 
changes to loose-fill labeling requirements, stated that the amendments 
are likely to reduce energy bills for consumers \54\ but not increase 
their costs.\55\
---------------------------------------------------------------------------

    \54\ Using studies and reports about the deficiency of 
insulation amounts installed in the past, ICAA's 1992 and 2002 
analysis estimated that, if the proposed loose-fill labeling 
requirement had been in place beginning in 1992, residential 
consumers would have realized a total economic benefit from energy 
savings between approximately $49 million and $500 million over that 
eleven-year period.
    \55\ ICAA indicated that the amendments for loose-fill 
insulation will allow home owners to verify installations easily by 
providing them with a less expensive method than alternatives such 
as the existing ``cookie-cutter'' test. In its view, this will also 
decrease the costs for builders and installers by making it easier 
for professional loose-fill installers to provide the contracted R-
value.
---------------------------------------------------------------------------

    ICAA (p. 27) acknowledged that there are ``some,'' but only 
nominal, costs associated with performing tests on loose-fill 
insulation products under ASTM C 1374 and maintaining related

[[Page 31273]]

records. It suggested that the initial installed thickness test (ASTM C 
1374) ``is quite simple to apply and does not require complex or 
expensive apparatus.'' Because manufacturers modify product bag labels 
periodically, ICAA believes any costs associated with the amendments 
will be negligible and may well represent no incremental cost over 
current labeling requirements. ICAA also suggested that the initial 
cost of the amendments to manufacturers can be further minimized by 
allowing a phase-in period of up to 90-days for implementation of the 
amended rules.\56\
---------------------------------------------------------------------------

    \56\ CIMA (p. 1) provided similar comments (see section 
V.E.1.b.i. of this document).
---------------------------------------------------------------------------

    Finally, PIMA (pp. 21-22) commented generally that use of home 
insulation delivers a positive impact on the environment because it 
reduces the use of fossil fuels to heat and cool buildings. In its 
view, the R-value Rule provides a means to ensure the proper amount of 
insulation is installed and educates consumers on their insulation 
purchases. NAIMA and ICAA similarly provided general information about 
the benefits that insulation products have for pollution reduction, 
energy savings, and public health. The Commission has analyzed these 
comments and determined that the proposed amendments to the Rule will 
not have significant effects on the national economy, on the cost of 
home insulation products, or on covered parties or consumers.\57\ In 
any event, to the extent, if any, these final rule amendments will have 
such effects, the Commission has previously explained above the need 
for, and the objectives of, the final amendments; the regulatory 
alternatives that the Commission has considered; the projected benefits 
and adverse economic or other effects, if any, of the amendments; the 
reasons that the final amendments will attain their intended objectives 
in a manner consistent with applicable law; the reasons for the 
particular amendments that the agency has adopted; and the significant 
issues raised by public comments, including the Commission's assessment 
of and response to those comments on those issues. See 15 U.S.C. 57b-
3(a)(2).
---------------------------------------------------------------------------

    \57\ As discussed at section V.H. of this document, the 
Commission plans to provide industry members 180 days to comply with 
the Rule?s new requirements.
---------------------------------------------------------------------------

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-12, requires 
that the agency conduct an analysis of the anticipated economic impact 
of the proposed amendments on small businesses. The purpose of a 
regulatory flexibility analysis is to ensure that the agency considers 
impact on small entities and examines regulatory alternatives that 
could achieve the regulatory purpose while minimizing burdens on small 
entities. Section 605 of the RFA, 5 U.S.C. 605, provides that such an 
analysis is not required if the agency head certifies that the 
regulatory action will not have a significant economic impact on a 
substantial number of small entities.
    With respect to the Rule's impact on small businesses, ICAA (p. 32) 
stated that very few loose-fill manufacturers are likely to be ``small 
businesses'' as defined by the U.S. Small Business Administration 
(``SBA'').\58\ Even so, ICAA believes that any possible adverse 
economic effects are likely to be small and did not identify any 
disproportionate impacts from the amendments on large and small 
builders or insulation contractors.\59\
---------------------------------------------------------------------------

