04-11101. Agency Information Collection Activities; Proposed Collection; Comment Request; Extension

AGENCY:

Federal Trade Commission (FTC or “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 August 31, 2007, the current PRA clearance for information collection requirements contained in its regulations under the Comprehensive Smokeless Tobacco Health Education Act of 1986 (“Smokeless Tobacco Act” or the “Act”). That clearance expires on August 31, 2004.

DATES:

Comments must be submitted on or before July 16, 2004.

ADDRESSES:

Interested parties are invited to submit written comments. Comments should refer to “Smokeless Tobacco Regulations: Paperwork Comments, [R001009]” to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission/Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580. If the comment contains any material for which confidential treatment is requested, it must be filed in paper (rather than electronic) form, and the first page of the document must be clearly labeled “Confidential.” ^[1] The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments, whether filed in paper or electronic form, will be considered by the Commission, and will be available to the public on the FTC Web site, to the extent practicable, at http://www.ftc.gov. As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC Web site. More information, including routine uses permitted by the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/​ftc/​privacy.htm.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information or copies of the proposed information requirements should be addressed to Rosemary Rosso, Attorney, Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 20580, [phone].

SUPPLEMENTARY INFORMATION:

Under the PRA (44 U.S.C. 3501-3520), Federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. “Collection of information” means agency requests or requirements that members of the public 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 paperwork clearance for the Smokeless Tobacco Act regulations (OMB Control Number 3084-0082).^[2]

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, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

Description of the collection of information and proposed use: The Smokeless Tobacco Act requires that manufacturers, packagers, and importers of smokeless tobacco products include one of three specified health warnings on packages and in advertisements. The Act also requires that each manufacturer, packager, and importer of smokeless tobacco products submit a plan to the Commission specifying the method to rotate, display, and distribute the warning statement required to appear in advertising and labeling. The Commission is required by the Act to determine that these plans provide for rotation, display, and distribution of warnings in compliance with the Act and implementing regulations. To the best of the Commission's knowledge, all of the affected companies have previously filed plans. However, the plan submission requirement continues to apply to a company that amends its plan, or to a new company that enters the market.

Burden statement:

Estimated annual hours burden: 1,000 hours (rounded). The FTC is retaining its existing burden estimated of 1,000 hours. This amount is based on the burden previously estimated for 14 smokeless tobacco companies to prepare and submit amended compliance plans, and to permit at least three new companies to submit initial compliance plans. Though staff's calculations underlying the estimate totaled 560 hours, staff then conservatively rounded up its estimate to 1,000 hours. Staff firmly believes that this prior rounded estimate will fully incorporate any incremental effects of an additional three companies submitting plans.

Virtually all affected companies long ago filed their plans with the Commission. Additional annual reporting burdens would occur only if those companies opt to change the way they display the warnings required by the Smokeless Tobacco Act. Although it is not possible to predict whether any of the companies will seek to amend an existing approval plan (and possibly none will), staff conservatively assumes that each of the 14 smokeless tobacco companies will file one amendment per year. This estimate is conservative because, over the past three years, the Commission has reviewed amended plans from only two companies,^[3] and the Commission has not changed the relevant regulations.^[4] The estimated time to prepare the amended plans submitted by these companies is less than 40 hours each. The only major amendment of an approved plan, occurring more than three years ago, required only 40 hours to prepare, which is considerably less time than individual companies spent preparing their initial plans. Commission staff believes it reasonable to assume that each of the 14 smokeless tobacco companies would spend no more than 40 hours to prepare an amended plan.

Commission staff also estimates that one smokeless tobacco manufacturer will file an initial plan, for an additional burden of approximately 150 hours. Over the past three years, only one company has submitted initial plans that together involve only two brands.^[5] When the regulations were first proposed in 1986, representatives of the Smokeless Tobacco Council, Inc. indicated that the six companies it represented would require approximately 700 to 800 hours in total (133 hours each) to complete the initial required plans, involving multiple brands and multiple brand varieties. Staff assumed that other companies would require a little more time, on average, to complete their plans. Staff estimated that one smokeless tobacco company may file an initial plan, and it would require approximately 150 hours to complete the plan, and it believes this estimate remains reasonable.

