[Senate Report 106-224]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 417
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-224
_______________________________________________________________________




 
                         FASTENER QUALITY ACT

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 795




               November 19, 1999.--Ordered to be printed

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
79-010                     WASHINGTON : 1999

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred sixth congress
                             first session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA SNOWE, Maine                 JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                       Mark Buse, Staff Director
                  Martha P. Allbright, General Counsel
     Ivan A. Schlager, Democratic Chief Counsel and Staff Director
                Kevin Kayes, Democratic General Counsel

                                  (ii)
                                                       Calendar No. 417
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-224

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




                          FASTENER QUALITY ACT

                                _______
                                

               November 19, 1999.--Ordered to be printed

                                _______
                                

       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 795]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 795) ``A Bill to amend the 
Fastener Quality Act to strengthen the protection against the 
sale of mismarked, misrepresented, and counterfeit fasteners 
and eliminate unnecessary requirements, and for other 
purposes'', having considered the same, reports favorably 
thereon with amendments and recommends that the bill (as 
amended) do pass.

                          Purpose of the Bill

  The purpose of the bill, as reported, is to amend the Faster 
Quality Act (FQA), 15 U.S.C. 5401 et seq., to strengthen the 
protection against the sale of mismarked, misrepresented, and 
counterfeit fasteners and eliminate unnecessary requirements, 
and for other purposes.

                          Background and Needs

  Every year billions of special high-strength bolts, screws, 
and other fasteners are sold in the United States which carry 
grade identifications markings. The markings indicate that the 
fasteners conform with specifications set by consensus 
standards organizations. These grade-marked fasteners are used 
in critical applications like highway bridges and aircraft, 
where failure of a fastener could jeopardize public safety.
  The FQA was enacted in 1990 (Public Law 101-592) and applies 
to all threaded, metallic, through-hardened fasteners, of one-
quarter inch diameter or greater, that directly or indirectly 
reference a consensus standard. Under the FQA, such fasteners must be 
testedor documented by a laboratory that is certified by the 
National Institute of Standards and Technology (NIST).
  The FQA was passed in 1990 because a number of incidents of 
mismarked, substandard, and/or counterfeit fasteners were 
uncovered and posed a threat to public safety and a risk of 
equipment and infrastructure failures in both the civilian and 
military sectors. In addition, Congress was concerned that 
foreign manufacturers were actively engaged in unfair trade 
practices that resulted in the dumping of ``substandard'' 
fasteners in the U.S. market. Most of the problems were 
associated with the federal procurement of fasteners at the 
Defense Industrial Supply Center (DISC) and National 
Aeronautics and Space Administration (NASA). It was concluded 
that a substantial number of these substandard fasteners were 
the result of attempts to undercut legitimate U.S. fastener 
manufacturers with products that were manufactured specifically 
to a lesser standard rather than the result of poor 
manufacturing processes.
  Despite the passage of time since its enactment, regulations 
to carry out the provisions of the FQA have never been 
implemented, mainly due to the lack of a sufficient number of 
accredited laboratories to conduct the inspection and testing 
required by the Act. NIST's most recent rule was published on 
April 14, 1998, and includes revisions to earlier proposed 
regulations which reflect legislative changes to the FQA 
adopted in 1996 as part of the National Technology Transfer and 
Advancement Act (P.L. 104-113). Since the passage of the FQA in 
1990, fastener quality control procedures have evolved 
substantially from the lot-sampling procedure that forms the 
basis for the current FQA. NIST attempted to accommodate the 
new ``process control''; quality approaches in the April 14 FQA 
rule. However, fastener manufacturers and major industrial 
users report that the NIST rule is overly restrictive and does 
not fully accommodate advances in quality control procedures. 
The April 14 rule was scheduled to take effect on October 26, 
1998.
  In August 1998, Congress passed legislation (P.L. 105-234) to 
delay implementation of regulations under FQA until the later 
of either June 1, 1999 or 120 days after the Secretary of 
Commerce reports to Congress on: (1) Changes in fastener 