    \58\ In general, under the size standards used by the SBA, the 
``small business'' threshold (measured in number of employees or 
average annual receipts) in the manufacturing industry is 500 
employees; wholesale trade, 100 employees; general and heavy 
construction, $28.5 million (avg. annual receipts); and special 
trade contractors, $12 million. See generally 13 CFR part 121; and 
http://www.sba.gov/size/summary-whatis.html (summary of SBA size 
standards).
    \59\ CIMA (p. 2) and R&D (pp. 3-4) commented that the proposed 
amendments related to blowing machine settings may have a 
significant impact on small businesses. The Commission, however, has 
altered the final amendments to address this concern.
---------------------------------------------------------------------------

    Because the R-value Rule covers home insulation manufacturers and 
retailers, professional installers, new home sellers, and testing 
laboratories, the Commission believes that any amendments to the Rule 
may affect a substantial number of small businesses. Nevertheless, the 
proposed amendments would not appear to have a significant economic 
impact upon such entities. Specifically, the Commission is adopting 
only a few limited amendments that are designed to clarify the Rule, 
make disclosure requirements consistent for competing types of loose-
fill insulation products as well as batt and blanket insulation 
products, require the most current procedures for preparing R-value 
test specimens and conducting R-value tests, provide consumers with 
information about the initial installed thickness of loose-fill 
insulation, and provide retailers with an optional method for 
satisfying the Rule's fact sheet disclosure requirement. The Commission 
concluded that the proposed amendments will not have a significant or 
disproportionate impact on the costs of small manufacturers, retailers, 
installers, new home sellers, and testers of home insulation products. 
Based on available information, therefore, the Commission certifies 
that the R-value Rule amendments published in this document will not 
have a significant economic impact on a substantial number of small 
businesses.
    Nonetheless, to ensure that no such impact, if any, has been 
overlooked, the Commission has conducted the following final regulatory 
flexibility analysis, as summarized below.

A. Need for and Objectives of the Rule

    As previously discussed, the Commission is issuing these amendments 
to streamline and increase the Rule's benefits for consumers and 
sellers, minimize its costs, and respond to the development and 
utilization of new technologies to make homes more energy efficient and 
less costly to heat and cool.

B. Significant Issues Raised by Public Comment, Summary of the Agency's 
Assessment of These Issues, and Changes, if any, Made in Response to 
Such Comments

    The Commission has reviewed the comments received and made changes 
to the proposed rule as appropriate. Section V of this notice contains 
a detailed discussion of the comments and the Commission's responses.

C. Description and Estimate of Number of Small Entities Subject of the 
Final Rule or Explanation Why No Estimate Is Available

    In general, under the size standards used by the SBA, the ``small 
business'' threshold (measured in number of employees or average annual 
receipts) in the manufacturing industry is 500 employees; wholesale 
trade, 100 employees; general and heavy construction, $28.5 million 
(avg. annual receipts); and special trade contractors, $12 million. See 
generally 13 CFR part 121. The Commission estimates that there are 
fewer than 170,000 small entities subject to the R-value Rule (see 67 
FR 45734, 45736 (July 10, 2002)). These entities include insulation 
manufacturers and their testing laboratories, insulation installers, 
new home builders/sellers of site-built homes, manufactured housing 
dealers, and retail sellers.

D. Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Rule, Including an Estimate of the 
Classes of Small Entities That Will Be Subject to the Rule and the Type 
of Professional Skills That Will Be Necessary To Comply

    As discussed in the Paperwork Reduction Act analysis of this notice 
(section VII.), the amendments will make minor changes to the 
reporting,

[[Page 31274]]

recordkeeping, and other compliance requirements of the Rule. This may 
affect some small entities such as certain manufacturers and 
installers. In addition, some of the new testing requirements for 
manufacturers may require engineering skills (although it is likely 
that affected entities have access to such skills in their current 
operations). The incremental cost of the amendments is difficult to 
estimate. As suggested by the comments, however, the Commission expects 
that the added costs of the amendments will be very small.

