2011-31692. Agency Information Collection Activities; Proposed Collection; Comment Request

AGENCY:

Federal Trade Commission.

ACTION:

Notice.

SUMMARY:

The information collection requirements described below will be submitted to the Office of Management and Budget (“OMB”) for review, as required by the Paperwork Reduction Act (“PRA”). The FTC is seeking public comments on its proposal to extend through March 31, 2015, the current PRA clearances for information collection requirements contained in four product labeling rules enforced by the Commission. Those clearances expire on March 31, 2012.

DATES:

Comments must be received by February 10, 2012.

ADDRESSES:

Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information or copies of the proposed information requirements should be addressed to Robert M. Frisby, [phone], or Lemuel Dowdy, [phone], Attorneys, Division of Enforcement, Bureau of Consumer Protection, 600 Pennsylvania Ave. NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

Proposed Information Collection Activities

Under the Paperwork Reduction Act (“PRA”), 44 U.S.C. 3501-3520, federal agencies must get OMB approval for each collection of information they conduct, sponsor, or require. “Collection of information” means agency requests or requirements to submit reports, keep records, or provide information to a third party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for public comment before requesting that OMB extend the existing PRA clearance for the information collection requirements associated with the Commission's rules and regulations under the Fur Products Labeling Act (“Fur Rules”), 16 CFR Part 301 (OMB Control Number 3084-0099); ^[1] rules and regulations under the Wool Products Labeling Act of 1939 (“Wool Rules”), 16 CFR part 300 (OMB Control Number 3084-0100); ^[2] rules and regulations under the Textile Fiber Products Identification Act (“Textile Rules”), 16 CFR part 303 (OMB Control Number 3084-0101); ^[3] and the Care Labeling of Textile Wearing Apparel and Certain Piece Goods As Amended (“Care Labeling Rule”), 16 CFR part 423 (OMB Control Number 3084-0103).

The FTC invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond.^[4] All comments must be received on or before February 10, 2012.

Burden Estimates

Staff's burden estimates for the four rules in question are based on data from the Department of Commerce's Bureau of the Census, the International Trade Commission, the Department of Labor's Bureau of Labor Statistics (“BLS”), and data or other input from industry sources. The relevant information collection requirements in these rules and staff's corresponding burden estimates follow. The estimates address the number of hours needed and the labor costs incurred to comply with the requirements.

1. Fur Rules (OMB Control Number: 3084-0099)

The Fur Products Labeling Act (“Fur Act”) ^[5] prohibits the misbranding and false advertising of fur products. The Fur Rules establish disclosure requirements that assist consumers in making informed purchasing decisions, and recordkeeping requirements that assist the Commission in enforcing the Rules. The Rules also provide a procedure for exemption from certain disclosure provisions under the Fur Act.

The Commission expects that recent amendments to the Fur Act will increase the cost of complying with the Fur Rules. Congress eliminated the Commission's power to exempt from the labeling requirements items where either the cost of the fur trim to the manufacturer or the manufacturer's selling price for the finished product is less than $150.^[6] As a result, more garments will be subject to the Fur Act and Rules, which will impose higher recordkeeping and labeling costs on manufacturers, importers, and retailers. Because the requirements started to apply to the previously exempted garments earlier this year, the Commission has only limited information on the extent to which compliance costs will increase. The Commission has some evidence that aggregate costs will rise substantially.^[7]

Estimated annual hours burden: 168,105 hours (51,870 hours for recordkeeping + 116,228 hours for disclosure).

Recordkeeping: The Fur Rules require that retailers, manufacturers, processors, and importers of furs and fur products keep certain records in addition to those they may keep in the ordinary course of business. Staff estimates that 1,230 retailers incur an average recordkeeping burden of about 13 hours per year (15,990 hours total); 90 manufacturers incur an average recordkeeping burden of about 52 hours per year (4,680 hours total); and 1,200 importers of furs and fur products incur an average recordkeeping burden of 26 hours per year (31,200 hours total). The combined recordkeeping burden for the industry is approximately 51,870 hours annually.

