22562 Federal Register / Vol. 66, No. 87 / Friday, May 4, 2001 / Notices

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.

3This 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.

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.

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.

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 × 40 hrs.

each) + (one company × 150 hours) + (2

companies × 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. × 0.8 × $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

FEDERAL TRADE COMMISSION

Agency Information Collection

Activities; Proposed Collection;

Comment Request; Extension

AGENCY: Federal Trade Commission

(FTC).

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, 2004 the current

PRA clearance for information

collection requirements contained in its

Telemarketing Sales Rule, 16 CFR part

435 (‘‘TSR’’ or ‘‘Rule’’). That clearance

expires on August 31, 2001.

DATES: Comments must be submitted on

or before June 4, 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

‘‘Telemarketing Sales Rule: Paperwork

comment.’’

FOR FURTHER INFORMATION CONTACT:

Requests for additional information or

copies of the proposed information

requirements should be addressed to

Karen Leonard, Attorney, Division of

Marketing Practices, Bureau of

Consumer Protection, Federal Trade

Commission, Room H–238, 600

Pennsylvania Ave., NW., Washington,

DC 20580, (202) 326–3597.

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

Federal Register / Vol. 66, No. 87 / Friday, May 4, 2001 / Notices 22563

1Although telemarketing fraud causes significant

harm to consumers—Congress has estimated that

misrepresentations or material omissions in

telemarketing sales presentations result in $3

billion to $40 billion annually in consumer injury—

the harm caused by telemarketing fraud remains a

small fraction of the $400 billion in total annual

sales through telemarketing.

2 Direct Marketing Association Statistical Fact

Book 2000 (22d ed. 2000) (based on data for 1997–

1998, the two most recent years included within

this source information).

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 TSR (OMB Control

Number 3084–0097).

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.

The TSR implements the

Telemarketing and Consumer Fraud and

Abuse Prevention Act, 15 U.S.C. 6101–

6108 (‘‘Act’’). The Act seeks to prevent

deceptive or abusive telemarketing

practices. It mandates certain

disclosures by telemarketers, and directs

the Commission to consider

recordkeeping requirements in its

promulgation of a telemarketing rule to

address such practices. As required by

the Act, the TSR mandates certain

disclosures regarding telephone sales

and requires telemarketers to retain

certain records regarding advertising,

sales, and employees. The disclosures

provide consumers with information

necessary to make informed purchasing

decisions. The records are available for

inspection by the Commission and other

law enforcement personnel to determine

compliance with the Rule. Records may

also yield information helpful to

measuring and redressing consumer

injury stemming from Rule violations.

Burden Statement

Estimated Annual Hours Burden:

2,301,000 Hours

The estimated recordkeeping burden

is 50,000 hours for all industry members

affected by the Rule. The estimated

burden related to the disclosures that

the Rule requires is 2,251,000 hours

(rounded to nearest thousand) for all

affected industry members, for a total of

2,301,000 burden hours.

Recordkeeping: At the time the

Commission issued the Rule, it

estimated that during the initial and

subsequent years after the Rule took

effect, 100 new telemarketing entities

per year would find it necessary to

revise their practices to conform with it,

each requiring approximately 100 hours

to develop a compliant recordkeeping

system, for a cumulative yearly total of

10,000 burden hours. The Commission

received no comments relating to this

estimate either when it issued the Rule

nor during the ensuing rule review and

PRA clearance processes, and staff

believes the estimate remains

representative. There is no reason to

believe that the number of affected new

entrants each year has increased.

Of the estimated 39,900 industry

members who have already assembled

and retained the required records in

their recordkeeping systems, staff

estimates that each member requires

only one hour per year to file and store

records required by the Rule. For

purposes of estimation, staff has

rounded by the cumulative sub-total of

39,900 hours to 40,000 hours. Thus,

total estimated annual recordkeeping

burden for new and existing entities is

50,000 hours.

Disclosure: Staff believes that a

substantial majority of telemarketers

now make in the ordinary course of

business the disclosures the Rule

requires because to do so constitutes

good business practice.1 To the extent

this is so, the time and financial

resources needed to comply with

disclosure requirements do not

constitute ‘‘burden.’’ 16 CFR

1320.3(b)(2). Moreover, many state laws

require the same or similar disclosures

the Rule mandates. Thus, the disclosure

hours burden attributable solely to the

Rule is far less than the total number of

hours associated with the disclosures

overall. As before when last seeking

OMB clearance and related public

comment, staff estimates that the

disclosures the Rule requires would be

made in at least 75 percent of

telemarketing presentations even absent

the Rule. See 63 FR 40713, July 30,

1998. Staff received no comments at that

time refuting this estimate. Accordingly,

staff determined that the hours burden

estimate for the Rule’s disclosure

requirements is 25 percent of the total

hours associated with disclosures of the

type the TSR requires. Staff estimates

the portion attributable to the Rule to be

2,251,000, rounded to the nearest

thousand. The components of this total

are detailed in the immediately

following paragraphs that address hours

burden.

