67102 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

Regulation K would not have a FEDERAL TRADE COMMISSION December 16, 1971, 36 FR 23883 (1971). significant economic impact on a In 1983, the Commission amended the substantial number of small entities that 16 CFR Part 423 Rule to clarify its requirements by are subject to its regulation. identifying in greater detail the washing Trade Regulation Rule on Care or dry cleaning information to be List of Subjects in 12 CFR Part 211 Labeling of Textile Wearing Apparel included on care labels.1 The Care Exports, Federal Reserve System, and Certain Piece Goods Labeling Rule, as amended, requires Foreign banking, Holding companies, AGENCY: Federal Trade Commission. manufacturers and importers of textile Investments, Reporting and ACTION: Advance Notice of Proposed wearing apparel and certain piece goods recordkeeping requirements. Rulemaking. to attach care labels to these items For the reasons set out in the stating ‘‘what regular care is needed for preamble, the Board proposes to amend SUMMARY: The Federal Trade the ordinary use of the product.’’ (16 12 CFR Part 211 as set forth below: Commission (the ‘‘Commission’’) CFR 423.6(a) and (b)). The Rule also proposes to commence a rulemaking requires that the manufacturer or PART 211ÐINTERNATIONAL proceeding to amend its Trade importer possess, prior to sale, a BANKING OPERATIONS Regulation Rule on Care Labeling of reasonable basis for the care (REGULATION K) Textile Wearing Apparel and Certain instructions. (16 CFR 423.6(c)). Piece Goods, 16 CFR Part 423 (‘‘the Care As part of its continuing review of its 1. The authority citation for Part 211 Labeling Rule’’ or ‘‘the Rule’’). The trade regulation rules to determine their continues to read as follows: Commission seeks comment on whether current effectiveness and impact, the Authority: 12 U.S.C. 221 et seq., 1818, the definitions of water temperatures in Commission published a Federal 1841 et seq., 3101 et seq., 3901 et seq. the Appendix of the Rule should be Register notice (‘‘FRN’’) on June 15, amended. In addition, the Commission 1994. This FRN sought comment on the 2. In § 211.22, paragraph (a) is revised; seeks comment on possible alternatives paragraph (c) is removed; and paragraph standard regulatory review questions, for amending the Rule’s current such as what changes in the Rule would (d) is redesignated as paragraph (c) to requirement that either a washing read as follows: increase the benefits of the Rule to instruction or a dry cleaning instruction purchasers and how those changes § 211.22 Interstate banking operations of may be used. Finally, the Commission would affect the costs the Rule imposes foreign banking organizations. seeks comment on whether the on firms subject to its requirements. (a) Determination of home state. (1) A reasonable basis portion of the Rule The FRN elicited 81 comments.2 The foreign bank (except a foreign bank to should be amended. comments generally expressed which paragraph (a)(2) of this section DATE: Written comments must be continuing support for the Rule, stating applies) that has any combination of submitted on or before March 13, 1996. that correct care instructions benefit domestic agencies or subsidiary ADDRESSES: Written comments should consumers by extending the useful life commercial lending companies that be identified as ‘‘16 CFR Part 423’’ and of the garment, by helping the consumer were established before September 29, sent to Secretary, Federal Trade maximize the appearance of the 1994, in more than one state and have Commission, Room 159, Sixth Street garment, and/or by allowing the been continuously operated shall select and Pennsylvania Ave., NW., consumer to take the ease and cost of its home state from those states in Washington D.C. 20580. care into consideration when making a which such offices or subsidiaries are FOR FURTHER INFORMATION CONTACT: purchase. Most comments said that the located. A foreign bank shall do so by Constance M. Vecellio or Laura Koss, costs imposed on consumers because of filing with the Board a declaration of Attorneys, Federal Trade Commission, the Rule were minimal when compared home state by March 31, 1996. In the Division of Enforcement, Bureau of to the benefits. Based on this review, the absence of such selection, the Board Consumer Protection, Sixth Street and Commission has determined to retain shall designate the home state for such Pennsylvania, Ave., NW., S–4302, the Rule, but to seek additional foreign banks. Washington, DC 20580, (202) 326–2966 (2) A foreign bank that, as of or (202) 326–2890. 1 The Rule was amended on May 20, 1983, 48 FR September 29, 1994, had declared a SUPPLEMENTARY INFORMATION: 22733 (1983). home state or had a home state 2 The commenters included cleaners; consumers; determined pursuant to the law and Part A—General Background public interest-related groups; fiber, textile, or regulations in effect prior to that date Information apparel manufacturers or sellers (or conglomerates); federal government entities; fiber, textile, or apparel shall have that state as its home state. This notice is being published manufacturers or retailers trade associations; two (3) A foreign bank that has any pursuant to Section 18 of the Federal label manufacturers; one cleaning products branches, agencies, subsidiary Trade Commission (‘‘FTC’’) Act, 15 manufacturer; one association representing the U.S.C. 57a et seq., the provisions of Part leather apparel industry; one Committee formed by commercial lending companies, or industry members from the countries signatory to subsidiary banks in one state, and has 1, Subpart B of the Commission’s Rules NAFTA; one appliance technician; one appliance no such offices or subsidiaries in any of Practice, 16 CFR 1.7, and 5 U.S.C. 551 manufacturers trade association; two standards- other states, shall have as its home state et seq. This authority permits the setting organizations; and two representatives from Commission to promulgate, modify, and foreign nations. The comments are on the public the state in which such offices or record and are available for public inspection in subsidiaries are located. repeal trade regulation rules that define accordance with the Freedom of Information Act, 5 * * * * * with specificity acts or practices that are U.S.C. 552, and the Commission’s Rules of Practice, By order of the Board of Governors of the unfair or deceptive in or affecting 16 CFR 4.11, during normal business days from 8:30 Federal Reserve System, December 21, 1995. commerce within the meaning of a.m. to 5 p.m., at the Public Reference Room, Room 130, Federal Trade Commission, 6th and Jennifer J. Johnson, Section 5(a)(1) of the FTC Act, 15 U.S.C. Pennsylvania Avenue, NW, Washington, D.C. The Deputy Secretary of the Board. 