manufacturing processes that have occurred since enactment of 
FQA; (2) a comparison of the Act to other programs that 
regulate the various categories of fasteners to analyze 
duplicate requirements amongst the programs; and (3) any 
further revisions that should be made to the Act due to the 
reported findings.
  Currently, proprietary fasteners of aviation manufacturers 
are subject to the quality assurance programs of the Federal 
Aviation Administration (FAA). Under these programs, aviation 
manufacturers already are required to demonstrate to the FAA 
that they have a quality control system which ensures that 
their products, including fasteners, meet design 
specifications. Therefore, the application of FQA requirements 
to such fasteners could create duplicative and potentially 
confusing regulations that would not assist federal efforts in 
ensuring the safety of the flying public. Furthermore, neither 
the FAA nor the National Transportation Safety Board is aware 
of any fatal aviation accidents caused by a substandard 
proprietary fastener. As a result, P.L. 105-234 is also 
exempted from certain testing and certification requirements 
fasteners specifically manufactured or altered for use on an 
aircraft if the quality and suitability of those fasteners for 
that use has been approved by the FAA.
  The Secretary of Commerce issued the report required under 
Public Law 105-234 on February 24, 1999, thus making June 24, 
1999 the effective enactment date for FQA. In addition to the 
findings requested, the report also addressed (1) substandard 
fasteners' current threat to public safety; (2) whether 
imported fasteners pose the same threat as they were perceived 
10 years ago, when the FQA was passed; (3) how the military and 
other federal agencies have improved their procurement 
practices since 1990; and (4) concerns expressed by industry 
about the Act as written.
  The report discovered the following:
          (1) The percentage of aircraft incidents involving 
        fasteners in the National Transportation Safety Board's 
        database appears to be reasonably low.
          (2) The percentage of all fastener-related recalls 
        for the automobile industry appears quite low.
          (3) Safety related fastener problems do not appear to 
        be an issue in the nuclear industry.
          (4) The U.S. Customs Service is currently 
        investigating a 5 percent noncompliance rate discovered 
        in January-April 1998 as opposed to significantly 
        higher rates in the 1980's.
          (5) DISC has checked military inventories over the 
        past 5 years and found no evidence of widespread 
        problems with substandard or mismarked fasteners.
          (6) NASA has adopted a parts policy for fasteners for 
        its ten centers concerning procurement policy.
          (7) The Department of Commerce found a number of 
        agencies with regulatory authority to impact fasteners, 
        but no agency other than the Department of Commerce has 
        explicit authority to regulate fastener quality.
          (8) Mismarked and fraudulent fasteners have appeared 
        in the US marketplace in the 1990's.
          (9) The use of quality management systems is a 
        positive trend.
          (10) Industry concerns with the current FQA are about 
        type of fasteners covered, cost of implementation, 
        allowance of electronic storage and transmission, and 
        why foreign manufacturers are treated differently under 
        the Act.
  The report makes the following recommendations:
          (1) Limit the fasteners covered under the Act should 
        be limited to high strength fasteners (those with a 
        minimum tensile strength of 120,000 psi).
          (2) Deem fasteners to be FQA compliant if they are 
        made in facilities registered by a Department of 
        Commerce-approved registrar to a quality management 
        system.
          (3) Allow electronic transmission and storage of 
        reporting requirements for fasteners.
          (4) Amend Title 18 of the U.S. Code to address fraud 
        in private commercial transactions involving fasteners.
          (5) Continue to review why the Act treats foreign and 
        domestic manufacturers differently.
  This bill, S. 795, amends the FQA to take into consideration 
the above findings and recommendations before the FQA 
implementation date of June 24, 1999. The bill would: (1) focus 
the scope of coverage on high strength grade-marked fasteners; 
(2) recognize the benefits of advanced quality assurances 
systems and implicitly encourages all producers to invest in 
the adoption of such systems; (3) create accountability by 
requiring fastener producers to imprint a registered insignia 
on their product; (4) provide traceability by requiring 
fastener manufacturers to retain documents and/or records 
generated during the manufacturing and inspection of each lot 
of fasteners for five years; (5) direct the Department of 
Commerce to create a mechanism to facilitate the reporting and 
investigation of suspected cases of international 
misrepresentation; and (6) define and establish punishments for 
the international misrepresentation of fasteners.

