Alternative Fuel Rule '13 Supptg Stmt fin

Supporting Statement for
Information Collection Provisions of the Rule
Concerning Labeling Requirements for Alternative Fuels
And Alternative Fueled Vehicles
16 C.F.R. Part 309
(OMB Control #3084-0094)
(1)

Necessity for Collecting the Information

The Energy Policy Act of 1992 (“EPA 92” or “Act”), Pub. L. 102-486, establishes a
comprehensive national energy policy to increase gradually and steadily U.S. energy security in
cost-effective and environmentally beneficial ways. The Act seeks to reduce U.S. dependence
on oil imports, encourage conservation and more efficient energy use, reduce the use of oil-based
fuels in the motor vehicle sector, and provide new energy options. The Act provides for
programs that encourage the development of alternative fuels and Alternative Fueled Vehicles
(AFVs).
EPA 92 directed the Federal Trade Commission (“FTC” or “Commission”) to establish
uniform labeling requirements, to the greatest extent practicable, for alternative fuels and AFVs.
In accordance with the statutory directive, on May 9, 1995, the Commission issued the
Alternative Fuel Rule (“Rule”), which implements EPA 92, and requires disclosure of specific
information on labels posted on fuel dispensers for non-liquid alternative fuels, effective August
21, 1995, and on labels on AFVs, effective November 20, 1995. To ensure the accuracy of the
labeling disclosures, the Rule also requires that sellers maintain records substantiating
product-specific disclosures they include on these labels.
EPA 92 did not specify what information should be displayed on these labels. Instead, it
provided generally that the Commission’s rule must require disclosure of “appropriate,”
“useful,” and “timely” cost and benefit information on “simple” labels. The purpose of the
labeling requirements is to enable consumers to make informed choices and comparisons among
competing non-liquid alternative vehicle fuels and AFVs. In formulating the Rule, the
Commission considered the problems associated with developing and publishing the required
information, taking into account lead time, costs, frequency of changes in costs and benefits that
may occur, and other relevant factors.
Non-Liquid Alternative Fuel Industry:
In general, the Rule establishes standard procedures for determining, certifying and
posting, by means of a label on the fuel dispenser (i.e., fuel pump), the fuel rating of: (1) a
nonliquid alternative vehicle fuel (other than electricity) intended for sale to consumers; and (2)
an electric vehicle fuel dispensing system. For a non-liquid alternative fuel, such as compressed
natural gas or hydrogen, the fuel rating is the commonly used name of the fuel along with a
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disclosure of the amount, expressed as a minimum molecular percentage, of the principal
component of the fuel. A disclosure of other components, expressed as a minimum molecular
percentage, may be included on the dispenser label, if desired. For electric vehicle fuel
dispensing systems, the fuel rating consists of a common fuel identifier, along with a disclosure
of the system’s kilowatt capacity, voltage (including whether the voltage is alternating current or
direct current), amperage, and whether the system is conductive or inductive.
Fuel Rating Determination
The Rule requires that importers, producers, or refiners of non-liquid alternative vehicle
fuels (other than electricity) determine the fuel rating of the alternative fuel they distribute. To
determine fuel ratings for non-liquid alternative vehicle fuels, industry members must possess a
reasonable basis, consisting of competent and reliable evidence, for the molecular percentage of
the principal component of the alternative fuel that they must disclose. They also must have a
reasonable basis, consisting of competent and reliable evidence, for the minimum molecular
percentages of other components that they choose to disclose.
Fuel ratings for compressed natural gas and hydrogen must be determined in accordance
with Rule-prescribed test methods developed by the American Society for Testing and Materials,
a voluntary standards-setting organization. Manufacturers of electric vehicle fuel dispensing
systems must determine the fuel rating of the system before they transfer it. To determine the
fuel rating of the system, manufacturers must possess a reasonable basis, consisting of competent
and reliable evidence, for the system output information they must disclose.
Certification
The Rule also requires that refiners, producers, importers, manufacturers, and distributors
certify the fuel rating of the fuel or electric vehicle fuel dispensing system that they transfer.
For non-liquid alternative vehicle fuels (other than electricity) this certification can be
accomplished in either of two ways: on a delivery ticket with each transfer, or by a one-time
letter or other written statement. For electric vehicle fuel dispensing systems, certification also
can be accomplished in either of two ways: on a delivery ticket with each transfer, or by placing
a permanent mark or label on the electric vehicle fuel dispensing system.
Posting (Labeling)
Retailers are required to post the fuel rating of the electric vehicle fuel dispensing system
or of the alternative fuel they sell to consumers. They must post at least one label on each face
of each fuel dispenser, and if more than one kind of fuel is sold from a single dispenser, separate
disclosures for each kind of fuel must be put on each face of the dispenser.

