[Federal Register Volume 80, Number 221 (Tuesday, November 17, 2015)]
[Rules and Regulations]
[Pages 71686-71689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28918]


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FEDERAL TRADE COMMISSION

16 CFR Parts 500 and 502

RIN 3084-AB33


Rules, Regulations, Statements of General Policy or 
Interpretation and Exemptions Under the Fair Packaging and Labeling Act

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

ACTION: Final rule.

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SUMMARY: The Commission amends the rules and regulations promulgated 
under the Fair Packaging and Labeling Act (``Rules'') to: Modernize the 
place-of-business listing requirement; incorporate a more comprehensive 
metric chart; address the use of exponents with customary inch/pound 
measurements; delete outdated prohibitions on retail price sales 
representations; and acknowledge the role of the weights-and-measures 
laws of individual states.

DATES: This rule is effective on December 17, 2015. The incorporation 
by reference of certain publications listed in the regulations is 
approved by the Director of the Federal Register as of December 17, 
2015.

ADDRESSES: Relevant portions of the proceeding, including this 
document, are available at the Commission's Web site, www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Megan E. Gray, Attorney, (202) 326-
3408, Division of Enforcement, Bureau of Consumer Protection, Federal 
Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Introduction

    Congress enacted the Fair Packaging and Labeling Act, 15 U.S.C. 
1451 et seq., (``FPLA'' or ``Act'') in 1966 to enable consumers to 
obtain accurate package quantity information to facilitate value 
comparisons and prevent unfair or deceptive packaging and labeling of 
``consumer commodities.'' \1\ Pursuant to the FPLA, the Commission 
promulgated the Rules, which generally concern products consumed during 
household use. However, several categories of these products are exempt 
from FTC regulations under the FPLA.\2\ Moreover, the FTC has excluded 
certain others from the Rules.\3\
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    \1\ Consumer commodities are any food, device, or cosmetic, and 
any other article, product, or commodity that is customarily 
produced or distributed for sale through retail sales agencies or 
instrumentalities for consumption or use by individuals for purposes 
of personal care or in the performance of services ordinarily 
rendered within the household, and which usually is consumed or 
expended in the course of such consumption or use. 15 U.S.C. 
1459(a). The Food and Drug Administration (``FDA'') administers the 
FPLA with respect to food, drugs, cosmetics, and medical devices. 15 
U.S.C. 1454(a); 15 U.S.C. 1456(a).
    \2\ 15 U.S.C. 1459(a)(1-5) (excluding, among other products, 
specified categories of meat, poultry, tobacco, insecticide, 
fungicide, drug, alcohol, and seed products).
    \3\ 16 CFR 503.2, 503.5. Many products outside the scope of the 
FPLA and the Rules nevertheless fall within the purview of 
individual state laws. 15 U.S.C. 1461. See also National Institute 
of Standards and Technology Handbook 130, Uniform Laws and 
Regulations in the areas of legal metrology and engine fuel quality 
(2015 ed.) (compilation of state and federal laws and regulations 
pertaining to product labeling and packaging).
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    Section 1453 of the Act directs the Commission to issue regulations 
requiring that all ``consumer commodities'' be labeled to disclose: (a) 
The identity of the commodity (e.g., detergent, sponges), which must 
appear on the principal display panel of the commodity in conspicuous 
type and position so that identity is easy to read and understand; \4\ 
(b) the name and place of business of the product's manufacturer, 
packer, or distributor; \5\ and (c) the net quantity of contents in 
terms of weight, measure, or numerical count, with such disclosure's 
placement and content in accordance with the Rules.\6\ The Rules detail 
how units of weight or mass and measure must be stated, and require use 
of both U.S. (e.g., pounds, feet, and gallons) and metric measures.\7\ 
The Rules also require net quantity disclosures for packages containing 
more than one product or unit, including: (a) ``multi-unit packages''; 
\8\ (b) ``variety packages''; \9\ and (c) ``combination packages.'' 
\10\
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    \4\ 16 CFR 500.4.
    \5\ 16 CFR 500.5.
    \6\ 16 CFR 500.6(b). The Office of Weights and Measures of the 
National Institute of Standards and Technology, U.S. Department of 
Commerce, is authorized to promote, to the greatest practical 
extent, uniformity in state and federal regulation of the labeling 
of consumer commodities. 15 U.S.C. 1458(a)(2).
    \7\ Congress amended the FPLA in 1992 to require use of metric 
measurements, in addition to customary inch/pound measures. Pub. L. 
102-245 (February 14, 1992); Pub. L. 102-329 (August 3, 1992). In 
1994, the FTC modified its regulations accordingly. 59 FR 1872 (Jan. 
12, 1994).
    \8\ 16 CFR 500.27.
    \9\ 16 CFR 500.28.
    \10\ 16 CFR 500.29.
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    In addition, the Act grants the FTC authority to issue rules to 
prevent consumer deception and facilitate value comparisons.\11\ The 
FTC has used this authority to address three types of representations: 
``cents-off,'' \12\ ``introductory offer,'' \13\ and ``economy size.'' 
\14\
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    \11\ 15 U.S.C. 1454(c). This discretionary authority enables the 
FTC to address four situations: (1) Setting standards for 
characterizing package sizes to supplement the net quantity 
statement (e.g., establishing a uniform size for a single sheet of 
toilet paper); (2) regulating packaging that claims a product price 
is lower than its customary retail price; (3) requiring labels to 
use common names or listing ingredients in order of decreasing 
prominence; and (4) preventing nonfunctional slack-fill. 15 U.S.C. 
1454(c).
    \12\ A cents-off representation is one in which ``cents-off'' or 
a similar term is used to indicate that the consumer commodity is 
being offered for sale at a price lower than the ordinary and 
customary retail price. 16 CFR 502.100.
    \13\ An introductory offer is one in which ``introductory 
offer'' or a similar phrase is used to indicate that the consumer 
commodity is being offered for sale at a price lower than the 
ordinary and customary retail price. 16 CFR 502.101. The Rules 
prohibit introductory offers in a trade area for a duration in 
excess of six months. 16 CFR 502.101(b)(3).
    \14\ An economy size representation is one in which ``economy 
size'' or similar phrase is used to indicate that the consumer 
commodity has a retail sale price advantage due to the size of that 
package or the quantity of its contents. 16 CFR 502.102.
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    As part of its ongoing regulatory review program, the Commission 
published an Advance Notice of Proposed Rulemaking (``ANPR'') in March 
2014 seeking comment on the economic impact of, and the continuing need 
for, the Rules; the benefits of the

