Federal Register: May 9, 2005 (Volume 70, Number 88)

DOCID: FR Doc 05-9261

SUBJECT CATEGORY:

Agency Information Collection Activities; Proposed Collection: Comment Request

DATES: Comments must be submitted on or before July 8, 2005.

DOCUMENT SUMMARY:

The FTC is soliciting public comments on proposed information requests to cigarette manufacturers and smokeless tobacco
manufacturers. These comments will be considered before the FTC submits a request for Office of Management and Budget (OMB) review under the Paperwork Reduction Act (PRA), 44 U.S.C. 35013520, of compulsory process orders to the largest companies in those two industries for information concerning, inter alia, their sales and marketing expenditures.

SUMMARY:

Agency information collection activities; proposals, submissions, and approvals,

SUPPLEMENTAL INFORMATION

The sales and marketing data contained in the cigarette and smokeless tobacco reports that the FTC has issued for many years have been based on data submitted to the Commission pursuant to compulsory process by the largest cigarette and smokeless tobacco manufacturers in the United States. \2\ The FTC has authority to compel production of this information from cigarette and smokeless tobacco manufacturers under Section 6(b) of the FTC Act, 15 U.S.C. 46(b). The Federal Reports Elimination and Sunset Act of 1995 \3\ terminated the statutory mandates for these reports and allowed the agency to assess for itself the need for the reports. Accordingly, the Commission sought public comment on whether continuing to issue reports on the cigarette and smokeless tobacco industries was in the public interest and what forms any such reports should take. \4\ The Commission determined that the continued publication of such reports was in the public interest, and subsequently issued several reports.
\2\ Beginning in 1967, the Commission submitted annual reports to Congress on cigarette sales and marketing pursuant to the Federal Cigarette Labeling and Advertising Act. 15 U.S.C. 13311341. Beginning in 1986, the Commission submitted biennially to Congress reports on smokeless tobacco pursuant to the Comprehensive Smokeless Tobacco Health Education Act. 15 U.S.C. 44014408.
\3\ Pub. L. 10466, Section 3003(a)(1), 109 Stat. 734.

\4\ 66 FR 18640 (2001).

More recently, the Commission decided to address its information requests to the ultimate parent of each of the leading cigarette and smokeless tobacco manufacturers in order to assure that no relevant data from affiliated companies goes unreported. This change presumably increases the number of separately incorporated entities affected by the Commission's requests. The Commission intends to seek OMB clearance under the Paperwork Reduction Act before requesting any information for these reports from the largest cigarette and smokeless tobacco manufacturers.

Under the PRA, federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. ``Collection of information'' means agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. 3502(3), 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for public comment before submitting the proposed information collection requirements to OMB for review, as required by the PRA.

The FTC invites comments on: (1) Whether the proposed collections of information are necessary for the proper performance of the functions of the FTC, including whether the information will have practical utility; (2) the accuracy of the FTC's estimate of the burden of the proposed collections of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of collecting 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.
A. Information Requests to the Cigarette and Smokeless Tobacco Industries
1. Description of the Collection of Information and Proposed Use

The FTC proposes to send information requests on an annual basis to the ultimate parent company of each of the five largest cigarette companies and each of the five largest smokeless tobacco companies in the United States (``industry members''). The information requests will seek data regarding, inter alia: (1) The tobacco sales of industry members; (2) how much industry members spend advertising and promoting their tobacco products; (3) whether industry members are involved in the appearance of their tobacco products in television shows or movies; (4) how much industry members spend on advertising intended to reduce youth tobacco usage; (5) the events, if any, during which industry members' tobacco brands are televised; and (6) for the cigarette industry, the tar, nicotine, and carbon monoxide ratings of their cigarettes, to the extent they possess such data.

2. Estimated Hours Burden

The FTC staff's estimate of the hours burden is based on the time required to respond to each information request. Although the Commission intends to issue the information requests only to the five largest cigarette companies and the five largest smokeless tobacco companies (for a total of 10 information requests), the burden estimate is based on up to 15 information requests being issued per year to take into account any future changes in these industries. Because these companies vary greatly in size, in the number of products that they sell, and in the extent and variety of their advertising and promotion, the FTC staff has provided a range of the estimated hours burden. Based upon its knowledge of the industries, the staff estimates that the time required to gather, organize, format, and produce such responses ranges between 30 and 80 hours per information request for all but the very largest companies. The very largest companies could require hundreds of hours per year. Thus, the staff estimates a total of 1,800 hours per year, with an average burden per company for each of the intended ten recipients of 180 hours. The staff estimates that for possible additional
[[Page 24417]]
recipients, which would be smaller companies, the burden should not exceed 300 hours (60 hours per company x 5 companies). Thus the staff's estimate of the total burden is 2,100 hours. These estimates include any time spent by separately incorporated subsidiaries and other entities affiliated with the ultimate parent company that has received the information request. \5\
\5\ The staff's burden estimate takes into account that the first request to the five smokeless tobacco companies may cover data for three calendar years.

3. Estimated Cost Burden

It is not possible to calculate with precision the labor costs associated with this data production, as they entail varying compensation levels of management and/or support staff among companies of different sizes. Financial, legal, marketing, and clerical personnel may be involved in the information collection process. We have assumed that professional personnel will handle most of the tasks involved in gathering and producing responsive information, and have applied an average hourly wage of $150/hour for their labor. The staff's best estimate for the total labor costs for up to 15 information requests is $315,000.

The Commission estimates that the capital or other nonlabor costs associated with the information requests are minimal. Although the information requests may necessitate that industry members maintain the requested information provided to the Commission, they should already have in place the means to compile and maintain business records. William Blumenthal,
General Counsel.
[FR Doc. 059261 Filed 5605; 8:45 am]
BILLING CODE 675001U

FOR FURTHER INFORMATION CONTACT

Requests for additional information should be addressed to Michael Ostheimer, Attorney, Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580. Telephone: (202) 3262699.

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