Textile SS - 3-16-2015-FINAL

Supporting Statement for Information Collection
Provisions of Rules and Regulations Under the Textile Fiber Products
Identification Act
16 C.F.R. § 303
(OMB Control #: 3084-0101)
1.

Necessity for Collecting the Information

The purpose of the Textile Fiber Products Identification Act (“Textile Act” or “Act”), 15
U.S.C. § 70 et seq., and its implementing Textile Act Rules and Regulations (“Textile Rules”
or “Rules”) is to protect producers and consumers against misbranding and false advertising
of textile fiber products. Section 7(c) of the Act directs the Federal Trade Commission
(“FTC” or “Commission”) to “. . . make such rules and regulations . . . under and in pursuance
of the terms of this Act as may be necessary and proper for administration and enforcement.”
The Textile Rules provide for the collection of information and fall into the
following categories. These category designations will be used throughout this supporting
statement.
Labeling and Invoicing
(e.g., 16 C.F.R. §§ 303.2, 303.15, 303.16, 303.17, 303.21(b), 303.31, 303.32, and
303.33)
The Rules require each covered product to be labeled or invoiced to provide disclosure
of: (1) fiber contents, (2) the identity of the manufacturer or other marketer of the product,
and (3) country of origin information. The various sections of the Rules that comprise this
category implement Section 4(b) of the Textile Act, which specifically mandates the
disclosure of this information. These disclosures are deemed necessary because they provide
material information about the products; lacking this information, potential purchasers could
not make informed buying decisions.
Recordkeeping
(16 C.F.R. § 303.39)
Section 303.39 implements Sections 5 and 6 of the Textile Act. It requires
manufacturers and those marketers who substitute labels (e.g., resellers) to maintain records,
invoices, and other documents that reflect the basis relied upon in making fiber content and
country of origin disclosures shown on invoices and labels attached to textile products.
Records must be retained for three years “to permit a determination that the requirements of the
Act and Regulations have been met and to establish a traceable line of continuity from raw
material through processing to finished product.” This information collection is necessary to
substantiate the country of origin disclosure and to establish a fiber content line of continuity
from raw material through sale of finished product.

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Advertising Disclosures
(16 C.F.R. §§ 303.34, 303.40, 303.41, and 303.42)
Section 303.34 implements Section 4(i) of the Textile Act, which requires each item
description of a covered product offered for sale in catalog or mail order promotional material
to include a clear and conspicuous disclosure of whether “such textile fiber product is
processed or manufactured in the United States of America, or imported, or both.”
Sections 303.40, 303.41, and 303.42 apply in situations where a written advertisement
for a covered product sets forth a “triggering term” (e.g., a fiber trademark or a term implying
fiber content). Where a written advertisement includes such a term, the advertisement must
disclose certain additional information pertaining to fiber content. The Rules implement
Section 4(c) of the Textile Act, which specifically mandates these disclosures in written
advertisements. These disclosures are necessary to preclude misinformation and misleading
representations.
Housemarks
(16 C.F.R. § 303.19)
As mentioned above, manufacturer or other marketer identification is a required
disclosure on labels and invoices of covered products. Companies may satisfy this identity
requirement by stating their business names. However, Section 303.19 establishes an
alternative means through which manufacturers and others may meet this identity requirement
in labeling. This section states: “Where a person has a word trademark, used as a housemark,
registered in the United States Patent Office, such word trademark may be used on labels in
lieu of the name otherwise required.”
Note that use of a housemark is voluntary. Those who opt to use a housemark,
however, must furnish the Commission with a copy of the trademark registration prior to its
use in labeling. Thus, this information collection is necessary only when companies choose to
meet the identity requirement via the alternative method established under Section 303.19.
Generic Name Petitions
(16 C.F.R. § 303.8)
Section 303.8 provides a mechanism whereby a manufacturer of a new, man-made
fiber may petition the Commission to include the new fiber among the list of established
generic fibers. The Rules require the petitioner to provide certain information, including the
chemical composition of the new fiber, samples of the fiber, and a statement of the reasons
why the fiber should not be identified by one of the generic names previously established by
the Commission. This information collection is necessary because it provides the Commission
with the scientific and other data required to make an informed decision whether to amend the
list of established generic fibers (i.e., Section 303.7) or to deny the petition and advise the
applicant of the proper method of disclosure using existing, established generic fiber
categories.
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2.

