[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
                            SUBCOMMITTEE ON
                      INVESTIGATIONS AND OVERSIGHT
                 HEARING ON THE CONSUMER PRODUCT SAFETY
                   IMPROVEMENT ACT AND SMALL BUSINESS

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                              May 14, 2009

                               __________

                               [GRAPHIC] [TIFF OMITTED] TONGRESS.#13
                               

            Small Business Committee Document Number 111-023
Available via the GPO Website: http://www.access.gpo.gov/congress/house


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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                         MICHAEL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                        PARKER GRIFFITH, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)

  
?

                         STANDING SUBCOMMITTEE

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, Pennsylvania, Chairman


HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana              LOUIE GOHMERT, TexasQ46
PARKER GRIFFITH, Alabama

                                 (iii)

  
?



                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page

Altmire, Hon. Jason..............................................     1
Fallin, Hon. Mary................................................     2

                               WITNESSES

Nord, Hon, Nancy A., Acting Chairman, U.S. Consumer Product 
  Safety Commission..............................................     3
Schreiber, Ms. Laurel, Lucy's Pocket Allison Park, PA............    12
Lang, Ms. Suzanne, Starbright Baby, Boalsburg, PA................    14
Baustian, Ms. Susan, Director, Once Upon a Child Corp., 
  Minneapolis, MN................................................    16
Vittone, Mr. Anthony F., Vice President & General Counsel, 
  Swimways Corporation, Virginia Beach, VA.......................    18
McCubbin, Mr. David, McCubbin Hosiery, Oklahoma City, OK.........    20

                                APPENDIX


Prepared Statements:
Altmire, Hon. Jason..............................................    28
Fallin, Hon. Mary................................................    30
Nord, Hon, Nancy A., Acting Chairman, U.S. Consumer Product 
  Safety Commission..............................................    32
Schreiber, Ms. Laurel, Lucy's Pocket Allison Park, PA............    71
Lang, Ms. Suzanne, Starbright Baby, Boalsburg, PA................    75
Baustian, Ms. Susan, Director, Once Upon a Child Corp., 
  Minneapolis, MN................................................    81
Vittone, Mr. Anthony F., Vice President & General Counsel, 
  Swimways Corporation, Virginia Beach, VA.......................    85
McCubbin, Mr. David, McCubbin Hosiery, Oklahoma City, OK.........    96

Statements for the Record:
Dahlkemper, Hon. Kathy...........................................   102
Eckerly, Ms. Susan, Senior Vice President of Public Policy, 
  National Federation of Independent Business....................   105
Hilbert, Mr. Sean, Cobra Motorcycle, Manufacturing, Hillsdale, MI   107
Consumers Union, Consumer Federation of America and others.......   110
Wion, Ms. Stacee, SpielWerk Toys, Portland, OR...................   112
Handmade Toy Alliance............................................   115
Warring, Mr. Michael, American Educational Resources, Fort 
  Collins, CO....................................................   119
Ballas, Ms, Connie, From My Room, Naperville, IL.................   128
Tommey, Ms. Melanie, MCC Enterprises, Sand Springs, OK...........   129
Peapod Natural Toys and Baby Care, St. Paul, MN..................   132
Printing Industries of America...................................   134
Chuckas, Ms. Jill, Crafty Baby, Stamford, CT.....................   137
American Apparel & Footware Association..........................   138
Newell, Ms. Mary, Terrapin Toys, Eugene, OR......................   142
Burnside, Mr. Steve, DSD KAwasaki, Parkersburg, WV...............   143
Toy Industry Association.........................................   146
Woldenberg, Mr. Richard M., Learning Resources, Inc., Vernon 
  Hills, IL......................................................   151

                                  (v)

  


                            SUBCOMMITTEE ON
                      INVESTIGATIONS AND OVERSIGHT
                             HEARING ON THE
                        CONSUMER PRODUCT SAFETY
                   IMPROVEMENT ACT AND SMALL BUSINESS

                              ----------                              


                         Thursday, May 14, 2009

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
2360 Rayburn House Office Building, Hon. Jason Altmire 
[chairman of the Subcommittee] presiding.
    Present: Representatives Altmire, Ellsworth and Fallin.
    Also Present: Representatives Dahlkemper and Thompson.
    Chairman Altmire. Thank you all for being here. And as we 
discussed, there are going to be votes called on the House 
Floor probably in 20 minutes or a half hour, so we're going to 
try to get through Ms. Nord's testimony, first, before we have 
those votes. And I will now call the meeting to order.
    This Subcommittee hearing is now called to order. When it 
comes to protecting our children Americans take every possible 
precaution. We strap our kids into car seats when we're 
driving. We insist on training wheels when they're learning to 
ride a bike. We vaccinate them against chicken pox, polio, and 
countless other illnesses. In other words, we do everything we 
can to make sure our children are safe. That's why it's so 
distressing when threats to their health go undetected, 
particularly when those threats come from inside our own homes.
    In 2007, excessive lead levels were detected in a wide 
variety of children's toys. Up until that point, those products 
which ranged from Thomas the Tank Engine toys to Winnie the 
Pooh playset were assumed to be safe. But when it turned out 
they were not, the Consumer Product Safety Commission launched 
a massive recall. All tolled 17 million products were collected 
and entrepreneurs played a critical role in getting them off 
the shelves. Needless to say, these small business owners 
wanted to protect their customers. However, what they didn't 
want--and what they couldn't afford--were the economic 
consequences of doing so and in the end they suffered heavy 
losses and economic consequences they could not afford.
    To help ensure this type of massive recall never happens 
again, President Bush signed the Consumer Product Safety 
Improvements Act into law in August 2008. While the law was 
intended to protect our children, it has done less to 
accomplish that than to hurt small businesses all across our 
country. In today's hearing, we are going to examine the impact 
of that law on entrepreneurs and discuss ways to ease that 
regulatory burden.
    Now recalls are never easy. Small firms already operate on 
tight profit margins and additional outlays for destroying 
products and reimbursing retailers can often be devastating. 
Under the new law, small businesses are required to conduct 
costly product testing and use pricey new tracking labels. 
These requirements are well intended and good in concept, but 
their utility has yet to be seen. And what's more, they are 
extremely expensive for small businesses to comply with.
    Even the Consumer Product Safety Commission has admitted 
that the cost to small business might be crippling. In fact, 
the Commission estimates entrepreneurs will end up paying 
billions of dollars just to comply with the new regulations. 
For small manufacturers, product testing alone can cost 
hundreds, if not thousands of dollars, per item. The process of 
testing the 233 various components in a child's bicycle, one 
bicycle, might run close to $14,000 for one.
    Manufacturers are not alone in shouldering these costs. 
Small retainers--from toy stores to clothing shops--have also 
been affected. They are now saddled with countless items that 
they can't sell and according to the Toy Industry Association, 
the new law has led to inventory losses which will reach close 
to $600 million.
    At a time when with the retail and the manufacturing 
industries are struggling these outlays might very well be the 
straw that breaks the camel's back. Obviously, we need to 
protect our children. We all support that. But we need to do it 
in a way that makes sense and doesn't cripple our small 
businesses.
    Fortunately, the Consumer Product Safety Commission, we 
believe, does have the authority to be flexible with these 
small firms. This is critical, particularly when it comes to 
product testing. For instance, it allows the rubber for a toy 
doll to be pretested at the rubber plant rather than the doll 
factor. This would go a long way. This kind of component 
analysis could reduce costs without compromising safety.
    Protecting our children is all of our top priority. It is 
extremely important to consumers to have confidence in the 
products they buy, and the Consumer Product Safety Act was 
intended to provide that confidence. But rather than 
streamlining and improving the process, it's added a crippling 
new level of complexity. As small firms continue to grapple 
with obstacles like restricted lending and tightening credit, 
we shouldn't be creating more roadblocks for those same small 
businesses.
    I'd like to thank all of today's witnesses in advance for 
their testimony and when--unless--Mr. Thompson, do you have an 
opening statement? I will, without objection, allow Ranking 
Member Fallin the opportunity to provide her opening statement 
when she arrives.
    So at this point I will turn to the witnesses and our first 
witness, thank you for being here is the Honorable Nancy A. 
Nord. She's the Acting Chairwoman of the United States Consumer 
Product Safety Commission. She was appointed by President Bush 
for a term that expires in October 2012. Ms. Nord formerly 
served as General Counsel of the White House Council on 
Environmental Quality and is counsel to the House Commerce 
Committee. Thank you for being here, Ms. Nord, and welcome.

  STATEMENT OF NANCY A. NORD, ACTING CHAIRMAN, U.S. CONSUMER 
                   PRODUCT SAFETY COMMISSION

    Ms. Nord. Thank you, Mr. Chairman, for calling this 
important hearing. I'm delighted to be here to talk with you 
about the efforts that my Agency has made to implement the 
CPSIA. My written statement provides an overview of the Agency 
and the details of the Agency's activities in implementing the 
new statute. So therefore, what I'd like to do with my time 
that I have with you is to first of all tell you what we did to 
inform the public about the new law. Second, what we learned 
along the way. And third, what we see as the issues going 
forward, especially as they impact small businesses.
    First, what we did. I first have to say that the CPSC staff 
has just been tremendous since the Act was signed into law last 
August and I can't praise their work highly enough. But they 
were operating in an extremely difficult environment right from 
the start. The Act was a very significant rewrite of our 
statutes and it required that we begin promulgating regulations 
very quickly. The first rule had to be finally promulgated 
within 30 days of enactment. So we really had to begin our 
implementation with absolutely no time to train our employees 
into the nuances of the new statute.
    Even though the Act doubled the workload of the Agency, we 
began with no additional funds, no new resources for a period 
lasting over seven months which was the critical first period 
of implementation of the Act. We also already had a very full 
safety agenda that had been planned for this coming year. So 
the new Act's requirements were layered on top of that 
important safety agenda.
    We took very seriously our obligation to educate 
stakeholders about the requirements of the new law. In the 
first month alone, we began a series of public meetings first 
providing an overview of the Act with later ones addressing 
specific topics that had fast-approaching deadlines, the 
testing and certification requirements, the phthalates ban, the 
lead ban, altering vehicles, books, apparel, to give you just 
some examples.
    We developed a special website dedicated to the Act which 
includes automatic updates to the public. We developed a plain 
English summary of the law's most relevant provisions and 
posted that summary on the website. We began what is now a list 
of over 100 plain English answers to Frequently Asked 
Questions.
    We've also issued guidance documents on numerous topics. 
Some of those that are particularly targeted to small 
businesses, resellers, and home crafters. Our small business 
guide got 365,000 hits on our website the first month that it 
was put up. Okay, so what have we learned? As we worked to 
educate both consumers and businesses, it became apparent that 
many--is this on?
    It became apparent that many of those impacted--somebody 
does not want me to talk. It became very apparent that many 
small businesses, in particular, were not well aware of the 
requirements of the law, the implications for the businesses, 
or the fast-approaching deadlines. And throughout the fall and 
the winter, as we heard more and more from small business 
people and learned about the problems that they were 
encountering with the law, the staff really did search for ways 
to provide some relief for them. But we were hamstrung by the 
law's sweeping reach and the inflexibility of the law.
    Just to give you a couple of examples, first of all when 
the House passed HR 4040 which is your version of the bill, you 
had a small business exemption in your legislation that allowed 
us to push back dates. That provision was taken out in the 
conference. Hence, we lost our ability to be flexible with 
respect to small business implementation.
    Perhaps the most onerous impact on small businesses, 
resellers, and thrift stores is caused by the lead and 
phthalates ban being retroactively applied to inventory. What I 
mean by that is that the law impacts not only products 
manufactured after the effective date, but it impacts products 
sold after the effective date. And this retroactive effect 
makes illegal on February 10 of 2009, inventories sitting in 
warehouses, products sitting on store shelves, that were 
perfectly legal when they were made and that nobody has alleged 
to be unsafe.
    The staff tried to address the retroactive effect of the 
law with respect to phthalates where the law, we thought, gave 
us a little bit of wiggle room, but we were overturned by the 
Courts just before the effective date of the law. The law also 
gives us very little ability to grant exclusions from its 
provisions, even for products that are scientists do not 
believe present risks of injury.
    Because we don't have the ability under the law to craft 
common sense solutions to the problems that we are now seeing, 
the Commission has used stays of enforcement as pressure valves 
to provide some relief for certain products and for the testing 
and certification requirements of the law.
    But we know that these stays of enforcement are now 
solutions. Instead, they are time outs for everyone. 
Businesses, consumers, the CBSC and also for Congress, and 
these time outs are meant to allow the CBSC and the Congress to 
address the growing list of unintended consequences that we are 
seeing coming out of this law. But it is important to remember 
the stays of enforcement are not solutions, permanent solutions 
to problems. Even if a provision, if the enforcement is stayed, 
the underlying liability stays in effect.
    Okay, so what do we see going forward? Having met every 
single deadline that was in the statute over the last, over the 
first six months of implementation, having advanced over 40 
rulemaking activities to date, we do know that much work lies 
ahead of us. And let me just give you a bit of a flavor of some 
of the problems that we see on the horizon as they impact small 
businesses.
    The first is August 14th of 2009 when the issue of 
retroactivity will occur again as even lower limits on lead 
content go into effect pulling into the law's reach, even more 
children's products. And this is where you're going to see the 
impact on books and bicycles. Permanent tracking label 
requirements also go into effect on August 14th which will have 
a particularly hard impact on home crafters. Next February, 
small businesses will be facing testing and certification 
requirements when the stay of enforcement ends.
    What can be done to improve the situation to still protest 
consumers which is what the law was intended to do and the 
mission of our Agency, and yet help small business owners 
survive under the law? Attached to my written statement is a 
list of legislative recommendations from the CPSC career staff 
that would go a long way towards helping small business people 
while maintaining the health and safety standards and 
enforcement activities that are at the core of our safety 
mission.
    Thank you for holding this hearing today. This is the very 
first hearing on the Act's implementation and I want to have a 
dialogue with the Congress so that we can work together to 
address the law's real-world problems by finding common sense 
solutions.
    Thank you so much.
    [The prepared statement of Ms. Nord is included in the 
appendix.]

    Chairman Altmire. Thank you, Chairwoman Nord, and we know 
that you, like every Member of Congress have been inundated 
with questions about this and impact statements and we're very 
happy to have you here to have this discussion.
    At this point I would yield to the Ranking Member, Ms. 
Fallin, from Oklahoma, for her opening statement, following 
which we'll do the questions.
    Ms. Fallin. Let me just say thank you to our Chairman 
Altmire for holding this hearing and working with us on the 
issue that's very important to our small businesses around the 
United States. And Chairwoman Nord, I appreciate your comments 
today. I appreciate the awareness that you have of the 
situation facing so many of our businesses throughout our 
nation and the challenges that this Congress have given you 
with the law itself and some of the recommendations that you've 
made to try to resolve this issue. And hopefully, within this 
panel and this group and our legislative body, we'll be able to 
draft some legislation. That's my hope, Mr. Chairman, that 
we'll be able to address these issues.
    We have called this hearing, of course, to examine the 
Consumer Product Safety Improvement Act on small business and 
it is a very important issue for all our manufacturers, 
distributors, and sellers of goods aimed at children under the 
age of 12. The federal law and regulations adopted last year 
were meant to ensure that our children were safe from toys that 
they play with and clothes that they wear, however, there are 
unintended consequences that this well-meaning legislation that 
do severely impact many of our small businesses that produce 
children's products, not only overseas in factories, but also 
right here in the United States.
    I'd like to extend a personal thank you to all of our 
witnesses that have joined us here today on our Subcommittee 
and to welcome you and we look forward to hearing all of your 
testimony and your personal experience with how this all has 
affected your small business and manufacturing and especially 
to give a welcome to David McCubbin who is from my home state, 
my home town, a long-time personal friend of mine and he is the 
owner and operator of McCubbin Hosiery in Oklahoma City.
    In 2007, toy manufacturers had to recall over one million 
toys that violate the standards concerning lead-based paint. 
The toys recalled included well-known children's products 
associated with things like Thomas the Tank Engine, Barbie 
Doll, Dora the Explorer, and obviously parents were rightfully 
outraged about the danger to their children and prompted 
Congress to pass a Consumer Product Safety Act in 2008. Most of 
the lead in these cited toys came from overseas toy 
manufacturers and although the law harshly affects many of the 
American businesses that also produce toys, the CPSIA prohibits 
the sale and distribution of a product for children under the 
age of 12 if it contains more than 600 parts per million, as 
we've talked about, of lead in February of 2009. And of course, 
that will drop to 300 parts August 14th. And to ensure this 
compliance the Act requires the manufacturers to certify their 
products meet these standards through independent lab testing.
    Given the many concerns of small businesses across the 
country and their ability to meet these strict requirements in 
a short time frame, the Commission did ease the enforcement of 
the regulations for one year, but it ended February 10th--it 
will end February 10, 2010. This stay, as you mentioned, is 
intended to ease some of the problems facing our small 
businesses, but it is by no means a cure-all. We do need a 
resolution to this and though the Consumer Product Safety 
Commission may not take punitive action against anyone selling 
the product with more than 600 parts of lead, others may choose 
to enforce the law, as you also stated. So there's still 
liability to many of our manufacturers and small businesses. An 
example of that is that a State Attorney General may take legal 
action of they find a business has produced, distributed, or 
sold a product for a child that exceeds the lead limit. So 
small businesses and owners are thus forced to incur large 
costs of testing their products or risk punishment in the 
future if their products do not conform to these standards and 
that has been exacerbated for small business retailers who, 
unlike manufacturers, are not yet required to certify lead 
content of products. So the retailers who do note test for lead 
are still subject to these restrictions on selling a product 
containing lead, even though they lack the ability and 
resources to determine if their products contain it.
    So cost of testing is going to be upwards of tens of 
thousands of dollars for small retailers and just to make sure 
that only a few of their products don't fall below the minimum 
requirements. And of course, at a time when our economy is 
suffering and a recession is here and people watching their 
bottom line trying to make a profit, keep their employees 
employed, this is certainly not good news for small businesses. 
So I think it is very imperative that we look at federal law 
changes to ensure that we do have a healthy environment for our 
children and their products and their toys, but also to have a 
regulatory structure that can co-exist and does not have unduly 
burdensome regulations upon our small businesses and especially 
our manufacturers.
    So I look forward today to having our witnesses and their 
testimony and hearing their recommendations, Mr. Chairman, that 
they have. Thank you so much and once again, I look forward to 
working with you on legislation and I'll yield back my time.
    Chairman Altmire. Thank you, Ms. Fallin. We should be able 
to get through the four of our questions. We each have five 
minutes before the vote is called, which is good. I want to 
note the presence of Congressman Ellsworth from Indiana and 
Congressman Thompson from Pennsylvania. I thank each of you for 
being here as well.
    I just first wanted to ask your opinion as someone who is 
literally at the tip of the sphere on this issue something that 
we've all heard so much about. And you think about this and 
work on this every day. Is it your opinion that the impact that 
this law has had on small businesses, the issue that we're 
talking about today, is this an unintended consequence of the 
law that was passed or is this what we were trying to achieve 
in passing the law?
    Ms. Nord. I cannot for a moment believe that Congress 
intended to make billions of dollars worth of products that 
were sitting on store shelves, sitting in warehouses, on 
container ships illegal even though nobody is alleging that 
they are unsafe.
    The biggest problem I think for small retailers and for 
resellers of products is the retroactive effect of the law that 
sweeps into its effect, products that were manufactured well 
before the effective date and were manufactured to meet the 
laws as they existed at that point.
    Chairman Altmire. And we believe that the law specifically 
gives the Commission the authority to exclude products from the 
lead limits that clearly do not pose lead ingestion risks. So 
do you agree with that, and if so, why hasn't the Commission 
taken specific action to exclude more products?
    Ms. Nord. I wish that the law did give us that flexibility. 
I think that flexibility is needed. Unfortunately, the law was 
written in a very deliberate way not to give us that 
flexibility. We brought this to the attention of Committee 
staff during the conference drafting process and were told very 
specifically that that flexibility was not intended.
    The way the law is written, we do not have the flexibility 
to exclude many products that our health scientists really feel 
do not pose a risk of injury, but which may have lead above 300 
parts per million content.
    Chairman Altmire. The small businesses, as we all know, 
bear disproportionate share of federal regulatory burdens to 
begin with, before discussing this law and they don't have the 
compliance resources of their larger counterparts and I was 
wanting your opinion, Chairwoman, on this law. Is it placing 
small businesses at a disadvantage compared to their larger 
competitors? And if so, is the Commission doing anything to 
level the playing field, given what you have to work with the 
letter of the law?
    Ms. Nord. I do think that this law is putting small 
businesses at a disadvantage. I have had informal conversations 
with many, many companies around the country. I do hear from 
large businesses, that they are changing their ways to try to 
accommodate the law. I am hearing from large retailers that 
they are sending back product early to make sure that 
everything on store shelves complies with the law. So those 
bigger companies are working to accommodate themselves to the 
law, but there are some things in the law that have a 
particularly adverse impact to small businesses, the 
retroactivity provision that I just mentioned, the fact that we 
cannot really do risk assessments and tailor our regulatory 
approaches to look at real risks. I think that impacts small 
businesses as well. There are a number of other things that are 
set out in my written testimony, but yes, I do think we need to 
figure out a way to make sure that this law fulfills its 
objective to help consumers without undue adverse impact on 
small businesses.
    Chairman Altmire. Thank you. I will not turn over to Ms. 
Fallin.
    Ms. Fallin. I appreciate your comments about the lack of 
flexibility to exclude products. Does the Commission have the 
sufficient authority under the law to exempt producers of 
textiles and textile products from the lead testing 
requirements in the Act? It's your opinion that you do not?
    Ms. Nord. Well, what we have done with respect to a 
category of products that includes natural textiles like wool 
and virgin wool and cotton and that kind of thing is we have 
rather pushed the limits of the law and said we are going to 
exclude them from the testing requirements. So that's natural 
fabrics.
    We've also included certain kinds of other products that by 
definition don't and cannot have lead, but that's really as far 
as we can go.
    Ms. Fallin. Okay, and how does the stay of enforcement on 
testing and certification requirements help the retail and 
wholesale industries since they are so liable under this Act, 
if they do have goods that exceed the lead limits and are 
subject to the enforcement actions say of Attorney Generals?
    Ms. Nord. Well, as I mentioned stays of enforcement are not 
the optimal way to regulate or to enforce laws, but it was 
really the only technique that we had available to us. We were 
hearing from many, many small businesses that they just were 
not ready to start issuing certifications, especially 
certifications based on the testing requirement of the law. 
That is a very stringent requirement. It is going to be very 
expensive. And it was just very clear that people were not 
ready to meet the requirements and the time lines in the law. 
So we did a stay of enforcement, but we made very clear that we 
don't have the authority to stay the underlying requirement of 
the law. So they are still liable, potentially, if they sell 
something that has more than 600 parts per million of lead in 
it.
    Ms. Fallin. Madam Chairman, according to the authors of the 
legislation, the authors believe that the Commission has 
sufficient authority to rectify the concerns of small 
businesses. What is the legal basis for the Commission to 
arrive at a different conclusion than this?
    Ms. Nord. I've heard that said. What isn't said is any 
examples of where in the law we have that flexibility. Instead, 
we can point to many examples where we explicitly don't have 
the flexibility. And again, as we worked through the drafting 
process during conference, it was made quite clear that 
flexibility was not what was being granted to the Commission. I 
can go through and give you any number of examples of where the 
Commission's authorities have been cabined so tightly that we 
really cannot respond to the real world situations that are 
coming up. And I think that is unfortunate. It is impacting 
small businesses much more adversely than others and it really 
doesn't advance product safety.
    Ms. Fallin. Would you please provide the Committee examples 
in writing where these restrictions keep you from doing that?
    Ms. Nord. I would be delighted to do that.
    Ms. Fallin. That would be great for us to have it in this 
Committee. Thank you.
    Thank you, Mr. Chairman.
    Chairman Altmire. Mr. Ellsworth.
    Mr. Ellsworth. Thank you, Mr. Chairman, for holding this 
extremely important hearing. And I thank Ms. Nord for being 
with us here today. If my information is correct and we're 
talking about unintended consequences, if my information is 
correct, all but one Member of the House of Representatives 
voted for this legislation, so I would have to assume that 
minus Dr. Paul, we all didn't have the intended consequence of 
hamstringing small businesses and large businesses as a matter 
of fact. I know that it wasn't directly after this vote that I 
went home and met with folks in my District from shoe 
distributors that were concerned that children were going to be 
chewing on their parents' shoes, from a sporting goods company 
that made foosball tables that the little men on the foosball 
table were afraid a two-year-old was going to crawl up there 
and chew on the foosball men, and many other examples of that. 
That's not the intended consequence of this legislation, like 
you said. Everyone wants to protect our children, but we have 
hamstringed many businesses.
    One of the things that concerns me, Ms. Nord, is what you 
said earlier, and it seems to be rampant here is that we 
implemented this legislation and gave you no time to train and 
I applaud you for doing the plain English explanation because 
that's another thing I hear a lot about is that when people 
deal with the Federal Government, our regulations, it is less 
than understandable terms, so I appreciate that.
    I'd like you, at some point to look at House Bill 1465. We 
filed that in March and look at that, if you would and see if 
that answers some of the questions and concerns. We filed that 
with the help of the NFIB to address some of these concerns and 
I would encourage the Members of the Committee, if they haven't 
looked at that already to look at that. It has not received a 
hearing, but we hope to forward that.
    What are some of the things again, in plain English, if I 
can speak plain English, that you're hearing from small 
businesses and large businesses, just bullet point the biggest 
concerns and how we might rectify that. If it's top three, top 
five, whatever you think you can do.
    Ms. Nord. The top thing that we hear is the rather perverse 
effect of the retroactivity provisions which renders existing 
inventory illegal. And we are then forcing people to either 
destroy inventory, test and determine what its contents are, or 
violate the law. And I think that is just--you shouldn't be 
putting business people in that position.
    Secondly, the law does not really give us the flexibility 
to respond to real-world situations and real-world problems 
that we are hearing. Our flexibility was removed. We asked, for 
example, certification and testing authority, but what we got 
was something so constricted that we really don't have the 
ability to move within the provisions of the law to structure 
something that makes sense for business sellers and small 
business people in this country.
    So more flexibility needs to be given.
    I think if you address those two things, as well as several 
of the other things that are in my written statement, you can 
have a law that really carries forward the principles that you 
wanted when you passed the CBSIA and that the Agency wants. Our 
mission is to protect consumers. That's what we're about, but 
we don't want to be putting people out of business for selling 
water wings with excess amounts of lead when we all know that 
nobody is getting lead poisoning from swimming in a pool with 
water wings. Or bicycle tire valvesthat have excess amounts of 
lead, excess above the law limits, but where nobody is getting 
lead poisoning by filling their bicycle tires with air. These 
things are preposterous. The law shouldn't operate in that way. 
And I think if Congress would give us back the flexibility that 
was removed from the expert Agency here, we could craft this in 
a way that makes some sense. I'd like to work with you on your 
legislation.
    Mr. Ellsworth. That would be great. And could you touch, 
briefly, I know they're getting down to that where we can run 
over there in a few minutes, they might hold it open just a 
little bit longer than 15 minutes. I've seen that done.
    Touch on the secondhand shops, I guess the chain, when 
we're going to secondhand shops, flea markets, if you could 
touch on that and the implications there as it goes down the 
chain what your views are on that?
    Ms. Nord. The secondhand shops, charity shops, provide such 
a value to our society, especially right now. And they have 
been impacted by this law in a rather unique way and again it's 
because of the retroactive effect, making it illegal to sell 
things that don't meet the lead limits as opposed to 
manufacturing products after the effective date that don't meet 
the lead limits.
    So you've got charities and thrift shops that bring in 
unique products. They don't have any way of knowing if those 
products have lead or phthalates. We've given some guidance, 
but it has to necessarily be general guidance. So they are in 
the really unfortunate position of either having to decline to 
sell these things, remove them from inventory and destroy them, 
or take their chances and possibly break the law. And we're 
talking about useful products. We're talking about children's 
clothing.
    Nobody has ever brought to my attention a child being 
poisoned by wearing a pair of kid's dungarees with a metal 
zipper or wearing a shirt with a pearlized button. These things 
may have more than 300 parts per million of lead. They don't 
necessarily pose a risk of injury. And we have put resellers at 
legal risk because of the retroactive effects of the law. I 
think that's wrong.
    Chairman Altmire. Let me cut it right there, so we can give 
Mr. Thompson from Pennsylvania the opportunity.
    Mr. Thompson.
    Mr. Thompson. Well, first of all, thanks, Chairman Altmire, 
Ranking Member Fallin for putting this into the Subcommittee 
for this very, very important discussion and Chairwoman Nord, 
we really appreciate your being here, your testifying and 
frankly, your remarks reflecting on kind of a common sense 
attitude with this. I find that refreshing for this town.
    I do have--you talk within your top five issues that were 
brought to you and one of those was existing inventory in terms 
of problems faced by small businesses. The folks I've been 
hearing from, however, in fact is that a problem that's being 
raised by a number of small businesses, in fact, many on the 
next panel, I believe, that the biggest problem involved the 
testing of components that have no lead in them, or affixing 
permanent labels to children's headbands and hosiery.
    How would you respond to those businesses, any thoughts on 
that issue? The inventory, obviously, is significant, but 
frankly, this is a problem going forward as well.
    Ms. Nord. Yes, I think component testing could be a very, 
very useful tool for us and for small businesses. The problem 
is that the way the law is written, the testing requirement 
falls on the producer of the children's product, not on people 
that make the component parts because buttons, by their nature 
are not necessarily children's products. When you put them on a 
child's dress, then they become a child's product. So the 
person who makes the dress is the person who is under the law 
required to do the testing.So I think that's one area where we 
could do some fine tuning of the law to clarify how we're doing 
to deal with component testing.
    The other issue is permanent tracking labels. The law does 
require that they go on all children's products on August 14th. 
Now the law was written in a very interesting way because it 
interjected a bit of ambiguity into it because it says that 
they need to be put onto to the extent practicable. The Agency 
had a hearing yesterday. We are in the process of developing 
guidance. I know it's somewhat late, but we are doing the best 
we can to get it out, but again, we want to be reasonable here. 
I want to be focussing with respect to the tracking labels on 
products that are dangerous; that we've had a history of 
recalling, like baby cribs. We're frankly not real interested 
in kids' headbands or stockings, but the law doesn't allow us 
to make those cuts and that's really what we need.
    Mr. Thompson. Thanks very much. I yield back the balance of 
my time, Mr. Chairman. Thank you.
    Chairman Altmire. Thank you. I recognize the gentle woman 
from Pennsylvania, Ms. Dahlkemper.
    Ms. Dahlkemper. Thank you, Chairman. In the interest of 
time and the fact that votes are being called I have a 
statement that I would just ask that there be unanimous consent 
to place in the record, along with a letter that I have written 
to Chairman Waxman and the Honorable Joe Barton.
    Chairman Altmire. Without objection, thank you.
    Thank you, Ms. Nord, for being here.
    Ms. Nord. Thank you.
    Chairman Altmire. We are going to adjourn for a vote. We 
have a series of five votes, so we're going to recess the 
Committee until 11:30 a.m.
    Thank you.
    [Off the record.]
    Chairman Altmire. We will reconvene the hearing. I ask the 
witnesses for the second panel to come forward. To explain the 
voting system, you will each have five minutes to give your 
remarks. As indicated by the lights that are in front of you, 
when you see the yellow light come on, you will have one 
minute, so please start to summarize your remarks at that point 
and the red lights means you have exceeded your time, please 
wrap up your thought at that moment and then we will move to 
questioning after all of you, as a group, have spoken.
    So I will introduce the first witness, Ms. Laurel 
Schreiber, who is my constituent and friend. Ms. Schreiber is 
owner of Lucy's Pocket in Allison Park, Pennsylvania. Lucy's 
Pocket sells a variety of children's clothing, as well as 
embroidered baby items such as bibs and blankets. Ms. Schreiber 
sells her products both online and in her store. Welcome, Ms. 
Schreiber. Please turn your microphone on.

                 STATEMENT OF LAUREL SCHREIBER

    Ms. Schreiber. Thank you for the opportunity to speak 
before you today about the effects of the CPSIA on business. My 
name is Laurel Schreiber and I have a small home-based business 
called Lucy's Pocket. I sell monogrammed gifts for children 
through my website.
    As the CPSIA now stands, I as well as thousands of 
crafters, seamstresses, artists and others who market safe, 
hand-made items for children under the age of 12 will be put 
out of business. As small business owners, we are looking to 
you to make legislative changes that will allow those of us who 
have been creating safe items to continue doing so.
    As it relates to my business, there are two major and 
substantial problems with the CPSIA as written: the redundant 
testing requirements and the comprehensive labeling mandates. 
All of the items I sew onto, or make myself, are made from 
commercially-available textiles, ribbons, threads, and other 
materials. They come from wholesale suppliers as well as retail 
stores. A majority of the items I purchase from wholesale 
suppliers have General Certificates of Conformity which attest 
that the items have been tested for lead and/or phthalates and 
have passed those tests. I also purchase items from large 
retail stores who are unable to provide GCCs, although they 
have tested their products prior to placing them on their 
shelves.
    Due to the CPSIA, I will have toe test each individual item 
prior to selling it. And though an enforcement stay for testing 
has been issued for textiles, there is no guarantee it will not 
be rescinded at a later date. The enforcement stay does not 
include items with buttons, snaps, zippers, or other non-
textile parts.
    In order to have my one-of-a-kind items tested, I will need 
to create two identical items, the wet method used to test for 
lead destroys the original. From the testing companies I have 
contacted, the cost to me is about $75 per component. A 
component includes the fabric, and thread and any other 
material that makes up that product.
    I have brought several examples of my work to show you how 
this expensive redundant testing will put me and those like me 
completely out of business for good.
    One of the most popular items is an appliqued bib and 
bloomer set. The basic set contains at a minimum 12 components. 
The components include four threads, two dyed fabrics, a two-
part Velcro closure, elastic, poly cotton fabric, 100 percent 
terry cotton fabric, and 100 percent cotton binding.
    To test those 12 components will cost me $900 to prove that 
the bib and bloomer set don't contain lead. If I use a plastic-
backed bib purchased from a retail store then I will need to 
add an extra $375 to prove that it doesn't contain illegal 
phthalates. So testing for that set will range from $900 to 
$1275. It sells for $20.
    I also create monogrammed hairbows. They consist of a metal 
clip, two types of thread, and ribbon. I have GCCs on file 
showing that the importer has tested the clip and it is free 
from the lead level. It will cost $300 to test that bow which 
sells for $5.
    I create monogrammed headbands which we had talked about 
earlier. The headband is made of plastic so it had to be tested 
for phthalates as well as the other components for lead. As 
with my other items, I have GCCs on file from the importer 
showing the headband does not contain the illegal phthalates. 
To test the components of the headband, plus the phthalates, 
will cost $675. It sells for $9.
    Because each of my items is unique, I'm unable to batch 
test. Redundant testing is not necessary. The air in my house, 
the sewing table I work at is not lead infused. It's not lead 
filled. Items coming out of my home will not be contaminated 
with lead. I say material coming in will go out as a safe 
product.
    If the redundant testing requirements will put me out of 
business, the labeling mandates would. As of this August, each 
and every item going out of my studio must contain a permanent 
label that contains information like the source, date of 
manufacture, and batch. For a business that creates one of a 
kind items and less than 5,000 or so a year, this is an 
unnecessary hardship. Permanent labels are not technically 
feasible for many of my items. And procuring permanent labeling 
supplies is an incredibly expensive proposition.
    My business is a way if I were to find out there were 
problem issue, I could pick up the phone and call my customers.
    I and many others like me started creating hand-made items 
as an antidote to mass-produced, possibly unsafe toys and 
clothing originating from China. Many of us have young 
children. We are very aware of the dangers of lead poisoning, 
but we use safe materials and we create safe products. We're 
willing to alter our methods to ensure compliance, but with the 
way the law is written we'll be forced to shut down completely.
    We're asking for common sense of the law. We've written 
letters and faxes, made calls. We're safe. We just want to be 
legal. But the unintended consequences of the CPSIA are showing 
that this would be absolutely impossible. I'll have to close my 
doors and once I close I'll not be supporting my suppliers or 
other businesses and they may not be affected hugely by my 
loss, but there are a lot of businesses like me. So once you 
start multiplying the effects it becomes fairly apparent that 
CPSIA is going to absolutely kill the hand-made industry and 
the ramifications are going to be beyond definition.
    [The prepared statement of Ms. Schreiber is included in the 
appendix.]


    Chairman Altmire. Perfect timing. Thank you, Ms. Schreiber.
    The next witness will be introduced by Representative 
Thompson.
    Mr. Thompson. Thank you, Chairman. Actually weeks after I 
came to Congress I had a meeting in my District Office in 
Bellefonte, Pennsylvania and the woman that I met with 
described her entrepreneurial aspirations in really a unique 
and innovative start-up company she created. And while her 
company was growing there was an unfortunate setback that had 
her doubting the future of her business. And it was brought to 
my attention that the Consumer Product Safety Improvement Act 
which passed unanimously in the 110th Congress as a result of 
lead contaminants in children's toys had unintended regulatory 
consequences that placed undue restraints on everything from 
product development to expansion.
    And my constituent went on to explain that if thee 
materials she used to make her products were not tested by a 
third-party laboratory, she could be in violation of the law 
and this testing would have grave financial ramifications on 
her product line.
    This seems to be counter-productive, mainly because her 
source material was purchased from retail outlets that already 
certified the goods. My constituent explained as a mother, she 
wanted our children to be safe and she did everything to ensure 
that with her business.
    I'm certainly confused as to how this law, and in turn, 
regulation set into place by the Consumer Product Safety 
Commission could place such a burden and disincentive on a 
budding entrepreneur and Mr. Chairman, I really appreciate your 
assistance in having Suzi Lang, owner of Starbright Baby 
teething giraffes join us today, one of my constituents. Suzi 
Lang is a former kindergarten through 12th grade art teacher, 
also trained as a graphic designer, a photographer, and she 
produces she's stuffed teething and toddler giraffes that are 
sold online and wholesaled to baby boutiques in both the United 
States and Canada.
    Welcome, Ms. Lang, and we look forward to your testimony.

                     STATEMENT OF SUZI LANG

    Ms. Lang. Thank you very much for having me here today. As 
the mother of a 2-year-old, I admire Congress' efforts to draft 
a law that protects children from excessive amounts of lead in 
toys. Unfortunately, the law, as it is currently written, will 
heavily danger small businesses and entrepreneur who make and 
sell items for children in this country. I do not believe the 
law is fatally flawed, however, I think the injection of some 
common sense provisions would more effectively ensure safe 
products for children and prevent irreparable damage to small 
business.
    The reason I am going my testimony is because that I, along 
with several business owners, are afraid for what the CPSIA 
means for our business and the important amount of income it 
brings into our families. Specifically, my business consists of 
fabricating and selling these soft little teeth giraffes for 
babies. I'm not affiliated with any groups. I'm here on behalf 
of my own business, however, I'm using the resources that I 
have to advocate for small businesses, many of whom rely on 
this income to sustain their families.
    A few of the major problems that this law presents to my 
business are unit testing, the tracking and labeling 
requirement and the fallacy of assuming that everything is 
toxic until proven safe.
    Unit testing is cost prohibitive for many small businesses, 
including my own. I make very small batches of these giraffes, 
usually about ten per fabric choice. I also make one-of-a-kind 
and custom items for my customers, using their own fabric or 
fabric from my collection. My giraffes would be required by 
this law, as of February 10, 2010, to be tested for both lead 
and phthalates. I contacted a research, a lab close to my home 
in Harrisburg to quote for lead and phthalate testing. For the 
lead testing I was quote $50 per component and for each giraffe 
there are four to five components. Cumulatively the total cost 
for testing one fabric line of giraffes would be anywhere from 
$1800 to $2200. That's also adding in the $400 per component 
for the phthalate testing. My giraffes usually sell for about 
$14 to $18 each, depending on the kind of fabric that I use and 
the added cost of testing would add another $180 to $225 per 
giraffe. For a one-of-a-kind item, the price would have an 
additional $1800 to $2200 price tag tacked on to a $14 charge. 
This is extremely cost prohibitive for my customers.
    Considering that the law specifies that if I change any 
component, it would need to be tested again. I created 36 
different patterns of giraffes in 2008. So the total cost of 
lead and phthalate testing would be $64,000 to $81,000. I 
actually only made $4500 gross last year. The deficit the 
testing would create would more than put me out of business. It 
would bankrupt my family.
    Another aspect of the law that affects my business is the 
tracking and labeling. The law says that it is to be to the 
extent practicable, but I question how this could be done by 
any home craft seller or small business. Each lot needs a new 
tag and it would force me to have to make my own labels because 
I would never be able to meet the minimum for the label 
companies that I use to print the labels that I have now. 
Because my giraffes are only ten or fewer or sometimes only 
one, it would never be practical.
    The most disheartening thing for me as a small business is 
the assumption that the law is everything bad and dangerous 
until proven safe. Especially since many of the materials I use 
are proven to have no phthalates, no lead, fabric is all I'm 
using, quilt fabric, cotton fabric. Many small businesses do 
not purchase their fabric wholesale, but instead buy it from 
local fabric or quilting shops. In this setting I can buy one 
yard of fabric from my local shop, make my giraffes, have to 
have them all lead and phthalate tested and my neighbor can go 
buy the very next yard off the bolt of fabric, make baby bibs, 
try to sell them, and she would also have to lead and phthalate 
test the very same fabric from this very same bolt which is not 
very--pretty much nonsense.
    The most problematic thing for me is to have to phthalate 
test this item since it's a teething item. It's required under 
the law to be phthalate tested, but it's entirely made out of 
cotton fabric. When I contacted the lab to get quotes, they 
asked me how they would have to be able to do this since the 
CPSIA said to grind the toy to get a sample to test, but 
there's no grinding on a fabric giraffe. I don't think he would 
survive.
    There are so many unintended consequences of this law that 
thousands of small businesses and crafters will be put out of 
business in this already tough economic climate.
    Thank you very much.
    [The prepared statement of Ms. Lang is included in the 
appendix.]

    Chairman Altmire. Thank you, Ms. Lang.
    Ms. Susan Baustian is Director of the franchise Once Upon A 
Child located in Minneapolis, Minnesota. Once Upon A Child are 
independently-owned resale businesses that purchase and sell 
used and new children's clothing and merchandise. Franchised in 
1993, these stores have become a rapidly-growing component of 
the Winmark Corporation family of brands.
    Welcome, Ms. Baustian.

                  STATEMENT OF SUSAN BAUSTIAN

    Ms. Baustian. Thank you, Chairman Altmire for having me to 
testify today.
    My name is Susan Baustian and I am the Director of Once 
Upon A Child Stores for Winmark Corporation. Today I'm speaking 
on behalf of our hundreds of stores in what we call the 
industry of gently-used products.
    Winmark Corporation owns two franchises that have been in 
business for over 20 years; Once Upon A Child, a store selling 
used children's goods and Play It Again Sports, they sell new 
and used sporting goods, that have been significantly impacted 
by this bill. Although our company headquarters are based in 
Minnesota, we have over 520 franchises across the country. What 
that amounts to is over 500 store owners worrying about whether 
or not they comply with the law, 5000 employees scrambling to 
figure out how to comply and over 200 vendors feeling they do 
not have the resources to test their products to ensure that 
they comply with these new standards. Last year alone, our two 
brands serviced over 7 million parents that are now confused as 
to what is safe or not for their children.
    The ill-executed implementation of this legislation has 
brought fear into the industry, and that fear, especially in 
economic times like these, can bring a half to successful and 
productive businesses. Our franchises have a lot on the line 
that is driving this fear. Most of them have business loans 
where their homes on the line. They have a family in which 
their business provides for, and they have a strong sense of 
giving back to the community in that they are being at the 
forefront of recycling. They buy and sell product that children 
no longer use or have outgrown. They are fearful that the CPSIA 
will force them to give up their American dream which is owning 
their own business.
    I think what is really unfortunate about this debate over 
the CPSIA has lead to finger pointing on an issue that we 
really all agree, that we want to ensure the safety and 
protection of our children.
    Our store owners have dedicated their lives to providing 
safe, fun, and educational products for children of all ages, 
and are now having to rethink how they can continue to offer 
these products without violating the law.
    We want to work with the Consumer Product Safety Commission 
to comply with this law, but the guidance issued thus far has 
been difficult to understand for many of our store owners. We 
do not want to have to shut our doors over legislation that we 
all agree could help children if implemented in an effective 
and productive way, but we need the help of the CPSC and 
Congress to clarify what is required for our store owners.
    The CPSC has come out and stated that resellers such as 
Once Upon A Child and Play It Again Sports, as well as 
Goodwill, Salvation Army, ARC, Church organizations, garage 
sellers, consignment stores, anybody that has a small business 
that does resell items, do not have to test products, but our 
businesses are still liable if those products with banned 
substances are sold.
    The CPSC recently produced a Handbook for Resale Stores and 
Product Resellers with the purpose being and I quote, ``to help 
identify the types of products that are affected and to 
understand how to comply with the law, so you can keep unsafe 
products out of the hands of consumers.'' Unlike the 
information that the CPSC supplies regarding recalls which is a 
very specific list by brand and model number, the handbook is 
too general to effectively determine which products are safe to 
buy and sell.
    For example, on page seven of the handbook, it indicates 
and I quote that ``items made of wood (without paint, surface 
coating or hardware) are OK to sell.'' It also indicates that 
and I quote again, ``clothes with rhinestones, metal or vinyl/
plastic snaps, zippers, grommets, closures or appliques are 
best for us to test. We can either contact the manufacturer or 
we should choose to not sell them.'' Unlike retailers of new 
products, our franchisees across the country really have no 
idea how to determine if the painted blocks, toy trucks, dolls, 
stuffed giraffe, or anything else that they're bringing in and 
they're buying and reselling contains lead paint or are made up 
of dangerous lead components or toxic plastics.
    It will be a violation of the Act to sell an item that is 
known to have more than the acceptable limit. This violation 
can be a fine of $5000 for each violation, and that fine 
increases to $100,000 on August 14. Being that the handbook 
gives us only guidance on determining which items are safe, the 
only way to be certain would be to test the product. However, 
being each piece that is bought and sold is unique, it would be 
very costly to do that. With a house on the line, a family to 
care for, and a potential liability to deal with, fear has 
really taken over for many of our retailers.
    Last year alone, Once Upon A Child paid families $45 
million for children's items that we purchased for resale which 
generated $120 million in sales for our franchisees. For 
families, the money that they receive from selling these 
children's items can be used to supplement the parents' income 
or maybe used to buy items for their children that they may 
otherwise can't afford. For business owners, this income helped 
provide for their family. But now, many business owners and 
parents are worried they won't know when a snap or zipper 
contains lead, and like toys, they have no way to test these 
items.
    If there's really one thing that's become clear through 
this process is that we as an industry need more guidance and 
we need more time to sift through inventory, understand the new 
regulations and find cheaper, more efficient ways of testing 
products. For my industry, it's critical that we are able to 
understand how we can better sort through the inventory and 
confidently buy and sell children's items without fear of 
selling something that is unsafe for a child or facing 
consequences of violating the Act.
    We need to know specifically what items are deemed unsafe 
for our children. I thank you for calling this hearing today on 
the impact of this bill.
    [The prepared statement of Ms. Baustian is included in the 
appendix.]

    Chairman Altmire. Thank you. Mr. Anthony Vittone is Vice 
President and General Counsel of Swimways Corporation in 
Virginia Beach, Virginia. Swimways Corporation manufacturers 
leisure and recreational water products. The Swimways brand has 
been around for over 35 years and can be found at major 
retailers and individual pool dealers alike.
    Welcome, Mr. Vittone.

                  STATEMENT OF ANTHONY VITTONE

    Mr. Vittone. Mr. Chairman, Ranking Member Fallin, Members 
of the Committee, thank you for holding this hearing and giving 
me the opportunity to talk with you about the issues small 
businesses are facing as a result last year of the passage of 
the Consumer Product Safety Improvement Act.
    My name is Anthony Vittone. And I am the Vice President and 
General Counsel of Swimways. Swimways is a small, privately-
held, family-owned company headquartered in Virginia Beach 
where we employ about 70 hardworking Americans.
    Swimways designs and makes pool toys for the water. We 
offer 120 different products to customers ranging from nine 
months through adulthood. The Swimways brand of products is 
sold in 40,000 storefronts with major retailers and individual 
pool dealers alike.
    For the past 15 years, Swimways has enjoyed an average rate 
of growth of 15 percent a year until 2008. Unfortunately, we 
took a step backwards last year and that was directly 
attributable to two factors, the state of the economy and the 
passage of the CPSIA.
    The CPSIA, together with the economy, created a perfect 
economic storm for us. Swimways' main issue with the CPSIA 
involves the phthalate restrictions. While we would agree that 
there are issues with other provisions in the Act, I plan to 
focus my testimony today on four issues regarding the CPSIA and 
the new phthalate restrictions.
    The first issue that we have is the timing of the phthalate 
ban was in our opinion the single biggest disaster in the 
CPSIA. When the European Union and the State of California 
passed a similar phthalate ban, they gave manufacturers and 
retailers 13 months and 15 months, respectively, to move 
through their inventories. Conversely, the CPSIA, as written, 
only gave manufacturers and retailers five months.
    For any consumer product company this would be wholly 
inadequate. For a seasonal company, like Swimways, the time 
frame was essentially nonexistent. I am sure that the Members 
will understand that there are not a lot of pool toys being 
sold in the fall and the winter. People buy pool toys when it's 
hot.
    Furthermore, whatever time was granted in the CPSIA was 
completely wasted by the back and forth interpretation of the 
Act's retroactivity on existing inventory. The industry relied 
on the CPSC's General Counsel's opinion that the new 
regulations would only apply for inventory manufactured after 
February 10th. When the New York Court in February overruled 
that interpretation, the retailers went into a complete panic. 
They had four days to review their inventory to determine which 
products were compliant with the CPSIA and remove that 
merchandise from the shelves. As a result of the severely 
compressed time line, broad-brush reactionary decisions were 
made and manufacturers like Swimways were expected to absorb 
the cost.
    The same product, if sold by a retailer on February 9, 
2009, was perfectly acceptable and safe by Government and 
industry standards. The next day, that same product became a 
toxic and dangerous weapon of mass destruction.
    Our second issue with the phthalates restrictions is the 
CPSIA included a specific legislative exemption for embedded 
lead. However, no such exemption was given for the 
significantly more benign phthalates. Swimways makes a number 
of products where there is no ability to access the phthalates 
unless the customer essentially destroys the product. These 
products present no risk to the consumer and should be 
available for sale.
    Third, both the CPSIA and the California legislation permit 
the use of three phthalates DINP, DIDP, and DNOP, depending on 
the age grade of the product. The California legislation only 
prohibits these three phthalates for child care articles and 
toys that are capable of going in the mouth if they are 
intended for children three and under while the CPSIA forbids 
them for children up to 12 years.
    We manufacture a product called the Rainbow Reef fish. 
These are battery-powered fish that swim in a swimming pool. 
We've sold over 7 million units of this product. Prior to 2009 
the fins of these fish were made with phthalates. Even those 
this Rainbow Reef fish is age graded five plus, there are 
nearly 15,000 units of this product that are now useless and 
will have to be destroyed. The only reason is because those 
fins are capable of going into a child's mouth. They're not 
going to come off, but they're capable of being chewed on.
    Adding further confusion to the marketplace is the 
exemption for sporting goods in the CPSIA. It is not clear what 
the definition of sporting good is and what the definition of 
toy is. The CPSIA has offered limited guidance, but more 
detailed criteria are needed. In our experience retailers are 
not willing to take a chance of using a broad-brush approach if 
it's for a kid, it's a toy.
    We manufacture another product called the Spring Jam 
basketball and have sold over 750,000 units of this product 
since 2005. A large retailer had approximately 10,000 units of 
this product on their store shelves and they immediately 
removed them on February 10th. We reviewed the item with them, 
argued that it was a sporting good, offered to sort through the 
inventory because some of the inventory was 2009 inventory and 
was phthalate-free. They destroyed it all, all 10,000 units, 
even though less than 15 percent of that inventory of those 
10,000 units had phthalates in them. All of them were put into 
the shredder.
    Under the California Act, these goods would have been 
compliant. If there had been an embedded phthalate exemption, 
these goods would have been compliant. Had the CPSIA allowed 
more time to move through existing inventory, this problem 
would not have occurred. The retailer is now insisting on 
$100,000 credit for the destruction of the Spring Jam inventory 
and other retailers have destroyed other lots of the same.
    I'll wrap up. I'm already over, but suffice it to say, Mr. 
Chairman, Swimways Corporation has incurred about $1 million in 
expenses as a result of this legislation. We ask for your help. 
Thank you.
    [The prepared statement of Mr. Vittone is included in the 
appendix.]

    Chairman Altmire. Thank you and for the video record of the 
proceedings for our colleagues who can't be here, can you hold 
that basketball up again, just for the camera?
    Mr. Vittone. Sure.
    Chairman Altmire. And that's what you were talking about 
with the 10,000 units?
    Mr. Vittone. Yes, 10,000 units of this.
    Chairman Altmire. Thank you. I would yield now to the 
Ranking Member to introduce our final witness.
    Ms. Fallin. Thank you, Mr. Chairman. It's my pleasure to 
introduce a gentleman from my home state, David McCubbin, who 
is the President of McCubbin Hosiery in Oklahoma City. He's 
been President of that company since 1982, but it is a family-
owned business. It's been in business for 57 years, so that's a 
long time. They design, market, and distribute children's and 
ladies' hosiery and their products are sold in a number of 
national and regional retail outlets including Nordstrom's, 
Dillard's, Stride Rite, K-Mart, Payless Shoe Source and many 
other small, independent retailers. Mr. McCubbin started 
emailing me as a fellow parent, both of our children go to 
school together, and said Mary, you've got to help me on this. 
This is really hurting my business and I'm scared to death 
about the laws that have been passed here in Congress. Help us 
out.
    We were able to do something, David. It's fun when you can 
complain to your Congressman and we can actually have you up 
here and hear from you and try to resolve the issues. So thank 
you all for coming and David, we're pleased to have you here.

                  STATEMENT OF DAVID McCUBBIN

    Mr. McCubbin. I want to thank you for inviting me to 
address this Committee. The Consumer Product Safety Improvement 
Act of 2008, well intentioned to enhance the level of safety in 
the products Americans purchase for our children has had 
massive consequences. The legislation's broad scope has 
impacted thousands of products for which the measured concerns 
are not material. Your willingness to review the implications 
for small businesses, in particular, is very much appreciated.
    I was specifically asked to comment in regard to the impact 
of the law on our business today, the implications we 
anticipate in upcoming year, and recommendations I would have 
regarding the CPSIA.
    Thus far we have been most impacted by the lead content 
testing requirements. Initially, we were told by industry 
experts, both in the U.S. and internationally, that there was 
no reliable lead content test for textiles engineering a 
scramble to execute any test that would work or be considered 
reliable. Reputable testing labs throughout the U.S. and Asia 
differed on their interpretations of what should be tested, 
consequently we tested all yarns and every sock at considerable 
expense. A sudden overwhelming demand in the testing labs 
resulted in delayed shipments, increased transportation costs, 
and strained relations with customers and suppliers.
    The implications for the upcoming years, staying on Section 
101 which is the lead content limits, this section classifies 
children's products containing more than the allowable limit of 
lead as banned, hazardous substances. This is a worthy and 
reasonable proposition, however, it has been laid upon the 
apparel industry in such blanket fashion without regard to any 
historical evidence or suggested likelihood that harmful 
amounts of lead are found in the products. In short, we are 
asked to search at considerable expense for something that does 
not exist, nor has been alleged to exist. We anticipate this 
redundant testing will cost in excess of half a million dollars 
to our company in the first 12 months.
    Section 102, General Conformity Certification, also known 
as GCCs. This section of the law has been interpreted to 
mandate that every time we make a shipment, each article 
contained therein must be accompanied by a GCC identifying each 
rule, ban, standard or regulation applicable to the product and 
certifying each product complies with our regulations. Ensuring 
accuracy and availability for the GCC for every incoming order 
from our factories and matching that information to the GCC for 
every item on every order shipped to our customers will result 
in the creation of tens of thousands of certificates annually. 
This is a daunting prospect for any small business.
    Section 103 on tracking labels. The apparent intent of this 
section provides for the identification of the specific 
manufacturing facility for every given item, and to maintain 
transparency through to the end-consumer. While this goal 
appears innocuous, we believe actually it will be harmful for 
our business. Most hosiery is exempt from the care labeling 
rules enforced by the Federal Trade Commission due to utility 
or appearance be substantially impaired by a permanently 
attached label.
    My recommendations are as follows regarding Section 101 on 
the lead contents, I believe based on the evidence a move 
should be made to exclude textile products from lead testing 
requirements. At the CPSC's public hearing in January credible 
and overwhelming evidence was presented demonstrating 
statistically negligible levels of lead existed in textiles.
    Our industry has done its due diligence on lead and 
textiles. The only possible outcome is higher cost to the 
consumer. We can't make the product any safer.
    Section 102 on the GCCs, allowing this document to be 
prepared on an annual basis for each style in a company's 
offering would vastly simplify compliance with the law.
    Regarding Section 103 on the tracking labels, the CPSC 
should follow precedence established by the FTC with regard to 
consumer labeling laws. We move that all hosiery items be 
excluded from tracking label requirements. Socks are a low-risk 
item. The country of origin and the company's RN number are 
already on the packaging of the item. There's no need for any 
additional information.
    Small businesses applaud the efforts of the United States 
Congress to ensure the safety of all citizens. In this instance 
of the CPSIA, however, unclear and belated interpretation is 
causing unintended punitive consequences for our business and 
thousands like us. Children's products existing in commerce for 
years should be judged based on the history of the consumer 
safety. Where there is no history of problems, common sense 
exclusions from the regulations should apply.
    Your willingness to review the implications for small 
businesses, in particular, is very much appreciated. My 
comments today are very consistent with the sentiments 
expressed last week by the distinguished Chairwoman of the 
House Small Business Committee, the Honorable Representative 
Nydia Velasquez. All too often, federal agencies overlook the 
unintended impact that regulations have on small businesses, 
she said, to create an environment that fosters 
entrepreneurship, the regulatory system must be responsive to 
small business needs.
    I hope you agree my testimony underscores her message. 
Thank you.
    [The prepared statement of Mr. McCubbin is included in the 
appendix.]

    Chairman Altmire. Thank you. We'll now move to the 
questioning. Each Member will have five minutes to question the 
witnesses. I will begin with Ms. Lang. Thank you for being here 
again.
    I know you talked about in your testimony that your 
business makes very small batches of the particular product 
line that you sell and with this limited quantity, testing each 
line is obviously very expensive and if you could rely on tests 
conducted by your component suppliers, rather than by you, 
would that provide significant relief and can you give me an 
example of the cost reduction that you would see?
    Ms. Lang. If I could rely on component testing and just 
getting GCCs from my suppliers, that would significantly reduce 
the cost of testing for my product. I wouldn't need to send it 
for the three-party wet lab lead testing and the phthalate 
testing. I am unsure, however, if since fabric is an item that 
is not intended always for a teething item, I'm not sure if 
that would be tested for phthalates, however, since there 
aren't any in fabric, it's not a plastic, if there could be an 
exemption for items that aren't plastic, written into the law 
or exempted by the CPSC would be wonderful.
    Chairman Altmire. Thank you. Ms. Schreiber, the product 
testing requirements of the law are obviously some of the most 
burdensome for small businesses and the tests can be very 
expensive. Can you quantify for us how much exactly would it 
cost you to test your products?
    Ms. Schreiber. If just this set would cost up to $1200, 
with what I make it would be conservatively in the hundreds of 
thousands of dollars. I mean because I use, everything I use is 
made once. It's a one-off item. Everything is personalized. So 
therefore, everything I make would have to be tested. So it 
would actually boggle the mind how much it would cost to test.
    Chairman Altmire. So it's an amount that you couldn't even 
consider.
    Ms. Schreiber. I couldn't quantify it. I wouldn't be able 
to. It would be 75 times the number of threads I have in my 
house, the number of ribbons I have, the number of products I 
have, the number of products that make up the products I get 
from my wholesalers.
    Chairman Altmire. Would anybody else on the panel like to 
comment on that issue? Okay.
    Ms. Baustian, secondhand stores like Once Upon A Child are 
generally selling items manufactured years earlier, long before 
the new law was even considered by Congress and I know the 
Consumer Product Safety Commission guidance has been vague to 
resellers. Do you feel that there's any economically feasible 
way for resellers to determine which products could be legally 
sold, lawfully sold?
    Ms. Baustian. Economically, I believe there is not. For us 
to test the product, if we so chose that, you can purchase an 
XRF technology type gun. The cost of that for an individual 
owner would be around $20,000. Let alone the labor included to 
be able to test each of the components of each of the unique 
items that they are purchasing for resale in their store.
    Chairman Altmire. Thank you. For Mr. Vittone and Ms. 
Schreiber, overly burdensome regulations can place small 
businesses on an uneven playing field. Small businesses simply 
don't have the compliance resources that their larger 
competitors do. So could each of you talk about how this, from 
a business perspective, these regulations have put you at a 
competitive disadvantage?
    We'll start with Mr. Vittone.
    Mr. Vittone. Sure. Thank you. I would say they do put us at 
a competitive disadvantage, not just with our other 
competitors, but also with the retailers that we sell to. We 
sell to large box retailers and when a large box retailer tells 
us that they just shredded 10,000 units of our product and 
wants $100,000 credit, we don't have much choice but to comply. 
We have to sell to that retailer next year if we want to stay 
in business.
    So it puts us at a competitive disadvantage not just to 
them, but those resources take us away from growing our 
business and hopefully selling more product the next year.
    Ms. Schreiber. And for me, the competition I have, it would 
really fall under who is going to try and be legal under the 
law and who is not. Many of my competitors probably feel the 
same way that I do, that we are making safe products. We want 
to be legal. There's also many people that believe it doesn't 
apply to them. They're not going to follow the letter of the 
law. So at that point the competitive difference goes from zero 
to 60 because I'm done. I'm closing my doors. I'm selling off 
my sewing machines and they're continuing to make what they 
already have on the assumption that they're never going to 
catch me. So I don't know if that clarifies.
    Chairman Altmire. It does. Thank you very much.
    Ms. Fallin?
    Ms. Fallin. Thank you, Mr. Chairman. I just have a question 
for any of you to answer and maybe I'll start with Mr. 
McCubbin. How does the stay of the enforcement and the testing 
and certification requirements on the retail and wholesale 
industry, how does that affect you since you still could be 
liable under the Act by like Attorney Generals. Does the stay 
really help or are you still worried about the liability under 
some other area of enforcement?
    Mr. McCubbin. Honestly, I'm not that worried because our 
products are so low risk and there are no lead in our products 
so I'm not that worried and I'm not testing currently. However, 
a lot of my--like Towle and Associates, they sell children's 
clothes. Well, they're still having to test and they are 
concerned. They've got lead in the zippers and he can change a 
button, he can have new buttons flown over from Asia and he can 
change, but the zippers, he's going to have to cut them out and 
that ruins the product. So our business is okay, until the stay 
goes away. And then that's when our costs would be just on the 
lead half a million dollars.
    Ms. Fallin. Okay.
    Mr. Vittone. Speaking on behalf of Swimways, we appreciate 
Chairman Nord's efforts. She has done as best she can to reduce 
the effects of this legislation, but the stay really hasn't 
affected us, frankly. We've gone ahead and moved forward with 
compliance. We're really more trying to deal with the aftermath 
of what to do with the products that we have sold to our 
retailers that are still on their shelves or that is still in 
our warehouse or in the warehouses of our manufacturers 
overseas.
    Ms. Fallin. Anybody else want to add anything?
    Ms. Baustian. Certainly from a resell standpoint for us it 
doesn't really affect us because either way we will have to 
comply on the sales side that all items are deemed safe. So our 
owners certainly are very concerned, but have no way to really 
ensure that they're doing that.
    Ms. Lang. The stay has kept me in business. I was going to 
shut down on February 10th of this year. It kept me in business 
until February 10th of next year. If it expires, I'm out of 
business. The thing that concerns me the most is that since it 
is a one-year stay, I'm not putting the money into my business 
that I would if I knew that I was going to be able to continue 
to grow my business. I'm not probably making the efforts that I 
would as far as on the wholesale side of selling my product and 
growing my business. But I would if I knew that I was going to 
be able to keep operating.
    Ms. Schreiber. And I think I'm in a sort of a similar 
situation as Mr. McCubbin, because I work mostly in textiles. 
I've had to discontinue some products because those wholesalers 
won't provide me with a GCC because it's a bib that doesn't 
contain lead, so they're not going to test for it because it 
doesn't contain lead. So I've dropped them because I want to 
have prove products. So it's affected me a little bit, but 
again, if it's not sort of re-upped, I'm done.
    Ms. Fallin. So all of you are saying basically that if 
nothing changes in the law and the stay and the one-year 
moratorium runs out, that there's a possibility that you could 
shut down your business.
    Ms. Lang. It's not only a possibility, it's a given.
    Ms. Fallin. You will.
    Ms. Lang. I can't afford $84,000 in testing when I make 
$4500 a year.
    Ms. Fallin. And I thought, Mr. Chairman, the other comment 
that she just made was that she could be investing more money 
and adding to her product line and creating more opportunities 
and buying more products, but she's decided to hold back and 
that's what we see a lot in our economy right now, especially 
during this recession time. People who have money are scared to 
invest, and so here we have one more thing that's causing 
concern for investment.
    I have another question for Mr. Vittone.
    Mr. Vittone. Yes.
    Ms. Fallin. You said you took a step back because of this 
Act. In taking a step back, what did you do?
    Mr. Vittone. What I meant was is that we had a rate of 
growth about 15 percent a year for the last 10 years and we 
went backwards last year and our profitability for 2008 was 
reduced by about 46 percent as a result of all of the inventory 
and the chargebacks from the retailers. So it was a significant 
impact last year.
    Ms. Fallin. And you talked about the one company with the 
hoop that you showed them a minute ago about how they destroyed 
their products, are they coming back after you to get a credit?
    Mr. Vittone. Yes, $100,000.
    Ms. Fallin. $100,000, and so--
    Mr. Vittone. They want credit not only for the price they 
paid for the inventory, but also for the destruction to it.
    Ms. Fallin. Are you in a legal matter with them on that?
    Mr. Vittone. No, no. Like I mentioned, we're in discussions 
with them on how to resolve it.
    Ms. Fallin. That's tough.
    Mr. Vittone. Yes.
    Ms. Fallin. Well, thank you all so much for coming today. 
We sure appreciate you.
    Thank you, Mr. Chairman.
    Chairman Altmire. Mr. Thompson.
    Mr. Thompson. Thank you, Chairman. First question I have 
for Ms. Schreiber, if one of the problems that the CPSIA tried 
to resolve was lead in toys from overseas manufacturing, does 
it make sense to you that most of the laboratories that can 
your testing are overseas?
    Ms. Schreiber. It doesn't. That's a little ironic, isn't 
it? And that's where some of the most cost-effective testing 
goes to. But I have people that order things for a specific 
occasion and with my time frame to get things done, between 
family issues and everything else, and then you're tacking on 
another two weeks to get it shipped to China to have them test 
it, when maybe the clip originated from China six months ago 
and I have testing that says it's good, so I'm sending it back 
and it's sort of an Alice fell down the rabbit hole sort of 
situation, really.
    I won't be sending it to China, but I quite frankly won't 
be sending it anywhere because I can't afford it.
    Mr. Thompson. It's unaffordable to do it. Thank you.
    Ms. Lang, the Food and Drug Administration has 
manufacturing guidelines that accepts certain food additives 
and chemicals to be generally recognized as safe. Would a 
similar generally recognized as not having any lead content 
standard be useful to your business in the implementation of 
the CPSIA?
    Ms. Lang. I think it would probably be useful if it were 
written into the law or if it were--the thing that I'm afraid 
of is that the 50 State Attorney Generals are each deputized to 
go after businesses. I sell in every state and so I would hate 
to not know if I am going--if somebody is going to come after 
me for my product.
    I would need something more cut and dry, I think. I think 
it would need to be more set in stone than just a wavy 
guideline.
    Mr. Thompson. Okay, thank you.
    Mr. McCubbin, in your opinion, has the Commission provided 
sufficient guidance to the industry on how to implement this 
CPSIA?
    Mr. McCubbin. No, it has not. I think that's a lot of the 
problem is the confusion that all companies have as to what the 
guidelines are. And our customers, as Ms. Fallin mentioned, 
you've got Dillard's. You've got Nordstrom. You've got Kohl's. 
We've got K-Mark. We've got Payless. They all interpret it 
differently and so as I said, we're going forth with that the 
stay is good for the socks, but let's just say K-Mart says no, 
but it's the law and you have to abide by the law, forget the 
stay. So we'd have to test the products for K-Mart. It's very 
confusing.
    Mr. Thompson. Mr. McCubbin, how will your firm ensure the 
suppliers meet the certification requirements of the Act?
    Mr. McCubbin. Is that addressed to me?
    Mr. Thompson. Yes, please.
    Mr. McCubbin. Say that again, please, I'm sorry.
    Mr. Thompson. How will your firm ensure that its suppliers 
meet the certification requirements of the Act?
    Mr. McCubbin. We actually have the products tested over in 
Asia. After they're made, they have to be sent off and as I 
said you might have a children's tight that six different 
colors in it at $40 a color, it gets tested for $240. The whole 
section of tights for K-Mart, I got 49 now, do a quick math on 
that, that's very expensive, just for that one run. So they'll 
tell us that it's passed. They'll send us the certificate and 
we're trusting it's accurate.
    Mr. Thompson. Seems like this Act has been a good economic 
stimulus for China.
    Mr. McCubbin. It's been good for the testing labs, I'll say 
that.
    Mr. Thompson. Mr. Vittone, do you have an estimate, in 
terms of numbers, do you have an estimate of the total number 
of employee hours devoted to the implementation of this, rather 
than more productive work associated with growing the Swimways 
business?
    Mr. Vittone. It would be hard to count them all up, but 
it's been thousands upon thousands of hours, just spent on 
complying with this Act. It touches everybody in the company, 
so everybody has to deal with it from the art department to the 
product development department to the finance department to 
sales, everybody has been having to work to comply with this 
Act and with the tracking labels and that brings in IT and then 
all of our manufacturers in China. It's hard to put a number on 
it.
    Mr. Thompson. It's pretty fair to say though it's had a 
pretty significant negative impact on productivity?
    Mr. Vittone. Absolutely.
    Mr. Thompson. And efficiency.
    Mr. Vittone. One of the points of my written testimony is 
that all of the time that was spent on complying with this 
could have been spent on us growing our business.
    Mr. Thompson. Very good. Mr. Chairman, I think I'm out of 
time.
    Chairman Altmire. Thank you. Thanks to everybody. Thank you 
for the audience for sticking it out through the long vote 
series.
    Before we adjourn, I just want to make a point about what 
we've done here today. You heard the Chairwoman say that this 
is the first hearing that's been held on this issue in Congress 
and this came about because each one of you took the time to 
contact your representative as thousands like you have done, 
all 435 of us have heard from small businesses and you're the 
reason that this happened. You're the reason that we held this 
hearing. This is just the first step. We're going to adjourn 
the hearing now, but we're going to continue to work to try to 
find a solution to this problem, but I just want to thank you 
for taking the time, making the trip, all the expenses and the 
time commitment that that entails. You made a big difference 
with your advocacy, both today and leading up to today. So be 
proud of what you've done and we're going to try to carry 
forward and get a solution to this problem.
    So with that, I ask unanimous consent that Members will 
have five days to submit statements and supporting materials to 
the record. Without objection, so ordered. This hearing is now 
adjourned.
    [Whereupon, at 1:01 p.m., the hearing was concluded.]

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