14050 Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Proposed Rules

1See section 8.1 of ANSI Standard C18.1M–1992.

2See section 7.5 of ANSI Standard C18.1M–1992.

3Repealing the Dry Cell Battery Rule would

eliminate the Commission’s ability to obtain civil

penalties for any future misrepresentations that dry

cell batteries are leakproof. The Commission,

however, has tentatively determined that repealing

the Rule would not seriously jeopardize the

Commission’s ability to act effectively. Any

significant problems that might arise could be

addressed on a case-by-case basis under Section 5

of the FTC Act, 15 U.S.C. 45, either administratively

or through Section 13(b) action, 15 U.S.C. 53(b),

filed in federal district court. Prosecuting serious

misrepresentations in district court allows the

Commission to obtain injunctive relief as well as

equitable remedies, such as redress or

disgorgement.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97–7434 Filed 3–24–97; 8:45 am]

BILLING CODE 7518–01–M

16 CFR Part 403

Deceptive Use of ‘‘Leakproof,’’

‘‘Guaranteed Leakproof,’’ Etc., as

Descriptive of Dry Cell Batteries

AGENCY: Federal Trade Commission.

ACTION: Advance notice of proposed

rulemaking.

SUMMARY: The Federal Trade

Commission (the ‘‘FTC’’ or

‘‘Commission’’) proposes to commence

a rulemaking proceeding to repeal its

Trade Regulation Rule on Deceptive Use

of ‘‘Leakproof,’’ ‘‘Guaranteed

Leakproof,’’ Etc., as Descriptive of Dry

Cell Batteries (‘‘the Dry Cell Battery

Rule’’ or ‘‘the Rule’’), 16 CFR Part 403.

The Commission is soliciting written

comments, data, and arguments

concerning this proposal. The

Commission also is requesting

comments about the overall costs and

benefits of the Rule and its overall

regulatory and economic impact as a

part of its systematic review of all

current Commission regulations and

guides.

DATES: Written comments must be

submitted on or before April 24, 1997.

ADDRESSES: Written comments should

be identified as ‘‘16 CFR Part 403

Comment’’ and sent to Secretary,

Federal Trade Commission, Room 159,

Sixth St. and Pennsylvania Ave., N.W.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Neil

Blickman, Attorney, FTC, Bureau of

Consumer Protection, Division of

Enforcement, Sixth St. and

Pennsylvania Ave., N.W., Washington,

DC 20580, (202) 326–3038.

SUPPLEMENTARY INFORMATION:

Part A—Background Information

This notice is being published

pursuant to Section 18 of the Federal

Trade Commission (‘‘FTC’’) Act, 15

U.S.C. 57a et seq., the provisions of Part

1, Subpart B of the Commission’s Rules

of Practice, 16 CFR 1.7 et seq., and 5

U.S.C. et seq. This authority permits the

Commission to promulgate, modify, and

repeal trade regulations rules that define

with specificity acts or practices that are

unfair or deceptive in or affecting

commerce within the meaning of

Section 5(a)(1) of the FTC Act, 15 U.S.C.

45(a)(1).

On May 20, 1964, the Commission

promulgated a trade regulation rule that

states that in connection with the sale

of dry cell batteries in commerce, the

use of the word ‘‘leakproof,’’ the term

‘‘guaranteed leakproof,’’ or any other

word or term of similar import, or any

abbreviation thereof, in advertising,

labeling, marking or otherwise, as

descriptive of dry cell batteries,

constitutes an unfair method of

competition and an unfair or deceptive

act or practice in violation of section 5

of the FTC Act (16 CFR 403.4). This

Rule was based on the Commission’s

finding that, despite efforts by dry cell

battery manufacturers to eliminate

electrolyte leakage, battery leakage and

damage therefrom occurs from the use

to which consumers ordinarily subject

dry cell batteries.

The Rule does not prohibit

manufacturers or marketers from

offering or furnishing guarantees that

provide for restitution in the event of

damage from battery leakage, provided

no representation is made, directly or

indirectly, that dry cell batteries will not

leak (16 CFR 403.5). The Rule further

provides that in the event any person

develops a new dry cell battery that he

believes is in fact leakproof, he may

apply to the Commission for an

amendment to the Rule, or other

appropriate relief (16 CFR 403.6).

