[Congressional Record Volume 153, Number 152 (Tuesday, October 9, 2007)]
[House]
[Pages H11341-H11342]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page H11341]]
PRODUCT SAFETY CIVIL PENALTIES IMPROVEMENT ACT
Mr. RUSH. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 2474) to provide for an increased maximum civil penalty for
violations under the Consumer Product Safety Act, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2474
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Product Safety Civil
Penalties Improvement Act''.
SEC. 2. MAXIMUM CIVIL PENALTIES OF THE CONSUMER PRODUCT
SAFETY COMMISSION.
(a) Initial Increase in Maximum Civil Penalties.--
(1) Temporary increase.--Notwithstanding the dollar amounts
specified for maximum civil penalties specified in section
20(a)(1) of the Consumer Product Safety Act (15 U.S.C.
2069(a)(1)), section 5(c)(1) of the Federal Hazardous
Substances Act, and section 5(e)(1) of the Flammable Fabrics
Act (15 U.S.C. 1194(e)(1)), the maximum civil penalties for
any violation specified in such sections shall be $5,000,000,
beginning on the date that is the earlier of the date on
which final regulations are issued under section 3(b) or 360
days after the date of enactment of this Act.
(2) Effective date.--Paragraph (1) shall cease to be in
effect on the date on which the amendments made by subsection
(b)(1) shall take effect.
(b) Permanent Increase in Maximum Civil Penalties.--
(1) Amendments.--
(A) Consumer product safety act.--Section 20(a)(1) of the
Consumer Product Safety Act (15 U.S.C. 2069(a)(1)) is amended
by striking ``$1,250,000'' both places it appears and
inserting ``$10,000,000''.
(B) Federal hazardous substances act.--Section 5(c)(1) of
the Federal Hazardous Substances Act (15 U.S.C. 1264(c)(1))
is amended by striking ``$1,250,000'' both places it appears
and inserting ``$10,000,000''.
(C) Flammable fabrics act.--Section 5(e)(1) of the
Flammable Fabrics Act (15 U.S.C. 1194(e)(1)) is amended by
striking ``$1,250,000'' and inserting ``$10,000,000''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect on the date that is 1 year after the
earlier of--
(A) the date on which final regulations are issued pursuant
to section 3(b); or
(B) 360 days after the date of enactment of this Act.
SEC. 3. DETERMINATION OF PENALTIES BY THE CONSUMER PRODUCT
SAFETY COMMISSION.
(a) Factors to Be Considered.--
(1) Consumer product safety act.--Section 20(b) of the
Consumer Product Safety Act (15 U.S.C. 2069(b)) is amended--
(A) by inserting ``the nature, circumstances, extent, and
gravity of the violation, including'' after ``shall
consider'';
(B) by striking ``products distributed, and'' and inserting
``products distributed,''; and
(C) by inserting ``, and such other factors as
appropriate'' before the period.
(2) Federal hazardous substances act.--Section 5(c)(3) of
the Federal Hazardous Substances Act (15 U.S.C. 1264(c)(3))
is amended--
(A) by inserting ``the nature, circumstances, extent ,and
gravity of the violation, including'' after ``shall
consider'';
(B) by striking ``substance distributed, and'' and
inserting ``substance distributed,''; and
(C) by inserting ``, and such other factors as
appropriate'' before the period.
(3) Flammable fabrics act.--Section 5(e)(2) of the
Flammable Fabrics Act (15 U.S.C. 1194(e)(2)) is amended--
(A) by striking ``nature and number'' and inserting
``nature, circumstances, extent, and gravity'';
(B) by striking ``absence of injury, and'' and inserting
``absence of injury,''; and
(C) by inserting ``, and such other factors as
appropriate'' before the period.
(b) Regulations.--Not later than 1 year after the date of
enactment of this Act, and in accordance with the procedures
of section 553 of title 5, United States Code, the Commission
shall issue a final regulation providing its interpretation
of the penalty factors described in section 20(b) of the
Consumer Product Safety Act (15 U.S.C. 2069(b)), section
5(c)(3) of the Federal Hazardous Substances Act (15 U.S.C.
1264(c)(3)), and section 5(e)(2) of the Flammable Fabrics Act
(15 U.S.C. 1194(e)(2)), as amended by subsection (a).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Illinois (Mr. Rush) and the gentleman from Florida (Mr. Stearns) each
will control 20 minutes.
The Chair recognizes the gentleman from Illinois.
General Leave
Mr. RUSH. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days to revise and extend their remarks and to
include extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
Mr. RUSH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am the author of the third consumer protection bill
that we are considering on the House floor this afternoon, H.R. 2474,
the Product Safety Civil Penalties Improvement Act, which raises the
cap on civil penalties that the Consumer Product Safety Commission can
impose from $1.83 million to $10 million. Furthermore, the new cap will
be phased in through two steps. It rises to $5 million as soon as the
CPSC issues its new interpretive guidelines or one year after
reenactment, whichever occurs first. Mr. Speaker, the cap will
subsequently rise to its full $10 million one year after this initial
increase. This new cap figure and two-step process is the product of
careful negotiations and compromise with the minority.