                          Legislative History

  S. 795 was referred to the Committee on Commerce, Science, 
and Transportation on April 14, 1999. A hearing on the 
legislation was held on April 21, 1999. On May 5, 1999, the 
Committee met in executive session and, by a voice vote, 
ordered S. 795 to be reported with amendments. An amendment 
package offered by Senator Hollings makes technical changes, 
requires importers to maintain a record of conformance similar 
to that maintained by U.S. manufacturers, and specifies upper 
limits on the amounts of civil penalties that can be imposed 
for violations of the different provisions in the Act.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 12, 1999.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 795, the Fastener 
Quality Act Amendments Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
(for federal costs) and Keith Mattrick (for the private-sector 
impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

S. 795--Fastener Quality Act Amendments Act of 1999

    Summary: The Fastener Quality Act (Public Law 101-592) 
imposes testing, recordkeeping, and disclosure requirements on 
manufacturers, distributors, and importers of certain screws, 
bolts, nuts, studs, and load-bearing washers. S. 795 would 
change the requirements for certifying documents and 
accrediting the laboratories that test fasteners. The bill also 
would increase civil penalties for certain violations of the 
Fastener Quality Act.
    Enacting S. 795 would probably increase collections of 
civil fines, which are recorded as receipts; therefore, pay-as-
you-go procedures would apply. CBO estimates, however, that the 
amounts of additional receipts would not be significant. CBO 
estimates that implementing S. 795 would cost the National 
Institute of Standards and Technology (NIST) less than $500,000 
a year, subject to the availability of appropriated funds.
    S. 795 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: S. 795 would 
increase civil fines for falsifying or misrepresenting records 
about the quality of fasteners. The bill also would increase 
civil fines for recklessly or intentionally violating the 
recordkeeping requirements of the Fastener Quality Act. CBO 
estimates that additional collections from civil fines would 
not be significant.
    Based on information from NIST, CBO estimates that the 
agency would spend less than $500,000 a year to implement the 
bill. The costs of this legislation fall within budget function 
370 (commerce and housing credit).
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. S. 795 
would affect receipts by increasing civil fines for certain 
violations of the Fastener Quality Act. Collections from such 
fines are likely to be negligible, however, because the federal 
government would probably not pursue many additional cases 
under the bill.
    Estimated impact on State, local, and tribal governments: 
S. 795 contains no intergovernmental mandates as defined in 
UMRA and would not affect the budgets of state, local, or 
tribal governments.
    Estimated impact on the private sector: S. 795 contains no 
new private-sector mandates as defined in UMRA. Under current 
law, regulations to implement the Fastener Quality Act will go 
into effect on June 24, 1999. As currently written, those 
regulations impose testing, certification, insignia, and 
recordkeeping requirements on manufacturers, distributors, 
importers, and other private-sector entities in the fastener 
industry. According to industry sources, the regulations will 
impose significant costs on those entities. Based on 
information provided by government and industry sources, CBO 
estimates that S. 795 would significantly reduce the 
requirements imposed on the private sector.
    Previous CBO estimate: On April 8, 1999, CBO transmitted a 
cost estimate for H.R. 1183, the Fastener Quality Act 
Amendments Act of 1999, as ordered reported by the House 
Committee on Science on March 25, 1999. Unlike S. 795, H.R. 
1183 would not alter civil penalties; therefore, the House bill 
would not affect receipts.
    Estimate prepared by: Federal costs: Mark Hadley; Impact on 
the private sector: Keith Mattrick.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

  Manufacturers, distributors, importers, and users of grade-
marked fasteners will be affected by the FQA requirements when 
they are implemented. The number of affected individuals is 
substantially reduced when compared to those affected by the 
existing FQA as passed in 1990. This is due to two factors: (1) 
S. 795 only applies to `high strength' fasteners; (2) S. 795 
also recognizes existing fastener quality assurance programs 
for manufacturing processes.

                            economic impact

  The number of fasteners covered is limited to a smaller 
percentage than those covered in the existing FQA. In addition, 
S. 795 provides exemption for FAA-approved and other types of 
fasteners manufactured according to fastener quality assurance 
systems that meet with certain standards. Therefore, those 
companies producing fasteners that are not subject to the new 
requirements of the FQA as specified by this bill do not incur 
any additional cost for compliance.

                                privacy

  This legislation will not have an adverse impact on the 
privacy of individuals.

                               paperwork

  S. 795, as reported, requires manufacturers and importers of 
fasteners to retain records of conformance for fasteners for 5 
years. These records can be on paper, in photographic form, or 
in electronic form, as long as the documents can be verified 
for authenticity. In addition, the bill eliminates the 
recordation requirement by the Secretary for insignias of 
private label distributors.

                      Section-by-Section Analysis


Section 1. Short title

  This section cites the Act as ``The Fastener Quality Act 
Amendments Act of 1999''.

Section 2. Findings and purpose

  This section would amend the findings of the Fastener Quality 
Act (15 U.S.C. 5401) to recognize the changes that have 
occurred in the fastener industry since passage of the existing 
FQA in 1990. The reported findings include the significant 
contribution of the fastener industry to the global economy; 
the state-of-the-art manufacturing and improved quality 
assurance systems that fasteners sold in commerce must adhere 
to; the small number of mismarked, misrepresented, and 
counterfeit fasteners that are actually sold in the United 
States; and the multiple criteria that markings on fasteners 
must satisfy to enable buyers and users to determine the 
characteristics of individual fasteners.

Section 3. Definitions

  This section would include definitions of relevant terms. The 
definition of ``fastener'' specifically excludes those that are 
part of a package containing 100 or fewer fasteners, and those 
that have been approved by the FAA, manufactured in accordance 
with a fastener quality assurance system, or manufactured 
according to a proprietary standard. The definition of 
``fastener quality assurance system'' accommodates those 
processes that follow international standards, such the 
International Organization for Standardization (ISO) Standard 
9000, 9001, 9002, and the Aerospace Basic Quality System 
Standard AS9000.

Section 4. Sale of fasteners

  Subsection (a) would repeal sections 4 through 7 of the FQA 
of 1990 (15 U.S.C. 5403 through 5406).
  The revised section (4) would establish rules regarding the 
sale of fasteners. The general rule is that manufacturers and 
distributors cannot intentionally misrepresent or falsify 
information about the lot of fasteners under consideration. 
This includes the record of conformance, the identification, 
characteristics, properties, mechanical or performance marks, 
chemistry, or strength of the lot of fasteners, or the 
manufacturer's insignia. In representing or specifying a 
fastener, if a description references a consensus standard to 
show that the fastener conforms to particular requirements of 
the standard or to show that particular requirements of the 
standard serve as specifications for the fastener, this shall 
not be construed as the fastener meeting all the requirements 
of the consensus standard. In cases where fasteners are 
manufactured solely to consensus standards, if end-of-line 
testing is required by the standard, then the tests shall be 
conducted by an accredited laboratory.
  Subsection (b) would delay implementation of the use of 
accredited laboratories for two years from date of enactment of 
this Act.

