Appliance Labeling Rule

AGENCY:

Federal Trade Commission (FTC or Commission).

ACTION:

Proposed rule.

SUMMARY:

The 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 21/2 years to conform their products and packaging to the labeling requirements. The Commission also proposes to require a specific test procedure (LM-79) 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.

DATES:

Written comments must be received on or before September 22, 2011.

ADDRESSES:

Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write “Notice of Proposed Rulemaking on Expanded Bulb Coverage for the Lighting Facts Label (16 CFR part 305) (Project No. P084206)” on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/lampcoveragenprm,, by following the instructions on the web-based form. If you prefer to file your comment on paper, mail or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex Y), 600 Pennsylvania Avenue, NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Hampton Newsome, Attorney, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-2889.

SUPPLEMENTARY INFORMATION:

I. Background

On July 19, 2010 (75 FR 41696), the Commission published new light bulb labeling requirements and sought comments on several unresolved issues related to those requirements. The new requirements, which amend the Appliance Labeling Rule, 16 CFR part 305 (“Rule”), feature a “Lighting Facts” label that discloses information about the bulb's brightness, annual energy cost, life, color appearance, and energy use. The Commission also sought additional comment on the following unresolved issues: the label's product coverage, light-emitting diode (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.

II. Proposed Amendments

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 the July 2010 Notice suggest that these changes will help consumers with their purchasing decisions. As discussed in section III, the Commission is not proposing amendments related to any other issues raised in the July 2010 Notice.

A. Expanded Light Bulb Label Coverage

The Commission proposes to expand label coverage beyond medium screw-based products to include all screw-based bulbs and GU-10 and GU-24 pin-based bulbs because expanded coverage will provide consumers uniform information, such as energy cost, brightness, and bulb life, to help them with their lighting decisions. In imposing these requirements, the Commission plans to give manufacturers at least two and a half years to change their packaging to incorporate the new labels. As explained below, the Commission also seeks comment on the Rule's existing exclusions for specialty bulbs (e.g., bug, marine, and mine service lamps) and requiring the Lighting Facts labels for general service fluorescent lamp packages.

In response to the July 2010 Notice, several energy efficiency groups recommended, while industry members opposed, expanding coverage to include all screw-based models, including intermediate and candelabra based models, and GU-10 and GU-24 pin-based models. The energy efficiency groups argued that such expanded label coverage would help consumers choose among bulbs with varying light output, energy efficiency, and other factors.

Specifically, the Natural Resources Defense Council (NRDC) argued that the new label should appear on packages for all screw-based models to ensure that the same information, in the form of the new label, appears on most light bulbs. In its view, the label's consistent disclosures for energy cost, brightness, life, color temperature, and watts will help consumers choose products with the characteristics they seek. According to the NRDC, consumers need the same basic light bulb information regardless of the product's shape (e.g., pear, globe, flame, or spiral), base (e.g., small, medium, or large diameter), or technology (e.g., incandescent, halogen, LED, CFL, etc.). Although medium screw bases are the most common type of consumer lamp, NRDC identified a wide variety of lamps which use candelabra and intermediate bases. During informal visits to retail stores, NRDC observed that these bulbs can range from 2 watts to 100 watts, fit many different applications including chandeliers, night lights, ceiling fans, and halogen fixtures, and use traditional incandescent, halogen, CFL, or LED technology. NRDC also identified wide differences in the light output among these products, arguing that labeling them would ensure a level playing field for industry. Finally, NRDC noted that packages for these products generally have room for the new FTC label.

The Consortium for Energy Efficiency (CEE) also urged labeling for candelabra-based bulbs but added a recommendation for pin-based (GU-24 and GU-10) lamps. In its view, expanding labeling coverage to additional styles of bulbs will better inform consumers about relative product performance and avoid confusion that could be caused by requiring the Lighting Facts label for some products but not others. CEE explained that, because these products can vary significantly in light output, energy use, and other characteristics, the label will be helpful to consumers. For example, current incandescent candelabra-based bulbs generally draw 25-60 watts per lamp and thus have a broad range of energy costs. These products also occupy a significant market share, according to CEE estimates, with candelabra-based products comprising roughly 9% of bulbs sold. Similarly, pin-based CFLs, which also appear in various wattages, comprise roughly 8% of the CFLs in the U.S. in 2008 (approximately 28.3 million lamps) according to CEE estimates. CEE observed that candelabra and pin-based lamps appear in varied light outputs, lifetimes, and color temperatures, suggesting such label information will help consumer purchasing decisions. Finally, CEE recommended that the FTC minimize the burden of expanded label coverage by providing manufacturers with more time to incorporate changes into their normal production and design schedules.