Disclosure: Staff estimates that 1,320 respondents (90 manufacturers + 1,230 retail sellers of fur garments) each require an average of 26 hours per year to determine label content (34,320 hours total), and an average of seven hours per year to draft and order labels (9,240 hours total). Staff estimates that the total number of garments subject to the fur labeling requirements annually is approximately 1,336,000.^[8] Staff estimates that for approximately 50 percent of these garments (668,000) labels are attached manually, requiring approximately four minutes per garment for a total of 44,533 hours annually. For the remaining 668,000, the process of attaching labels is semi-automated and requires an average of approximately five seconds per item, for a total of 928 hours. Thus, the total burden for attaching labels is 45,461 hours, and the total burden for labeling garments is 89,021 hours per year (34,320 hours to determine label content + 9,240 hours to draft and order labels + 45,461 hours to attach labels).

Staff estimates that the incremental burden associated with the Fur Rules' invoice disclosure requirement, beyond the time that would be devoted to preparing invoices in the absence of the Rules, is approximately one minute per invoice for garments and thirty seconds per invoice for pelts.^[9] The invoice disclosure requirement applies to fur garments, which are generally sold individually, and fur pelts, which are generally sold in groups of at least 50, on average. Assuming invoices are prepared for sales of 1,336,000 garments, the invoice disclosure requirement entails an estimated burden of 22,267 hours (1,336,000 invoices × one minute). Based on information from the International Trade Commission and the Fur Commission USA, staff estimates total sales of 7,498,000 pelts annually. Assuming invoices are prepared for sales of 149,960 groups (derived from an estimated 7,498,000 million pelts ÷ 50) of imported and domestic pelts, the invoice disclosure requirement entails an estimated total burden of 1,250 hours (149,960 total invoices × thirty seconds). Thus, the total burden for invoice disclosures is 23,517 hours.

Staff estimates that the Fur Rules' advertising disclosure requirements impose an average burden of three hours per year for each of the approximately 1,230 domestic fur retailers, or a total of 3,690 hours.

Thus, staff estimates the total disclosure burden to be approximately 116,228 hours (89,021 hours for labeling + 23,517 hours for invoices + 3,690 hours for advertising).

Estimated annual cost burden: $2,806,665 (solely relating to labor costs). The chart below summarizes the total estimated costs.

Task	Hourly rate	Burden hours	Labor cost
Determine label content	$23.00	34,320	$789,360
Draft and order labels	18.00	9,240	166,320
Attach labels	10 9.00	45,461	409,149
Invoice disclosures	18.00	23,517	423,306
Prepare advertising disclosures	23.00	3,690	84,870
Recordkeeping	18.00	51,870	933,660
Total			2,806,665

Staff believes that there are no current start-up costs or other capital costs associated with the Fur Rules. Because the labeling of fur products has been an integral part of the manufacturing process for decades, manufacturers have in place the capital equipment necessary to comply with the Rules' labeling requirements.^[11] Industry sources indicate that much of the information required by the Fur Act and Rules would be included on the product label even absent the Rules. Similarly, invoicing, recordkeeping, and advertising disclosures are tasks performed in the ordinary course of business so that covered firms would incur no additional capital or other non-labor costs as a result of the Act or the Rules.

2. Wool Rules (OMB Control Number: 3084-0100)

The Wool Products Labeling Act of 1939 (“Wool Act”) ^[12] prohibits the misbranding of wool products. The Wool Rules establish disclosure requirements that assist consumers in making informed purchasing decisions and recordkeeping requirements that assist the Commission in enforcing the Rules.

Estimated annual hours burden: 440,000 hours (80,000 recordkeeping hours + 360,000 disclosure hours).

Recordkeeping: Staff estimates that approximately 4,000 wool firms are subject to the Wool Rules' recordkeeping requirements. Based on an average annual burden of 20 hours per firm, the total recordkeeping burden is 80,000 hours.

Disclosure: Approximately 8,000 wool firms, producing or importing about 600,000,000 wool products annually, are subject to the Wool Rules' disclosure requirements. Staff estimates the burden of determining label content to be 15 hours per year per firm, or a total of 120,000 hours, and the burden of drafting and ordering labels to be 5 hours per respondent per year, or a total of 40,000 hours. Staff believes that the process of attaching labels is now fully automated and integrated into other production steps for about 40 percent of all affected products. For the remaining 360,000,000 items (60 percent of 600,000,000), the process is semi-automated and requires an average of approximately two seconds per item, for a total of 200,000 hours per year. Thus, the total estimated annual burden for all respondents is 360,000 hours (120,000 hours for determining label content + 40,000 hours to draft and order labels + 200,000 hours to attach labels). Staff believes that any additional burden associated with advertising disclosure requirements would be minimal (less than 10,000 hours) and can be subsumed within the burden estimates set forth above.