[[Page 71687]]

Rules to consumers; and any burdens the Rules place on businesses.\15\
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    \15\ 79 FR 15272 (March 19, 2014).
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    In response, the Commission received fifteen comments. Based on 
these comments, the Commission issued a Notice of Proposed Rulemaking 
(``NPRM'') on February 2, 2015, proposing several amendments to 
modernize the place-of-business listing requirement, incorporate a more 
comprehensive metric chart, address the use of exponents with customary 
inch/pound measurements, delete prohibitions on certain retail price 
sale representations, and acknowledge the role of weights-and-measures 
laws of individual states.\16\
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    \16\ 80 FR 5491 (February 2, 2015).
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    The Commission received nine comments in response to the NPRM, one 
from a nonprofit association representing officials and consumers 
affected by the Rules and eight from individuals.\17\ The nonprofit 
association approved of the Commission's proposals.\18\ One individual 
approved of the Commission's proposal to modernize the place-of-
business listing requirement and acknowledge the role of weights-and 
measures of individual states; he also suggested the Commission amend 
Section 500.5(b) to delete the Rules' ``actual corporate name'' 
requirement, as well as amend the Rules to acknowledge that FDA 
labeling rules could be relevant to an entity's FPLA compliance and 
that the FDA has not finalized its proposal to permit metric 
measurements.\19\ One individual approved of the Commission's proposal 
to modernize the place-of-business listing requirement; she did not 
address the Commission's other proposals.\20\ Six individuals discussed 
extraneous topics not material to this rulemaking.\21\
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    \17\ The Commission posted the comments at https://www.ftc.gov/policy/public-comments/initiative-599. Each comment has a number 
correlating to the date of submission. This notice cites comments 
using the last name of the individual submitter or the name of the 
organization, followed by that number.
    \18\ Packaging and Labeling Subcommittee of the National 
Conference on Weights and Measures (``NCWM'') (1).
    \19\ Schindler (3).
    \20\ Lynn (5).
    \21\ Willey (2), Signer (4), Nagpal (6), Gordon (7), Vita (8), 
Anonymous (9). For example, Gordon (7) commented on labels for 
genetically modified foods.
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II. Procedures for Promulgating Regulations Under FPLA