In contrast, the National Electrical Manufacturers Association (NEMA) opposed expanded label coverage. NEMA explained that because intermediate and candelabra-based bulbs use less energy than medium screw base bulbs on a daily basis and appear only in a few household locations such as bathrooms, dining rooms, and some outdoor lighting decorative fixtures, they do not warrant labeling. NEMA also argued that intermediate and candelabra based bulbs produced using differing technologies (e.g., incandescent, CFL, and LED) do not necessarily have the same functionality, and thus are not always direct substitutes for each other, presumably decreasing the comparative benefits of the FTC label. For example, most CFL replacements do not dim and may not provide the same “sparkle” sought by consumers. NEMA also asserted that consumers are likely to purchase intermediate and candelabra bulbs based on aesthetic shape, fit, and maximum wattage of their existing sockets, not on the information provided by the new labels. Finally, NEMA argued that packages for intermediate and candelabra bulbs (often cardboard sheets with plastic bulb covers) have little or no room for the new label.

After considering the comments, the Commission finds the energy efficiency group recommendations for expanding coverage more persuasive than NEMA's arguments opposing them. Contrary to NEMA's assertions, expanded labeling is likely to help consumers compare the variations in energy use, technology, and performance of these products. Specifically, these products can use significant amounts of energy compared to other lighting products. For example, as detailed by the comments, candelabra and intermediate-based incandescent bulbs are likely to draw significantly more watts than their CFL and LED counterparts. These bulbs also may draw more watts than larger, medium-based CFLs and LEDs. In addition, while competing technologies may not be available for some of these bulbs, that is not always the case, and the development of additional competing technologies is likely in the future. Also, given the relatively high wattage and light output variation among these products, consumers are likely to consider the label's light output, energy cost, life, and other disclosures even if, as NEMA states, they also are concerned with other factors such as shape, fit, and maximum wattage. In fact, as indicated by other comments, performance characteristics for these bulbs vary significantly, strongly suggesting that the FTC label, which highlights such variations, will be relevant to many consumers. And, although typical usage patterns (e.g., hours per day of operation) may vary for these products, the standard usage assumption on the Lighting Facts label (i.e., three hours per day) will provide consumers a consistent method to compare performance. Finally, though NEMA raised concerns about package size, the Rule already addresses space limitation issues by allowing an alternative text-only label for packages with less than 24 inches of printable space.

To expand the label's coverage to additional styles of bulbs, the Commission proposes to amend the definition of “general service lamp” to cover all screw-based incandescent, CFL, and LED lamps, eliminate existing exclusions for specific bulb shapes generally available to consumers, and make other minor, conforming changes consistent with this proposal. Currently, the definition excludes G shape lamps (as defined in ANSI C78.20-2003 and C79.1-2002) with a diameter of 5 inches or more; T shape lamps (as defined in ANSI C78.20-2003 and C79.1-2002) that use not more than 40 watts or have a length of more than 10 inches; and B, BA, CA, F, G16-1/2, G-25, G30, S, or M-14 lamps (as defined in ANSI C79.1-2002 and ANSI C78.20-2003) of 40 watts or less.

The Commission seeks comment on this proposal, particularly whether the Rule should retain existing exclusions for the particular shapes described above. Please also provide detailed reasons for all comments. In preparing responses, commenters should review carefully the proposed revisions to the definition of “general service lamp” at the end of this notice. In addition, the Commission requests that comments address whether the Commission should retain existing exclusions for special-use bulbs including appliance lamps as defined at 42 U.S.C. 6291(30); black light lamps; bug lamps; colored lamps as defined at 42 U.S.C. 6291(30); infrared lamps; left-hand thread lamps; marine lamps; marine signal service lamp; mine service lamp; plant light lamps; rough service lamps as defined at 42 U.S.C. 6291(30); shatter-resistant lamps (including shatter-proof lamps and a shatterprotected lamps); sign service lamps; silver bowl lamps; showcase lamps; traffic signal lamps; and vibration service lamps as defined at 42 U.S.C. 6291(30). In addressing label coverage for these specialty bulbs or for any particular bulb shape, comments should indicate whether such bulbs are distributed, to any significant extent, for personal use or consumption by consumers.