45(a)(1). comments are referred to within this Advance Notice of Proposed Rulemaking (‘‘ANPR’’) by their [FR Doc. 95–31364 Filed 12–27–95; 8:45 am] The Care Labeling Rule was name and the number assigned to each submitted BILLING CODE 6210±01±P promulgated by the Commission on comment. Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 67103 comment on possible amendments to United States, and that such differences 2. Environmental Issues the Rule as discussed below. can cause problems in washing clothes a. Background The FRN sought comment on possible because, in the winter in colder parts of amendments, which are addressed the country, granular detergents may not In the June 1994 FRN, the below, in this ANPR, including: (1) fully dissolve and activate during a cold Commission stated that, because of Whether the Rule should be amended to wash cycle.6 An appliance technician evidence that dry cleaning solvents are require labeling instructions for both from Maine noted that consumers may damaging to the environment, the washing and dry cleaning, rather than hesitate to use hotter water when the for just one method of cleaning and (2) Environmental Protection Agency label advises to use ‘‘cold’’ water.7 As a whether the reasonable basis standard (‘‘EPA’’) was interested in reducing the result, clothes may not be thoroughly set forth in the Rule should be clarified use of such solvents. The Commission or changed. The comments also cleaned and may be left with soap stated that EPA’s Office of Pollution 8 recommended that the Commission residue. Prevention and Toxics had been consider other amendments, which also Other comments suggested that the working with the dry cleaning industry are addressed in detail below. Rule’s definition of hot water (up to 150 to reduce the public’s exposure to Several comments suggested degrees F, or 66 C) 9 should be changed. perchloroethylene (‘‘PCE’’), the most expanding the coverage of the Rule. The The American Association of Textile common dry cleaning solvent.12 In Leather Apparel Association (‘‘LAA’’) Chemists and Colorists (‘‘AATCC’’) connection with this effort, EPA has suggested that garments made commented that the temperatures stated published a summary of a process completely of leather be included in the in the Appendix to the Rule should be referred to as ‘‘Multiprocess Wet Rule, which now applies only to textile changed to match the AATCC Cleaning,’’ which is an alternative wearing apparel and certain piece definitions, which the AATCC believes cleaning process that relies on the 3 goods. J.C. Penney suggested that ‘‘more accurately reflect current controlled application of heat, steam consumers would benefit by expanding washing machine settings and consumer and natural soaps to clean clothes that the Rule to cover items such as ‘‘towels, 13 practice.’’ 10 The AATCC defines ‘‘hot’’ would ordinarily be dry cleaned. sheets, window coverings and other as 120 F plus or minus 5 (49 C plus or The FRN asked whether the current textile home furnishing products.’’4 Rule may pose an impediment to However, the Commission considered minus 3). Another commenter noted the reducing solvent use because it requires and rejected including these product variances in temperature definitions categories when it amended the Rule in within the NAFTA countries and either a washing instruction or a dry 1983. The comments do not provide suggested they should be harmonized.11 cleaning instruction; it does not require both. Thus, garments that can legally be sufficient evidence for reopening these b. Objectives and Regulatory issues. labeled with a ‘‘dry clean’’ instruction Alternatives alone also may be washable, a fact not Part B—Objectives the Commission The Commission believes that the ascertainable from such an instruction. Seeks To Achieve and Possible If the Rule were amended to require Regulatory Alternatives definition of cold water in the Appendix may need to be revised to ensure that both washing and dry cleaning 1. Definitions of Water Temperature in consumers understand that washing instructions for garments cleanable by both methods, consumers and cleaners the Appendix clothes in extremely cold water may not could make more informed choices and be effective. In addition, the a. Background the use of dry cleaning solvents might Commission believes that the Some comments recommended that be lessened. To solicit comment on definitions of warm and hot water may the Commission revise the definition of these issues, the Commission posed a need to be changed to ‘‘more accurately cold water temperature in the Appendix series of questions in the FRN, each of reflect current washing machine settings to the Rule. The Appendix to the Rule which is separately addressed below: currently states that ‘‘cold’’ water means and consumer practice.’’ Accordingly, the Commission seeks comment on (i) Does the current Rule pose an ‘‘cold tap water up to 85 degrees F (29 impediment to the EPA’s goal of degrees C).’’ 5 Commenters noted that whether the Commission should amend reducing the use of dry cleaning tap water temperatures vary across the the Rule to change the definitions of ‘‘warm’’ and ‘‘hot’’ water, or to include solvents? Nine commenters addressed this question. Three responded simply 3 Comment 58, p.1; see also Drycleaners Fund (65) a new term such as ‘‘cool’’ or p.4. LAA stated that consumers ‘‘would benefit ‘‘lukewarm’’ in the Appendix. The that the Rule does not pose an from having a label that, in so many words, advises impediment to EPA’s goals.14 Six others, consumers that leather requires special care * * *.’’ Commission further seeks comment on whether the Rule should be amended to however, contended that the current Comment 58, p.1. However, it seems probable that Rule impedes EPA’s goal of reducing the most consumers know that leather requires special state that care labels recommending use of dry cleaning solvents by care; in the absence of evidence to the contrary, the ‘‘cold’’ wash must define the highest Commission cannot conclude that it is unfair or permitting manufacturers to disclose acceptable temperature for ‘‘cold’’ on deceptive for manufacturers of leather garments to only one cleaning instruction when a fail to disclose this information. Secondly, LAA the label, and on the benefits and costs stated that leather cleaning ‘‘is more art than to consumers and manufacturers of such science’’ and that any care label ‘‘must be non- 12 PCE has been designated as a hazardous air specific as to the cleaning process.’’ LAA suggested an amendment. pollutant under Section 112 of the Clean Air Act a label that simply states ‘‘Do not wash or dry clean and under many state air toxics regulations. On by fabric method. Take to a leather expert.’’ Id. September 15, 1993, EPA set national emission Such a label is unlikely to significantly assist the 6 Association of Home Appliance Manufacturers standards for new and existing PCE dry cleaning average dry cleaner, who presumably already (53) p.2. facilities. According to a study conducted on Staten knows that conventional dry cleaner, who 7 Bruce W. Fifield (62) p.1. Island and in New Jersey, PCE is among the toxic presumably used on leather garments and knows 8 air pollutants found at the highest concentrations in whether or not he has the ability to clean leather Id. urban air. 9 garments. 16 CFR Part 423, Appendix A, 2.a. 13 59 FR 30733–34. See also EPA (73) p.1. 4 Comment 70, p.1. 10 Comment 34, p.1. 14 Baby Togs, Inc. (2) p.2; The Warren 5 16 CFR Part 423, Appendix A, 2.c. 11 Jo Ann Pullen (44) p.3. Featherbone Co. (33) p.3; VF Corp. (36) p.5. 67104 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules garment can be either washed or dry maintained that a reduction in dry Because wet-cleaning wash formulas are cleaned.15 cleaning would diminish for humans created to cover categories of fabric (ii) What is the actual incidence of and the environment those risks that are type, two commenters stated that labels labeling that fails to include both associated with the use of PCE.22 One should clearly state the composition of washing and dry cleaning instructions? commenter pointed out that some the fabric or fabrics used so the correct Few comments responded directly to consumers may prefer to dry clean machine wet-cleaning formula may be this question. One guessed that the washable garments and that care used.26 incidence is ‘‘Probably none,’’ reasoning instructions should give these (iv) What are the costs and benefits, that, because washing is less expensive individuals a choice of methods when including environmental benefits, of than dry cleaning, it would be both laundering and dry cleaning would such an amendment? Several unimaginable for a manufacturer to put be appropriate.23 commenters opposing the amendment a ‘‘Dry Clean’’ label on a garment that Another group of commenters to require instructions for both washing could be washed.16 Another stated that suggested that the Rule be amended to and dry cleaning contended that a dual it is common practice to label require washing instructions for labeling requirement would result in conservatively (e.g., ‘‘dry clean only’’),17 garments that can be safety laundered as increased costs for manufacturers who and a third alleged that there is a wide well as dry cleaned, and to require dry would have to test for both methods variation in adherence to the cleaning instructions solely for those instead of only one.27 However, those requirements of the Rule, especially garments that must only be dry cleaned, who favored amending the Rule in any among small firms and importers.18 Two rather than to require that both of the ways discussed above cited as cleaners using wet cleaning technology instructions be specified for garments benefits the reduced cleaning costs to contended between them that the that could withstand both processes.24 consumers, the benefits to human health incidence ranged from 40% to 100% These commenters reasoned that, and the environment, or, occasionally, because a ‘‘Professionally Wet Clean’’ although many items (cotton underwear both. instruction is never given on labels for and outerwear, children’s clothing, Materials describing methods, garments that normally would be dry wash-and-wear apparel, etc.) could training, and equipment in many of the cleaned but also could be professionally safely be dry cleaned, it would be comments suggesting a requirement for 19 wet cleaned. neither necessary nor desirable to do so. a ‘‘Professionally Wet Clean’’ (iii) With regard to a garment that can In fact, they contended, a requirement instruction implied that a significant be either washed or dry cleaned, should for dual instructions for such products cost would be incurred by cleaners the Commission amend the Rule to would actually result in an increase in wishing to use the new technology. One require that care instructions be the use of dry cleaning solvents because comments also concluded that an provided for both washing and dry manufacturers now exclusively amendment to require such an cleaning? Several commenters preferred producing washable (but also dry instruction should be accompanied by a that the Rule not be amended in this 28 cleanable) products would have to consumer education effort. regard at all, contending that apparel install dry cleaning facilities and manufacturers should be free to select b. Objectives and Regulatory equipment so they could provide a the best care method based on their own Alternatives reasonable basis for the dry cleaning judgment.20 Some commenters favored, The record indicates that PCE is instruction. without extensive analysis, requiring dangerous to humans and the Other commenters suggested that the care instructions for both dry cleaning environment, and that some consumers Rule be amended to include a and home laundering if neither process are interested in avoiding the use of PCE requirement that labels on garments for would harm the garment. Most of these when possible. Through the proposed which dry cleaning is appropriate expected that such an amendment amendments to the Rule, discussed include a ‘‘professionally wet clean’’ would enable consumers to save the below, the Commission seeks to ensure instruction in addition to the dry expense associated with unnecessary that consumers are provided with cleaning instruction.25 These dry cleaning for products that could information that would allow them the commenters contended that the safely be laundered at home.21 Others choice of washing garments when professional wet cleaning process is a possible, or having them professionally viable alternative to dry cleaning in 