    Commission Rule 1.26 sets forth the procedures for promulgation of 
rules under authority other than section 18(a)(1)(B) of the FTC Act; it 
governs these FPLA amendments.\22\ The effective date of any 
regulations issued under the FPLA will not be prior to 30 days after 
publication in the Federal Register.\23\
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    \22\ 16 CFR 1.26(f).
    \23\ 16 CFR 1.26(f).
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III. Amendments

    Based on its consideration of the record, the Commission amends the 
Rules as explained below.

A. Modernize the Place-of-Business Listing Requirement

    Currently, the Rules require a label to conspicuously state the 
name and place of business of the manufacturer, packer, or distributor 
and further specify that the place of business statement contain the 
street address, city, state, and ZIP code. The street address, however, 
may be omitted if it is listed in a current city or telephone 
directory.\24\ The Commission proposed revising this exception to 
permit a business to omit the street address if it is listed in any 
readily accessible, well-known, widely published, and publicly 
available resource, including but not limited to a printed directory, 
electronic database, or Web site. The inclusion of ``any readily 
accessible, widely published, and publicly available resource'' in the 
exception provides flexibility and is intended to encompass new 
technologies that meet these requirements.
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    \24\ 16 CFR 500.5(a)-(e). The Act itself requires the label to 
include the place of business, but does not specify to what level of 
detail. 15 U.S.C. 1453(a)(1).
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    All the comments addressing this proposal supported it.\25\ One 
individual suggested that the Commission delete the requirement that 
certain business entities use their ``actual corporate name'' (as 
opposed to their fictitious or doing-business-as name). However, he 
acknowledged that the requirement did not burden business and he did 
not demonstrate any benefit associated with his suggested 
amendment.\26\ Accordingly, the Commission adopts its proposed 
amendment without change.
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    \25\ NCWM (1), Schindler (3), Lynn (5).
    \26\ Schindler (3).
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B. Incorporate a More Comprehensive Metric Chart

    Section 500.19(a) currently contains an incomplete metric 
conversion chart that fails to list possible, albeit uncommon, 
conversion factors that a packager might use, such as weight expressed 
in grain, or length expressed in rods. The Commission proposed to 
correct this omission by deleting the current chart and incorporating 
by reference the complete metric conversion chart published in National 
Institute of Standards and Technology (NIST) Handbook 133, Checking the 
Net Contents of Packaged Goods (2015 ed., Exhibit E, pgs. 135-157).\27\ 
Members of the public can access the Handbook online at NIST's Web 
site, www.NIST.gov.
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    \27\ The NPRM proposed to incorporate a metric conversion chart 
from NIST Handbook 130, but the Final Rule incorporates the metric 
conversion chart from NIST Handbook 133. NIST Handbook 133's metric 
conversion chart is consistent with the table provided in NIST 
Handbook 130, but provides a more comprehensive listing of metric 
conversion factors. This revision does not change the obligations of 
entities subject to the Rules. Therefore, pursuant to the 
Administrative Procedure Act, the Commission finds ``good cause'' 
for foregoing additional public comment because this change is 
merely ministerial and further public comment is ``unnecessary.'' 5 
U.S.C. 553(b)(3)(B).
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    The only comment addressing this proposal approved its 
adoption.\28\ Accordingly, the Commission adopts this proposed 
amendment without change for the reasons explained in the NPRM.
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    \28\ NCWM (1).
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C. Address the Use of Exponents With Customary Inch/Pound Measurements