Section. 5. Manufacturers' insignias

  This section would redesignate section 8 of the FQA (15 
U.S.C. 5407) as section 5, and amend the newly designated 
section 5 as follows.
  Subsection (a) would be amended to establish the general rule 
that fasteners cannot be offered for sale unless they bear 
their manufacturer insignias according to applicable consensus 
standard(s), unless the specifications provide otherwise. The 
manufacturer must comply with the insignia recordation 
requirements established under subsection (b).
  Subsection (b) would be amended to require the Secretary to 
record only insignias of manufacturers in accordance with 
Subsection (a) and not private label distributors.

Section 6. Remedies and penalties

  This section would redesignate section 9 of the FQA (15 
U.S.C. 5408) as section 6, and amends the newly designated 
section 6 as follows.
  Subsection (b)(1) would be amended to specify different 
maximum amounts of civil penalties for a person who is 
determined by the Secretary, after notice and an opportunity 
for a hearing, to have violated certain provisions of the Act. 
Negligent violation of section 7 or any regulation under 
section 7 is subject to a maximum civil penalty of $10,000 for 
each violation. Gross negligence in violating section 7 or any 
regulation under section 7 is subject to a maximum civil 
penalty of $35,000 for each violation. Reckless or intentional 
violation of section 7 or any regulation under section 7 is 
subject to a maximum civil penalty of $50,000 for each 
violation. Violation of section 4(a) or any regulation under 
section 4(a) is subject to a maximum civil penalty of $50,000 
for each violation. Violations of any other provisions of this 
Act or any other regulations under this Act is subject to a 
maximum civil penalty of $25,000 for each violation.
  Subsection (b)(3) would be amended to clarify the reference 
to this subsection.
  Subsection (b)(4) would be amended to allow the Secretary to 
arbitrate civil penalties imposed under this section prior to 
referral to the Attorney General.
  A new paragraph (2) is added to subsection (d) to have the 
Secretary establish and maintain a hotline system for the 
reporting of violations of this Act. The Secretary shall also 
evaluate allegations reported through that system and report 
any credible allegations to the Attorney General.

Section 7. Recordkeeping requirements

  This section would redesignate section 10 of the FQA (15 
U.S.C. 5409) as section 7. Subsections (a) and (b) would be 
deleted and replaced by a provision that requires manufacturers 
and importers to retain records of conformance for fasteners 
for 5 years, on paper or photographic or electronic format, as 
long as authenticity of the documents can be ascertained. 
Information in these records must be provided upon request from 
a distributor who has purchased a fastener or a person who has 
purchased a fastener for use in the production of a commercial 
product. It is the Committee's understanding that these 
requirements would be imposed on manufacturers and importers in 
a similar manner.

Section 8. Relationship to State laws

  This section would redesignate section 11 of the FQA (15 
U.S.C. 5410) as section 8.

Section 9. Construction

  This section would redesignate section 12 of the FQA (15 
U.S.C. 5411) as section 9 and amends the newly revised section 
9 by striking ``in effect on the date of enactment of this 
Act''.

Section 10. Certification and accreditation

  This section would repeal sections 13 and 15 of the FQA (15 
U.S.C. 5412 and 5414) and add a new section 10 on 
``Certification and Accreditation'' as follows.
  Manufacturing systems that meet or exceed the rigor and 
reliability required by the ISO/IEC Guide 62 may be certified 
by the Director as a ``fastener quality assurance system'' as 
defined by this Act. The Director must act upon such petition 
for certification within 180 days after its filing.
  Accreditation bodies to accredit third parties that can 
certify manufacturing systems as described above may be 
approved by the Director if they provide equal or greater rigor 
and reliability as compared to ISO/IEC Guide 61. The Director 
must act upon such petition for approval within 180 days after 
its filing.
  Laboratories that show equal or greater rigor and reliability 
as compared to ISO/IEC Guide 25 may be accredited by the 
Director as an ``accredited laboratory'' as defined by this 
Act. The Director must act upon such petition for accreditation 
within 180 days after its filing.
  Accreditation bodies to accredit laboratories that provide 
equal or greater rigor and reliability as compared to ISO/IEC 
Guide 58 may be approved by the Director. The Director must act 
upon such petition for approval within 180 days after its 
filing.

Section 11. Applicability

  This section would add a new section 11 at the end of the 
FQA, specifying that the Act shall be applicable only to 
fasteners that are fabricated 180 days or more after the date 
of enactment of this Act. However, if manufacturers or 
distributors prepare records of conformance for fasteners 
fabricated before that date, then these records must comply 
with the requirements of this Act.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                          FASTENER QUALITY ACT

                      TITLE 15. COMMERCE AND TRADE

                         CHAPTER 80. FASTENERS

[SEC. 2. FINDINGS AND PURPOSE.