Finally, commenters should address whether the Lighting Facts label should appear on the package of general service fluorescent lamps. Currently, the Rule requires an encircled “E” on the package of these lamps to denote compliance with federal efficiency standards. When it issued this requirement in 1994, the Commission declined to require more detailed disclosures (e.g., lumens, life, etc.) because of similarities in the characteristics of competing general service fluorescent lamps. The Commmission asks now whether it should reconsider this decision and, if so, why. In particular, comments should address the extent to which these products are sold to consumers in the residential market, the amount of energy such products use, the variability in energy use between comparable products, the burdens associated with such label changes, and the likelihood the new label information would help consumers in their purchasing decisions for these products.

B. LED Test Procedure

Based on unchallenged support in the comments, the Commission proposes to require a specific test procedure, IES-LM-79-2008 (LM-79), for measuring LED light output and color characteristics to help ensure consistent label content. The July 2010 Notice identified this procedure as a “safe harbor,” allowing manufacturers to use LM-79 as a reasonable basis for LED light output claims. Now, the Commission proposes to make the procedure mandatory and provide manufacturers one year to begin using the procedure as the basis for their label information for LED bulbs. The Commission seeks comment on this proposal.

Comments provided convincing support for the adoption of LM-79. CEE argued that an FTC requirement for LM-79 would create more consistency in the market. It explained that the procedure offers the only test available to measure LED products, given their unique properties. CEE also noted that representatives of industry, research institutions, and test laboratories contributed to its development and that the ENERGY STAR program has incorporated LM-79 into its specifications. Cree, Inc., also explained that most manufacturers know the LM-79 procedures, test labs conduct these measurements, and, in the commercial market at least, consumers are looking for this test data when they purchase LED bulbs.

III. Issues Not Included in Proposed Amendments

After reviewing the comments submitted in response to the July 2010 Notice, the Commission is not proposing any new requirements for watt-equivalence standards, beam spread disclosures, directional light disclosures, lead content disclosures, bilingual labels, fossil fuel lamp labels, and power factor at this time. Unless stated otherwise, the Commission is not seeking additional comments on these issues.

A. Watt-Equivalence Claims

The Commission is not proposing standards for watt-equivalence claims because such requirements may inhibit helpful, truthful representations, and thus may not necessarily help consumers in their bulb purchasing decisions. Nevertheless, manufacturers should heed the Commission's earlier recommendation to use ENERGY STAR equivalence benchmarks for general guidance in developing their watt-equivalence claims.

Watt-equivalence claims often appear on CFL packages and generally contain conspicuous comparisons of the CFL's light output to equivalent incandescent lamps (e.g., “this bulb is a ‘60-watt’ equivalent” or “13W=60W”). In the June 2010 Notice, the Commission sought comment on establishing mandatory, watt-equivalence requirements for these claims.

The comments offered conflicting views. NRDC suggested the Commission set standards to mandate consistency in watt-equivalence claims on light bulb packages. In particular, NRDC, which provided several examples of problematic watt-equivalence claims, urged the Commission to use the ENERGY STAR watt-equivalence benchmarks in that program's CFL specifications. It also noted that the European Union has already adopted such standards. Additionally, NRDC urged standards for reflector lamps separate from those for conventional incandescent bulbs. NEMA also supported standards but, as an alternative, recommended the Commission impose a blanket prohibition on all watt-equivalence claims. Such a prohibition, in NEMA's view, would shift consumers away from using older, nearly obsolete technology as the basis for their bulb comparisons.

Conversely, Cree, Inc. argued that strict standards may actually encourage watt-equivalence claims and cause continued consumer reliance on power as a shorthand for light output. Cree, Inc. also argued that watt-equivalence comparisons should take into account factors other than light output such as light quality and distribution. According to Cree, Inc., products with identical light outputs and color temperature may actually appear to be substantially different to consumers because of factors such as color rendition index, light distribution, and color point location.

