Light Bulb SS for Proposed Expanded Coverage 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 (“FTC” or “Commission”) proposes to expand coverage
of the Lighting Facts label to include all screw-based and GU-10 and GU-24 pin-based light
bulbs. Under this proposal, manufacturers would have two-and-a half years to conform their
products and packaging to the labeling requirements. The Commission also proposes to require
a specific test procedure for measuring light output for all light emitting diode (LED) bulbs
covered by the Rule. Finally, the Commission is not proposing amendments for several other
issues such as watt-equivalent standards, directional light disclosures, and lead content
disclosures.
On July 19, 2010 (75 Fed. Reg. 41,696), the Commission published new light bulb1
labeling requirements and sought comments on several unresolved issues related to those
requirements2 (those requirements were submitted on July 20, 2010 to OMB for review and
received clearance on August 3, 2010). The new requirements amend the Appliance Labeling
Rule (“Rule”) and feature a “Lighting Facts” label that discloses information about the bulb’s
brightness, annual energy cost, life, color appearance, and energy use.3 The Commission also
sought additional comment on the following unresolved issues: the label’s product coverage,
LED test procedures, watt-equivalence claims, beam spread and directional light disclosures,
lead content disclosures, bilingual labels, fossil fuel lamp labels, and power factor disclosures.
The Commission sought comment on these issues in response to the Congressional directive to
consider reopening the labeling rulemaking in 2011 if the Commission determines that further
labeling changes are necessary.4
Consistent with Congress’ directive, the Commission is now reopening the light bulb
labeling rulemaking to seek comments on proposed amendments to the Rule. Specifically, the
Commission proposes to expand label coverage to additional styles of bulbs and to require a
specific test procedure requirement for LED bulb labels. The comments received in response to

1

This document uses the terms “lamp,” “light bulb,” and “bulb” interchangeably.

2

The Energy Independence and Security Act (EISA) of 2007 directed the Commission to examine existing
light bulb labeling requirements. Pub. L. 110-140. EISA amended the Energy Policy and Conservation Act
(EPCA) (42 U.S.C. 6291 et seq.).
3

The requirements also direct manufacturers to print lumen information and, where appropriate, a mercury
disclosure on the products themselves.
4

42 U.S.C. 6294(a)(2)(D)(iii)(II)(bb).

the July 2010 Notice suggest that these changes will help consumers with their purchasing
decisions.5
(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

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 has sought to ensure that its mercury disclosure
requirements are consistent with existing state requirements.6
(5)

Efforts to Minimize Burden on Small Organizations

Although the EPCA requires the Rule to apply to all manufacturers of covered products,
the Commission is seeking comment about minimizing impact on small businesses. 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 has proposed 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.

5

See http://www.ftc.gov/os/comments/lamplabelingfinal/index.shtm.

6

75 Fed. Reg. at 41,706-41,707.

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(7)

Circumstances Requiring Collection Inconsistent With Guidelines

The proposed amendments’ 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. It has sought comments from the public and other agencies
through its July 2010 Federal Register notice. Additionally, in conjunction with the instant
clearance request, the Commission is seeking public comment on its proposal to modify the label
design for light bulbs and to make miscellaneous other amendments 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
personal or sensitive information is involved nor is any commercially confidential information
included.
(12)

Estimated Annual Hours Burden and Associated Labor Cost

Total Incremental Burden of the Proposed Rulemaking: 54,550 hours
Total Associated Labor Cost: $1,962,412
Package and Product Labeling: The proposed amendments require manufacturers to label
several new bulb types. Accordingly, manufacturers will have to amend their package and
product labeling to include new disclosures. The new requirements impose a one-time
adjustment for manufacturers. The Commission estimates that there are 50 manufacturers
making approximately 3,000 of these newly covered products. This adjustment will require an
estimated 600 hours per manufacturer on average.7 Annualized for a single year reflective of a
prospective 3-year PRA clearance, this averages to 200 hours per year. Thus, the label design
change will result in cumulative annualized burden of 10,000 hours (50 manufacturers x 200
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 $23.44 per hour

7

The Commission has increased its estimate of the hours required to make this change from earlier estimates
given recent concerns raised about the burden of implementing label changes. See 75 Fed. Reg. 81,943 (Dec.
29, 2010) (proposed rule to change the effective date of the 2010 light bulb amendments from July 19, 2010 to
January 1, 2012).