                            [15 U.S.C. 5401]

    [(a) Findings.--The Congress finds that--
          [(1) the American economy uses billions of fasteners 
        each year;
          [(2) millions of mismarked, substandard, counterfeit, 
        and other nonconforming fasteners have been sold in 
        commerce to end-users in the United States, and their 
        use has dramatically increased the risk of equipment 
        and infrastructure failures;
          [(3) both the military and civilian sectors of the 
        economy have encountered unnecessary, unwarranted, and 
        dangerous equipment and construction failures, as well 
        as extraordinary expenses, as a result of the use of 
        nonconforming fasteners;
          [(4) the purchase and use of nonconforming fasteners 
        stem from material misrepresentations about such 
        fasteners made by certain manufacturers,importers, and 
        distributors engaged in commerce;
          [(5) current fastener standards of measurement 
        evaluate bolts and other fasteners according to 
        multiple criteria, including strength, hardness, and 
        composition, and provide grade identification markings 
        on fasteners to make the characteristics of individual 
        fasteners clear to purchasers and users;
          [(6) current tests required by consensus standards, 
        designed to ensure that fasteners are of standard 
        measure, are adequate and appropriate for use as 
        standards in a program of high-strength fastener 
        testing;
          [(7) the lack of traceability of fasteners sold in 
        commerce is a serious impediment to effective quality 
        control efforts; and
          [(8) the health and safety of Americans is threatened 
        by the widespread sale in commerce of mismarked, 
        substandard, and counterfeit fasteners, a practice 
        which also harms American manufacturers, importers, and 
        distributors of safe and conforming fasteners, and 
        workers in the American fastener industry.
  [(b) Purpose.--In order to protect public safety, to deter 
the introduction of nonconforming fasteners into commerce, to 
improve the traceability of fasteners in commerce, and 
generally to provide commercial and governmental customers with 
greater assurance that fasteners meet stated specifications, it 
is the purpose of this Act to create procedures for the 
testing, certification, and distribution of certain fasteners 
used in commerce within the United States.]

SEC. 2. FINDINGS.

  The Congress finds that--
          (1) the United States fastener industry is a 
        significant contributor to the global economy, 
        employing thousands of workers in hundreds of 
        communities;
          (2) the American economy uses billions of fasteners 
        each year;
          (3) state-of-the-art manufacturing and improved 
        quality assurance systems have dramatically improved 
        fastener quality, so virtually all fasteners sold in 
        commerce meet or exceed the consensus standards for the 
        uses to which they are applied;
          (4) a small number of mismarked, misrepresented, and 
        counterfeit fasteners do enter commerce in the United 
        States; and
          (5) multiple criteria for the identification of 
        fasteners exist, including grade identification 
        markings and manufacturer's insignia, to enable 
        purchasers and users of fasteners to accurately 
        evaluate the characteristics of individual fasteners.

[SEC. 3. DEFINITIONS.

                            [15 U.S.C. 5402]

    [As used in this Act, the term--
          [(1) ``alter'' means to alter--
                  [(A) by through-hardening,
                  [(B) by electroplating of fasteners, or
                  [(C) by machining;
          [(2) ``consensus standards organization'' means the 
        American Society for Testing and Materials, American 
        National Standards Institute, American Society of 
        Mechanical Engineers, Society of Automotive Engineers, 
        or any other consensus standard-setting organization 
        determined by the Secretary to have comparable 
        knowledge, expertise, and concern for health and safety 
        in the field for which such organization purports to 
        set standards;
          [(3) ``container'' means any package of fasteners 
        traded in commerce;
          [(4) ``Director'' means the Director of the National 
        Institute of Standards and Technology;
          [(5) ``fastener'' means--
                  [(A) a--
                          [(i) screw, nut, bolt, or stud having 
                        internal or external threads, or
                          [(ii) a load-indicating washer,with a 
                        nominal diameter of 5 millimeters or 
                        greater, in the case of such items 
                        described in metric terms, or \1/4\ 
                        inch or greater, in the case of such 
                        items described in terms of the English 
                        system of measurement, which contains any 
                        quantity of metal and is held out as meeting 
                        a standard or specification which requires 
                        through-hardening,
                  [(B) a screw, nut, bolt, or stud having 
                internal or external threads which bears a 
                grade identification marking required by a 
                standard or specification, or
                  [(C) a washer to the extent that it is 
                subject to a standard or specification 
                applicable to a screw, nut, bolt, or stud 
                described in subparagraph (B),
        except that such term does not include any screw, nut, 
        bolt, or stud that is produced and marked as ASTM A 307 
        Grade A or produced in accordance with ASTM F 432;
          [(6) ``grade identification marking'' means any 
        symbol appearing on a fastener purporting to indicate 
        that the fastener's base material, strength properties, 
        or performance capabilities conform to a specific 
        standard of a consensus standards organization or 
        government agency;
          [(7) ``importer'' means a person located within the 
        United States who contracts for the initial purchase of 
        fasteners manufactured outside the United States for 
        resale or such person's use within the United States;
          [(8) ``Institute'' means the National Institute of 
        Standards and Technology;
          [(9) ``lot'' means a quantity of fasteners of one 
        part number fabricated by the same production process 
        from the same coil or heat number of metal as provided 
        by the metal manufacturer and submitted for inspection 
        and testing at one time;
          [(10) ``manufacturer'' means a person who fabricates 
        fasteners, or who alters any item so that it becomes a 
        fastener;
          [(11) ``private label distributor'' means a person 
        who contracts with a manufacturer for the fabrication 
        of fasteners bearing the distributor's distinguishing 
        insignia;
          [(12) ``Secretary'' means the Secretary of Commerce;
          [(13) ``standard and specifications'' means the 
        provisions of a document published by a consensus 
        standards organization or a government agency; and
          [(14) ``through-harden'' means heating above the 
        transformation temperature followed by quenching and 
        tempering for the purpose of achieving a uniform 
        hardness.]