Estimated annual cost burden: $5,920,000, rounded to the nearest thousand (solely relating to labor costs). The chart below summarizes the total estimated costs.

Task	Hourly rate	Burden hours	Labor cost
Determine label content	$23.00	120,000	$2,760,000
Draft and order labels	18.00	40,000	720,000
Attach labels	13 5.00	200,000	1,000,000
Recordkeeping	18.00	80,000	1,440,000
Total			5,920,000

Staff believes that there are no current start-up costs or other capital costs associated with the Wool Rules. Because the labeling of wool products has been an integral part of the manufacturing process for decades, manufacturers have in place the capital equipment necessary to comply with the Rules. Based on knowledge of the industry, staff believes that much of the information required by the Wool Act and Rules would be included on the product label even absent their requirements. Similarly, recordkeeping and advertising disclosures are tasks performed in the ordinary course of business so that covered firms would incur no additional capital or other non-labor costs as a result of the Rules.

3. Textile Rules (OMB Control Number: 3084-0101)

The Textile Fiber Products Identification Act (“Textile Act”) ^[14] prohibits the misbranding and false advertising of textile fiber products. The Textile Rules establish disclosure requirements that assist consumers in making informed purchasing decisions, and recordkeeping requirements that assist the Commission in enforcing the Rules. The Rules also contain a petition procedure for requesting the establishment of generic names for textile fibers.

Estimated annual hours burden: 7,528,142 hours (506,025 recordkeeping hours + 7,022,117 disclosure hours).

Recordkeeping: Staff estimates that approximately 20,241 textile firms are subject to the Textile Rules' recordkeeping requirements. Based on an average burden of 25 hours per firm, the total recordkeeping burden is 506,025 hours.

Disclosure: Approximately 22,218 textile firms, producing or importing about 19.4 billion textile fiber products annually, are subject to the Textile Rules' disclosure requirements.^[15] Staff estimates the burden of determining label content to be 20 hours per year per firm, or a total of 444,360 hours and the burden of drafting and ordering labels to be 5 hours per respondent per year, or a total of 111,090 hours.^[16] Staff believes that the process of attaching labels is now fully automated and integrated into other production steps for about 40 percent of all affected products. For the remaining 11.64 billion items (60 percent of 19.4 billion), the process is semi-automated and requires an average of approximately two seconds per item, for a total of 6,466,667 per year. Thus, the total estimated annual burden for all firms is 7,022,117 hours (444,360 hours to determine label content + 111,090 hours to draft and order labels + 6,466,667 hours to attach labels).^[17] Staff believes that any additional burden associated with advertising disclosure requirements or the filing of generic fiber name petitions would be minimal (less than 10,000 hours) and can be subsumed within the burden estimates set forth above.

Estimated annual cost burden: $53,662,000, rounded to the nearest thousand (solely relating to labor costs). The chart below summarizes the total estimated costs.

Task	Hourly rate	Burden hours	Labor cost
Determine label content	$23.00	444,360	$10,220,280
Draft and order labels	18.00	111,090	1,999,620
Attach labels	18 5.00	6,466,667	32,333,335
Recordkeeping	18.00	506,025	9,108,450
Total			53,661,685

Staff believes that there are no current start-up costs or other capital costs associated with the Textile Rules. Because the labeling of textile products has been an integral part of the manufacturing process for decades, manufacturers have in place the capital equipment necessary to comply with the Rules' labeling requirements. Industry sources indicate that much of the information required by the Textile Act and Rules would be included on the product label even absent their requirements. Similarly, recordkeeping, invoicing, and advertising disclosures are tasks performed in the ordinary course of business so that covered firms would incur no additional capital or other non-labor costs as a result of the Rules.

4. The Care Labeling Rule (OMB Control Number: 3084-0103)

The Care Labeling Rule requires manufacturers and importers to attach a permanent care label to all covered textile clothing in order to assist consumers in making purchase decisions and in determining what method to use to clean their apparel. Also, manufacturers and importers of piece goods used to make textile clothing must provide the same care information on the end of each bolt or roll of fabric.