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based on Bureau of Labor Statistics information.8 Thus, the Commission estimates annual labor
cost for this adjustment will total $234,400 (10,000 hours x $23.44 per hour).
Catalog Sellers: The proposed amendments will also require catalog sellers (e.g.,
website and print catalog sellers) to make required disclosures for these products pursuant to 16
C.F.R. § 305.20. The Commission estimates that these sellers each require approximately 17
hours per year to incorporate the data into their catalogs. This estimate is based on the
assumption that entry of the required information takes on average one minute per covered
product and an assumption that the average online catalog contains approximately 1,000 covered
products. Given that there is great variety among sellers in the volume of products that they
offer online, it is very difficult to estimate such numbers with precision. In addition, this
analysis assumes that information for all 1,000 products is entered into the catalog each year.
This is a conservative assumption because the number of incremental additions to the catalog
from year to year is likely to be much lower after initial start-up efforts have been completed.
Applying this assumption, the total annual disclosure burden for all catalog sellers of light bulbs
covered by the Rule is 2,550 hours (150 sellers × 17 hours annually). 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 $23.44 per hour.9 Thus, estimated labor cost for
this adjustment is $59,772 (2,550 hours x $23.44 per hour).
Testing: The Commission assumes conservatively that manufacturers will have to test
3,000 basic models at 14 hours for each model for a total of 42,000 hours.10 In calculating the
associated labor cost estimate, the Commission assumes that this work will be implemented by
electrical engineers at an hourly wage rate of $39.72 per hour.11 Thus, the Commission estimates
that the new label design change will result in associated labor costs of approximately
$1,668,240 (42,000 hours x $39.72 per hour). The Commission does not expect that the final
amendments will create any capital or other non-labor costs for such testing.
Accordingly, the revised estimated total hour burden of the amendments is 54,550 hours
(10,000 hours for packaging and labeling + 2,550 hours for catalog compliance + 42,000 hours
for additional testing for correlated color temperature) with associated labor costs of $1,962,412.

8

See http://www.bls.gov/ncs/ncswage2009.htm (National Compensation Survey: Occupational Earnings in
the United States 2009, U.S. Department of Labor (June 2010), Bulletin 2738, Table 3 (“Full-time civilian
workers,” mean and median hourly wages), at 3-12).
9

Id.

10

The Commission also assumes conservatively that manufacturers will conduct new testing for 3,000 out of
the 6,000 estimated covered products. The Commission does not expect the specific LED testing
requirements will increase burden because existing burden estimates account for testing of products already
covered by the Rule. See 75 Fed. Reg. 81,943.

11

Supra note 8.

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(13)

Estimated Annual Capital or Other Non-labor Costs

The Commission estimates that the annualized capital cost of expanding the light bulb
label coverage is $1,535,000. This estimate is based on the assumptions that manufacturers will
have to change 3,000 model packages over a three-year period to meet the new requirements12
and that package label changes for each product will cost $1,335.13 Manufacturers place
information on products in the normal course of business. Annualized in the context of a 3-year
PRA clearance, these non-labor costs would average $1,335,000 (3,000 model packages x
$1,335 each ÷ 3 years). As for product labeling, the Commission assumes that the one-time
labeling change will cost $200 per model14 for an annualized estimated total of $200,000 (3,000
models x $200 ÷ 3 years). Annualized in the context of a 3-year PRA clearance, these non-labor
costs would average $1,535,000.
(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 54,550
burden hours, annualized, and cumulative of all affected manufacturers, at an estimated labor
cost of $1,962,412, with anticipated additional capital or other non-labor costs of $1,535,000.
(16)

Plans for Tabulation and Publication
Not applicable.

12

This assumes that manufacturers will change packages for one third of their products in the normal course
of business over the compliance period (i.e., 2½ years). The two-and-a half year compliance period and the
notice provided by this proceeding should minimize the likelihood that manufacturers will have to discard
package inventory. In addition, manufacturers may use stickers in lieu of discarding inventory.

13

See 75 Fed. Reg. at 41,711, n. 149 and accompanying text.

14

Subject to relevant forthcoming public comments, the Commission will continue to apply this estimate, as
it had with its July 19, 2010 final issuance of the preceding light bulb amendments. See 75 Fed. Reg. at
41,712.

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(17)

Failure to Display the OMB Expiration Date
Not applicable.

(18)

Exceptions to Certification
Not applicable.

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