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Recordkeeping
The Rule also requires refiners, producers, importers, manufacturers, distributors, and
retailers to keep for one year records of any delivery tickets, letters of certification, or tests upon
which they based the fuel ratings that they certified or posted. These records must be open for
inspection by Commission staff members or by persons authorized by the Commission. Thus,
the certification or representation of a fuel rating begins with the importer or refiner or
manufacturer and travels through the chain of distribution to the retailer, where the fuel rating is
posted on the dispenser. The certification is usually noted on delivery tickets already in use, or
is accomplished with a one-time letter of certification or permanent mark, so the recordkeeping
burden is minimal.
Regarding alternative fuels (other than electricity), for purposes of certification, posting
or recordkeeping, if distributors and retailers blend alternative fuels, they must possess a
reasonable basis, consisting of competent and reliable evidence, for the automotive fuel rating
they use.
AFV manufacturers:
The Rule requires that before offering a new covered vehicle for sale to consumers,
manufacturers must affix, and new vehicle dealers must maintain, a new vehicle label on a
visible surface of each such vehicle. If an aftermarket conversion system is installed on a
vehicle by a person other than the manufacturer before a consumer acquires the vehicle, the Rule
requires the manufacturer to provide that person with the vehicle's estimated cruising range and
emission certification standard and to ensure that new vehicle labels are affixed to such vehicles.
Labels for new AFVs must disclose and identify the vehicle’s estimated cruising range,
determined in accordance with ' 309.22 of the Rule and additional general information pertinent
to all consumers considering an AFV acquisition. This general information, which is provided
by the Commission, consists of a list of factors consumers should consider in purchasing an AFV
(and identifies the Departments of Energy and Transportation, with appropriate telephone
numbers, as additional sources of information about AFVs).
The Rule also requires that sellers of used AFVs place a label on a visible surface of each
vehicle. Labels for used AFVs must simply disclose the general information pertinent to all
consumers considering an AFV acquisition.
Manufacturers of AFVs also are required to maintain records for three years that
substantiate the required product-specific disclosures. These records must be available for
inspection by Commission staff members or by persons authorized by the Commission.

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(2)

Use of the Information

The generic fuel rating approach for the non-liquid alternative vehicle fuels (i.e., the
common name of the fuel and the minimum molecular percentage of the fuel’s principal
component) provides consumers with information necessary to make informed fuel-purchasing
decisions. This approach also provides fuel producers and marketers with the flexibility to
develop and blend fuels appropriate for location and climate, and is consistent with EPA and
original equipment manufacturer requirements.
The fuel rating determination, certification, and labeling requirements of the Rule, as well
as the Rule’s AFV labeling requirements, establish a framework that provides consumers with
reliable, comparable, and readily available information about the fuel ratings of similar types of
fuels, and the characteristics of competing AFVs. Using this information, consumers can buy
vehicle fuels and AFVs appropriate for their needs.
The information that must be kept under the Rule’s recordkeeping requirements is used
by FTC staff, or by persons authorized by the FTC. Authorized persons check the records for
enforcement purposes, to ensure the accuracy of representations of fuel ratings for non-liquid
alternative fuels and of estimated cruising ranges and emission certification standards for AFVs.
The information is examined on a case-by-case or spot check basis.
The primary purpose of the recordkeeping requirements is to preserve evidence of the
fuel rating certification from importers, producers, and refiners through the chain of distribution
and of each AFV’s estimated cruising range and emission certification standard. Without
records of how the fuel rating of the non-liquid alternative fuel was represented when the transfer
was made and of how the vehicle’s estimated cruising range and emission certification standard
were determined for AFVs, it would be impossible to ensure that the required labeling
disclosures are accurate and substantiated.
(3)