15 Business Habits, Inc. (38) p.4 (the current Rule wet cleaned. The information about most cases, and that the process does is a disincentive for the dry cleaner to consider washability may be important to many washing or professional wet cleaning when the little damage to the environment. labels state ‘‘Dry Clean Only’’); Mothers & Others consumers, either for economic or (22) pp.1–4 (unless consumers are informed of their 22 See, e.g., Ardis W. Koester (12) p.1; University environmental reasons. options, the market will be skewed in favor of dry of Kentucky College of Agriculture (15) p.1; Center When a garment is labeled ‘‘dry cleaning and consumers may not use cheaper clean,’’ many consumers may be misled methods (home laundering) and/or safer methods for Neighborhood Technology (59) pp. 2–3. (professional wet cleaning)); Aqua Clean System 23 Drycleaners Environmental Legislative Fund into believing that the garment cannot (20) p.4; Ecofranchising, Inc. (28) pp.3–4; Jo Ann (65) p.2. be washed in water; if the garment can Pullen (44) p.7; Center for Neighborhood 24 See, e.g., OshKosh B’Gosh, Inc. (27) p.2; VF be washed in water, the consumer may Technology (59) pp.2–3. Corp. (36) p. 5; see also Fieldcrest Cannon (11) p. 16 Baby Togs, Inc. (2) p.2. 4 (opposed suggested amendment but advanced the 26 Aqua Clean (20) p. 7; Ecofranchising (28) pp. 17 Carter’s (24) p.3. same reasoning as the preceding commenters); 2, 4. 18 OshKosh B’Gosh, Inc. (27) p.2. American Textile Manufacturers Institute (56) pp.5– 27 Fieldcrest Cannon (11) p. 4; Woolrich, Inc. (21) 19 Aqua Clean System (20) p.4; Ecofranchising, 6. p. 1; OshKosh B’Gosh, Inc. (27) p. 2; VF Corp. (36) Inc. (28) pp.3–4. 25 Aqua Clean System (20) pp. 4–6; Mothers & p. 5, Industry Canada (37) p. 3; The GAP, Inc. (78) 20 The Warren Featherbone Co. (33) p.1–2, 3; Others (22) pp. 2–3; The Massachusetts Toxics Use p. 5. 28 Clothing Manufacturers Association (40) p.1; Salant Reduction Institute (23) pp. 1–2; Ecofranchising, See, e.g., Mothers & Others (22) pp. 1–2; Public Corp. (52) p.1. See also Braham Norwick (25) p.3. Inc. (28) p. 3; Public Advocate for the City of New Advocate for the City of New York (39) 21 See, e.g., Benjamin Axleroad (1) p.1; Don (transmitting the comprehensive report on ‘‘The York (39) pp. 8, 73; Friends of the Earth (43) p. 1, Pietsch (3) p.1; Evelyn Borrow (4) p.1; Claudia G. Risk to New Yorkers from Drycleaning Emissions Pasche (5) p.1; Margaret S. Jones (6) p.1; Judith S. Jo Ann Pullen (44) p. 7; Greenpeace (45) pp. 1–3; and What Can Be Done About It’’); Greenpeace (45) Barton (7) p.1; Virginia J. Martin (8) p.1; SuzAnne Association of Home Appliance Manufacturers (53) pp. 1–3, Attachment: ‘‘Dressed to Kill’’; Center for A. Darlington (14) p.1; Ann Geerhar (29) p.1. p. 2, Center for Neighborhood Technology (59) pp. Neighborhood Technology (59) pp. 2–3. 2–4; EPA (73) p. 1. See also American Apparel Manufacturers Association (68) p. 5. Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 67105 incur the unnecessary expense of dry both that the items could be safely dry 3. The Reasonable Basis Requirement of cleaning the garment.29 If the garment is cleaned and that home laundering the Rule labeled ‘‘dry clean’’ when it in fact would be inappropriate for them.31 a. Background could be wet cleaned by a professional The disclosures required by this cleaner, the consumer may believe it is proposal would inform consumers The rule requires that manufacturers necessary to have the garment dry purchasing washable items that the and importers of textile wearing apparel cleaned although the consumer would items could be safely laundered at possess, prior to sale, a reasonable basis prefer a cleaning method that is less home. As noted in the comments, this for the care instructions they provide. damaging to the environment. would enable consumers to make a Under the Rule, a reasonable basis must The lack of this information can result more informed purchasing choice and consist of reliable evidence supporting in substantial injury to consumers in the provide them with the option of saving the instructions on the label. 16 CFR form of unnecessary expense and/or money by laundering at home instead of 423.6(c). Specifically, a reasonable basis damage to the environment that the incurring the higher expenses of dry can consist of (1) reliable evidence that the product was not harmed when consumer wishes to avoid. Moreover, it cleaning. In addition, consumers who cleaned reasonably often according to can be extremely difficult for consumers are concerned about reducing the use of the instructions; (2) reliable evidence to avoid this injury by obtaining the PCE will have information about the that the product or a fair sample of the information about washability of an ‘‘washability’’ of all apparel items they product was harmed when cleaned by item for themselves. While fiber content are considering purchasing. Moreover, methods warned against on the label; (3) can be a guide to washability, other this proposal would not result in the reliable evidence, like that described in factors—such as the type of dye or additional substantiation testing (and (1) or (2), for each component part; (4) finish used—can also determine increased PCE use) that the comments reliable evidence that the product or a washability, and consumers have no suggested a ‘‘dual disclosure’’ fair sample of the product was way of learning what dyes and finishes requirement could necessitate, because successfully tested; (5) reliable evidence were used and whether they will a dry cleaning instruction would be of current technical literature, past survive washing. In addition, it may be optional, as would the necessary experience, or the industry expertise that some garments that traditionally substantiation to support it. have been damaged by washing (e.g., supporting the care information on the The Commission also seeks comment wool business suits) can be cleaned label; or (6) other reliable evidence. 