In connection with the Rule’s

issuance and in the ensuing rule review

and PRA clearance processes, staff

estimated that the 39,900 (rounded to

40,000) industry members make

approximately 9 billion calls per year,

or 225,000 calls per year per company.

The TSR provides that if an industry

member chooses to solicit inbound calls

from consumers by advertising media

other than direct mail or by using direct

mail solicitations that make certain

required disclosures (providing for an

inbound telephone call as a possible

response) that member is exempted

from complying with the Rule’s oral

disclosures. Staff estimates that at least

9,000 firms will choose to adopt

marketing methods that exempt them

from complying with the Rule’s oral

disclosure requirements. This

assumption is based on industry data

indicating that slightly over 20% of

industry members engage in direct mail

solicitations involving telemarketing 2

(and staff’s corollary assumption that

these solicitations will include written

disclosures the Rule alternatively

requires).

When the Commission issued the

TSR, staff estimated that it takes 7

seconds for telemarketers to disclose the

required outbound call information

orally. Staff also estimated that a least

60 percent of calls result in ‘‘hang-ups’’

before the seller or telemarketer can

make all the required disclosures and

the ‘‘hang-up’’ calls consume only 2

seconds. Accordingly, staff estimates

that the total time associated with these

initial disclosure requirements is

approximately 250 hours per firm

(90,000 non-hang up calls (.40 ×

225,000) × 7 seconds per call) +

(135,000 hang-up calls (.60 × 225,000) ×

2 seconds per call). Thus, the total time

expenditure for the 31,000 firms

choosing marketing methods that

require these oral disclosures is 7.75

million hours. When it initially

published this estimate, the

Commission received no comments on

it nor had the Commission received

related comments in the ensuing Rule

review and PRA clearance processes.

Staff believes the estimate remains

reasonable. Based on the assumption

22564 Federal Register / Vol. 66, No. 87 / Friday, May 4, 2001 / Notices

that no more than 25 percent of this

time constitutes ‘‘burden’’ imposed

solely by the Rule (as opposed to the

normal business practices of most

affected entities apart from the Rule’s

requirements), the burden subtotal

attributable to these basic disclosures is

1,937,500 hours.

The TSR also requires further

disclosures before the customer pays for

goods or services. Specifically,

telemarketers must disclose the total

cost of the offered goods or services; all

material restrictions; and all material

terms and conditions of the seller’s

refund, cancellation, exchange, or

repurchase policies (if a representation

about such a policy is a part of the sales

offer). If a prize promotion is involved

in connection with the sale of goods or

services, the telemarketer must also

disclose information about the nonpurchase entry method for the prize

promotion. Staff estimates that these

disclosures consume approximately 10

seconds. However, the Rule requires

these disclosures only when a call

results in a sale. Staff estimates that

sales occur in approximately 6 percent

to telemarketing calls. Accordingly, the

estimated amount of time for these

disclosures is 37.5 hours per firm

(13,500 calls resulting in a sale (.06 ×

225,000 × 10 seconds) or 1.163 million

hours for the 31,000 firms choosing

marketing methods that require oral

disclosures. When it initially published

this estimate, the Commission received

no comments on this estimate nor had

it received related comments in the

ensuing Rule review and PRA clearance

processes. Again, staff believes the

estimate remains reasonable. Based on

the assumption that no more than 25

percent of this time constitutes

‘‘burden’’ imposed solely by the Rule,

the burden subtotal attributable to these

additional disclosures is 290,750 hours.

As noted above, staff estimates that

approximately 9,000 telemarketing firms

will choose the written disclosure

option. Firms electing this option are

likely to be those using written

advertising materials. Thus, the burden

of adding the required disclosures

should be minimal. Staff previously

estimated that a typical firm will spend

approximately 10 hours per year

engaged in activities ensuring

compliance with this provision of the

Rule, for an estimated total burden of

90,000 hours for all 9,000 firms using

written disclosure. As was the case

regarding the other estimates stated

above, when the Commission initially

published this estimate, it received no

comments on it nor had the Commission

received any such comments in the

ensuring Rule review and PRA

clearance processes. Staff believes this

estimate also remains reasonable. Based

on the assumption that no more than 25

percent of this time constitutes

‘‘burden’’ imposed solely by the Rule,

residual burden attributable to these

written disclosures is 22,500 hours.

Estimated Annual Labor Cost Burden:

$34,361,000

The estimated labor cost for

recordkeeping is $600,000. Assuming a

cumulative burden of 10,000 hours/year

to set up compliant recordkeeping

systems, and applying to that a skilled

labor rate of $20/hour, start-up costs

would approximate $200,000 yearly for

all new telemarketing entities. Staff also

estimates that existing industry

members require 40,000 hours,

cumulatively, to maintain compliance

with the TSR’s recordkeeping

provisions. Applying a clerical cost rate

of $10/hour, cumulative recordkeeping

maintenance would cost approximately

$400,000 annually. The estimated labor

cost for disclosure is $33,765,000, based

on an estimate of 2,251,000 disclosure

burden hours and a wage rate of $15/

hour. Thus total labor cost, rounded to

the nearest thousand, is $34,361,000.

Estimated Annual Non-Labor Cost

Burden: $10,022,000

Total capital and start-up cost: Staff

estimates that the capital and start-up

costs associated with the TSR’s

information collection requirements are

de minimis. The Rule’s recordkeeping

requirements mandate that companies

maintain records but not in any

particular form. While those

requirements necessitate that affected

entities have a means of storage,

industry members should have that

already regardless of the Rule. Even if

an entity finds it necessary to purchase

a storage device, the cost is likely to be

minimal, especially when annualized

over the item’s useful life. The Rule’s

disclosure requirements require no

capital expenditures.

Other non-labor cost: Affecters

entities need some storage media such

as file folders, computer diskettes, or

paper in order to comply with the Rule’s

recordkeeping requirements. Although

staff believes that most affected entities

would maintain the required records in

the ordinary course of business, staff

estimated that the approximately 40,000

industry members affected by the Rule

spend a annual amount of $50 each on

office supplies as a result of the Rule’s

recordkeeping requirements, for a total

recordkeeping cost burden of

$2,000,000.

To comply with the Rule’s disclosure

requirements, telemarketing firms likely

incur additional cost for telephone

service, assuming that the firms spend

more time on the telephone with

customers due to the required

disclosures. As further detailed above,

staff believes that the burden relating to

the required oral disclosures amounts to

8,913.000 hours (7.75 million initial

disclosure hours + 1.163 million hours

regarding sales). Assuming all calls to

customers are long distance, at a

commercial calling rate of 6 cents per

minute ($3.60 per hour), affected

entities as a whole may incur up to

$32,086,800 in telecommunications cost

as a result of the Rule’s disclosure

requirements. However, as also noted

above, staff estimates that only 25

percent of such disclosures constitute

‘‘burden.’’ Accordingly, the oral

disclosure cost burden, adjusted for this

apportionment, is $8,022,000, rounded

to the nearest thousand.

Staff believes that the estimated 9,000

entities choosing to comply with the

Rule through written disclosures incur

no additional capital or operating

expenses as a result of the Rule’s

requirements because they are likely to

provide written information to

prospective customers in the ordinary

course of business. Adding the required

disclosures to that written information

likely requires no supplemental

expenditures.

Thus, total estimated non-labor cost

burden associated with the Rule is

$10,022,000 ($2,000,000 for

recordkeeping + $8,022,000 for oral

disclosures).

Christian S. White,

Acting General Counsel.

[FR Doc. 01–11238 Filed 5–2–01; 8:45 am]

BILLING CODE 6750–01–M

GENERAL ACCOUNTING OFFICE

[Document No. JFMIP–SR–01–01]

Joint Financial Management

Improvement Program (JFMIP)—

Federal Financial Management System

Requirements (FFMSR)

AGENCY: Joint Financial Management

Improvement Program (JFMIP)

ACTION: Notice of document availability.

SUMMARY: The JFMIP is seeking public

comment on an exposure draft entitled

‘‘Benefit System Requirements,’’ dated

May 2001. The draft is the first Federal

Financial Management System

Requirements (FFMSR) document to

address standard requirements for

Federal agency benefit systems. The

document is intended to assist agencies

when developing, improving or