Consideration of the Use of Improved Information Technology to Reduce Burden

Although nothing in the Rule requires that certifications under the Rule contain any
signature (see ' 309.11), to the extent such a certification may typically involve a signature, the
Rule leaves certifying parties free to use whatever technology they deem appropriate to identify
and authenticate such signatures, consistent with the Government Paperwork Elimination Act, 44
U.S.C. §3504 note (GPEA). Likewise, the Rule complies with GPEA by permitting certain
disclosures to be made (see '' 309.10, 309.20, and 309.21) and necessary records to be kept (see
'' 309.12, 309.14, 309.16, and 309.23) without regard to format, so that a regulated entity, if it
chooses, may conduct these activities electronically.
Under GPEA, however, it would be impracticable and incompatible with the Rule’s
purpose to permit the use of electronic mail or other electronic option to substitute for the
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automotive fuel rating labels (see ' 309.17) that retailers must post on the face of each fuel
dispenser and the vehicle labels (see '' 309.20 and 309.21) that manufacturers and dealers must
affix to new and used covered vehicles. This is because these disclosures must be made to the
consumer at the pump or the vehicle dealership, although nothing in these labeling requirements
expressly prohibits the labels themselves from being electronically displayed if they otherwise
satisfy the typeface, color, size, and durability requirements of the Rule.
(4)

Efforts to Identify Duplication/Availability of Similar Information

The Commission recently proposed to consolidate FTC’s AFV label with EPA’s fuel
economy label for alternative fuel vehicles. See 77 Fed. Reg. 36,423 (June 19, 2012). The
Commission explained that such consolidation will benefit consumers and industry by
eliminating potential confusion caused by overlapping or inconsistent labels, and by reducing the
burden on manufacturers to create and post two labels. Generally, the EPA labels are likely to
be more helpful to consumers in making choices and comparisons because they contain more
vehicle-specific information than the current FTC labels. The Commission has not completed
this rulemaking, and is considering the public comments received for it.
(5)

Efforts to Minimize Burden on Small Businesses

The Rule was designed to impose the minimum possible burden on members of the
affected industries. Under the Rule, the fuel ratings of non-liquid alternative fuels must be
determined by refiners, importers, and producers, and they must retain for one year records they
produced during the rating determination process. The certification of a fuel rating by a refiner
to a distributor, or by a distributor to a retailer, may be made on any document that is used as
written proof of transfer. These fuel transfer documents are already retained by refiners,
distributors, and retailers during the ordinary course of business.
To further minimize the certification and recordkeeping burdens, the Rule permits a fuel
rating certification to be provided by means of a one-time letter of certification, or a permanent
mark or label on an electric vehicle fuel dispensing system, thereby obviating the need for
individual certifications on each delivery ticket. This one-time letter or permanent mark can
remain effective for a number of years, and its retention would constitute compliance with the
recordkeeping requirements in the Rule.
In addition, the Rule is designed to make the compliance burden on manufacturers and
used vehicle dealers as light as possible. Prototype labels for new AFVs are provided by the
Rule as figures 4 through 6 of Appendix A to the Rule. The content (headlines and text) are
standard; the manufacturer need only supply the estimated cruising range and the emission
certification standard. Labels for used AFVs are provided fully by the Rule in Appendix A, as
figures 7 & 8. This information (i.e., “information originally supplied by the Federal
government to the recipient for the purpose of disclosure to the public”) is excluded from the
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definition of “collection of information,” as defined by section 1320.3(c)(2) of the OMB
regulations (5 C.F.R. Part 1320) that implement the Paperwork Reduction Act (“PRA”), 44
U.S.C. §§ 3501-3521.
(6)

Consequences of Conducting Collection Less Frequently

To require less than the aforementioned labeling and recordkeeping requirements for
sellers of non-liquid alternative vehicle fuels and for sellers of AFVs would frustrate the
statutory objective of providing purchasers with “uniform” and “useful” information to enable
them to make informed choices and comparisons among alternative vehicle fuels and AFVs.
(7)