In addition to the estimates above, the staff anticipates that in the next three years, up to two small importers or small single brand companies may submit initial plans, for an additional burden of approximately 80 hours. The Commission has received such plans in the past. Because these plans involved only a limited number of brands and no advertising, the estimated time to prepare the plans was very modest. Staff estimates that the two importers or small single brand companies who may submit initial plans will spend no more than 40 hours each to prepare the plans.

Based on these assumptions, the total annual hours burden should not exceed 1,000 hours. [(14 companies × 40 hrs. each) + (one company × 150 hrs.) + (2 companies × 40 hrs.) = 790 total hours, rounded to one thousand hours.]

Estimated annual labor cost burden: $103,000.

The total annualzied labor cost to these companies should not exceed $103,000. This is based on the assumption that management or attorneys will account for 80% of the esitmated 1,000 hours required to rewrite or amend the plans, at an hourly rate of $125, and that clerical support will account for the remaining time (20%) at an hourly rate of $15. [Management and attorneys' time (1,000 hrs. × 0.80 × $125 = $100,000) + clerical time (1,000 hrs. × 0.2 × $15 = $3,000).]

Estimated annual non-labor cost burden: $0 or minimal.

The applicable requirements impose minimal start-up costs. The companies may keep copies of their plans to ensure that labeling and advertising complies with the requirements of the Smokeless Tobacco Act. Such recordkeeping would require the use of office supplies, e.g., file folders and paper, all of which the companies should have on hand in the ordinary course of their business.

While companies submitting initial plans may incur one-time capital expenditures for equipment used to print package labels in order to include the statutory health warnings or to prepare acetates for advertising, the warnings themselves disclose information completely supplied by the federal government. As such, the disclosure does not constitute a “collection of information” as it is defined in the regulations implementing the PRA, nor by extension, do the financial resources expended in relation to it constitute paperwork “burden.” See 5 CFR 1320.3(c)(2). Moreover, any expenditures relating to the statutory health warning requirements would likely be minimal in any event. As noted above, virtually all affected firms have already submitted approved plans. For these companies, there are no capital expenditures. After the Commission approves a plan for the display of the warnings required by the Smokeless Tobacco Act, the companies are required to make additional submissions to the Commission only if there is a change in the way that they choose to display the warnings. Once the companies have prepared plates to print the required warnings on their labels, there are no additional set-up costs associated with the display of the warnings in labeling. Similarly, once the companies have prepared acetates of the required warnings for advertising and promotional materials, there are no additional set-up costs associated with printing the warnings in those materials.

Finally, capital expenditures for small importer are likely to be de minimis. Both firms that submitted plans over the past three years used stickers to place the warnings on their packages. The stickered warnings could be generated with office equipments and supplies such as computers and labels, all of which the companies should have on hand in the ordinary course of their business. Because neither firm engaged in any advertising, no costs associated with advertising were incurred.

John D. Graubert,

Acting General Counsel.

Footnotes

1.  Commission rule 4.2(d), 16 CFR 4.2(d). The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission's General Counsel, consistent with applicable law and the public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).

2.  The Commission seeks comment on the costs and burdens imposed by the existing smokeless tobacco regulations. In March 2000, the Commission commenced a regulatory review of its smokeless tobacco regulations to determine whether there is a continuing need for the regulations and, if so, what revisions, if any, should be made. 65 FR 11944 (Mar. 7, 2000). If the Commission determines that the regulations should be amended, it will commence a rulemaking proceeding. Should any resulting amendments materially affect PRA burden, the Commission will notify OMB and seek amended clearance.

3.  One of these companies also submitted its initial plans for two brands during this period. The burden estimate for the initial plans is calculated separately.

4.  Should the Commission amend the regulations in a manner that materially affects the burden under the PRA, it will notify OMB and seek amended clearance.

5.  One of the plans involved a single brand with two brand varieties. The other plan involved a single brand with a single brand variety.