Request for Comments Concerning Rules and Regulations Under the Hobby Protection Act

FEDERAL TRADE COMMISSION

16 CFR Part 304

Request for Comments Concerning Rules and Regulations Under the

Hobby Protection Act

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Request for public comments.

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SUMMARY: The Federal Trade Commission requests public comments on its

Rules and Regulations Issued Under the Hobby Protection Act (``the

Rule''). The Commission, as a part of its systematic review of all

current Commission regulations and guides, requests comments about the

overall costs, benefits, and regulatory and economic impact of the

Rule. Further, the Commission, as mandated by the Regulatory

Flexibility Act, 5 U.S.C. 601, seeks information about the impact of

the Rule on small business firms.

DATES: Written comments will be accepted until May 27, 1997.

ADDRESS: Comments should be should be identified as ``16 CFR Part 304--

Comment'' and sent to: Secretary, FTC, Room H-159, Sixth and

Pennsylvania Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Robert E. Easton, Special Assistant,

Division of Enforcement, Bureau of Consumer Protection, FTC,

Washington, D.C. 20580, (202) 326-3029.

SUPPLEMENTARY INFORMATION: The Commission has determined, as part of

its oversight responsibilities, to review its rules and guides

periodically to seek information about their costs and benefits and

their regulatory and economic impact. The information obtained will

assist the Commission in identifying rules and guides that warrant

modification or rescission. Where appropriate, the Commission will

combine such periodic general reviews with reviews seeking information

about the economic impact of the rule on small business firms as

required by the Regulatory Flexibility Act.

A. Background

On November 29, 1973, Congress passed the Hobby Protection Act

(``Act''), 15 U.S.C. 2101-2106. The Act requires manufacturers and

importers of ``imitation political items'' \1\ to mark ``plainly and

permanently'' such items with the ``calendar year'' such items were

manufactured. 15 U.S.C. 2101(a). The Act also requires manufacturers

and importers of ``imitation numismatic items'' \2\ to mark ``plainly

and permanently'' such items with the word ``copy.'' 15 U.S.C. 2101(b).

The Act further provides that the Commission is to promulgate

regulations for determining the ``manner and form'' imitation political

items and imitation numismatic items are to be permanently marked with

the calendar year of manufacture or the word ``copy.'' 15 U.S.C.

2101(c).

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\1\ An imitation political item is ``an item which purports to

be, but in fact is not, an original political item, or which is a

reproduction, copy, or counterfeit of an original political item.''

15 U.S.C. 2106(2).

\2\ An imitation numismatic item is ``an item which purports to

be, but in fact is not, an original numismatic item or which is a

reproduction, copy, or counterfeit of an original numismatic item.''

15 U.S.C. 2106(4).

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Pursuant to the Act, in 1975 the Commission issued Rules and

Regulations under the Hobby Protection Act, 16 CFR Part 304. The Rule

tracks the definitions of terms used in the Act and implements the

Act's ``plain and permanent'' marking requirements by establishing the

sizes and dimensions of the letters and numerals to be used, the

location of the marking on the item, and how to mark incusable and

nonincusable items. In 1988, the Rule was amended to provide additional

guidance on the minimum size of letters for the word ``copy'' as a

proportion of the diameter of the diameter of coin reproductions.\3\ 53

FR 38942 (1988).

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\3\ Prior to the amendment, if a coin were too small to comply

with the minimum letter size requirements, the manufacturer or

importer had to individually request from the Commission a variance

from those requirements. Because imitation miniature coins were

becoming more common, the Commission determined that it was in the

public interest to allow the placing of the word ``copy'' on

miniature imitation coins in sizes that could be reduced

proportionately with the size of the item.

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In preparation for the reviews of the Rule, staff undertook a

limited inquiry to ascertain the degree of compliance with the Rule.

Based on this inquiry, it appears that there is a high level of

compliance with the Rule, both as to imitation political items and

imitation numismatic items.

B. Issues for Comment

The Commission solicits written public comments on the following

questions:

(1) Do there continue to be reasons for legislative and regulatory

intervention in the sale and marking of imitation political items and

imitation numismatic items, but not for other items collected by

hobbyists (e.g., stamps)? If so, please explain.

(a) What benefits has the Rule provided to purchasers of the

products or services affected by the Rule?

(b) Has the Rule imposed costs on purchasers?

(2) What changes, if any, should be made to the Rule to increase

the benefits of the Rule to purchasers?

(a) How would these changes affect the costs the Rule imposes on

firms subject to its requirements?

(3) What significant burdens or costs, including costs of

compliance, has the Rule imposed on firms subject to its requirements?

(a) Has the Rule provided benefits to such firms?

(4) What changes, if any, should be made to the Rule to reduce the

burdens or costs imposed on firms subject to its requirements?

(a) How would these changes affect the benefits provided by the

Rule?

(5) Does the Rule overlap or conflict with other federal, state, or

local laws or regulations?

(6) Since the Rule was issued, what effects, if any, have changes

in relevant technology or economic conditions had on the Rule?

(7) What significant burdens or costs, including costs of

compliance, has the Rule imposed on small firms subject to its

requirements?

(a) How do these burdens or costs differ from those imposed on

larger firms subject to the Rule's requirements?

(8) To what extent are the burdens or costs that the Rule imposes

on small firms similar to those small firms would incur under standard

and prudent business practices?

(9) What changes, if any, should be made to the Rule to reduce the

burdens or costs imposed on small firms?

(a) How would these changes affect the benefits of the Rule?

(b) Would such changes adversely affect the competitive position of

larger firms?

(10) The Rule currently mandates the minimum sizes for the calendar

year to be marked on imitation political items and for the word

``copy'' to be marked on imitation numismatic items.

(a) Should the Commission amend the Rule to replace the mandated

minimum sizes with a performance based standard (e.g., clear and

prominent disclosure)?

(b) If so, what should the performance based standard be?

(c) What would be the costs and benefits of the proposed

performance based standard?

List of Subjects in 16 CFR Part 304

Hobbies, Labeling, Trade practices.

Authority: 15 U.S.C. 41-58.

[[Page 14050]]

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97-7434 Filed 3-24-97; 8:45 am]

BILLING CODE 7518-01-M