Use of the Information
Labeling and Invoicing

Potential purchasers, both consumers and businesses, rely upon the disclosed fiber
content and country of origin information to make informed buying decisions in the
marketplace. Disclosure of company identification is used by the Commission for enforcement
purposes, i.e., to identify the manufacturer of a misbranded item. It is also used by other
companies seeking to identify the manufacturer of a particular item for business reasons.
Recordkeeping
The information collected pursuant to the recordkeeping rule is used by manufacturers
and marketers who choose to substitute labels. The records serve as support for the fiber
content and country of origin claims made on labels and invoices and provide a deterrent
against misbranding. The records are also available to the Commission and may be used in an
inquiry or law enforcement action.
Advertising Disclosures
Consumers who purchase covered products by catalog or other mail order sale do not
always have an opportunity to examine the label on the product before buying it. They often
see the label for the first time only after the sale has been consummated. Consequently,
Section 303.34 ensures that, prior to purchase, consumers will be apprised of whether a
covered product offered for sale by catalog or other mail order promotional material is made in
the USA, is imported, or both.
Consumers and other potential purchasers rely upon information contained in
written advertisements. Where such advertisements include a “triggering term,” Sections
303.40, 303.41, and 303.42 ensure that further fiber content disclosures are made to avert
the possibility of deception.
Housemarks
The information collected is a copy of the trademark registration to be used as a
housemark. This must be submitted to the Commission before the housemark is used for
identification purposes. The Commission uses this information for enforcement purposes.
For example, where misbranding is an issue, the Commission can locate the manufacturer by
accessing the file of approved housemarks.

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Generic Name Petitions
The information collected pursuant to the section establishing procedures for adopting a
new generic fiber is used by the Commission to determine whether to amend the list of
established generic fibers (i.e., Section 303.7), or to deny the petition and advise the applicant of
the proper method of disclosure using existing, established generic fiber categories. In practice,
the information collected is technical in nature and is referred to and used by consultant experts
(e.g., polymer chemists) who aid the Commission in the ultimate disposition of the applicant’s
petition.
3.

Consideration of the Use of Improved Information Technology to Reduce Burden

Generally, this item does not apply to any of the categories of information
collection covered by this submission.
The Rules requiring labeling and invoicing, recordkeeping, and disclosure in
advertising merely set forth certain performance standards. For example, fiber content labels
must clearly and conspicuously disclose the required information; however, companies may
avail themselves of any improved technology (e.g., in the area of mechanization, typesetting,
and printing) in meeting these performance standards. In addition, covered entities have
flexibility with regard to the placement of information on labels and the attachment of labels to
products.
The housemark information collection is merely a copy of a registered trademark.
Under the rule provision providing for generic name petitions, the applicant has discretion over
the amount of information to be submitted and the format in which it is presented.
For information that is required to be disclosed on textile product labels, an electronic
disclosure option, pursuant to the Government Paperwork Elimination Act, Pub. L. No. 105277, Title XVII, 112 Stat. 2681-749 (“GPEA”), is impracticable. For non-labeling disclosures,
however, the Commission, in compliance with the Act, has previously amended relevant
Textile Rules definitions so that they are either format-neutral or explicitly recognize and
permit such disclosures in electronic format. See 16 C.F.R. § 303.1(h) (“invoice” or “invoice or
other document”– issued “electronically, in writing, or in some other form capable of being
read and preserved in a form that is capable of being accurately reproduced for later reference,
whether by transmission, printing, or otherwise”), (u) (“mail order catalog” or “mail order
material” – materials disseminated “in print or by electronic means”). Likewise, the rules
permit the maintenance of relevant records in any format, including electronic, that a
manufacturer chooses. 16 C.F.R. § 303.39.
4.

Efforts to Identify Duplication/Availability of Similar Information

There is no other Federal law or regulation that requires the information
collection contained in the Textile Act or Rules.
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The Act and Rules were placed into effect because many companies were not
voluntarily providing material product information or were not providing it in a meaningful,
standardized format that facilitated informed buying decisions in the marketplace. The record
collection and retention requirements do not constitute an “additional burden” to most
companies, because they apply to information that most covered companies would routinely
record and maintain in the normal course of business.
5.

Efforts to Minimize Burden on Small Businesses

The provisions of the Textile Act and the Rules apply to all manufacturers and other
marketers of covered textile fiber products, including small businesses and other small
entities. Under the Act, the Commission has no latitude to treat small businesses differently.
The Act specifically requires “any person” marketing covered products to label, invoice, and
keep records; “person” is defined as, “. . . an individual, partnership, corporation, association
or any other form of business enterprise” (emphasis added). Thus, Congress intended to
cover all concerns, of whatever size, engaged in the marketing of textile fiber products.
Further, the Act does not include language allowing the Commission to either exempt a
particular category of firm or set forth a lesser standard of compliance for any category of
firm.
Although there have been no specific efforts to minimize the burden on small
companies in particular, the Rules serve to achieve this end. Small companies that fall within
the sections requiring labeling and invoicing, recordkeeping, and disclosure in advertising are
aided by the fact that their suppliers (e.g., mills, wholesalers) must provide them with accurate
information regarding fiber content and country of origin. Consequently, their burden would
appear to be minimal. Any company wishing to obtain a housemark need provide only a copy
of a trademark registration. In practice, usually only large textile fiber manufacturers submit
petitions for adopting a new generic fiber because only large companies have the necessary
research and development capabilities to develop such a fiber.
6.

