Senate Democrats

S. 2663, the Consumer Product Safety Commission Reform Act

Background

On February 25, 2008, Senators Pryor and Stevens introduced S.2663, the Consumer Product Safety Commission Act (the “CPSC Reform Act“) The bill would rebuild and strengthen the Consumer Product Safety Commission (“CPSC” or “Commission”) to enable the agency to aggressively pursue and successfully fulfill its mission of “protecting consumers and families from products that pose a fire, electrical, chemical, or mechanical hazard or can injure children.”  Multiple, high-profile recalls in the summer and fall of 2007, most notably the deadly Magnetix toy, lead-based toys, and pet-food recalls, highlighted the importance of the CPSC and brought attention to the serious funding, staffing, resource, authority, enforcement tool, and process deficiencies that have crippled the Commission’s ability to protect consumers and their families. 

The 110th Congress moved quickly to develop legislation that would improve the CPSC.  The Senate held hearings on the CPSC in the Committee on Commerce, Science, and Transportation and in the Committee on Appropriations with CPSC commissioners and consumer advocacy groups, which highlighted that, among other things, the Commission was funded and staffed at only a fraction of its need given the increased number of domestic and internationally produced products on American shelves. The Senate has also held hearings on toy safety in the Appropriations Committee, which revealed that the standards and frequency of toy inspections, including lead inspections, and recall response times were too low to adequately protect our nation’s children. 

As Congress sought to develop CPSC reform legislation in the Senate and House, members faced opposition from the Acting Chair of the CPSC, Nancy Nord, who rejected efforts to increase the Commission’s funding.  

Undeterred, the House passed legislation in December 2007, entitled the Consumer Product Safety Modernization Act of 2007 (H.R4040).  Also in December, the Senate Commerce Committee favorably reported a bill entitled the CPSC Reform Act of 2007 (S.2045).  That bill was recently amended and introduced as S.2663.  On March 3, the Senate passed a cloture motion to proceed to consideration of S.2663 on a 86 -1 vote. 

Summary

S.2663 would:

·        Strenthen CPSC resources and effectiveness by increasing funding by 50 percent over the next seven years, restoring the Board of Commissioners to a five member panel (from the current three member panel), increasing CPSC staff to at least 500 employees by 2013, and streamlining product safety rulemaking procedures;

·        Protect children from unsafe products by banning lead in children’s products, requiring third-party testing and certification of children’s products, and mandating label tracking for children’s products;

·        Prevent deadly imports by improving information sharing among relevant federal, state, local, and foreign agencies, increasing the numbers of CPSC employees at our nation’s ports, requiring safety certification of products, and banning the importation of recalled products;

·        Provide greater penalties for violators and resources for law enforcement by increasing civil penalties up to $250,000 per violation, creating criminal penalties of up to five years in jail, authorizing State Attorneys General to pursue injunctive relief, and extending whistleblower protections to manufacturers’ employees; and

·        Enhance recall effectiveness by banning the sale of recalled products, requiring manufactures and importers to ensure the funding of recalls, creating an online product safety database, increase public access to recall information, and enhance CPSC authority to order recalls and other corrective actions. 

Major Provisions

Funding.  S.2663 would provide $835 million for CPSC over the next seven years.  The bill would authorize funding of the CPSC at the following levels:

1)     $88.5 million for Fiscal Year 2009;

2)     $96.8 million  for Fiscal Year 2010;

3)     $106.5 million for Fiscal Year 2011;

4)     $117.12 million for Fiscal Year 2012;

5)     $128.84 million for Fiscal Year 2013;

6)     $141.73 million for Fiscal Year 2014; and

7)     $155.9 million for Fiscal Year 2015.

The bill would authorize funding of the CPSC Office of the Inspector General at the following levels:

1)     $1.6 million for Fiscal Year 2009;

2)     $1.8 million for Fiscal Year 2010;

3)     $1.9 million for Fiscal Year 2011;

4)     $2.2 million for Fiscal Year 2012;

5)     $2.34 million for Fiscal Year 2013;

6)     $2.58 for Fiscal Year 2014; and

7)     $2.83 for Fiscal Year 2015.