SEC. 3. DEFINITIONS.

  As used in this Act, the term--
          (1) ``accredited laboratory'' means a fastener 
        testing facility used to perform end-of-line testing 
        required by a consensus standard or standards to verify 
        that a lot of fasteners conforms to the grade 
        identification marking called for in the consensus 
        standard or standards to which the lot of fasteners has 
        been manufactured, and which--
                  (A) meets the requirements of ISO/IEC Guide 
                25, including revisions from time to time, or 
                another document approved by the Director under 
                section 10(c); and
                  (B) has been accredited by a laboratory 
                accreditation body that meets the requirements 
                of ISO/IEC Guide 58, including revisions from 
                time to time, or another document approved by 
                the Director under section 10(d);
          (2) ``consensus standard'' means the provisions of a 
        document that describes fastener characteristics 
        published by a consensus standards organization or a 
        Federal agency, and does not include a proprietary 
        standard;
          (3) ``consensus standards organization'' means the 
        American Society for Testing and Materials, the 
        American National Standards Institute, the American 
        Society of Mechanical Engineers, the Society of 
        Automotive Engineers, the International Organization 
        for Standardization, any other organization identified 
        as a United States consensus standards organization or 
        a foreign and international consensus standards 
        organization in the Federal Register at 61 Fed. Reg. 
        50582-83 (September 26, 1996), and any successor 
        organizations thereto;
          (4) ``Director'' means the Director of the National 
        Institute of Standards and Technology;
          (5) ``distributor'' means a person who purchases 
        fasteners for the purpose of reselling them at 
        wholesale to unaffiliated persons within the United 
        States, and, for purposes of this paragraph, an 
        original equipment manufacturer and its dealers shall 
        be considered affiliated persons for purposes of this 
        Act;
          (6) ``fastener'' means a metallic screw, nut, bolt, 
        or stud having internal or external threads, with a 
        nominal diameter of 6 millimeters or greater, in the 
        case of such items described in metric terms, or \1/4\ 
        inch or greater, in the case of such items described in 
        terms of the English system of measurement, or a load-
        indicating washer, that is through-hardened or 
        represented as meeting a consensus standard that calls 
        for through-hardening, and that is grade identification 
        marked or represented as meeting a consensus standard 
        that requires grade identification marking, except that 
        such term does not include any screw, nut, bolt, stud, 
        or load-indicating washer that is--
                  (A) part of an assembly;
                  (B) in a package containing no more than 100 
                of any one screw, nut, bolt, stud, or load-
                indicating washer at the time of sale;
                  (C) produced and marked as ASTM A 307 Grade 
                A, or a successor standard thereto;
                  (D) produced in accordance with ASTM F 432, 
                or a successor standard thereto;
                  (E) specifically manufactured for use on an 
                aircraft if the quality and suitability of 
                those fasteners for that use has been 
                approved--
                          (i) by the Federal Aviation 
                        Administration; or
                          (ii) by a foreign airworthiness 
                        authority as described in part 21.29, 
                        21.500, 21.502, or 21.617 of title 14 
                        of the Code of Federal Regulations;
                  (F) manufactured in accordance with a 
                fastener quality assurance system; or
                  (G) manufactured to a proprietary standard, 
                whether or not such proprietary standard 
                directly or indirectly references a consensus 
                standard or any portion thereof;
          (7) ``fastener quality assurance system'' means--
                  (A) a system that meets the requirements, 
                including revisions from time to time, of--
                          (i) International Organization for 
                        Standardization (ISO) Standard 9000, 
                        9001, 9002, or TS16949;
                          (ii) Quality System (QS) 9000 
                        Standard;
                          (iii) Verband der Automobilindustrie 
                        e. V. (VDA) 6.1 Standard; or
                          (iv) Aerospace Basic Quality System 
                        Standard AS9000; or
                  (B) any fastener manufacturing system--
                          (i) that has as a stated goal the 
                        prevention of defects through 
                        continuous improvement;
                          (ii) that seeks to attain the goal 
                        stated in clause (i) by incorporating--
                                  (I) advance quality planning;
                                  (II) monitoring and control 
                                of the manufacturing process;
                                  (III) product verification 
                                embodied in a comprehensive 
                                written control plan for 
                                product and process 
                                characteristics, and process 
                                controls (including process 