The Commission conducted an

informal review of industry practices by

examining the advertising, labeling and

marking of dry cell batteries available

for retail sale. The products, packaging

and advertising inspected contained no

presentations that the batteries so

described were leakproof. The

Commission’s review, therefore,

indicated general compliance with the

Rule’s provisions. Moreover, the

Commission has no record of receiving

any complaints regarding noncompliance with the Rule, or of

initiating any law enforcement actions

alleging violations of the Rule.

Additionally, the Commission’s

review indicated general voluntary

compliance by the industry with the

requirements of American National

Standards Institute (‘‘ANSI’’) Standard

C18.1M–1992 Dry Cells and Batteries—

Specifications. The ANSI standard

contains specifications for dry cell

batteries, and requirements for labeling

the products and their packages. The

ANSI standard requires the following

information to be printed on the outside

of each battery (when necessary, the

standard permits some of this

information to be applied to the unit

package): (1) The name or trade name of

the manufacturer; (2) the ANSI/National

Electronic Distributors Association

number, or some other identifying

designation; (3) year and month, week

or day of manufacture, which may be a

code, or the expiration of a guarantee

period, in a clear readable form; (4) the

nominal voltage; (5) terminal polarity;

and (6) warnings or cautionary notes

where applicable.1

The ANSI standard recommends that

dry cell battery manufacturers and

sellers include on their products and

packages several battery user guidelines

and warnings that are relevant to this

proceeding. They are: (1) although

batteries basically are trouble-free

products, conditions of abuse or misuse

can cause leakage; (2) failure to replace

all batteries in a unit at the same time

may result in battery leakage; (3) mixing

batteries of various chemical systems,

ages, applications, types or

manufacturers may result in poor device

performance and battery leakage; (4)

attempting to recharge a nonrechargeable battery is unsafe because it

could cause leakage; (5) reverse

insertion of batteries may cause

charging, which may result in leakage;

(6) devices that operate on either

household current or battery power may

subject batteries to a charging current,

which may cause leakage; (7) do not

store batteries or battery-powered

equipment in high-temperature areas;

and (8) do not dispose of batteries in

fire.2

At a minimum, each dry cell battery

and battery package inspected by

Commission staff informed consumers

that the batteries may explode or leak if

recharged, inserted improperly,

disposed of in fire, or mixed with

different battery types. Based on the

foregoing, the Commission has

tentatively concluded that industry

members that comply with the

standard’s point-of-sale disclosure

requirements, of necessity, also are in

compliance with the Rule.

Part B—Objectives

Based on the review described above,

the Commission has tentatively

determined that the Rule is no longer

necessary.3 the objective of this notice is
Federal Register / Vol. 62, No. 57 / Tuesday, March 25, 1997 / Proposed Rules 14051

to solicit comment on whether the

Commission should initiate a

rulemaking proceeding to repeal the Dry

Cell Battery Rule.

Part C—Alternative Actions

The Commission is not considering

any alternative other than the possibility

of repealing the Dry Cell Battery Rule.

Part D—Request for Comments

Members of the public are invited to

comment on any issues or concerns they

believe are relevant or appropriate to the

Commission’s review of the Dry Cell

Battery Rule. The Commission requests

that factual data upon which the

comments are based be submitted with

the comments. In this section, the

Commission identifies the issues on

which it solicits public comments. The

identification of issues is designed to

assist the public and should not be

construed as a limitation on the issues

on which public comment may be

submitted.

Questions

(1) Is there a continuing need for the

Rule?

(a) What benefits has the Rule

provided to purchasers of the products

affected by the Rule?

(b) Has the Rule imposed costs on

purchasers?

(2) What changes, if any, should be

made to the Rule to increase the benefits

of the Rule to purchasers?

(a) How would these changes affect

the costs the Rule imposes on firms

subject to its requirements?

(3) What significant burdens or costs,

including costs of compliance, has the

Rule imposed on firms subject to its

requirements?

(a) Has the Rule provided benefits to

such firms?

(4) What changes, if any, should be

made to the Rule to reduce the burdens

or costs imposed on firms subject to its

requirements?