    In the current rule (Section 500.22), exponents are not listed for 
customary inch/pound measurements, but are included in the metric 
examples listed in Section 500.23(b) (e.g., cubic centimeter--cm\3\). 
Because exponents are not listed in the customary inch/pound 
measurements, affected businesses might think they are not permitted, 
although they are common in the marketplace and historically sanctioned 
by the Office of Weights and Measures of the National Institute of 
Standards and Technology, U.S. Department of Commerce, which is 
authorized to promote uniformity in labeling regulations.\29\ 
Therefore, the Commission proposed to clarify the Rules to expressly 
permit exponents with customary inch/pound measurements (e.g., cubic 
inches--in\3\).
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    \29\ NCWM (1).
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    The only comment addressing this proposal approved its 
adoption.\30\ Accordingly, the Commission adopts this proposed 
amendment without change.
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    \30\ NCWM (1).
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D. Delete Prohibitions on Certain Retail Price Sales Representations

    The Commission proposed to eliminate sections addressing when and 
how a packager or labeler represents a commodity to be ``cents off,'' 
an ``introductory offer,'' or ``economy size.'' \31\ The Commission 
originally

[[Page 71688]]

promulgated these provisions to curtail certain price representations 
that were commonly used in a deceptive manner during the 1960s and 
1970s. However, these representations are now rarely seen in the modern 
marketplace. Indeed, they have been absent for some time.\32\ Should 
they re-appear, the Commission has other tools at its disposal to 
ensure they are not used deceptively.
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    \31\ 15 U.S.C. 1454(c)(2).
    \32\ In 1997, the U.S. Food and Drug Administration revoked 
similar regulations for ``cents off'' and economy size 
representations, on the grounds that such representations were no 
longer used in the marketplace. 62 FR 39439 (1997).
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    The only comment addressing this proposal approved its 
adoption.\33\ Accordingly, the Commission adopts this proposed 
amendment without change.
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    \33\ NCWM (1).
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E. Acknowledge the Role of Weights-and-Measures Laws of Individual 
States

    Many products outside the Commission's FPLA purview fall within the 
purview of weights-and-measures laws of individual states; amending the 
Rules to acknowledge the state role would aid compliance efforts by 
alerting businesses that state laws may apply. Therefore, the 
Commission proposed to amend the Rules to state ``[m]any products 
exempted through proceedings under section 5(b) of the Act and section 
500.3(e) of this chapter or excluded under part 503 of this chapter 
nonetheless fall within the purview of the weights-and-measures laws of 
individual states.''
    The two comments addressing this proposal approved its 
adoption.\34\ One, however, favored further clarification to indicate 
that FDA also has a role in FPLA regulation, but did not provide any 
indication that entities were unfamiliar with this fact. Accordingly, 
the Commission adopts this proposed amendment without change.
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    \34\ NCWM (1), Schindler (3).
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IV. Paperwork Reduction Act

    The Rules contain various existing information collection 
requirements for which the Commission has obtained OMB clearance under 
the Paperwork Reduction Act (``PRA'').\35\ Because the amendments do 
not trigger additional recordkeeping, disclosure, or reporting 
requirements, there is no incremental burden under the PRA. See 44 
U.S.C. 3501-3521. None of the comments disputed the PRA analysis in the 
NPRM.
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    \35\ 44 U.S.C. 3501 et seq. On April 6, 2015, OMB granted 
clearance through April 30, 2018, for these requirements and the 
associated PRA burden estimates. The OMB control number is 3084-
0110.
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V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') \36\ requires the 
Commission to conduct an initial and final analysis of the anticipated 
economic impact of the amendments on small entities.\37\ The purpose of 
a regulatory flexibility analysis is to ensure the agency considers the 
impacts on small entities and examines regulatory alternatives that 
could achieve the regulatory purpose while minimizing burdens on small 
entities. Section 605 of the RFA \38\ 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.
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    \36\ 5 U.S.C. 601-612.
    \37\ The Commission previously conducted an RFA analysis of the 
Rules. 59 FR 1862 (Jan. 12, 1994).
    \38\ 5 U.S.C. 605.
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    The Commission believes the amendments will not have a significant 
economic impact on small entities, although they may affect a 
substantial number of small businesses. The amendments expand labeling 
options to accommodate the rise of online media, remove unnecessary 
price statement prohibitions, or are technical in nature.
    In the Commission's view, the amendments will not have a 
significant or disproportionate impact on the costs small entities 
incur in manufacturing, distributing, or selling consumer commodities. 
Indeed, the Rule revisions provide increased flexibility for companies 
complying with the Rules. Therefore, the Commission certifies that 
amending the Rules will not have a significant economic impact on a 
substantial number of small businesses.
    Although the Commission certifies under the RFA that the amendments 
will not have a significant impact on a substantial number of small 
entities, the Commission nonetheless has determined it is appropriate 
to publish a final regulatory flexibility analysis to ensure the impact 
of the amendments on small entities is fully addressed. Therefore, the 
Commission prepared the following analysis:

A. Need for and Objective of the Amendments

    The objective of the amendments is to clarify and update the Rules 
in accordance with marketplace practices. The Act authorizes the 
Commission to implement its requirements through the issuance of rules. 
The amendments clarify and update the Rules, and provide covered 
entities with additional labeling options without imposing significant 
new burdens or additional costs.

B. Significant Issues Raised in Public Comments

    In the NPRM's initial regulatory flexibility analysis, the 
Commission concluded that the proposed amendments would not have a 
significant or disproportionate economic impact (including compliance 
costs) on small entities that produce consumer commodities other than 
those commodities falling within the authority of other agencies or 
otherwise outside the Act's or Rules' scope. None of the comments 
disputed the initial regulatory flexibility analysis. The Commission 
did not receive any comments from the Small Business Administration.

C. Small Entities to Which the Amendments Will Apply

    The amendments cover every company in the economy that produces 
consumer commodities other than those commodities falling within the 
authority of other agencies or otherwise outside the Act's or Rules' 
scope. Based on available information, it is not feasible for the 
Commission to estimate the number of entities within this class of 
industry that are also small companies within the meaning of the 
Regulatory Flexibility Act.\39\ A substantial number of these entities 
likely qualify as small businesses. Nevertheless, the Commission 
estimates that the amendments will not have a significant impact on 
small businesses because the amendments do not impose any significant 
new obligations. The Commission sought, but did not receive, comment 
with regard to the estimated number or nature of small business 
entities, if any, for which the amendments would have a significant 
impact.
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    \39\ 5 U.S.C. 601(3).
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D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements, Including Classes of Covered Small Entities and 
Professional Skills Needed To Comply

    As explained earlier in this document, the amendments expand 
labeling options to accommodate the rise of online media, remove 
unnecessary price statement prohibitions, or are technical in nature. 
The small entities potentially covered by these amendments will include 
all such entities subject to the Rules. The professional skills 
necessary for compliance with the Rules as modified by the amendments 
will include office and administrative support supervisors to determine 
label content and clerical personnel to draft and obtain labels and 
keep records.

[[Page 71689]]

E. Significant Alternatives to the Amendments

    The Commission has not proposed any specific small entity exemption 
or other significant alternatives, because the amendments expand 
labeling options to accommodate the rise of online media, remove 
unnecessary price statement prohibitions, or are technical in nature. 
In addition, these changes provide new flexibilities for small 
entitities by, for example, allowing regulated entities to omit a 
business address from a label if the address is readily available in an 
online directory or other Web site. Under these limited circumstances, 
the Commission does not believe a special exemption for small entities 
or significant compliance alternatives are necessary or appropriate to 
minimize the compliance burden, if any, on small entities while 
achieving the intended purposes of the proposed amendments. 
Nonetheless, the Commission sought, but did not receive, comments on 
the need, if any, for alternative compliance methods to reduce the 
economic impact of the Rules on small entities.
    None of the comments addressed the Regulatory Flexibility Act 
analysis in the NPRM.

VI. Incorporation by Reference

    Consistent with 1 CFR part 51, the Commission is incorporating the 
complete metric conversion chart published in the National Institute of 
Standards and Technology (NIST) Handbook 133, Checking the Contents of 
Packaged Goods (2015 ed., Exhibit E, pgs. 135-157), as described in 
Section III.B above. The metric conversion chart provides a complete 
and up-to-date list of metric conversion factors for packagers.
    The metric conversion chart is reasonably available to interested 
parties. Members of the public can access the metric conversion chart 
online at NIST's Web site, NIST.gov.