The legislation would also authorize $40 million for use in Fiscal Years 2009 and 2010 for renovating and improving the CPSC lab testing facilities and $1 million for use in Fiscal Years 2009 and 2010 for research into the safety impact of nanotechnology in consumer products.

Personnel.  S.2663 would require the CPSC to increase the number of its fulltime personnel to at least 500 from its current level of approximately 400 by October 1, 2013.  The bill would also require the CPSC to increase the number of personnel at United States ports of entry by at least 50.

Commissioners and Quorum.  S.2663 would repeal the limit on the use of appropriated funds for more than three Commissioners and would urge the President to nominate members to fill all five Commissioner positions. 

The bill would also meet the needs of the current two commissioner board by allowing two commissioners, if they are not affiliated with the same political party, to constitute a quorum for the transaction of business for the nine month period following the date of enactment. 

Public Disclosure of Product Information.  S.2663 would amend the Consumer Product Safety Act (CPSA) to authorize the CPSC to shorten the notification period to 15 days before the Commission can release information on a consumer product.  Currently, the Commission must wait 30 days after notifying a manufacturer that information on its product is about to be released and providing a summary of the information to be released.  The CPSA would also be amended to permit the CPSC to shorten the notification period further if it publishes a finding that the public health and safety requires a shorter timeframe. 

The legislation would further provide that if the Commission is sued to enjoin the release of information, and it determines that the public health and safety requires expedited consideration of the case, the Commission may request the court to expedite the case. 

Consumer Product Safety Database.  S.2663 would require the CPSC to establish and maintain a publicly available and searchable database on the Commission’s website.  The database would include any reports of injury, illness, death or the risk of injury, illness, or death related to the use of consumer products received by the Commission from sources including consumers, health care professionals, child service providers, public safety entities, government agencies, and other non-governmental sources.  If the Commission determined, after investigation, that information made available on the database was incorrect the Commission would be required to promptly remove it from the database.   A manufacturer, private labeler, or retailer would be given an opportunity to comment on any information involving a product manufactured by that manufacturer, or distributed by that private labeler or retailer. 

Rulemaking.  S.2663 would revise the CPSC’s rulemaking procedures under the CPSA, the Federal Hazardous Substances Act (FHSA), and the Flammable Fabrics Act (FFA) to make permissible the current requirement that the CPSC issue an advanced notice of proposed rulemaking before issuing a notice of proposed rulemaking. 

Prohibition on Stockpiling.  S.2663 would authorize the Commission to prohibit, by rule, a manufacturer from stockpiling a product that is subject to a rule under the CPSA or any other law enforced by the CPSC.

Third-Party Certification of Children’s Products.  S.2663 would require that every manufacturer of a children’s product, which is subject to a children’s product safety standard, would be required to have the product tested by a qualified non�’governmental independent third party; certify that such product conforms to such standard; and specify the applicable children’s product safety standard.  The CPSC would be required, within one year after enactment, to issue a final rule regarding the protocols, standards, and testing procedures for manufactures, third-parties, etc. to meet this requirement.  Until then, within 30 days after enactment, the Commission would be required to consider existing laboratory testing certification procedures established by independent standard-setting organizations and designate an existing procedure for manufacturers of children’s products as an interim procedure for manufacturers.  Starting 60 days after the date on which the interim procedure is published, manufacturers would be required to test and certify compliance with the interim procedures until the Commission issues a final rule.  Products without proper certification would be banned from importation. 

Tracking Labels for Products for Children.  S.2663 would require manufacturers of children’s products, one year after the date of enactment, to place distinguishing marks on the product or its packaging, to the extent practicable, that would enable the purchaser to ascertain the manufacturer, production time period, and cohort (including the batch, run number, or other identifying characteristic) of production of the product by reference to those marks.  Authorizes the CPSC to extend this requirement to other products through a rulemaking proceeding.  The bill would also require that manufacturers, retailers, distributors, private labelers, and licensors for any toy, game, balloon, small ball, or marble that requires a warning label in stores under current law to provide a similar cautionary statement to be displayed in a catalogue or online advertisement. 

Substantial Product Hazard Reporting.  S.2663 would require that every manufacturer, importer, retailer or distributor of a consumer product who obtains information which reasonably supports the conclusion that such product fails to comply with any safety-related rule or standard promulgated by the Commission under the CPSA is required to immediately inform the Commission of such failure. 