Circumstances Requiring Collection Inconsistent With Guidelines

The collections of information in the Rule are consistent with all applicable guidelines
contained in 5 C.F.R. ' 1320.5(d)(2).
(8)

Consultation Outside the Agency

In the years since the original rulemaking in 1994, FTC staff has triennially sought public
comment on the Rule=s information collection requirements and staff’s associated PRA burden
estimates when the FTC pursues renewed OMB clearance for them. Additionally, the FTC has
sought public comment on the June 19, 2012 proposed rulemaking mentioned above (see item 4)
and for the related June 1, 2011 Advance Notice of Proposed Rulemaking (76 Fed. Reg. 31,513)
preceding it.
As a prelude to this clearance request, the FTC again sought public comment on the
Rule=s information collection requirements and related PRA burden estimates. No comments
were received. Pursuant to the OMB’s regulations that implement the PRA, the FTC is
providing a second opportunity for public comment on this clearance request while seeking
OMB approval to extend the existing PRA clearance for the Rule.
(9)

Payments or Gifts to Respondents
Not applicable.

(10)

Assurances of Confidentiality

To the extent that information covered by a recordkeeping requirement is collected by the
Commission for law enforcement purposes, it would be subject to the confidentiality provisions
of Sections 6(f) and 21 of the Federal Trade Commission Act, 15 U.S.C. '' 46(f), 57b-2, as
applicable.

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(11)

Matters of a Sensitive Nature
Not applicable.

(12)

Annual Hours Burden/Associated Labor Costs

It is common practice for alternative fuel industry members to determine and monitor
fuel ratings in the normal course of their business activities. This is because industry members
must determine the fuel ratings of their products in order to monitor quality and to decide how to
market them. “Burden” for PRA purposes is defined to exclude effort that would be expended
regardless of any regulatory requirement. 5 C.F.R. § 1320.2(b)(2). Moreover, as originally
anticipated when the Rule was promulgated in 1995, many of the information collection
requirements and the originally estimated hours were associated with one-time start up tasks of
implementing standard systems and processes.
Other factors also limit the burden associated with the Rule. Certification might be a
one-time event or require only infrequent revision. Disclosures on electric vehicle fuel
dispensing systems might be useable for several years. Nonetheless, there is still some burden
associated with posting labels. There is also some minimal burden associated with new or
revised certification of fuel ratings and recordkeeping. The burden on vehicle manufacturers is
limited because only newly-manufactured vehicles require label posting and manufacturers
produce very few new models each year.
(a) Estimated total annual hours burden: 52,272 total burden hours
(i) Non-liquid alternative fuels
Certification: Staff estimates that the Rule’s fuel rating certification requirements will
affect approximately 550 industry members (compressed natural gas producers and distributors
and manufacturers of electric vehicle fuel dispensing systems) and consume approximately one
hour each per year for a total of 550 hours.
Recordkeeping: Staff estimates that all 5,900 industry members (non-liquid fuel
producers, distributors, and retailers) will be subject to the Rule’s recordkeeping requirements
(associated with fuel rating certification) and that compliance will require approximately
one-tenth hour each per year for a total of 590 hours.
Labeling: Staff estimates that labeling requirements will affect approximately nine of
every ten industry members (or roughly 5,300 members out of 5,900), but that the number of
annually affected members is approximately 1,100 because labels may remain effective for
several years (staff assumes that in any given year approximately 20% of 5,300 industry
members will need to replace their labels). Staff estimates that industry members require
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approximately one hour each per year for labeling their fuel dispensers for a total of 1,100 hours.
Sub-total: 2,240 hours (550 + 590 +1,100)
(ii) AFV manufacturers
Recordkeeping: Staff estimates that a total of 13 manufacturers will require 30 minutes
to comply with the Rule’s recordkeeping requirements for a total of 7 hours, rounded.
Producing labels: Staff estimates 2.5 hours as the average time required of
manufacturers to produce labels for each of the 10 new AFV models introduced industry-wide
each year for a total of 25 hours.
Posting labels: Staff estimates 2 minutes as the average time to comply with the posting
requirements for each of the approximately 1,500,000 new AFVs for sale and used AFVs for
resale each year for a total of 50,000 hours.
Sub-total: 50,032 hours (7 + 25 + 50,000)
Thus, the total burden for these industries combined is approximately 52,272 hours
(2,240 + 50,032).
(b) Labor Costs
Estimated total labor costs: $1,090,918
Labor costs are derived by applying appropriate hourly cost figures to the burden hours
described above. According to Bureau of Labor Statistics data for 2011 (most recent available
whole-year information), the average compensation for fuel system operators is $28.99 per hour;
$10.33 per hour for automotive service attendants; and $20.69 per hour for transportation
equipment painters.
(i) Non-liquid alternative fuels
Certification and labeling: Generally, all of the estimated hours except for
recordkeeping will be performed by fuel system operators, i.e., producers and distributors of
fuels. Thus, the associated labor costs would be $47,833. [(550 certification hours + 1,100
labeling hours) × $28.99]
Recordkeeping: Only 1/6 of the total recordkeeping hours will be performed by fuel
system operators (1/6 of 590 hours = approximately 98 hours; 98 hours × $28.99 = $2,841); the
other 5∕6 is attributable to service station employees (5/6 of 590 hours = approximately 492
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hours; 492 hours × $10.33 = $5,082). Thus, the labor cost due to recordkeeping for the entire
industry is approximately $7,923 ($2,841 for fuel system operators +$5,082 for service station
employees).
Associated labor cost: $55,756 ($47,833 for certification and labeling costs + $7,923 for
recordkeeping costs).
(ii) AFV manufacturers
The maximum labor cost for the entire industry is approximately $1,035,162 per year for
recordkeeping and producing and posting labels (50,032 total hours × $20.69 per hour).
Thus, the estimated total labor cost for both industries for all collection of information
requirements is $1,090,918 ($55,756 + $1,035,162) per year.
(13)

Estimated Capital and Other Non-Labor Cost Burden
Estimated annual non-labor cost burden: $570,813
(a) Non-liquid alternative fuels

Staff believes that there are no current start-up costs associated with the Rule, inasmuch
as the Rule has been in effect since 1995. Industry members, therefore, have in place the capital
equipment and means necessary to determine automotive fuel ratings and comply with the Rule.
Industry members, however, incur the cost of procuring fuel dispenser and AFV labels to comply
with the Rule. The estimated annual fuel labeling cost, based on estimates of approximately
2,140 fuel dispensers (assumptions: an estimated 20% of 5,350 total fuel retailers need to replace
labels in any given year with an approximate five-year life for labels - i.e., 1,070
retailers—multiplied by an average of two dispensers per retailer) at thirty-eight cents for each
label (per industry sources), is $813 ($0.38 × 2,140).
(b) AFV manufacturers
Here, too, staff believes that there are no current start-up costs associated with the Rule,
for the same reasons as stated immediately above regarding the nonliquid alternative fuel
industry. However, based on the labeling of an estimated 1,500,000 new and used AFVs each
year at thirty-eight cents for each label (per industry sources), estimated annual AFV labeling
cost is $570,000 ($0.38 × 1,500,000).
Thus, the estimated total annual non-labor cost burden associated with the Rule is
$570,813 ($813 + $570,000).

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(14)

Estimated Cost to Federal Government

Staff estimates that a representative year’s cost of administering the Rule’s requirements
during the 3-year clearance period sought will be approximately $19,000. This represents 0.15
of an attorney/economist work year, and includes employee benefits.
(15)

Changes in Burden

Staff=s increased estimate of burden hours (with a corollary rise in associated labor costs)
is due to a rise in the estimated number of AFVs on the market and in the number of affected
entities, and not a function of increased burden per entity. Similarly, its increased estimate of
non-labor cost burden is attributable to an increase in the number of AFVs since staff’s prior
PRA submission three years ago.
(16)

Statistical Use of Information
There are no plans to publish for statistical use any information the Rule requires.

(17)

Requested Permission Not to Display of the Expiration Date for OMB Approval
Not applicable.

(18)

Exceptions to the ACertification for Paperwork Reduction Act Submissions@
None.

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