Estimated annual hours burden: 6,666,477 hours (solely relating to disclosure ^[19] ).

Staff estimates that approximately 22,218 manufacturers or importers of textile apparel, producing about 17 billion textile garments annually, are subject to the Rule's disclosure requirements. The burden of developing proper care instructions may vary greatly among firms, primarily based on the number of different lines of textile garments introduced per year that require new or revised care instructions. Staff estimates the burden of determining care instructions to be 43 hours each year per firm, for a cumulative total of 955,374 hours. Staff further estimates that the burden of drafting and ordering labels is 2 hours each year per respondent, for a total of 44,436 hours. Staff believes that the process of attaching labels is fully automated and integrated into other production steps for about 40 percent of the approximately 17 billion garments that are required to have care instructions on permanent labels.^[20] For the remaining 10.2 billion items (60 percent of 17 billion), the process is semi-automated and requires an average of approximately two seconds per item, for a total of 5,666,667 hours per year. Thus, the total estimated annual burden for all firms is 6,666,477 hours (955,374 hours to determine care instructions + 44,436 hours to draft and order labels + 5,666,667 hours to attach labels).

Estimated annual cost burden: $51,107,000, rounded to the nearest thousand (solely relating to labor costs). The chart below summarizes the total estimated costs.

Task	Hourly rate	Burden hours	Labor cost
Determine care instructions	$23.00	955,374	$21,973,602
Draft and order labels	18.00	44,436	799,848
Attach labels	21 5.00	5,666,667	28,333,335
Total			51,106,785

Staff believes that there are no current start-up costs or other capital costs associated with the Care Labeling Rule. Because the labeling of textile products has been an integral part of the manufacturing process for decades, manufacturers have in place the capital equipment necessary to comply with the Rule's labeling requirements. Based on knowledge of the industry, staff believes that much of the information required by the Rule would be included on the product label even absent those requirements.

Request for Comments

You can file a comment online or on paper. Write “https://ftcpublic.commentworks.com/​ftc/​apparelrulespra” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http://www.ftc.gov/​os/​publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the Commission Web site.

Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, don't include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, don't include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest.

Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, the Commission encourages you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https://ftcpublic.commentworks.com/​ftc/​apparelrulespra,, by following the instructions on the web-based form. If this Notice appears at http://www.regulations.gov,, you also may file a comment through that Web site.

If you file your comment on paper, write “Apparel Rules: FTC File No. P074201” on your comment and on the envelope, and mail or deliver it to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex J), 600 Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your paper comment to the Commission by courier or overnight service.

Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before February 10, 2012. You can find more information, including routine uses permitted by the Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/​ftc/​privacy.htm.

Willard K. Tom,

General Counsel.

Footnotes

1.  The Commission issues the Fur Rules to implement the Fur Products Labeling Act, 15 U.S.C. 69 et seq.

2.  The Commission issues the Wool Rules to implement the Wool Products Labeling Act of 1939, 15 U.S.C. 68 et seq.

3.  The Commission issues the Textile Rules to implement the Textile Fiber Products Identification Act, 15 U.S.C. 70 et seq.

4.  As part of its regulatory review program, the Commission is currently reviewing the Care Labeling Rule as well as the Fur and Textile Rules . See Federal Trade Commission: Care Labeling of Textile Wearing Apparel and Certain Piece Goods as Amended: Advance Notice of Proposed Rulemaking; Request for Public Comment, 76 FR 41148 (Jul. 13, 2011); Federal Trade Commission: Rules and Regulations Under the Fur Products Labeling Act: Advance Notice of Proposed Rulemaking: Request for Comment, 76 FR 13550 (Mar. 14, 2011); and Federal Trade Commission: Rules and Regulations Under the Textile Fiber Products Identification Act: Advance Notice of Proposed Rulemaking; Request for Public Comment, 76 FR 68690 (Nov. 7, 2011). The Commission also announced that this year it plans to initiate a review of the Wool Rules. Federal Trade Commission: Notice Announcing Ten-year Regulatory Review Schedule and Request for Public Comment on the Federal Trade Commission's Regulatory Review Program, 76 FR 41150 (Jul. 13, 2011).