List of Subjects in 16 CFR Parts 500 and 502

    Fair Packaging and Labeling Act, Incorporation by reference, 
Labeling, Packaging and containers, Trade practices.

    Under 15 U.S.C. 1454-1455 and as discussed in the preamble, the 
Federal Trade Commission amends title 16 of the Code of Federal 
Regulations by amending parts 500 and 502 as follows:

PART 500--REGULATIONS UNDER SECTION 4 OF THE FAIR PACKAGING AND 
LABELING ACT

0
1. The authority citation for part 500 continues to read as follows:


    Authority: 15 U.S.C. 1453, 1454, 1455.


0
2. In Sec.  500.3, revise paragraph (d) to read as follows:


Sec.  500.3  Prohibited acts, coverage, general labeling requirements, 
exemption procedures.

* * * * *
    (d) Each packaged or labeled consumer commodity, unless it has been 
exempted through proceedings under section 5(b) of the Act, shall bear 
a label specifying the identity of the commodity; the name and place of 
business of the manufacturer, packer, or distributor; the net quantity 
of contents; and the net quantity per serving, use or application, 
where there is a label representation as to the number of servings, 
uses, or applications obtainable from the commodity. Many products 
exempted through proceedings under section 5(b) of the Act and section 
500.3(e) of this chapter or excluded under part 503 of this chapter 
nonetheless fall within the purview of the weights-and-measures laws of 
the individual states.
* * * * *

0
3. Revise Sec.  500.5(c) to read as follows:


Sec.  500.5  Name and place of business of manufacturer, packer or 
distributor.

* * * * *
    (c) The statement of the place of business shall include the street 
address, city, state, and zip code; however, the street address may be 
omitted if it is listed in a readily accessible, widely published, and 
publicly available resource, including but not limited to a printed 
directory, electronic database, or Web site.
* * * * *

0
4. In Sec.  500.19, revise paragraph (a) to read as follows:


Sec.  500.19  Conversion of SI metric quantities to inch/pound 
quantities and inch/pound quantities to SI metric quantities.

    (a) For calculating the conversion of SI metric quantities to and 
from customary inch/pound quantities, the conversion chart published in 
the following handbook shall be employed: National Institute of 
Standards and Technology (NIST) Handbook 133, Checking the Net Contents 
of Packaged Goods, Appendix E--General Tables of Units of Measurements, 
2015 Edition, adopted November 2014. This incorporation by reference 
was approved by the Director of the Federal Register in accordance with 
5 U.S.C. 552(a) and 1 CFR part 51. You may obtain a copy of NIST 
Handbook 133 at the National Institute of Standards and Technology's 
Web site, http://www.nist.gov/pml/wmd/pubs/hb133.cfm. You may inspect a 
copy at FTC Library, (202) 326-2395, Federal Trade Commission, Room H-
630, 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/cfr/ibr-locations.html.
* * * * *

0
5. Revise Sec.  500.22 to read as follows:


Sec.  500.22  Abbreviations.

    The following abbreviations and none other may be employed in the 
required net quantity declaration:

Inch--in.
Feet or foot--ft.
Fluid--fl.
Liquid--liq.
Ounce--oz.
Gallon--gal.
Pint--pt.
Pound--lb.
Quart--qt.
Square--sq.
Weight--wt.
Yard--yd.
Avoirdupois--avdp.
Cubic--cu.

    Note:  Periods and plural forms shall be optional. Exponents are 
permitted.

PART 502--REGULATIONS UNDER SECTION 5(C) OF THE FAIR PACKAGING AND 
LABELING ACT

0
6. The authority citation for part 502 is revised to read as follows:

    Authority: 15 U.S.C. 1454, 1455.


Sec. Sec.  502.100, 502.101, and 502.102  [Removed and Reserved]

0
7. Remove and reserve Sec. Sec.  502.100, 500.101, and 502.102.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-28918 Filed 11-16-15; 8:45 am]
 BILLING CODE 6750-01-P