[Federal Register Volume 66, Number 87 (Friday, May 4, 2001)]
[Notices]
[Pages 22561-22562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11237]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

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

ACTION: Notice.

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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, 2004 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, 2001.

DATES: Comments must be submitted on or before July 3, 2001.

ADDRESSES: Send written comments to Secretary, Federal Trade 
Commission, Room H-159, 600 Pennsylvania Ave., NW., Washington, DC 
20580. All comments should be captioned ``Smokeless Tobacco 
Regulations: Paperwork comment.''

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, 
(202) 326-2174.

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).\1\
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    \1\ 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). In addition to comments sought on 
the costs and benefits of the existing regulations, the Commission 
requested comment on whether the regulations are effective in 
meeting the Smokeless Tobacco Act's format and display requirements 
and whether the current ``safe harbor'' approach is sufficiently 
enforceable. If the Commission determines that the regulations 
should be amended, it will commence a rulemaking proceeding. Should 
resulting amendments materially affect PRA burden, the Commission 
will notify OMB and seek amended clearance.
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    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. With one exception, 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 estimate of 1,000 hours. This amount is 
based on the burden previously estimated for fourteen 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 these companies will seek to amend an existing 
approved plan (and possibly none will), staff conservatively assumes 
that each company will file one amendment per year. This estimate is 
conservative because, over the past three years, the Commission has 
reviewed only two minor amendments to plans and the Commission has not 
changed the relevant regulations.\2\ The

[[Page 22562]]

estimated time to prepare the two amended plans is less than 20 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 company would consume no more than 40 hours to prepare an amended 
plan.
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    \2\ 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. In addition to questions concerning the costs 
and benefits of the existing regulations, the Commission requested 
comment on whether the regulations are effective in meeting the 
Smokeless Tobacco Act's format and display requirements and whether 
the current ``safe harbor'' approach is sufficiently enforceable. If 
the Commission determines that the regulations should be amended, it 
will commence a rulemaking proceeding. Should any resulting 
amendments materially affect burden under the PRA, the Commission 
will notify OMB and seek amended clearance.
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    Commission staff also estimates that one smokeless tobacco 
manufacturer will file an initial plan, for an additional burden of 
approximately 150 hours.\3\ 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 apiece) to complete the initial 
required plans. Staff assumed that other companies, whose plans were 
prepared by various other representatives, would require more time, on 
average, to complete their plans. Staff estimated that this latter 
group of companies would each require approximately 150 hours, and it 
believes this estimate remains reasonable.
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    \3\ This company has been selling smokeless tobacco products for 
several years, but failed to submit a plan as required by the Act 
and the regulations. The company currently is in the process of 
obtaining approval of a complying rotational plan. Thus, most, if 
not all, of the 150 estimated burden hours likely will have been 
expended before August 31, 2001. However, erring on the conservative 
side, staff has included these hours in its burden estimate.
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    In addition to the estimates above, the Commission anticipates that 
in the next three years, up to two small importers may submit initial 
plans, for an additional burden of approximately 80 hours. Over the 
past three years, two small importers submitted initial plans. 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 companies spent 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  x  40 hrs. each) + (one company 
 x  150 hours) + (2 companies  x  40 hrs.) = 780 total hours, rounded 
to one thousand hours.]

Estimated annual labor cost burden: $103,000

    The total annualized 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 estimated 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.  x  0.8  x  
$15 = $3,000).
    Estimated annual non-labor cost burden: $0 or minimal.
    The Commission knows of no recordkeeping cost burden associated 
with the plans for the display of the warnings. 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 importers 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.

Christian S. White,
Acting General Counsel.
[FR Doc. 01-11237 Filed 5-3-01; 8:45 am]
BILLING CODE 6750-01-M