5.  15 U.S.C. 69 et seq.

6.  Truth in Fur Labeling Act, Public Law 111-313.

7.  For example, one comment filed in the regulatory review of the Fur Rules stated that the elimination of the exemption required the commenter to spend over $1 million to label footwear that had left the factory. Deckers Outdoor Corporation at http://www.ftc.gov/​os/​comments/​furlabeling/​00016-59947.pdf.

8.  The total number of imported fur garments, fur-trimmed garments, and fur accessories is estimated to be approximately 1,156,000 based on International Trade Commission data. Estimated domestic production totals 180,000.

9.  The invoice disclosure burden for PRA purposes excludes the time that respondents would spend for invoicing, apart from the Fur Rules, in the ordinary course of business. See 5 CFR 1320.3(b)(2).

10.  Per industry sources, most fur labeling is done in the United States. This rate is reflective of an average domestic hourly wage for such tasks, which is derived from recent BLS statistics. Conversely, attaching labels with regard to the other rules discussed herein is mostly performed by foreign labor, as detailed in note 13.

11.  Although items previously exempt from the labeling requirements must now be labeled regarding their fur content, the Textile and Wool Rules already required many such items to have fiber content labels. Hence, manufacturers likely have in place the equipment needed to comply with the labeling requirements.

12.  15 U.S.C. 68 et seq.

13.  For imported products, the labels generally are attached in the country where the products are manufactured. According to information compiled by an industry trade association using data from the International Trade Commission, the U.S. Customs Service, and the U.S. Census Bureau, approximately 95% of apparel and other textile products used in the United States is imported. With the remaining 5% attributable to U.S. production at an approximate domestic hourly wage of $9 to attach labels, staff has calculated a weighted average hourly wage of $5 per hour attributable to U.S. and foreign labor combined. The estimated percentage of imports supplied by particular countries is based on trade data for the year ending in September 2011 compiled by the Office of Textiles and Apparel, International Trade Administration, U.S. Department of Commerce. Wages in major textile exporting countries, factored into the above hourly wage estimate, were based on 2009 data from the U.S. Department of Labor, Bureau of International Labor Affairs. See Table 1.1 Production Workers: Indexes of hourly compensation costs in manufacturing, U.S. dollar basis, 1975-2009 (Index, U.S. = 100) available at: ftp://ftp.bls.gov/pub/suppl/ichcc.ichccpwsuppt1_1.txt.

14.  15 U.S.C. 70 et seq.

15.  The apparent consumption of garments in the U.S. in 2009 was 18 billion. Staff estimates that 1 billion garments are exempt from the Textile Act (i.e., any kind of headwear and garments made from something other than a textile fiber product, such as leather) or are subject to a special exemption for hosiery products sold in packages where the label information is contained on the package. Based on available data, staff estimates that an additional 3 billion household textile products (non-garments, such as sheets, towels, blankets) were consumed. However, approximately 0.6 billion of all of these combined products (garments and non-garments) are subject to the Wool Act, not the Textile Act, because they contain some amount of wool. Thus, the estimated net total products subject to the Textile Act is 19.4 billion.

16.  In 2007, Congress amended the Wool Act to explicitly define “cashmere” and certain terms used to describe superfine wool (e.g., “Super 80s,” “Super 90s,” etc.). See Public Law 109-428. The Commission anticipates revising the Wool Rules to incorporate these amendments. The Commission will seek comment on the increased burden, if any, imposed by these changes when it announces the revisions.

17.  The Commission revised the Textile Rules in 2006 in response to amendments to the Textile Act. See 70 FR 73369 (Dec. 12, 2005). These amendments concerned the placement of labels on packages of certain types of socks and, therefore, do not place any additional disclosure burden on covered entities.

18.  See note 13.

19.  The Care Labeling Rule imposes no specific recordkeeping requirements. Although the Rule requires manufacturers and importers to have reliable evidence to support the recommended care instructions, companies may provide as support current technical literature or rely on past experience.

20.  About 1 billion of the 18 billion garments produced annually are either not covered by the Care Labeling Rule (gloves, hats, caps, and leather, fur, plastic, or leather garments) or are subject to an exemption that allows care instructions to appear on packaging (hosiery).

21.  See note 13.