After considering these comments, the Commission is not proposing watt-equivalence standards at this time. As discussed by the Commission in the July 2010 Notice, the ENERGY STAR benchmarks provide important guidance, but they may not be applicable in every case. Variables such as color appearance and other factors discussed in the comments make it difficult to apply a “one-size-fits-all” approach. Indeed, rigid equivalence standards could inhibit truthful claims. For example, while typical 60-watt incandescent bulbs have an 800-lumen rating, some 60-watt bulbs that have a cooler light appearance, could have lower lumen ratings (e.g., 675 lumens). A strict legal standard requiring at least 800 lumens for all 60-watt comparisons would prohibit such claims for those cooler, dimmer (e.g., 675 lumens) bulbs even though they are truthful. The comments did not address these concerns in any detail.

However, even in the absence of rigid watt-equivalence standards, manufacturers must ensure they can substantiate their watt-equivalence claims. The comments highlight the need for manufacturers to ensure their watt-equivalence claims are not deceptive. In particular, manufacturers must take into account the brightness of the bulbs they are comparing, as well as other material factors such as light appearance (i.e., color temperature). To help manufacturers with these claims, the ENERGY STAR program has issued watt-equivalence standards that provide general benchmarks for comparing the light output of traditional incandescents to CFLs. In the short run, the Commission recommends that manufacturers adhere to the benchmarks in the ENERGY STAR watt-equivalence guidelines (see Table 1 below) unless they have a reasonable basis for a different equivalence standard. Simply put, if a manufacturer's claim is inconsistent with the ENERGY STAR benchmarks, it must possess another competent and reliable basis to substantiate its claims and should consider clearly qualifying its claims to avoid deception. Deceptive watt-equivalence comparisons are subject to FTC law enforcement actions under § 5 of the FTC Act.

In the long run, as more high-efficiency products appear and older incandescent technology leaves the market, watt-equivalence comparisons will have decreasing relevance to consumers. As equivalence claims recede, lumens will continue to provide a clear, consistent measurement for light output. However, consumer transition from watts to lumens will take time. The Commission encourages manufacturers to focus their communication efforts on lumens to help consumers with their lighting decisions. Eventually, consumer education, coupled with the phase-out of old incandescent bulbs, will help consumers look to lumens, not to obsolete watt-equivalence claims to evaluate bulb brightness.

B. Beam Spread and Directional Light Disclosure

The Commission is not proposing requirements for beam spread or directional light disclosures because the need for such mandatory disclosures to help consumers is unclear. In particular, no consistent definition exists for beam spread across different bulb types and the need for mandatory directional light disclosures is uncertain.

NEMA's comments opposed a beam spread disclosure because definitions of beam spread vary among different bulb types (e.g., reflector and PAR [parabolic aluminized reflector] products). In addition, NEMA asserted that most residential consumers do not understand beam spread terminology. NEMA also indicated that commercial consumers and lighting designers generally obtain beam spread information from manufacturer catalogs, not from packages, thus suggesting that beam spread information on label packages would not be particularly helpful. No other commenter specifically addressed this issue. The Commission does not plan to pursue it further at this time.

NEMA and Cree, Inc. supported a directional light disclosure, arguing it would be useful to consumers and use little space on the package. In particular, NEMA recommended Center Beam Candlepower (CBCP) (i.e., brightness at the center of the beam) for the directional disclosure on packaging for reflector lamps, including PARs. Cree, Inc. added that the label should disclose beam angle (either a specific angle or a category such as spot, flood, etc.).

Despite support in the comments, the Commission is not proposing to require CBCP disclosures at this time because nothing on the record suggests such information is familiar to typical consumers. Given this, CBCP or directional disclosure information may detract from information already on the label. If manufacturers believe such disclosures are important, nothing in the Rule prohibits them from providing it somewhere on the package (other than on the Lighting Facts label), as long as the information is truthful and substantiated.

C. Lead Content Disclosure

The Commission is not proposing a lead disclosure on the Lighting Facts label at this time because there is no clear basis in the comments demonstrating that this additional requirement would assist consumers in their purchasing decisions. According to NEMA, manufacturers have removed most of the lead from regulated products and any remaining lead is not available to human touch.