                                influence factors and 
                                statistical process control), 
                                tests, and measurement systems 
                                to be used in production; and
                                  (IV) the creation, 
                                maintenance, and retention of 
                                electronic, photographic, or 
                                paper records required by the 
                                control plan regarding the 
                                inspections, tests, and 
                                measurements performed pursuant 
                                to the control plan; and
                          (iii) that--
                                  (I) is subject to 
                                certification in accordance 
                                with the requirements of ISO/
                                IEC Guide 62, including 
                                revisions from time to time, 
                                (or another document approved 
                                by the Director under section 
                                10(a)) by a third party who is 
                                accredited by an accreditation 
                                body in accordance with the 
                                requirements of ISO/IEC Guide 
                                61, including revisions from 
                                time to time, (or another 
                                document approved by the 
                                Director under section 10(b)); 
                                or
                                  (II) undergoes regular or 
                                random evaluation and 
                                assessment by the end user or 
                                end users of the screws, nuts, 
                                bolts, studs, or load-
                                indicating washers produced 
                                under such fastener 
                                manufacturing system to ensure 
                                that such system meets the 
                                requirements of clauses (i) and 
                                (ii);
          (8) ``grade identification marking'' means any grade-
        mark or property class symbol appearing on a fastener 
        purporting to indicate that the lot of fasteners 
        conforms to a specific consensus standard, but such 
        term does not include a manufacturer's insignia or part 
        number;
          (9) ``importer'' means a distributor located within 
        the United States who contracts for the initial 
        purchase of fasteners manufactured outside the United 
        States;
          (10) ``lot'' means a quantity of fasteners of one 
        part number fabricated by the same production process 
        from the same coil or heat number of metal as provided 
        by the metal manufacturer;
          (11) manufacturer'' means a person who fabricates 
        fasteners for sale in commerce;
          (12) ``proprietary standard'' means the provisions of 
        a document that describes characteristics of a screw, 
        nut, bolt, stud, or load-indicating washer and is 
        issued by a person who--
                  (A) uses screws, nuts, bolts, studs, or load-
                indicating washers in the manufacture, 
                assembly, or servicing of its products; and
                  (B) with respect to such screws, nuts, bolts, 
                studs, or washers, is a developer and issuer of 
                descriptions that have characteristics similar 
                to consensus standards and that bear such 
                user's identification;
          (13) ``record of conformance'' means a record or 
        records for each lot of fasteners sold or offered for 
        sale that contains--
                  (A) the name and address of the manufacturer;
                  (B) a description of the type of fastener;
                  (C) the lot number;
                  (D) the nominal dimensions of the fastener 
                (including diameter and length of bolts or 
                screws), thread form, and class of fit;
                  (E) the consensus standard or specifications 
                to which the lot of fasteners has been 
                manufactured, including the date, number, 
                revision, and other information sufficient to 
                identify the particular consensus standard or 
                specifications being referenced;
                  (F) the chemistry and grade of material; and
                  (G) the coating material and characteristics 
                and the applicable consensus standard or 
                specifications for such coating; and
                  (H) the results or a summary of results of 
                any tests performed for the purpose of 
                verifying that a lot of fasteners conforms to 
                its grade identification marking or to the 
                grade identification marking the lot of 
                fasteners is represented to meet;
          (14) ``represent'' means to describe one or more of a 
        fastener's purported characteristics in a document or 
        statement that is transmitted to a purchaser through 
        any medium;
          (15) ``Secretary'' means the Secretary of Commerce;
          (16) ``specifications'' means the required 
        characteristics identified in the contractual agreement 
        with the manufacturer or to which a fastener is 
        otherwise produced, except that the term does not 
        include proprietary standards; and
          (17) ``through-harden'' means heating above the 
        transformation temperature followed by quenching and 
        tempering for the purpose of achieving uniform 
        hardness.