(a) How would these changes affect

the benefits provided by the Rule?

(5) Does the Rule overlap or conflict

with other federal, state, or local laws or

regulations?

(6) Since the Rule was issued, what

effects, if any, have changes in relevant

technology or economic conditions had

on the rule?

(7) Are ‘‘leakproof’’ or ‘‘guaranteed

leakproof’’ representations by

manufacturers and marketers of dry cell

batteries a significant problem in the

marketplace?

(8) Should the Rule, or any portion of

it, be kept in effect, or should it be

repealed?

(9) How would repealing the Rule

affect the benefits experienced by

consumers?

(10) How would repealing the Rule

affect the benefits and burdens

experienced by firms subject to Rule’s

requirements?

(11) Does the existence of ANSI

Standard C18.1M–1992 for Dry Cell

Batteries eliminate or greatly lessen the

need for the Rule?

Authority: Section 18(d)(2)(B) of the

Federal Trade Commission Act, 15 U.S.C.

57a(d)(2)(B).

List of Subjects in 16 CFR Part 403

Advertising, Dry cell batteries,

Labeling, Trade practices.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97–7433 Filed 3–24–97; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG–209785–95]

RIN 1545–AT97

Substantiation of Business Expenses

for Travel, Entertainment, Gifts and

Listed Property

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

by cross-reference to temporary

regulations.

SUMMARY: In the Rules and Regulations

section of this issue of the Federal

Register, the IRS is issuing temporary

regulations relating to the substantiation

requirements for business expenses for

travel, entertainment, gifts, or listed

property. The text of those temporary

regulations also serves as the text of

these proposed regulations.

DATES: Written or electronically

generated comments and requests for a

public hearing must be received by June

23, 1997.

ADDRESSES: Send submissions to

CC:DOM:CORP:R (REG–209785–95),

room 5228, Internal Revenue Service,

P.O. Box 7604, Ben Franklin Station,

Washington, DC 20044. In the

alternative, submissions may be hand

delivered between the hours of 8 a.m.

and 5 p.m. to CC:DOM:CORP:R (REG–

209785–95), Courier’s Desk, Internal

Revenue Service, 1111 Constitution

Avenue NW., Washington, DC, or

electronically, via the IRS Internet site

at: http://www.irs.ustreas.gov/prod/

taxlregs/comments.html.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, contact

Donna M. Crisalli, (202) 622–4920;

concerning submissions, contact

Christina Vasquez, (202) 622–7190 (not

toll-free numbers).

SUPPLEMENTARY INFORMATION

Paperwork Reduction Act

The collection of information

contained in this notice of proposed

rulemaking has been submitted to the

Office of Management and Budget for

review in accordance with the

Paperwork Reduction Act of 1995 (44

U.S.C. 3507). Comments on the

collection of information should be sent

to the Office of Management and

Budget, Attn: Desk Officer for the

Department of the Treasury, Office of

Information and Regulatory Affairs,

Washington, DC 20503, with copies to

the Internal Revenue Service, Attn: IRS

Reports Clearance Officer, T:FP,

Washington, DC 20224. Comments on

the collection of information should be

received by May 27, 1997.

Comments are specifically requested

concerning: Whether the proposed

collection of information is necessary

for the proper performance of the

functions of the Internal Revenue

Service, including whether the

information will have practical utility;

The accuracy of the estimated burden

associated with the proposed collection

of information (see below);

How the quality, utility, and clarity of

the information to be collected may be

enhanced;

How the burden of complying with

the proposed collection of information

may be minimized, including through

the application of automated collection

techniques or other forms of information

technology; and

Estimates of capital or start-up costs

and costs of operation, maintenance,

and purchase of service to provide

information.

The collection of information in this

notice of proposed rulemaking is in

§ 1.274–5T(c)(2) and (f)(4). This

information is required by the IRS as a

condition for a taxpayer to deduct

certain business expenses or exclude

from income certain reimbursed

business expenses of employees. This

information will be used to determine

whether a taxpayer properly qualifies

for a deduction or exclusion. The

collection of information is required in

order to deduct certain business

expenses or exclude from income

certain reimbursed business expenses of