D. Bilingual Label Requirements

The current Rule allows, but does not require, bilingual labels. In light of the substantial marketing directed at non-English speakers, the July 2010 Notice sought comment on whether, when manufacturers make claims in a foreign language on a light bulb package, they should be required to include the Lighting Facts label in both that language and English. NEMA, the only organization to comment on this issue, opposed such a bilingual labeling requirement, citing space limitations on packages and the confusion multiple languages may cause. The Commission heard from no organizations or persons with expertise in issues affecting non-English speaking consumers.

The Commission believes this issue warrants further consideration. For nearly 40 years, Commission rules, guides, and cease-and-desist orders that mandate the clear and conspicuous disclosure of information in advertisements and sales material have required that such information be displayed in the language of the target audience (ordinarily, the language principally used in the advertisement or sales material in question). Before adopting an alternative approach in the context of light bulb packaging, the Commission will continue to consider this issue and seeks additional information from a wider group of stakeholders. As part of that process, the Commission requests further comment on whether non-English claims on light bulb packages should trigger mandatory bilingual labels or other disclosures, and specifically asks commenters to address the following questions:

1. How prevalent today are non-English claims on light bulb packages? What are the languages being used? What types of information is typically conveyed through such non-English claims?

2. Do any light bulb packages currently include non-English information without displaying a bilingual version of the required FTC label? If so, please address whether, in such circumstances, the English label sufficiently conveys lighting information to non-English speaking consumers given the label's emphasis on numerical information. If so, why? If not, why not?

3. Would a bilingual label requirement triggered by non-English claims on packages discourage manufacturers from including non-English information on their packages? If so why, and what could be done to ameliorate that effect? If not, why not?

4. Could a bilingual label fit on all light bulb packages? If so, why? If not, why not? If the bilingual label could fit some but not all package sizes, how big would the package have to be to reasonably carry a bilingual label? Should a triggered disclosure depend on the size of the label?

5. Finally, the Commission seeks input on any other measures it should consider to help non-English speaking consumers obtain the information provided on the Lighting Facts Label concerning estimated annual energy cost, brightness, light appearance, life energy use, and the presence of mercury.

E. Fossil Fuel Lamps

The Commission is not proposing to require fossil fuel lamp labels (e.g., natural gas lights, propane lights, and kerosene lamps) at this time because there is no clear basis in the record to indicate the Lighting Facts label would be appropriate for these products and thus help consumers in their purchasing decisions. In earlier comments, the Edison Electric Institute urged labeling for fossil fuel lamps noting their high energy costs. However, fossil fuel lamps are significantly different from electric lamps in factors such as fuel type and use. For example, the usage and cost assumptions applicable to electric light bulbs may not apply to fossil fuel lamps. NEMA, which provided the only comments on this issue, noted that consumers use fossil fuel lamps for different applications than other lamps. NEMA also stated that consumers do not expect fossil fuel lamps to be energy efficient.

F. Power Factor

The Commission is not proposing to include power factor on the Lighting Facts label because, according to the comments, power factor does not affect a consumer's energy costs and few consumers are likely to understand the term.

IV. Minor, Clarifying Changes

The Commission also proposes to clarify the Rule language for labeling bulbs that operate at multiple, separate light levels (e.g., “3-way” bulbs) to clarify that such language applies to all covered bulb technologies. Currently, the Rule's language addressing such bulbs applies only to incandescent bulbs.

V. Request for Comment

The Commission invites interested persons to submit written comments on any issue of fact, law, or policy that may bear upon the proposals under consideration. Please include explanations for any answers provided, as well as supporting evidence where appropriate. After examining the comments, the Commission will determine whether to issue specific amendments.

You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before September 22, 2011. Write “Notice of Proposed Rulemaking on Expanded Bulb Coverage for the Lighting Facts Label (16 CFR part 305) (Project No. P084206)” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the Commission Website.

Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest.

Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online, or to send them to the Commission by courier or overnight service. To make sure that the Commission considers your online comment, you must file it at https://ftcpublic.commentworks.com/ftc/lampcoveragenprm,, by following the instructions on the web-based form. If this Notice appears at http://www.regulations.gov/#!home,, you also may file a comment through that website.