E. Steps the Agency Has Taken To Minimize Any Significant Economic 
Impact on Small Entities, Consistent With the Stated Objectives of the 
Applicable Statutes, Including the Factual, Policy and Legal Reasons 
for Selecting the Alternative(s) Finally Adopted, and Why Each of the 
Significant Alternatives, if Any, Was Rejected

    In response to comments, the Commission has extended the effective 
date of these amendments to 180 days after publication to minimize the 
Rule's impact on small entities. This extended date will provide 
manufacturers with more time to complete the new test required by the 
amendments. This should reduce the burden by allowing businesses to 
determine the best and most cost-effective means to comply. In 
developing these final amendments, the Commission has sought to 
minimize the burden on small businesses while achieving the intended 
objectives of the Rule. For example, the Commission has amended Sec.  
460.14 to exempt retailers from making separate fact sheets available 
at the point of purchase if all the required fact sheet disclosures are 
made on the insulation package and if the insulation packages are 
available on the sales floor for the consumer to inspect before 
purchase. In addition, the Commission has decided not to amend the 
tolerance provision (Sec.  460.8) as proposed to avoid confusion and 
unnecessary costs the changes could have imposed on companies subject 
to the Rule.

VII. Paperwork Reduction Act

    The R-value Rule contains various information collection 
requirements for which the Commission has obtained clearance under the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq., Office of Management 
and Budget (``OMB'') Control Number 3084-0109. The Commission believed 
that the proposed rule amendments would not substantially or materially 
modify the collection of information and related burden estimates but 
sought comments on any paperwork burden related to the proposed changes 
to ensure that no significant paperwork burden was being overlooked. 
(68 FR at 41897). In response, PIMA (pp. 21-22) indicated that there 
would be no additional paperwork burdens associated with the proposed 
changes. Similarly, ICAA (p. 26) did not identify any paperwork burden 
requirements beyond those already identified by the Commission in the 
proposed rule. ICAA (p. 27) also acknowledged that there may be ``some 
costs'' associated with the new loose-fill requirements but such costs 
would be nominal.
    The Commission is adopting a limited number of final rule 
amendments that are designed to clarify the Rule, make disclosure 
requirements consistent for competing types of loose-fill insulation 
products and batt and blanket insulation products, require the most 
current procedures for preparing R-value test specimens and conducting 
R-value tests, require initial installed thickness information for 
loose-fill insulations, eliminate disclosure requirements for radio 
ads, provide retailers with a method that decreases their compliance 
burden, and additional minor clarifications and changes.
    The Commission believes that any additional burden resulting from 
certain amendments will be offset (or possibly exceeded) by other 
amendments that eliminate disclosure requirements for radio ads and 
relieve retailers from providing fact sheets for customers under 
certain circumstances. The new labeling, testing, and recordkeeping 
requirements for loose-fill manufacturers affect a subset of the 
manufacturers in the industry, and according to most comments, would 
not impose a significant burden. Although those few manufacturers 
producing batts or blankets from materials other than mineral fiber may 
have to add information to their coverage charts, the Commission 
believes, based on staff's knowledge of the industry that at least some 
of these entities voluntarily are providing this information already. 
In addition, ICAA, an installer association, did not identify an 
increase in paperwork burden for installers.
    The rule amendments eliminating disclosure requirements for radio 
ads and relieving retailers from providing fact sheets in certain 
circumstances will decrease burden and will affect many more industry 
members than the small subset of loose-fill manufacturers who may have 
an increased burden. In sum, the net effect of the rule amendments will 
not increase burden under the Paperwork Reduction Act.

List of Subjects in 16 CFR Part 460

    Advertising, Incorporation by reference, Insulation, Labeling, 
Reporting and recordkeeping requirements, Trade practices.

VIII. Final Rule Language

0
For the reasons set out in this document, the Commission is adopting 
the following amendments to 16 CFR part 460.

PART 460--LABELING AND ADVERTISING OF HOME INSULATION

0
1. The authority citation for part 460 continues to read as follows:

    Authority: 38 Stat. 717, as amended (15 U.S.C. 41 et seq.).


0
2. Revise Sec.  460.1 to read as follows:


Sec.  460.1  What this regulation does.

    This regulation deals with home insulation labels, fact sheets, 
ads, and other promotional materials in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act. If you are 
covered by this regulation, breaking any of its rules is an unfair and 
deceptive act or practice or an unfair method of competition under 
section 5 of that Act. You can be fined heavily (up to $11,000 plus an 
adjustment for inflation, under Sec.  1.98 of this chapter) each time 
you break a rule.

0
3. Revise Sec.  460.5 to read as follows:


460.5  R-value tests.

    R-value measures resistance to heat flow. R-values given in labels, 
fact sheets, ads, or other promotional materials must be based on tests 
done under the methods listed below. They were designed by the American 
Society of Testing and Materials (ASTM). The test methods are:
    (a) All types of insulation except aluminum foil must be tested 
with ASTM C 177-04, ``Standard Test Method for Steady-State Heat Flux 
Measurements and Thermal Transmission Properties by Means of the 
Guarded-Hot-Plate Apparatus;'' ASTM C 518-04, ``Standard Test Method 
for Steady-State Thermal Transmission Properties by Means of the Heat 
Flow Meter Apparatus;'' ASTM C 1363-97, ``Standard Test Method for the 
Thermal Performance of Building Assemblies by Means of a Hot Box 
Apparatus'' or ASTM C 1114-00, ``Standard Test Method for Steady-State 
Thermal Transmission Properties by Means of the Thin-Heater 
Apparatus.'' The tests must be done at a mean temperature of 75 
[degrees] Fahrenheit and with a temperature differential of 50

[[Page 31275]]

[degrees] Fahrenheit plus or minus 10 degrees Fahrenheit. The tests 
must be done on the insulation material alone (excluding any airspace). 
R-values (``thermal resistance'') based upon heat flux measurements 
according to ASTM C 177-04 or ASTM C 518-04 must be reported only in 
accordance with the requirements and restrictions of ASTM C 1045-01, 
``Standard Practice for Calculating Thermal Transmission Properties 
from Steady-State Conditions.''
    (1) For polyurethane, polyisocyanurate, and extruded polystyrene, 
the tests must be done on samples that fully reflect the effect of 
aging on the product's R-value. To age the sample, follow the procedure 
in paragraph 4.6.4 of GSA Specification HH-I-530A, or another reliable 
procedure.
    (2) For loose-fill cellulose, the tests must be done at the settled 
density determined under paragraph 8 of ASTM C 739-03, ``Standard 
Specification for Cellulosic Fiber Loose-Fill Thermal Insulation.''
    (3) For loose-fill mineral wool, self-supported, spray-applied 
cellulose, and stabilized cellulose, the tests must be done on samples 
that fully reflect the effect of settling on the product's R-value.
    (4) For self-supported spray-applied cellulose, the tests must be 
done at the density determined pursuant to ASTM C 1149-02, ``Standard 
Specification for Self-Supported Spray Applied Cellulosic Thermal 
Insulation.''
    (5) For loose-fill insulations, the initial installed thickness for 
the product must be determined pursuant to ASTM C 1374-03, ``Standard 
Test Method for Determination of Installed Thickness of Pneumatically 
Applied Loose-Fill Building Insulation,'' for R-values of 13, 19, 22, 
30, 38, 49 and any other R-values provided on the product's label 
pursuant to Sec.  460.12.
    (b) Single sheet systems of aluminum foil must be tested with ASTM 
E 408-71 (Reapproved 2002), ``Standard Test Methods for Total Normal 
Emittance of Surfaces Using Inspection-Meter Techniques,'' or ASTM C 
1371-04a, ``Standard Test Method for Determination of Emittance of 
Materials Near Room Temperature Using Portable Emissometers.'' This 
tests the emissivity of the foil--its power to radiate heat. To get the 
R-value for a specific emissivity level, air space, and direction of 
heat flow, use the tables in the most recent edition of the American 
Society of Heating, Refrigerating, and Air-Conditioning Engineers' 
(ASHRAE) Fundamentals Handbook, if the product is intended for 
applications that meet the conditions specified in the tables. You must 
use the R-value shown for 50[degrees] Fahrenheit, with a temperature 
differential of 30[degrees] Fahrenheit.
    (c) Aluminum foil systems with more than one sheet, and single 
sheet systems of aluminum foil that are intended for applications that 
do not meet the conditions specified in the tables in the most recent 
edition of the ASHRAE Fundamentals Handbook, must be tested with ASTM C 
1363-97, ``Standard Test Method for the Thermal Performance of Building 
Assemblies by Means of a Hot Box Apparatus,'' in a test panel 
constructed according to ASTM C 1224-03, ``Standard Specification for 
Reflective Insulation for Building Applications,'' and under the test 
conditions specified in ASTM C 1224-03. To get the R-value from the 
results of those tests, use the formula specified in ASTM C 1224-03.
    (d) For insulation materials with foil facings, you must test the 
R-value of the material alone (excluding any air spaces) under the 
methods listed in paragraph (a) of this section. You can also determine 
the R-value of the material in conjunction with an air space. You can 
use one of two methods to do this:
    (1) You can test the system, with its air space, under ASTM C 1363-
97, ``Standard Test Method for the Thermal Performance of Building 
Assemblies by Means of a Hot Box Apparatus,'' which is incorporated by 
reference in paragraph (a) of this section. If you do this, you must 
follow the rules in paragraph (a) of this section on temperature, aging 
and settled density.
    (2) You can add up the tested R-value of the material and the R-
value of the air space. To get the R-value for the air space, you must 
follow the rules in paragraph (b) of this section.
    (e) The standards listed above are incorporated by reference into 
this section. These incorporations by reference were approved by the 
Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 
1 CFR part 51. Copies may be inspected at the Federal Trade Commission, 
Consumer Response Center, Room 130, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, or at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call (202) 741-6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. Copies of materials and standards incorporated by 
reference may be obtained from the issuing organizations listed in this 
section.
    (1) The American Society of Testing and Materials, 100 Barr Harbor 
Drive, P.O. Box C700, West Conshocken, PA 19428-2959.
    (i) ASTM C 177-04, ``Standard Test Method for Steady-State Heat 
Flux Measurements and Thermal Transmission Properties by Means of the 
Guarded-Hot-Plate Apparatus.''
    (ii) ASTM C 518-04, ``Standard Test Method for Steady-State Thermal 
Transmission Properties by Means of the Heat Flow Meter Apparatus.''
    (iii) ASTM C 739-03, ``Standard Specification for Cellulosic Fiber 
Loose-Fill Thermal Insulation.''
    (iv) ASTM C 1045-01, ``Standard Practice for Calculating Thermal 
Transmission Properties from Steady-State Conditions.''
    (v) ASTM C 1114-00, ``Standard Test Method for Steady-State Thermal 
Transmission Properties by Means of the Thin-Heater Apparatus.''
    (vi) ASTM C 1149-02, ``Standard Specification for Self-Supported 
Spray Applied Cellulosic Thermal Insulation.''
    (vii) ASTM C 1224-03, ``Standard Specification for Reflective 
Insulation for Building Applications.''
    (viii) ASTM C 1363-97, ``Standard Test Method for the Thermal 
Performance of Building Assemblies by Means of a Hot Box Apparatus.''
    (ix) ASTM C 1371-04a, ``Standard Test Method for Determination of 
Emittance of Materials Near Room Temperature Using Portable 
Emissometers.''
    (x) ASTM C 1374-03, ``Standard Test Method for Determination of 
Installed Thickness of Pneumatically Applied Loose-Fill Building 
Insulation.''
    (xi) ASTM E 408-71 (Reapproved 2002), ``Standard Test Methods for 
Total Normal Emittance of Surfaces Using Inspection-Meter Techniques.''
    (2) U.S. General Services Administration (GSA), 1800 F Street, NW., 
Washington, DC 20405.
    (i) GSA Specification HH-I-530A, Federal Specification, Insulation 
Board, Thermal (Urethane), November 22, 1971.
    (ii) [Reserved]

0
4. Revise Sec.  460.8 to read as follows:


Sec.  460.8  R-value tolerances.

    If you are a manufacturer of home insulation, no individual 
specimen of the insulation you sell can have an R-value more than 10% 
below the R-value shown in a label, fact sheet, ad, or other 
promotional material for that insulation. If you are not a 
manufacturer, you can rely on the R-value data given to you by the 
manufacturer, unless you know or should know that the data is false or 
not based on the proper tests.

[[Page 31276]]


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5. Revise Sec.  460.12 to read as follows:


Sec.  460.12  Labels.

    If you are a manufacturer, you must label all packages of your 
insulation. The labels must contain:
    (a) The type of insulation.
    (b) A chart showing these items:
    (1) For batts and blankets of any type: the R-value, length, width, 
thickness, and square feet of insulation in the package.
    (2) For all loose-fill insulation: the minimum settled thickness, 
initial installed thickness, maximum net coverage area, number of bags 
per 1,000 square feet, and minimum weight per square foot at R-values 
of 13, 19, 22, 30, 38, and 49. You must also give this information for 
any additional R-values you list on the chart. Labels for these 
products must state the minimum net weight of the insulation in the 
package. You must also provide information about the blowing machine 
and machine settings used to derive the initial installed thickness 
information.
    (3) For boardstock: the R-value, length, width, and thickness of 
the boards in the package, and the square feet of insulation in the 
package.
    (4) For aluminum foil: the number of foil sheets; the number and 
thickness of the air spaces; and the R-value provided by that system 
when the direction of heat flow is up, down, and horizontal. You can 
show the R-value for only one direction of heat flow if you clearly and 
conspicuously state that the foil can only be used in that application.
    (5) For insulation materials with foil facings, you must follow the 
rule that applies to the material itself. For example, if you 
manufacture boardstock with a foil facing, follow paragraph (b)(3) of 
this section. You can also show the R-value of the insulation when it 
is installed in conjunction with an air space. This is its ``system R-
value.'' If you do this, you must clearly and conspicuously state the 
conditions under which the system R-value can be attained.
    (6) For air duct insulation: the R-value, length, width, thickness, 
and square feet of insulation in the package.
    (c) The following statement: ``R means resistance to heat flow. The 
higher the R-value, the greater the insulating power.''
    (d) If installation instructions are included on the label or with 
the package, add this statement: ``To get the marked R-value, it is 
essential that this insulation be installed properly. If you do it 
yourself, follow the instructions carefully.''
    (e) If no instructions are included, add this statement: ``To get 
the marked R-value, it is essential that this insulation be installed 
properly. If you do it yourself, get instructions and follow them 
carefully. Instructions do not come with this package.''


Sec.  460.13  [Amended]

0
6. In Sec.  460.13, remove paragraph (d) and redesignate paragraphs (e) 
and (f) as paragraphs (d) and (e) respectively.

0
7. Revise Sec.  460.14 to read as follows:


Sec.  460.14  How retailers must handle fact sheets.

    If you sell insulation to do-it-yourself customers, you must have 
fact sheets for the insulation products you sell. You must make the 
fact sheets available to your customers. You can decide how to do this, 
as long as your insulation customers are likely to notice them. For 
example, you can put them in a display, and let customers take copies 
of them. You can keep them in a binder at a counter or service desk, 
and have a sign telling customers where the fact sheets are. You need 
not make the fact sheets available to customers if you display 
insulation packages on the sales floor where your insulation customers 
are likely to notice them and each individual insulation package 
offered for sale contains all package label and fact sheet disclosures 
required by Sec. Sec.  460.12 and 460.13.

0
8. Revise Sec.  460.17 to read as follows:


Sec.  460.17  What installers must tell their customers.

    If you are an installer, you must give your customers a contract or 
receipt for the insulation you install. For all insulation except 
loose-fill and aluminum foil, the receipt must show the coverage area, 
thickness, and R-value of the insulation you installed. The receipt 
must be dated and signed by the installer. To figure out the R-value of 
the insulation, use the data that the manufacturer gives you. If you 
put insulation in more than one part of the house, put the data for 
each part on the receipt. You can do this on one receipt, as long as 
you do not add up the coverage areas or R-values for different parts of 
the house. Do not multiply the R-value for one inch by the number of 
inches you installed. For loose-fill, the receipt must show the 
coverage area, initial installed thickness, minimum settled thickness, 
R-value, and the number of bags used. For aluminum foil, the receipt 
must show the number and thickness of the air spaces, the direction of 
heat flow, and the R-value.

0
9. In Sec.  460.18, paragraph (e) is removed, and paragraph (f) is 
redesignated as paragraph (e) and revised to read as follows:


Sec.  460.18  Insulation ads.

* * * * *
    (e) The affirmative disclosure requirements in Sec.  460.18 do not 
apply to ads on television or radio.

0
10. In Sec.  460.19, paragraph (g) is revised to read as follows:


Sec.  460.19  Savings claims.

* * * * *
    (g) The affirmative disclosure requirements in Sec.  460.19 do not 
apply to ads on television or radio.

0
11. In Sec.  460.23, paragraph (a) is revised to read as follows:


Sec.  460.23  Other laws, rules, and orders.

    (a) If an outstanding FTC Cease and Desist Order applies to you but 
differs from the rules given here, you can petition to amend the order.
* * * * *

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 05-10683 Filed 5-27-05; 8:45 am]
BILLING CODE 6750-01-P