Corrective Action Plans.  S.2663 would authorize the CPSC to approve the corrective action plan (or voluntary recall plan) that it determines to be in the public interest, rather than allow the manufacturer to select the corrective action plan.  If needed, the Commission may also amend an already approved action plan and, if plans are not followed, may order the manufacturer, retailer, or distributor to cease further distribution of the product.

Identification of Manufacturer by Importers, Retailers, and Distributors.  S.2663 would require, upon request by the Commission, every importer, retailer, or distributor of a consumer product or other product under the Commission’s jurisdiction to identify the manufacturer of that product by name, address, or such other identifying information as the Commission may request to the extent that the information is known, or can be determined, by the importer, retailer, or distributor.

Prohibited Acts.  S.2663 would prohibit the sale of recalled products, would authorize the CPSC to prohibit the exportation of recalled products, would prohibit the knowing  sale, distribution, or importation of any falsely certified product, would prohibit the knowing issuance of a false certification, would prohibit misrepresentations to CPSC officers regarding the scope of a product subject to a corrective action or an investigation under this bill, and would prohibit undue influence on third-party testing laboratories. 

Civil and Criminal Penalties.  S.2663 would raise the civil penalty cap for each violation of a prohibited act from $8,000 to $250,000 and would raise the maximum civil penalty cap for a related series of violations from $1.82 million to $20 million.  Penalties above $10 million would only be appropriate when issuing a finding of aggravated circumstances.

The measure would provide that criminal penalties for a knowing and willful violation of the CPSA and FFA be punishable by imprisonment for not more than 5 years and/or a fine.  Violations committed with the intent to defraud or mislead, or for second and subsequent offenses under the FHSA, would be punishable by imprisonment for not more than 5 years and/or a fine.   The CPSC would also be authorized to seek forfeiture of assets associated with a criminal violation.

The bill would also eliminate the requirement that the CPSC provide a violator notice of noncompliance before seeking a criminal penalty and strikes the requirement that the CPSC demonstrate “knowledge of notice of noncompliance received by the corporation from the Commission” before seeking criminal penalties from individual directors, officers, or agents of a corporation.  

Information Sharing Amongst Federal, State, Local, and Foreign Law Enforcement Agencies.  S.2663 would authorize the Commission to make information obtained by the Commission available to any federal, state, local, or foreign law enforcement agency upon the prior certification that such material will be maintained in confidence and will be used only for official law enforcement or consumer protection purposes, provided:  (a) the agency has set forth a bona fide legal basis for its authority to maintain the material in confidence; (b) the materials are to be used for purposes of investigating or enforcing violations of product safety laws, would aid the CPSC’s investigation, or, with the approval of the U.S. Attorney General, aid in investigating an offense covered by a criminal mutual legal assistance treaty. 

Costs of an Effective Recall.  S.2663 would authorize the Commission to require manufacturers or distributors of a consumer product, or a category or class of consumer products, to post an escrow, proof of insurance, or security acceptable to the Commission in an amount sufficient to cover the costs of an effective recall of the product or substance or to cover the costs of holding the product or substance, and destruction of the product or substance should such action be required.

State Attorneys General.  S.2663 would authorize State Attorneys General to bring a civil action on behalf of its residents in an appropriate U.S. District Court for injunctive relief provided under Acts enforced by the Commission whenever there is reason to believe that the interests of the residents of that State have been, or are being, threatened or adversely affected by a violation of any consumer product safety rule, regulation, standard, certification or labeling requirement, or order prescribed under this Act or any other Act enforced by the Commission (including the sale of a voluntarily or mandatorily recalled product or of a banned hazardous substance or product).  The state would be required to serve written notice to the Commission of any civil action at least 60 days prior to initiating such civil action, if feasible.  The Commission would be authorized to intervene in the civil action, be heard on all matters in the case, and file petitions for appeal of a decision.  If, however, the Commission has instituted a civil action or an administrative action, no State Attorney General would be authorized to bring an action during the pendency of the Commission action against any defendant or agency named in the complaint. 