Consequences of Conducting Collection Less Frequently

The disclosure of information required by the labeling and invoicing sections applies
to each covered product in the marketplace. If disclosure were not required in every case, the
objective of informing purchasers of important, material information would be defeated.
The recordkeeping requirement applies to manufacturers and those who substitute
labels (e.g., resellers, printers, and screeners) and requires them to record and retain
substantiation for the labeling claims they make concerning covered products. In the absence
of this requirement, the country of origin disclosure often would be unsupported and the chain
of fiber content continuity from raw material through finished product would be lost. This
would remove an important deterrent against misbranding and would complicate any
Commission investigation, inquiry, or enforcement action.
The sections pertaining to disclosure in advertising provide that (1) each mail order and
catalog advertisement must include a country of origin disclosure, and (2) any advertisement
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that uses a “triggering term” implying the presence of a particular fiber must disclose the
generic names of all the constituent fibers. If country of origin information were not required
in mail order literature, consumers might not receive any country of origin information until
after they purchased a product. If the “triggering term” requirements for fiber disclosure were
relaxed, the objective of preventing dissemination of misinformation and misleading
representations would be more difficult to accomplish.
The issue of collecting information less frequently does not apply to the sections
pertaining to housemarks and generic name petitions. These involve one-time submissions
that are made voluntarily by applicant firms.
7.

Circumstances Requiring Collection Inconsistent with Guidelines

The collection of information under the Rules is consistent with all applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2).
8.

Solicitation of Comments/Consultation Outside the Agency

Over the years, the FTC has had recurring contacts with affected companies and major
trade associations. For example, Commission staff has an ongoing liaison relationship with
the American Apparel and Footwear Association. Staff also has frequent contact with
companies subject to these information collection rules, both large multi-national
corporations and small businesses entering the market.
Based on these recurring contacts with covered companies and its own experience (e.g.,
from reviewing and amending the Rules and conducting routine compliance investigations), the
Commission concludes that virtually all covered companies: (1) are aware of the Rules
pertaining to labeling, invoicing, and advertising; (2) know that the FTC will freely provide
copies of the Textile Act and Rules and additional explanatory materials upon request; and (3)
consider the Rules to be clear and reasonable. Experience further indicates that the information
collection required merely calls for minimal, routine records that generally would be
maintained by a responsible company, even absent the recordkeeping provision.
In 2014, the Commission completed a review of the Textile Rules under its
regulatory review program. Among other things, the Commission had sought comment on
the overall costs, benefits, necessity, regulatory and economic impact of, and possible
modifications to, the Textile Rules. The Commission retained the Rules with certain
clarifying amendments. See 79 Fed. Reg. 18,766 (April 4, 2014).
Most recently, Commission staff sought public comment in connection with the
FTC’s latest PRA clearance request for these Rules, in accordance with 5 C.F.R. 1320.8(d).
See 80 Fed. Reg. 1,411 (January 9, 2015) (no comments were received). Consistent with 5
C.F.R. § 1320.12(c), Commission staff is doing so again contemporaneous with this
submission.
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9.

Payments or Gifts to Respondents
Not applicable.

10. & 11.

Assurances of Confidentiality and Matters of a Sensitive Nature

Actual submission of information pertains only to the housemark rule and the generic
petition rule. The issue of confidentiality ordinarily does not apply in either case. Housemark
holders are a matter of public record. Commission Rules treat petitions or filings for adoption
of a new generic fiber name as public material except those for which confidential classification
was sought, which occurs infrequently. 1 The submitter bears the burden of proving that a
document warrants confidentiality under all applicable statutes, regulations and orders. 2
12.

Estimated annual hours burden: 39,186,772 hours (1,237,015 recordkeeping
hours + 37,949,757 disclosure hours).

Recordkeeping: Staff estimates that approximately 19,031 textile firms are
subject to the Textile Rules’ recordkeeping requirements. Based on an average burden of
65 hours per firm, the total recordkeeping burden is 1,237,015 hours.
Disclosure: Approximately 22,642 textile firms, producing or importing about
20.8 billion textile fiber products annually, are subject to the Textile Rules’ disclosure
requirements. 3 Staff estimates the burden of determining label content to be 65 hours per
year per firm, or a total of 1,471,730 hours and the burden of drafting and ordering labels
to be 80 hours per firm per year, or a total of 1,811,360 hours. 4 Staff believes that the
1

16 C.F.R. § 4.9(b)(3)(I).

2

16 C.F.R. § 4.9(c).

3

The estimated consumption of garments in the U.S. in 2012 was 19.4 billion.
However, staff estimates that 1 billion garments are exempt from the Textile Act (i.e., any kind
of headwear and garments made from something other than a textile fiber product, such as
leather) or are subject to a special exemption for hosiery products sold in packages where the
label information is contained on the package. Based on available data, staff estimates that an
additional 3 billion household textile products (non-garments, such as sheets, towels, blankets)
were consumed. However, approximately 0.6 billion of all of these garments and household
products are subject to the Wool Act, not the Textile Act, because they contain some amount of
wool. Thus, the estimated net total products subject to the Textile Act is 20.8 billion (19.4 – 1
+ 3 = 21.4 – 0.6 = 20.8 billion).
4

In 2006, Congress amended the Wool Act to explicitly define “cashmere” and certain
terms used to describe superfine wool (e.g., “Super 80s,” “Super 90s,” etc.). See Pub. L. 109428. In 2014, the Commission revised the Wool Rules to incorporate these amendments as
well as to clarify and streamline certain provisions and to allow more flexibility in marketing
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process of attaching labels is now fully automated and integrated into other production
steps for about 40 percent of all affected products. For the remaining 12.48 billion items
(60 percent of 20.8 billion), the process is semi-automated and requires an average of
approximately ten seconds per item, for a total of 34,666,667 hours per year. Thus, the
total estimated annual burden for all firms is 37,949,757 hours (1,471,730 hours to
determine label content + 1,811,360 hours to draft and order labels + 34,666,667 hours to
attach labels). 5 Staff believes that any additional burden associated with advertising
disclosure requirements or the filing of generic fiber name petitions would be minimal
(less than 10,000 hours) and can be subsumed within the burden estimates set forth above.
Estimated annual cost burden: $280,754,000, rounded to the nearest thousand
(solely relating to labor costs). The chart below summarizes the total estimated costs.
Task

Hourly
Rate

Burden
Hours

Labor Cost

Determine label
content

$26.00

1,471,730

$38,264,980

Draft and order labels

$17.00

1,811,360

$30,793,120

Attach labels

$5.50 6

34,666,667

$190,666,669

Recordkeeping

$17.00

1,237,015

$21,029,255
$280,754,024

TOTAL
13.

Estimated Capital or Other Non-Labor Costs
Staff believes that there are no current start-up costs or other capital costs associated with

wool products (e.g., allowing the use of certain hang-tags that do not disclose a product’s full
fiber content). The Commission sought comment on the increased burden, if any, imposed by
these changes but did not receive any comments asserting that the amendments would increase
compliance costs. See 79 FR 32157 (June 4, 2014).
5

The Commission revised the Textile Rules in 2006 in response to amendments to the
Textile Act. See 70 Fed. Reg. 73369 (Dec. 12, 2005). These amendments concerned the
placement of labels on packages of certain types of socks and, therefore, do not place any
additional disclosure burden on covered entities. In 2014, the Commission revised the Textile
Rules to clarify and streamline certain provisions and to allow more flexibility in marketing
textile products (e.g., allowing the use of certain hang-tags that do not disclose the product’s full
fiber content). The Commission sought comment on the increased burden, if any, imposed by
these changes but did not receive any comments asserting that the amendments would increase
compliance costs. See 79 FR 18766 (Apr. 4, 2014).
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See note 3.
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the Textile Rules. Because the labeling of textile products has been an integral part of the
manufacturing process for decades, manufacturers have in place the capital equipment necessary
to comply with the Rules’ labeling requirements. Industry sources indicate that much of the
information required by the Textile Act and Rules would be included on the product label even
absent their requirements. Similarly, recordkeeping, invoicing, and advertising disclosures are
tasks performed in the ordinary course of business; therefore, covered firms would incur no
additional capital or other non-labor costs as a result of the Rules.
14.

Estimated Cost to Federal Government

Staff estimates a representative year’s cost imposed by the Rules during the course of
the three-year clearance period sought will be approximately $90,000. Attorney, clerical, and
other support staff costs are included in this estimate, as are employee benefits.
15.

Program Changes or Adjustments

FTC staff has adjusted upward its annual burden estimates. This increase is mostly
attributable to revised upward estimates of compliance time from the industry association. One
small factor in the upward adjustment was an estimated increase in the production of textile
fiber products.
16.

Statistical Use of Information
There are no plans to publish, for statistical use, any information the Rules require.

17.

Display of the Expiration Date for OMB Approval
Not applicable.

18.

Exceptions to the Certification for Paperwork Reduction Act Submissions
Not applicable.

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