Furthermore, the bill, as amended in this subcommittee, renders the
factors used in assessing the amount of penalties more expansive and
flexible, and it further makes clear that the current list of factors
is not exclusive. This flexibility will allow the commission to take
into account factors such as whether the manufacturer is a recidivist
or a first-time offender when imposing these civil penalties. In this
regard CPSC is required to promulgate interpretive rules on these
penalty factors within 360 days.
Mr. Speaker, passage of H.R. 2474 is badly needed. For too long the
CPSC has only been able to slap violators on the wrist with a puny
civil penalties cap of $1.8 million. Under current law, section 15(b)
of the Consumer Product Safety Act requires every manufacturer, every
distributor, or retailer of a consumer product to notify the CPSC
immediately upon information that reasonably supports the conclusion
that a given product, one, violates a safety standard promulgated by
the CPSC; two, contains a defect that could pose a substantial hazard;
or, three, otherwise creates an unreasonable risk of injury or death.
Unfortunately, for many large companies, a civil penalty of $1.83
million is a mere drop in the bucket and does not always provide
substantial and sufficient incentive for companies to report problems
to the commission. The cost of civil penalties may be outweighed by the
cost of compliance with the prohibitions and requirements of the law.
For instance, at our June 6 hearing before the Subcommittee on
Commerce, Trade, and Consumer Protection, we heard testimony that the
$750,000 fine assessed by the CPSC against Wal-Mart for failing to
report a defect in fitness machines represented 1 minute, 33 seconds'
worth of sales for the retail giant.
While most companies try to do the right thing and report injuries in
a timely manner to the CPSC, H.R. 2474 gives the commission a bigger
hammer to crack down on bad corporate behavior that leads to defective
and dangerous products on the market.
Mr. Speaker, I urge a ``yes'' vote from my colleagues on this
bipartisan piece of legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. STEARNS. Mr. Speaker, I yield myself such time as I may consume.
This is a straightforward bill, and we support it on this side. Of the
four consumer product safety bills that we have on the floor, we feel
this is the one that is the most straightforward and, obviously, we
support and we speak in favor of it.
My colleagues, go back to 1972. The House passed the Consumer Product
Safety Act. At that time the penalty was simply $500,000. Now let's
leap ahead. Adjusted for inflation, what is that equivalent in today's
dollars? About $2.5 million. However, the original penalty maximum in
the CPSA was not indexed to inflation; so $500,000 as years went by up
to 1990 was a pretty paltry amount over this period of time. And then
in 1990 it was indexed to inflation so that the current civil penalty
maximum is $1.825 million.
The chairman would indicate that is a small incentive for companies
out there. I submit that the penalty is not the big product for
companies. It's bad PR. If you are a Wal-Mart and you have a product
that is defective or you are a toy manufacturer, the penalty is going
to be a deterrent, but the big deterrent is you won't be able to sell
that product if those products have to be recalled and everybody knows
that your
[[Page H11342]]
company has manufactured a defective product.
I support the ability of the Consumer Product Safety Commission to
penalize those who willfully, willfully violate the act. At the same
time, we are not sure whether the effect of an increase in potential
penalties to as much as $10 million will have the desired effect.
I can support this measure, however, because there are three key
factors when you look at this bill. First, the increase in the penalty
maximum will be phased in, thanks to the chairman and his staff and our
staff working together. Two, this measure amends the CPSA to include
specific penalty assessment factors. And, three, the measure directs
the CPSC to promulgate rules interpreting these factors and delineates
how the commission will assess the fines.
My colleagues, this last factor in particular is important to our
business community. Interpretive rules are necessary to provide
guidance, clarity, and some predictability to regulate industries.
Additionally, interpretive guidelines will provide a constant framework
within which the CPSC may act. $10 million is too great an amount to
not act responsibly, I agree with the chairman. That is a deterrent,
and consistently imposing such fines is important.
{time} 1615
But again, I point out that the larger deterrent for corporations is
the fact that the publicity will be damaging to their sale of future
products.
So, I would commend the chairman for his leadership in updating the
CPSC on this matter, again, for his staff working with us to create, I
think, a bipartisan work product that all of us, both Democrats and
Republican, can support.
Mr. Speaker, I yield back the balance of my time.
Mr. RUSH. Mr. Speaker, this, again, is another example of commonsense
legislation, bipartisan cooperation that is aimed at improving and
enhancing the flow of commerce between consumers and manufacturing.
Mr. Speaker, this piece of legislation takes a giant, giant step
toward improving the overall product safety, product recall phenomenon
that exists to stream the system that exists.
I urge passage of this outstanding piece of legislation.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Illinois (Mr. Rush) that the House suspend the rules and
pass the bill, H.R. 2474, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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