Whistleblowers.  S.2663 would prohibit a manufacturer, private labeler, distributor, or retailer from discharging or discriminating against an employee because the employee refused to participate in, is about to report, testifies regarding, or assists in an investigation of a violation of an CPSC order, regulation, or rule.  An employee who believes he/she has been discharged or discriminated against due to being a whistleblower may file a complaint with the Secretary of Labor within 180 days of the discharge or discriminatory act.  The complainant would be required to make a prima facie showing that his/her whistleblower actions were a contributing factor in the unfavorable personnel action alleged in the complaint, otherwise the Secretary would be required to dismiss the complaint and cease the investigation. 

Similarly, no investigation or relief would be authorized if the employer demonstrates, by clear and convincing evidence, that the employer would have taken the same unfavorable personnel action in the absence of the employee’s status as a whistleblower.  If the Secretary determines that a personnel violation has occurred, the Secretary would be required to order the person who committed such violation to take affirmative action to abate the violation; to reinstate the complainant to his or her former position together with the compensation (including back pay); restore the terms, conditions, and privileges associated with his or her employment; and to provide compensatory damages to the complainant.

Lead-based children’s products and paint.  S.2663 would provide that, beginning one year after the date of enactment, any children’s product containing lead would be treated as a banned hazardous substance under the FHSA.  A product would be considered to contain lead if the lead content is greater than .03 percent.  After three years, the permissible lead amount would be reduced to .01 percent, unless the CPSC determines that the .01 percent ceiling isn’t feasible.  The lowest level could not, however, be more than .03 percent.   

If the Commission determines that it is not feasible for certain electronic devices, including batteries, to comply with the prohibition, the Commission would be authorized to issue standards to reduce the exposure of and accessibility of lead in such electronic devices, and to establish a schedule by which such electronic devices shall be in full compliance with the regulations.

The legislation would also direct the CPSC to reduce the lead level permitted in consumer use paint from .06 to .009 percent, effective one year after the date of enactment. 

S.2663 would require the Commission, in cooperation with the National Academy for Sciences and the National Institute of Standards and Technology, to study the feasibility of establishing a measurement standard based on a units-of-mass-per-area standard that is statistically comparable to the parts-per-million measurement standard currently used in laboratory analysis. 

Study Minority Children’s Deaths and Injuries.  S.2663 would require the Government Accountability Office (GAO) to initiate a study to assess disparities in the risks and incidence of preventable, consumer product related deaths and injuries among children of minority populations, including Black, Hispanic, American Indian, Alaskan Native, and Asian/Pacific Islander children in the United States within 90 days after the date of enactment.   Not later than one year after the date of enactment of this Act, the Commission would be required to report its findings to Congress.  There would be $500,000 authorized to the CPSC in Fiscal Year 2009 for this purpose. 

Inspector General Reports.  S.2663 would require the Inspector General of the Commission to conduct reviews and audits of implementation of the CPSC Reform Act and report on those findings in an annual report to Congress.  The Inspector would also be required to conduct a review and report on complaints from employees of the Commission about violations of the CPSA and other acts enforced by the Commission and leaks and unlawful disclosures of information by employees of the Commission to persons not authorized to receive such information.

Public Interest Website Links.  S.2663 would require that the Commission, no later than 30 days after the date of enactment, establish and maintain a direct link on the homepage of its website to the website of the Office of Inspector General of the Commission and a mechanism on the home page of the Office of Inspector General’s website by which individuals may anonymously report cases of waste, fraud, or abuse with respect to the Commission. 

Product Specific Standards

·        Child-Resistant Portable Gasoline Containers.  S.2663 would establish, as a CPSC rule, that each portable gasoline container for sale in the United States conform to the child resistance requirements as specified in the ASTM F2517-05 standard and its successors, unless the Commission determines otherwise. 

·        Toy Safety Standard.  S.2663 would establish the ASTM 963-07 standard for toy safety as a consumer product safety rule issued by the Commission.  If ASTM International proposes to revise the toy safety standard, it would be required to notify the Commission of the proposed revision and the proposed revision would be incorporated in the consumer product safety rule, unless the Commission determines that the revised standard would not improve the safety of the consumer product covered.  If the Commission so notifies ASTM-International with respect to a proposed revision, the existing standard would continue to be considered a consumer product safety rule. 

·        All-Terrain Vehicle Safety Standard.  S.2663 would mandate that the CPSC publish in the Federal Register as a consumer product safety standard the Specialty Vehicle Institute of America, ANSI/SVIA-1-2007.  The Commission also would have the authority to include any additional provisions that the Commission determines is reasonably necessary to reduce an unreasonable risk of injury associated with ATVs.  After the standard takes effect, it would be unlawful for any manufacturer or distributor to import into or distribute any newly assembled or unassembled ATV unless the vehicle complies with each applicable provision of the standard and is subject to or complying with an applicable ATV action plan filed with the Commission.  Failure to comply with any ATV standard would be deemed a failure to comply with a consumer product safety rule and would be subject to all of the penalties and remedies available under the CPSA. 

·        Garage Door Opener Standard.  Requires that all automatic garage door openers that directly drive the door in the closing direction include an external secondary entrapment protection device that does not require contact with the person or object for the door to reverse. 

Final Rules.  S.2663 would require the Commission to issue a final rule in its proceeding entitled, “Portable Generators.”  The Commission would also be required to submit a report that reviews the effectiveness of its labeling requirements for its charcoal briquettes, identifies any specific challenges faced by non-English speaking populations with use of the current standards; and contains recommendations for improving the labels on charcoal briquettes.  The legislation would also require the Commission to issue a final rule mandating general safety standards for cigarette lighters in its proceeding entitled “Safety Standard for Cigarette Lighters.”

Consumer Product Registration Forms.  S.2663 would require the CPSC,no later than one year after the date of enactment, to promulgate consumer product safety rules that require manufacturers of durable infant or toddlers products to provide consumers with postage-paid registration forms.  Manufacturers would be required to maintain for six years the contact information of consumers who register their ownership of such products in order to improve the effectiveness of recalls.

It would be unlawful for a manufacturer to use or disseminate contact information collected by the manufacturer for any purpose other than for recall or safety alerts.

The legislation would also require manufacturers to permanently place its name, contact information, model name and number, and the date of manufacture, on each durable infant or toddler product. 

Four years after the date of enactment, the Commission would be required to conduct a study on the effectiveness of the registration process.

Border Presence and Import Screening.  S.2663 would authorize the CPSC to assign personnel to the National Targeting Center at Customs and Border Protection (CBP) to help stop the importation of dangerous products.  The billwould require the CPSC to develop a comprehensive risk assessment methodology for screening noncompliant imported consumer products. 

Seizure and destruction of imported products in violation of consumer product safety standards.  S.2663 would require that, six months after the date of enactment, the CPSC publish and update a list of product defects that constitute a substantial product hazard.  The Department of Homeland Security would be required to ensure the destruction of products that do not comply with consumer product safety rules or with defects listed as substantial product hazards, or allow the exportation of such products under the DHS or CPSC regulations.  

Database of manufacturing facilities and suppliers involved in violations

of consumer product safety standards.  S.2663 would require the CPSC to create a database documenting violations of consumer product safety rules that will contain the: (1) date of the violation; (2) description of the violation; (3) details of the act or omission that constituted the violation; and (4) identifying information about the manufacturing facility or supplier.  Manufacturers could submit information to the CPSC refuting evidence contained in the database and or remedial measures taken to correct the violation.  These submissions would also be placed in the database. 

CBP and CPSC would have access to this database and would only be authorized to disseminate information to law enforcement and intelligence agencies.  The general public would not have access to the database, even through the Freedom of Information Act.

Moreover, the CPSC could not penalize a person solely on the basis of their being the subject of an entry in the database. 

*This summary has been adapted from a section-by-section summary prepared by the Commerce Committee. 

Legislative History

S.2663, the CPSC Reform Act, was introduced on February 25, 2008 by Senator Pryor, a member of the Senate Commerce Committee.  This bipartisan bill has five original co-sponsors, including Senator Stevens, Ranking Member of the Senate Commerce Committee.  There are nine co-sponsors in total, including Senators Collins, Durbin, Harkin,Inouye, Klobuchar, Lincoln, Nelson (FL), and Schumer.  The bill was placed directly on the Senate Legislative Calendar on February 26.  On March 3, the Senate passed a cloture motion to proceed to consideration of the bill on a 86 to 1 vote. 

