[Congressional Record (Bound Edition), Volume 153 (2007), Part 19]
[House]
[Pages 26874-26876]
[From the U.S. Government Publishing Office, www.gpo.gov]




             PRODUCT SAFETY CIVIL PENALTIES IMPROVEMENT ACT

  Mr. RUSH. Mr. Speaker, I move to suspend the rules and pass the bill

[[Page 26875]]

(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 1 year after this initial 
increase. This new cap figure and 2-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

[[Page 26876]]

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 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 3 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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