If you file your comment on paper, write “Notice of Proposed Rulemaking on Expanded Bulb Coverage for the Lighting Facts Label (16 CFR part 305) (Project No. P084206)” on your comment and on the envelope, and mail or deliver it to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex Y), 600 Pennsylvania Avenue, NW., Washington, DC 20580. If possible, submit your paper comment to the Commission by courier or overnight service.

Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before September 22, 2011. You can find more information, including routine uses permitted by the Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Because written comments appear adequate to present the views of all interested parties, the Commission has not scheduled an oral hearing regarding these proposed amendments. Interested parties may request an opportunity to present views orally. If such a request is made, the Commission will publish a document in the Federal Register stating the time and place for such oral presentation(s) and describing the procedures that will be followed. Interested parties who wish to present oral views must submit a hearing request, on or before September 22, 2011, in the form of a written comment that describes the issues on which the party wishes to speak. If there is no oral hearing, the Commission will base its decision on the written rulemaking record.

VI. Paperwork Reduction Act

The current Rule contains recordkeeping, disclosure, and testing requirements that constitute a “collection of information” as defined by 5 CFR 1320.3(c), the definitions provision within OMB regulations that implement the Paperwork Reduction Act (PRA). OMB has approved the Rule's existing information collection requirements through January 31, 2014 (OMB Control No. 3084-0069). The amendments make changes in the Rule's labeling requirements. Accordingly, the Commission has submitted this notice of proposed rulemaking and associated Supporting Statement to OMB for review under the PRA.

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. 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 burden of 10,000 hours (50 manufacturers × 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 based on Bureau of Labor Statistics information. Thus, the Commission estimates annual labor cost for this adjustment will total $234,400 (10,000 hours × $23.44 per hour).

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 requirements and that package label changes for each product will cost $1,335. 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 × $1,335 each ÷ 3 years). As for product labeling, the Commission assumes that the one-time labeling change will cost $200 per model for an annualized estimated total of $200,000 (3,000 models × $200 ÷ 3 years). Annualized in the context of a 3-year PRA clearance, these non-labor costs would average $1,535,000.

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 CFR 305.20. The Commission estimates that there are approximately 150 entities subject to the amended requirements. 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. Thus, the total annual disclosure burden for all catalog sellers of light bulbs covered by the proposed 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. Thus, estimated labor cost for this adjustment is $59,772 (2,550 hours × $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. 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. Thus, the Commission estimates that the new label design change will result in associated labor costs of approximately $1,668,240 (42,000 hours × $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 and annualized capital or other non-labor costs totaling $1,535,000.

Comments on any proposed labeling requirements subject to review under the Paperwork Reduction Act should additionally be submitted to OMB. If sent by U.S. mail, they should be addressed to Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for the Federal Trade Commission, New Executive Office Building, Docket Library, Room 10102, 725 17th Street, NW., Washington, DC 20503. Comments sent to OMB by U.S. postal mail, however, are subject to delays due to heightened security precautions. Thus, comments instead should be sent by facsimile to (202) 395-5167.

VII. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires that the Commission provide an Initial Regulatory Flexibility Analysis (IRFA) with a proposed rule and a Final Regulatory Flexibility Analysis (FRFA), if any, with the final rule, unless the Commission certifies that the rule will not have a significant economic impact on a substantial number of small entities. See 5 U.S.C. 603-605.

The Commission does not anticipate that the proposed rule will have a significant economic impact on a substantial number of small entities. The Commission recognizes that some of the affected manufacturers may qualify as small businesses under the relevant thresholds. However, the Commission does not expect that the economic impact of the proposed amendments will be significant.

In its July 19, 2010 Notice (75 FR 41711), the Commission estimated that the new labeling requirements will apply to about 50 product manufacturers and an additional 150 online and paper catalog sellers of covered products. The Commission expects that approximately 150 qualify as small businesses.