S.2663 is an amended version of S.2045, the CPSC Reform Act of 2007, which was ordered to be favorably reported with an amendment in the nature of a substitute out of the Senate Commerce Committee on October 30, 2007.  The written report for that bill was filed on February 25, 2008. 

On December 19, 2007, the House passed a similar bill, H.R.4040, the Consumer Product Safety Modernization Act of 2007, as amended, on a 407 to 0 vote.   

CBO Estimate

At the time of this writing, the Congressional Budget Office (CBO) had not published an estimate for S.2663.  CBO estimates have, however, been published for S.2045, and it is estimated that the bill would increase spending by $447 million over the 2009-2012 period and would increase federal revenues by $17 million over the 2008-2012 period and $48 million over the 2008-2017 period by increasing civil penalties levied by CPSC.  The bill would not affect direct spending. 

Amendments

At the time of this writing, several amendments have been filed to S.2663, including:

S.A. 4085(Klobuchar) — An amendment to ban industry-sponsored travel for an CPSC employee or Commissioner.

S.A. 4087 (Menendez) — An amendment to ban paid for travel by a non-federal entity for an agency employee if that entity has been subject to jurisdiction of the agency in the previous two years. 

S.A. 4088(Klobuchar) — An amendment to exempt lead crystal from the lead products provisions of S.2663 if it is shown that the lead content in lead crystal is not a danger. 

S.A. 4089 (Schumer) — An amendment to add the International and Domestic Product Safety Act

S.A. 4091(Inouye) — An amendment to add the Commercial Seafood Consumer Protection Act.

S.A. 4092 (Dodd) — An amendment to enhance the safety standards for equestrian helmets. 

S.A. 4093 (Mikulski) — An amendment to require labeling of foods containing a cloned animal product 

S.A. 4094 (Cornyn) — An amendment to prohibit State Attorneys General from entering into an contingency fee agreement for legal or expert witness services relating to civil actions authorized in S.2663.

Additional Democratic and Republican amendments are expected.  While it is unclear the subject of those amendments, it is anticipated that a focus will be on the provisions of the bill that deal with databases, whistleblowers, and State Attorneys General.  It is also anticipated that an amendment will be offered to substitute the language of H.R.4040.  An amendment on drug importation from Canada may also be offered. 

Administration Position

The Bush Administration released a Statement of Administration Policy on S.2663 on March 3 in opposition to several provisions of the bill.  The statement, however, did not include a specific veto threat.    

Support

The following persons and organizations have expressed support for or endorsed S.2663

Thomas H. Moore, Consumer Product Safety Commissioner

Alliance for Patient Safety

American Academy of Pediatrics

American Association of Law Libraries

American Association of University Professors, AZ Conference

American Library Association

Circumpolar Conservation Union

Coalition for Civil Rights and Democratic Liberties

Consumers Union

Consumer Federation of America

Doctors for Open Government

DoorTech Industries, Inc.

Ethics in Government Group (EGG)

Federation of American Scientists

Federal Employees Against Discrimination

Focus On Indiana

Fund for Constitutional Government

Georgians for Open Government

Government Accountability Project

HALT, Inc. — An Organization of Americans for Legal Reform

Health Integrity Project

Information Trust

Integrity International

Kids in Danger

Liberty Coalition

National Consumers League

National Association of State Fire Marshals

National Employment Lawyers Association

National Judicial Conduct and Disability Law Project, Inc.

National Research Center for Women & Families

National Whistleblower Center

No Fear Coalition

OMB Watch

OpenTheGovernment.org

Parentadvocates.org

Patrick Henry Center

Project on Government Oversight

Public Citizen

Public Employees for Environmental Responsibility

Sustainable Energy and Economy Network

Taxpayers Against Fraud

The 3.5.7 Commission

The New Grady Coalition

The Semmelweis Society International (SSI)

The Student Health Integrity Project (SHIP)

Truckers Justice Center

Union of Concerned Scientists

U.S. Bill of Rights Foundation

U.S. Public Interest Research Group

Whistleblowers USA

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