16 on the feasibility of requiring, for all without damage by new methods of CFR 423.6(c). covered products bearing a dry cleaning professional wet cleaning, but The FRN solicited comment on instruction, the addition of a consumers have no way of determining whether the Commission should amend professional wet cleaning instruction for for themselves which of the many the Rule ‘‘to make clear that a variety of items for which professional wet garments available to them are now types of evidence, alone or in cleaning would be appropriate. The washable. combination, might provide a Accordingly, the Commission seeks comments indicate that the reasonable basis [for cleaning comment on whether it should amend comparatively new processes of directions] in specific instances,’’ but the Care Labeling Rule to require a professional wet cleaning technologies that as reflected in the Rule’s original laundering instruction for all covered are promising alternatives to PCE-based Statement of Basis and Purpose, the products for which laundering is dry cleaning. However, these comments Rule should not be read to suggest that appropriate. This amendment would do not provide enough information the reasonable basis standard permit optional dry cleaning about professional wet cleaning for the necessarily is met whenever a seller instructions for such washable items, Commission to assess whether and how possesses at least one of the types of provided dry cleaning would be an the Rule should address wet cleaning. evidence set forth as examples of how appropriate alternative cleaning Therefore, the Commission seeks the standard might be satisfied. The information on the cost of wet cleaning, method.30 The amendment would, FRN also sought comment on whether the availability of wet cleaning facilities, however, require that manufacturers the Commission should clarify in the and any other information that would marketing items with a ‘‘Dry Clean’’ Rule that the criteria for determining the help the Commission determine instruction alone be able to substantiate proper level of substantiation that were whether it should consider amending recited in the Commission’s Policy 29 A Perdue University survey found that 89.3% the Rule to require, for all covered Statement Regarding Advertising of the 962 respondents indicated that they would products bearing a dry cleaning Substantiation,32 apply to care labeling not wash a garment labeled ‘‘dryclean.’’ Staff Report instruction, the addition of a claims, whether analyzed directly under to the Federal Trade Commission and Proposed professional wet cleaning instruction for Revised Trade Regulation Rule (16 CFR Part 423) Section 5 or under the Rule. (May 1978), p. 141. Other surveys showed similar items for which professional wet In addition, the Commission results. Id. at 142–143. cleaning would be appropriate. The expressed interest in whether particular 30 The Commission has learned from several Commission also seeks comment on the types of garments or garment commenters, primarily manufacturers, that feasibility of the processes as practical components might necessitate special requiring both washing and dry clean labels (a current alternatives to dry cleaning. In ‘‘dual disclosure’’ amendment) would require a dry treatment. Question 9 in the FRN asked: addition, the Commission seeks cleaning instruction on virtually all washable items. Should the Commission amend the Rule to According to these commenters, this would comment on whether fiber identification specify under what conditions a necessitate additional testing expenses for should be on a permanent label, as is manufacturer or importer must possess a manufacturers and a resulting increase in PCE use, currently required for care information, to the detriment of human health and the particular type of basis among those listed in environment. The Commission has no reason to because this information may be needed believe at this time that it is either unfair or for wet-cleaning processes, and 32 FTC Policy Statement Regarding Advertising deceptive for a manufacturer or importer to fail to comment on the costs to manufacturers Substantiation, 104 F.T.C. 839 (1984). The reveal that a garment labeled for washing can also of such a requirement. Commission issued this statement to ‘‘reaffirm[]’’ its be dry cleaned. The comments also indicate that commitment under Section 5 of the FTC Act, 15 most consumers would not want to spend the U.S.C. § 45, to requiring adequate substantiation for additional money necessary to dry clean such 31 The Rule currently requires this level of objective advertising claims before they are items. substantiation for a ‘‘Dry Clean Only’’ instruction. disseminated. 67106 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

§ 423.6(c) of the Rule, such as test results? commenter said that testing might not option is to indicate in the Rule that Should the ‘‘reasonable basis’’ requirements always be required and suggested that whether one or more of the types of of the Rule be modified in any other way? the Rule should specify different types evidence described in Section 423.6(c) The comments responding to these of required evidence for different constitutes a reasonable basis for care portions of the FRN suggest that some circumstances.40 This commenter labeling instructions depends on the care labels may lack a reasonable basis. stressed, however, that the Rule should factors set forth in the FTC Policy One commenter stated that inaccurate require a reasonable basis for a garment Statement Regarding Advertising care labels were responsible for 33–45% in its finished state, noting that the Substantiation.43 Another option, as of the damaged garments sent in to the current Rule suggests that it is reflected in Question 9 of the FRN, is to International Fabricare Institute for satisfactory to have reliable evidence require in the Rule that cleaning testing during a 1988–1993 period.33 ‘‘for each component part’’ of a directions for certain garments, fabrics Furthermore, many of the commenters’ garment.41 Another Commenter or materials will comply with the Rule responses to Question 10 in the FRN suggested that the Rule should set out only if they are supported by the results (‘‘Are there garments in the marketplace performance standards for certain of appropriately designed and that contain inaccurate or incomplete properties of garments (e.g., conducted scientific tests recognized by care instructions?’’) indicate that many dimensional stability and colorfastness) experts in the field as probative of garments are labeled ‘‘dry clean only’’ and should identify both testing whether the item can be cleaned as without a reasonable basis for warning methodologies and evaluation criteria directed without damage. The that they cannot be washed.34 The for those properties.42 Commission also seeks comment on comments additionally suggest that care whether, if testing is required under instructions may not be appropriate for b. Objectives and Regulatory certain circumstances, the Rule should all components of a garment, such as Alternatives specify particular testing methodologies trims.35 Colorfastness and shrinkage The Commission appreciates the to be used. were also identified as problems comments submitted on the FRN and Finally, the Commission solicits experienced with inaccurate or continues to explore this area. The comment on whether the Rule should incomplete care instructions.36 Commission seeks comment on the set forth standards for acceptable and Twelve commenters stated that they incidence of inaccurate and incomplete unacceptable changes in garments were in favor of modifying the labels, the extent to which that following cleaning as directed. The reasonable basis portion of the Rule, incidence might be reduced by Commission also seeks comment on suggesting that the reasonable basis clarifying the reasonable basis standard, whether it would be useful for the Rule requirement should be clarified and and the costs and benefits of such a to specify properties, such as strengthened to reduce the problem of clarification. Section 423.6(c)(3) of the dimensional stability and colorfastness, inaccurate and incomplete care labels.37 Rule provides that a reasonable basis to which such standards would apply. Seven commenters were opposed to may consist of reliable evidence that Part C—Request for Comments modifying the reasonable basis ‘‘each component’’ of the garment can requirements of the Rule.38 These be cleaned according to the care Members of the public are invited to commenters expressed concern, for instructions. As several commenters comment on any issues or concerns they example, that requiring tests would be pointed out, however, a garment believe are relevant or appropriate to the too expensive and would ultimately component that may be cleaned Commission’s consideration of increase costs for consumers. satisfactorily by itself might not be proposed amendments to the Care Several commenters recommended cleaned satisfactorily when cleaned as Labeling Rule. The Commission clarifying the Rule by specifying the part of an assembled garment made of requests that factual data upon which circumstances in which a manufacturer different components, for example, by the comments are based be submitted or importer must possess test results or bleeding noticeably onto the other parts with the comments. In addition to the another specific type of evidence to of the garment. The Commission, issues raised above, the Commission 39 establish a reasonable basis. One therefore, seeks comment on whether to solicits public comment on the specific amend the Rule to specify that the questions identified below. These 33 Drycleaners Environmental Legislative Fund reasonable basis requirement applies to questions are designed to assist the (65) p.4. public and should not be construed as 34 the garment in its entirety rather than to Evelyn Borrow (4) p.1; Claudia G. Pasche (5) a limitation on the issues on which p.1; Margaret S. Jones (6) p.1; University of each of its individual components. Kentucky College of Agriculture (15) p.1; Aqua If the Commission decides to amend public comment may be submitted. Clean System (20) p.3; Carter’s (24) p.3; Braham the reasonable basis standard, one Norwick (25) p.1; Ecofranchising, Inc. (28) pp.3–4; Questions Jo Ann Pullen (44) pp.2–3; J.C. Penney (70) p.3. A. Definitions of Water Temperatures in 35 VF Corp. (36) p.7; Drycleaners Environmental 40 Drycleaners Environmental Legislative Fund Legislative Fund (65) p.4. (65) p.4. Thus, for example, for garments made the Appendix 36 J.C. Penney (70) p.3. entirely of material with a long history of care, such (1) Is it feasible and desirable to use as 100% undyed cotton, historical knowledge may 37 Clorox Co. (32); Industry Canada (37); Business the words ‘‘lukewarm’’ or ‘‘cool’’ on a Habits, Inc. (38); Jo Ann Pullen (44); Salant Corp. be sufficient to constitute a reasonable basis. In (52); Association of Home Appliance Manufacturers contrast, when the garment is made of a new fiber care label rather than ‘‘cold’’? Should (53); Center for Neighborhoods Technology (59); and is dyed with a new dye or when the garment Drycleaners Environmental Legislative Fund (65); is a cotton garment with a bright trim, a 43 In the Statement, the Commission set forth Department of the Air Force (67); American Apparel manufacturer may be required to conduct multiple criteria to consider in establishing the minimum Manufacturers Association (68); EPA (73); The Gap, tests on various samples of the garment in order to required basis for objective advertising claims, Inc. (78). establish a reasonable basis. where no specific basis was stated or implied: 38 Baby Togs, Inc. (2); Carter’s (24); OshKosh 41 Drycleaners Environmental Legislative Fund ‘‘These factors include: the type of claim, the B’gosh, Inc. (27); The Warren Featherbone Co. (33); pointed out that a trim might not noticeably bleed product, the consequences of a false claim, the VF Corp. (36); American Textile Manufacturers when cleaned by itself but might bleed onto the benefits of a truthful claim, the cost of developing Institute (56); Fruit of the Loom (64). body of a garment when the finished garment is substantiation for the claim, and the amount of 39 E.g., Center for Neighborhood Technology (59) cleaned. Thus, it would not suffice to have one substantiation experts in the field believe is p.1; Salant Corp. (52) p.2; Drycleaners ‘‘reasonable basis’’ for the body of a garment and reasonable.’’ FTC Policy Statement Regarding Environmental Legislative Fund (65) p.4; Clorox Co. another for the trim. Comment 65, p.4. Advertising Substantiation, 104 F.T.C. 839, 840 (32) p.3. 42 Industry Canada (37) p.2. (1984). Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 67107 these terms be required instead of the amend the Rule to require a professional (8) Should the Rule specify testing word ‘‘cold’’? What benefits would wet cleaning instruction too (provided methodologies to be used in situations consumers derive from such a change? wet cleaning is appropriate for the in which testing would be required? (2) Is it feasible and desirable to garment)? What would be the benefits What should those methodologies be? amend the Rule to require that the and costs to consumers and (9) Should the Rule refer to highest acceptable temperature for manufacturers of such an amendment? performance standards for certain ‘‘cold’’ water be stated on the care label? properties of garments? If so, which What benefits would consumers derive (8) Should fiber identification be on a permanent label? Should fiber properties, and what should these from such an amendment? What costs performance standards be? would such an amendment impose on identification be on the same label as (10) What steps, if any, do garment manufacturers? care information? What costs would (3) Should the Rule’s definition of such requirements impose on manufacturers take to provide cleaning ‘‘warm’’ water be amended, and if so, manufacturers? instructions for products comprising more than one fabric or material, such what temperature should be specified (9) How many garments currently instead? What benefits would as those with metallic trim or trim of a labeled ‘‘dry clean’’ or ‘‘dry clean only’’ fabric or color different from that of the consumers derive from such an could be washed at home by amendment? main part of the product? consumers? Should the Rule be (11) What evidence is there (4) Should the Rule’s definition of amended to require a laundering ‘‘hot’’ water be amended, and if so, what concerning the effectiveness of current instruction for all covered products for actions by garment manufacturers to temperature should be specified which laundering is appropriate? What instead? What benefits would ensure appropriate cleaning of their would be the benefits and costs to products? consumers derive from such an consumers and manufacturers of such amendment? an amendment? (12) Do garment labels stating, for B. Environmental Issues example, that particular cleaning C. The Reasonable Basis Requirement of instructions apply to the garment (1) Please describe the process, or the the Rule ‘‘exclusive of trim’’ provide sufficient processes, commonly referred to as guidance to consumers or cleaners to ‘‘Wet Cleaning,’’ ‘‘Multiprocess Wet (1) Are care label instructions enable them to avoid damaging the Cleaning,’’ ‘‘Professional Wet Cleaning,’’ generally accurate? If not, in what ways garments by improper cleaning? or other similar terms, and provide as are they inaccurate, and do these (13) Should the Rule be amended to much technical detail as possible. inaccuracies result in damage to the (2) What equipment and what delete Section 423.6(c)(3), which affected garments or other costs to provides that a reasonable basis can materials are necessary for a consumers? professional cleaning establishment to consist of reliable evidence that each employ the wet cleaning processes? (2) Are any types of garments or piece component of the garment can be (3) What effects do the materials used goods particularly prone to damage even cleaned according to the care in the wet cleaning process have on when the care label instructions are instructions and to state, instead, that a human beings, animals, plants, and the followed? manufacturer must possess a reasonable environment? Please be as specific as basis for the garment as a whole? possible. (3) Are home laundering directions on (14) Should the Rule be amended to (4) How many domestic businesses care labels incomplete or inaccurate in clarify that whether one or more of the provide professional wet cleaning to the ways that result in damage to garments types of evidence described in Section public on a regular basis? Please specify when they are laundered as directed? If 423.6(c) constitutes a reasonable basis is the type(s) of professional wet cleaning so, what are the most common based on the factors set forth in the FTC provided. Does the service comprise all, problems, and how widespread are Policy Statement Regulating Advertising or a part of, each such company’s they? Substantiation? business? If part, what percentage? (4) Are dry cleaning directions on care (15) Do garment or piece goods (5) What percentage of garments and labels incomplete or inaccurate in ways manufacturers or retailers offer refunds other items for which professional dry that result in damage to garments when for products damaged in cleaning cleaning has historically been the only they are dry cleaned as directed? If so, despite adherence to care label appropriate cleaning method are safely what are the most common problems, directions? What is the typical refund and satisfactorily cleanable by and how widespread are they? policy? How is the existence of such professional wet cleaning? Please be as refunds made known to consumers? specific as possible as to fiber, fabric, (5) What actions, if any, do garment (16) What are the costs to consumers and garment type. What difference, if or piece goods manufacturers ordinarily of complaining to manufacturers or any, would there be in customer take to assure that care labels are retailers about garments damaged in satisfaction between the results of the accurate? To what extent do garment cleaning? Are there factors that two processes? manufacturers rely solely on care (6) What is the average cost, for as information provided by the suppliers discourage consumers whose garments many items as respondents can of components of garments? have been damaged in cleaning from reasonably describe, of professional wet (6) Do garment manufacturers complaining to manufacturers or cleaning compared to professional dry typically analyze or test garments for retailers? cleaning? The Commission requests appropriate cleaning procedures in their (17) What would be the benefits and information both as it pertains to the completed form or before the garments’ costs to consumers and manufacturers cost to the cleaner providing the service components are assembled? of these amendments clarifying the and the cost to the consumer using it. (7) In what situations, if any, should Rule’s reasonable basis requirement? (7) With regard to a garment that the testing of garments be the only Authority: Section 18(d)(2)(B) of the cannot be home laundered but can be evidence that would be legally Federal Trade Commission Act, 15 U.S.C. dry cleaned, should the Commission acceptable? 57a(d)(2)(B). 67108 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

List of Subjects in 16 CFR Part 423 proposed rule would make extensive Medicare premium will be paid and the Care labeling of textile wearing changes in the existing regulation, a balance of the annuity amount will be apparel and certain piece goods; Trade section-by-section analysis is provided applied toward recovery of the Practices. below. overpayment. This section is new and is The title of part 255 is proposed to be intended both to save the agency the By direction of the Commission. revised to ‘‘Recovery of Overpayments’’. administrative costs of billing an Donald S. Clark, The current title, ‘‘Recovery of annuitant for his or her Part B Medicare Secretary. Erroneous Payments’’, mistakenly premium where his or her annuity [FR Doc. 95–31411 Filed 12–27–95; 8:45 am] implied that all such payments were would be offset in its entirety to recover BILLING CODE 6750±01±M caused by ‘‘fault’’. Overpayments can an overpayment and also to avoid lapse and do occur through no fault of the of Medicare coverage. recipients of such payments. The Section 255.10 sets out the general RAILROAD RETIREMENT BOARD purpose of part 255 is to set out requirements for waiver of recovery of regulations to govern those instances an overpayment as set forth in the 20 CFR Part 255 where more than the correct amount of Railroad Retirement Act and replaces benefits has been paid, regardless of the present §§ 255.10 and 255.11. RIN 3220±AA44 whether or not ‘‘fault’’ exists. Section 255.11, as currently in effect, Section 255.1 would replace the would be removed because it is Recovery of Overpayments present § 255.1, which sets out statutory redundant. The new section 255.11 AGENCY: Railroad Retirement Board. provisions, with an introductory would define ‘‘fault’’ and gives ACTION: Proposed rule. statement to summarize what is examples of when an individual is or is included in part 255. not at fault based upon past agency SUMMARY: The Railroad Retirement Section 255.2 defines ‘‘overpayment’’ decisions. Section 255.12 defines when Board (Board) revises part 255 of its using essentially the same language that recovery is contrary to the purpose of regulations, currently entitled is used in the current § 255.2 to define the Railroad Retirement Act, based upon ‘‘Recovery of Erroneous Payments’’, to ‘‘erroneous payments’’. past agency decisions. Section 255.13 clarify and update its regulations with Section 255.3 states the general rule defines when recovery is against equity respect to recovery of overpayments. that overpayments shall be recovered in or good conscience. Each of these The revisions more clearly identify the all cases except where recovery is sections is new and together they individuals from whom recovery may be waived under § 255.10 or administrative expand on the present § 255.12. sought and under what circumstances relief from recovery is granted under Sections 255.14, 255.15, and 255.16 recovery of an overpayment of benefits § 255.17 or where collection is are new sections which describe special will be made. The revisions also cover suspended or terminated under these situations where waiver of recovery of the circumstances under which such regulations or the Federal Claims an overpayment is not available. recovery may be waived, and the Collection Standards. Specifically, § 255.14 provides that circumstances under which such Section 255.4 would replace the waiver is not available under certain recovery may be terminated or current § 255.4, which simply states in circumstances when recovery can be suspended under the Board’s authority a summary manner the methods by made from an accrual of social security concerning administrative relief from which erroneous payments may be benefits. Section 255.15 provides that recovery. recovered, with a detailed description of waiver is not available to the estate of DATES: Comments must be received by those individuals from whom an individual. January 29, 1996. overpayments may be recovered. Section 225.16 would provide that Section 255.5–255.8 set out the recovery of a small overpayment of less ADDRESSES: Secretary to the Board, methods by which an overpayment of than $500 will never be considered Railroad Retirement Board, 844 Rush benefits may be recovered. These contrary to the purpose of the Railroad Street, Chicago, Illinois 60611. methods include recovery by cash Retirement Act or against equity or good FOR FURTHER INFORMATION CONTACT: payment (§ 255.5), recovery by setoff conscience. Under this rule, waiver of Thomas W. Sadler, Assistant General from any subsequent payment recovery would not be applicable for Counsel, Railroad Retirement Board, determined to be payable on the basis of debts under $500. This proposed rule is 844 Rush Street, Chicago, Illinois 60611, the same record of compensation similar to the rule contained in (312) 751–4513, TDD (312) 751–4701). (§ 255.6), recovery by deduction in the § 340.10(e)(2) of the Board’s regulations SUPPLEMENTARY INFORMATION: Part 255 of computation of a residual lump-sum with respect to recovery of the Board’s regulations has not been death benefit payable under the overpayments under the Railroad revised since 1967. Although section 10 Railroad Retirement Act (§ 255.7), and Unemployment Insurance Act (20 CFR of the Railroad Retirement Act of 1974 recovery by actuarial adjustment of an 340.10(e)(2)). (45 U.S.C. 231i) includes provisions for annuity (§ 255.8). These sections are Section 255.17 sets out internal Board recovery and waiver of overpayments of substantially similar to the current policy governing those situations where benefits which are substantially the §§ 255.5–255.8. However, § 255.8, recovery of an overpayment may not be same provisions included in the unlike the current section, provides that waived under section 10(c) of the Railroad Retirement Act of 1937 (45 an actuarial adjustment is not effective Railroad Retirement Act, thus U.S.C. 228i, superseded), internal until the overpaid annuitant negotiates extinguishing the debt, but where procedures dealing with overpayments the first check which reflects the recovery will not be sought for equitable of benefits have been developed which actuarially adjusted rate. reasons. The regulations do not should properly be included in the Section 255.9 provides that where currently contain such a provision. regulations of the Board. In addition, in recovery of an overpayment is by setoff Section 255.18 is new and explains the Board’s view, waiver should not be which can be effected within 5 months how an overpayment is recovered when available with respect to certain types of and the individual from whom recovery that overpayment was made to a overpayments and this proposed rule is sought is an enrollee under Medicare representative payee under part 266 of reflects those proosals. Because the Part B, the individual’s monthly this chapter.