Accordingly, this document serves as notice to the Small Business Administration of the FTC's certification of no effect. To ensure the accuracy of this certification, however, the Commission requests comment on whether the proposed rule will have a significant impact on a substantial number of small entities, including specific information on the number of entities that would be covered by the proposed rule, the number of these companies that are “small entities,” and the average annual burden for each entity. Although the Commission certifies under the RFA that the rule proposed in this notice would not, if promulgated, have a significant impact on a substantial number of small entities, the Commission has determined, nonetheless, that it is appropriate to publish an IRFA in order to inquire into the impact of the proposed rule on small entities. Therefore, the Commission has prepared the following analysis:

A. Description of the Reasons That Action by the Agency Is Being Taken

Section 321(b) of the Energy Independence and Security Act of 2007 (Pub. L. 110-140) requires the Commission to consider reopening light bulb labeling requirements in 2011. The Commission is proposing expanded product coverage and additional testing requirements to help consumers in their purchasing decisions for high efficiency products.

B. Statement of the Objectives of, and Legal Basis for, the Proposed Rule

The objective of the rule is to improve the effectiveness of the current lamp labeling program. Section 321(b) of the Energy Independence and Security Act of 2007 (Pub. L. 110-140) requires the Commission consider reopening light bulb labeling requirements in 2011 to consider whether alternative labeling approaches would help consumers better understand new high-efficiency lamp products and help them choose lamps that meet their needs.

C. Small Entities to Which the Proposed Rule Will Apply

Under the Small Business Size Standards issued by the Small Business Administration, lamp manufacturers qualify as small businesses if they have fewer than 1,000 employees (for other household appliances the figure is 500 employees). Lamp catalog sellers qualify as small businesses if their sales are less than $8.0 million annually. The Commission estimates that there are approximately 150 entities subject to the proposed rule's requirements that qualify as small businesses. The Commission seeks comment and information with regard to the estimated number or nature of small business entities for which the proposed rule would have a significant economic impact.

D. Projected Reporting, Recordkeeping and Other Compliance Requirements

The changes under consideration would not increase any reporting or recordkeeping requirements associated with the Commission's labeling rules (75 FR 41696). The amendments will increase compliance burdens by extending the labeling requirements to new types of light bulbs. The Commission assumes that the label design change will be implemented by graphic designers.

E. Duplicative, Overlapping, or Conflicting Federal Rules

The Commission has not identified any other federal statutes, rules, or policies that would duplicate, overlap, or conflict with the proposed rule. The Commission invites comment and information on this issue.

F. Significant Alternatives to the Proposed Rule

The Commission seeks comment and information on the need, if any, for alternative compliance methods that, consistent with the statutory requirements, would reduce the economic impact of the rule on small entities. For example, in proposing to extend the bulb coverage, the Commission is currently unaware of the need to adopt any special provision for small entities to be able to take advantage of the proposed extension or exemption, where applicable. However, if such issues are identified, the Commission could consider alternative approaches such as extending the effective date of these amendments for catalog sellers to allow them additional time to comply beyond the labeling deadline set for manufacturers. Nonetheless, if the comments filed in response to this notice identify small entities that are affected by the rule, as well as alternative methods of compliance that would reduce the economic impact of the rule on such entities, the Commission will consider the feasibility of such alternatives and determine whether they should be incorporated into the final rule.

VIII. Communications by Outside Parties to the Commissioners or Their Advisors

Written communications and summaries or transcripts of oral communications respecting the merits of this proceeding, from any outside party to any Commissioner or Commissioner's advisor, will be placed on the public record. See 16 CFR 1.26(b)(5).

IX. Proposed Rule

List of Subjects in 16 CFR Part 305

• Advertising
• Energy conservation
• Household appliances
• Labeling
• Reporting and recordkeeping requirements

For the reasons discussed above, the Commission proposes to amend part 305 of title 16, Code of Federal Regulations, as follows:

PART 305—RULE CONCERNING DISCLOSURES REGARDING ENERGY CONSUMPTION AND WATER USE OF CERTAIN HOME APPLIANCES AND OTHER PRODUCTS REQUIRED UNDER THE ENERGY POLICY AND CONSERVATION ACT (“APPLIANCE LABELING RULE”)

1. The authority citation for part 305 continues to read as follows:

Authority: 42 U.S.C. 6294.

2. In § 305.3, revise paragraphs (l), (m), (n), (o), (p) and (q) to read as follows: