Lamp Labeling Effectiveness '09 SS FIN_mtd

Supporting Statement
Proposed Amendments to the Appliance Labeling Rule
16 C.F.R. Part 305
(OMB No. 3084-0069)
(1)

Necessity for Collecting the Information

The Federal Trade Commission (“Commission” or “FTC”) is proposing lamp labeling
amendments to the Appliance Labeling Rule (“Proposed Rule”), 16 CFR Part 305, in response to
Congressional direction in the Energy Independence and Security Act of 2007, Pub. L. 110-140
(“EISA”). Among other things, EISA directs the Department of Energy (“DOE”) to issue
stringent energy efficiency standards for lighting products. These standards will eliminate low
efficiency incandescent light bulbs from store shelves. The remaining high efficiency light bulbs
will include products widely available now, such as compact fluorescent lamps (“CFLs”), as
well as products that are likely to become increasingly available in the future such as improved
incandescent bulbs and very high efficiency solid-state lighting, e.g., light-emitting diode (LED)
products.
Given these changes, Congress directed the FTC to consider the effectiveness of its
current light bulb disclosure requirements and possible alternative labeling disclosures that could
help consumers understand new high-efficiency bulbs and help them choose bulbs that meet
their needs.1 In particular, the law directs the Commission to consider labeling disclosures that
address consumer needs for information about lighting level, light quality, lamp life, and total
lifecycle cost. The Commission must complete this effort by June 2010.2 Section 321(c) of the
EISA requires DOE, in cooperation with the FTC and other agencies, to conduct a “proactive
national program of consumer awareness, information, and education” to help consumers
understand new light bulb labels and make energy-efficient lighting choices that meet their
needs.
To begin fulfilling this mandate, the Commission published an Advance Notice of
Proposed Rulemaking (“ANPR”) on July 18, 2008 (73 FR 40988) seeking comment, and then
held a public roundtable on September 15, 2008. Commenters and roundtable participants
discussed the effectiveness of current labeling requirements, as well as whether labeling
alternatives would help consumers in their purchasing decisions. Using this information, the

1

Section 321(b) of EISA amends section 324(a)(2)(C) of the Energy Policy and Conservation Act (EPCA)
(42 U.S.C. 6294(a)(2)(C)). Additional amendments in EISA redesignate 6294(a)(2)(C) as 6294(a)(2)(D) (see
section 324(d) of EISA).
2

Section 321(b) of EISA (42 U.S.C. 6294(a)(2)(D)) also gives the Commission the discretion to “consider
reopening the rulemaking not later than 180 days before the effective dates of the standards for general service
incandescent lamps [implemented by DOE], if the Commission determines that further labeling changes are
needed to help consumers understand lamp alternatives.”

Commission conducted a consumer research study to aid in determining what revisions, if any, it
should make to existing labeling requirements.3
The Commission has considered the effectiveness of current requirements and alternative
approaches for labeling lamps, commonly referred to as light bulbs.4 After reviewing public
comments and conducting consumer research, the Commission now proposes amendments to the
Rule that would require light bulb packages to display brightness and energy cost information on
the front panel and a detailed “Lighting Facts” label on the side or rear. The proposed
amendments also would require certain disclosures on the bulbs. These new labeling
requirements should help consumers choose energy efficient bulbs that meet their lighting needs.
The Commission is seeking comments on these proposed changes.
(2)

Use of the Information

The primary purpose of the Rule is to encourage consumers to comparison shop for
energy-efficient household products. Consumers will use the required labeling to help them
purchase light bulbs.
(3)

Consideration of Using Improved Technology to Reduce Burden

The proposed amendments permit the use of any technologies that covered firms may
wish to employ and that may reduce the burden of information collection. Disclosing energy
usage information to consumers, however, entails labeling on products or their packaging; as
such, electronic disclosure pursuant to the Government Paperwork Elimination Act, 44 U.S.C.
§ 3504 note, is impracticable.
(4)

Efforts to Identify Duplication

Under the EPCA (see footnote 1), the FTC does not have discretion to forgo this
rulemaking proceeding. Nonetheless, for most issues covered by the proposed Rule, the
Commission staff has not identified any other federal statutes, rules, or policies that would
duplicate the proposed Rule. The Commission understands, however, that some states have
mercury disclosure rules that apply to light bulb packages. The Commission intends to ensure
that its mercury disclosure requirements5 are consistent with existing state requirements.

3

See 73 FR 72800 (Dec. 1, 2008); 74 FR 7894 (Feb. 20, 2009). See comments at
http://www.ftc.gov/os/comments/lampstudypra2/index.shtm.
4

This Notice uses the terms lamp, light bulb, and bulb interchangeably.

5

The Commission proposes requiring disclosures for light bulbs containing mercury. The EISA amendments
provided the Commission with general authority to consider “alternative labeling approaches that will help
consumers to understand new high efficiency lamp products” including CFLs. See 42 U.S.C.
6294(a)(2)(D)(iii)(I)(bb). The proposed language of those disclosures, which would appear on product
(continued...)

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(5)

Efforts to Minimize Burden on Small Organizations

Although the EPCA requires the Rule to apply to all manufacturers of covered products,
the Commission sought comments in the ANPR about minimizing impact on small businesses.
It received no specific comments responding to that request. While some manufacturers subject
to the Rule's requirements may be small businesses, staff believes that everything consistent with
the requirements of EPCA has been done to minimize compliance burden. The Commission will
consider establishing an effective date for the new requirements that will ensure affected
companies have adequate time to comply with the Rule.
(6)

Consequences of Conducting the Collection Less Frequently

Not applicable; there is no flexibility within the framework of EPCA to “collect” less
frequently the information contained in the proposed new labeling requirements.
(7)

Circumstances Requiring Collection Inconsistent With Guidelines

The proposed Rule’s information collection requirements are consistent with all
applicable guidelines contained in 5 C.F.R. § 1320.5(d)(2).
(8)

Consultation Outside the Agency

In developing the proposed requirements, the Commission has conducted extensive
consultation outside the agency. The Commission has sought comments from the public and
other agencies through its July 2008 ANPR and a public workshop in September 2008. The FTC
staff also conducted consumer research on various label designs in 2009. Finally, in conjunction
with the instant clearance request, the Commission is seeking public comment on its proposal to
modify the label design and make other miscellaneous changes to the Rule.
(9)

Payments and Gifts to Respondents
Not applicable.

(10) & (11)

Assurances of Confidentiality/Matters of a Sensitive Nature

The information to be disclosed is of a routine business nature. It is collected and
disseminated by the industry among its membership and made available to the public. No

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(...continued)
packaging, is consistent with that which already appears on many packages given existing ENERGY STAR
criteria and language recommended by the National Electronic Manufacturers Association to its members. In
addition, the proposed amendments require a mercury disclosure on the bulbs themselves to help consumers
properly dispose of CFLs.

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personal or sensitive information is involved nor is any commercially confidential information
included.
(12)

Estimated Annual Hours Burden and Associated Labor Cost6

Total Incremental Burden of the Proposed Rulemaking: 2,384
Total Associated Labor Cost: $72,062
Burden estimates for the proposed Rule are based on data previously submitted by
manufacturers to the FTC under the Rule’s existing requirements and on the staff’s general
knowledge of manufacturing practices.
Package and Product Labeling: The proposed Rule requires manufacturers to change
their light bulb packages and light bulbs to include new disclosures. The new requirements
would require a one-time change for manufacturers. The Commission estimates that this onetime change will take 80 hours per manufacturer. Annualized for a single year reflective of a
prospective 3-year clearance, this averages to 26.67 hours per year. Based on past estimates, the
Commission further estimates that there are approximately 50 manufacturers of affected covered
products. Therefore, the label design change will result in a cumulative burden of 1,334 hours
(50 manufacturers x 26.67 hours). In estimating the associated labor cost, the Commission
assumes that the label design change will be implemented by graphic designers at an hourly
wage rate of $22.70 per hour based on Bureau of Labor Statistics information.7 Thus, the
Commission estimates that the labor cost for this new label design change will $30,282 (1,334
hours x $22.70 per hour).
Catalog Disclosures: The proposed Rule also requires retailers who sell through
catalogs to disclose information that is required on package labels for lamps. The Commission’s
previous estimates of the rule’s burden on catalog sellers (including Internet sellers) have
assumed conservatively that catalog sellers must enter their data for each product into the catalog
each year (see, e.g,. 71 FR 78057, 78062 (Dec. 28, 2006)). The rule change does not alter that
assumption because the amendments require a one-time change of all products in affected
catalogs. This one-time change is consistent with previous burden estimates. Accordingly, the
Commission does not believe any change is required to the existing burden estimates for catalog
sellers.

6

As detailed in section IV.D. of the associated notice of proposed rulemaking, the proposed amendments
include lifting a current stay on implementation of reporting provisions under the Rule;. The current PRA
clearance for the Rule's information collection requirements, however, includes prior burden estimates for
those requirements. Accordingly, the instant burden analysis accounts solely for information collection
provisions not previously implemented or otherwise accounted for in previously cleared PRA submissions.
7

See http://www.bls.gov/ncs/ncswage2008.htm#Wage_Tables (National Compensation Survey:
Occupational Earnings in the United States 2008, U.S. Department of Labor (August 2009), Bulletin 2720,
Table 3 (“Full-time civilian workers,” mean and median hourly wages), at 3-12).

4

Color Temperature: The proposed Rule may require additional testing for correlated
color temperature, if such testing has not already been conducted in the normal course of
business. Although the Commission expects that many manufacturers conduct such testing for
other purposes (e.g., ENERGY STAR criteria), the Commission assumes, based on past
estimates of basic models, that manufacturers will have to test 2,100 basic models at 0.5 hours
for each model for a total of 1,050 hours. In calculating the associated labor cost estimate, the
Commission assumes that the label design change will be implemented by electrical engineers
at an hourly wage rate of $39.79 per hour based on Bureau of Labor Statistics information (see
footnote 7). Thus, the Commission estimates that the new label design change will result in
associated labor cost of approximately $41,780 (1,050 hours x $39.79 per hour).
Accordingly, the estimated total burden of the proposed amendments is 2,384 hours
(1,334 hours for packaging and labeling + 1,050 hours for additional testing for correlated color
temperature).
(13)

Estimated Annual Capital or Other Non-labor Costs

The Commission does not expect that these amendments will create any capital or other
non-labor costs.
(14)

Estimated Cost to Federal Government

Staff believes that the cost to the FTC for administering the proposed Rule changes will
be de minimis. Accordingly, Commission staff retains the previous estimate of $90,000 per year
as the cost to the Government for implementing the Rule. This estimate is based on the
assumption that one-half attorney work year and half of a legal technician work year will be
expended.
(15)

Program Changes/Adjustments

The proposed additional labeling disclosures will result in an estimated additional 2,384
hours, cumulative of all affected manufacturers, at an estimated labor cost of $72,062, with no
anticipated additional capital or other non-labor costs.
(16)

Plans for Tabulation and Publication
Not applicable.

(17)

Failure to Display the OMB Expiration Date
Not applicable.

(18)

Exceptions to Certification
Not applicable.
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