[SEC. 5. TESTING AND CERTIFICATION OF FASTENERS.

                            [15 U.S.C. 5404]

  [(a) Requirement.--
          [(1) No fastener shall be offered for sale or sold in 
        commerce unless it is part of a lot which--
                  [(A) conforms to the standards and 
                specifications to which the manufacturer 
                represents it has been manufactured; and
                  [(B) has been inspected, tested, and 
                certified as provided in subsections (b), (c), 
                and (d) of this section.
          [(2) (A) Paragraph (1)(B) of this subsection shall 
        not apply to fasteners which are part of a lot of 50 
        fasteners or less if, within 10 working days after the 
        delivery of such fasteners, or as soon as practicable 
        thereafter--
                  [(i) inspection, testing, and certification 
                as provided in subsections (b), (c), and (d) is 
                carried out; and
                  [(ii) written notice detailing the results of 
                such inspection, testing, and certification is 
                sent (I) to all purchasers of such fasteners, 
                except retail sellers and retail consumers, and 
                (II) to any retail seller or retail consumer 
                who, prior to delivery, requests such written 
                notice.
          [(B) If a fastener is sold under this paragraph, each 
        purchaser of such fastener, except for retail sellers 
        and retail consumers unless such retail sellers and 
        retail consumers request such notice in advance, shall 
        be provided, contemporaneously with each sale and 
        delivery, written notice stating that such fastener has 
        not yet been inspected, tested, and certified as 
        required by this Act.
  [(b) Inspection and Testing.--
          [(1) The manufacturer of a lot of fasteners shall 
        cause to be inspected and tested a representative 
        sample, as provided in paragraph (2) of this 
        subsection, of the fasteners in such lot to determine 
        whether the lot conforms to the standards and 
        specifications to which the manufacturer represents it 
        has been manufactured. Such inspection and testing 
        shall be performed by a laboratory accredited in 
        accordance with the procedures and conditions specified 
        by the Secretary under section 6. The standards and 
        specifications to which the manufacturer represents 
        such lot has been manufactured shall be disclosed by 
        the manufacturer to the laboratory at the time the lot 
        is submitted for inspection and testing under this 
        paragraph. The manufacturer of a lot may perform the 
        inspection and testing required by this paragraph in a 
        laboratory which it owns or with which it is otherwise 
        affiliated, if such laboratory is accredited in 
        accordance with the procedures and conditions specified 
        by the Secretary under section 6; unless the Secretary 
        finds that, as to a specific type of fastener and as to 
        a specific type of inspection or testing, a ban on 
        manufacturer ownership or affiliation with the 
        accredited laboratory would increase the protection of 
        health and safety of the public or industrial workers.
          [(2) The size, selection, and integrity of the sample 
        to be inspected and tested under paragraph (1) shall be 
        governed--
                  [(A) by the standards and specifications to 
                which the manufacturer represents the fasteners 
                in the sample have been manufactured; or
                  [(B) if such standards and specifications do 
                not provide for the size, selection, or 
                integrity of the sample, by sampling procedures 
                prescribed by the Secretary, who shall to the 
                extent practicable use consensus testing 
                standards and related materials.
        Nothing in this paragraph shall prohibit a purchaser 
        from requiring the inspection and testing of a greater 
        number of fasteners from a lot than is specified in the 
        applicable standards and specifications or in the 
        applicable sampling procedures prescribed by the 
        Secretary.
  [(c) Laboratory Report of Testing.--If a laboratory 
performing the inspection and testing under subsection (b)(1) 
determines, as to the characteristics selected under the 
sampling procedures prescribed by the Secretary and based on 
the sample examined, that a lot conforms to the standards and 
specifications to which the manufacturer represents it has been 
manufactured, the laboratory shall provide to the manufacturer 
a written inspection and testing report with respect to such 
lot. The report, which shall be in a form prescribed by the 
Secretary by regulation, shall--
          [(1) state the manufacturer's name, the part 
        description, and the lot number and note the grade 
        identification mark and insignia found on the fastener;
          [(2) reference the standards and specifications 
        disclosed by the manufacturer with respect to such lot 
        under subsection (b)(1);
          [(3) list the markings and characteristics selected 
        under the Secretary's procedures for testing 
        significant characteristics required by the standards 
        and specifications described in paragraph (2) and 
        specify the results of the inspection and testing under 
        subsection (b)(1);
          [(4) except as provided in subsection (d), state 
        whether, based on the samples provided as 
        representative of the lot, such lot has been found 
        after such inspection and testing to conform to such 
        standards and specifications; and
          [(5) bear the original signature of a laboratory 
        employee or officer determined by the Secretary to be 
        responsible for the accuracy of the report and of the 
        inspection and testing to which it relates.
  [(d) Alternative Procedure for Chemical Characteristics.--
Notwithstanding the requirements of subsections (b) and (c), a 
manufacturer shall be deemed to have demonstrated, for purposes 
of subsection (a)(1), that the chemical characteristics of a 
lot conform to the standards and specifications to which the 
manufacturer represents such lot has been manufactured if the 
following requirements are met:
          [(1) The coil or heat number of metal from which such 
        lot was fabricated has been inspected and tested with 
        respect to its chemical characteristics by a laboratory 
        accredited in accordance with the procedures and 
        conditions specified by the Secretary under section 6.
          [(2) Such laboratory has provided to the 
        manufacturer, either directly or through the metal 
        manufacturer, a written inspection and testing report, 
        which shall be in a form prescribed by the Secretary by 
        regulation, listing the chemical characteristics of 
        such coil or heat number.
          [(3) The report described in paragraph (2) indicates 
        that the chemical characteristics of such coil or heat 
        number conform to those required by the standards and 
        specifications to which the manufacturer represents such 
        lot has been manufactured.
          [(4) The manufacturer demonstrates that such lot has 
        been fabricated from the coil or heat number of metal 
        to which the report described in paragraphs (2) and (3) 
        relates.
In prescribing the form of report required by subsection (c), 
the Secretary shall provide for an alternative to the statement 
required by subsection (c)(4), insofar as such statement 
pertains to chemical characteristics, for cases in which a 
manufacturer elects to use the procedure permitted by this 
subsection.

[SEC. 6. LABORATORY ACCREDITATION.

                            [15 U.S.C. 5405]

  [(a) Establishment of Accreditation Program.--
          [(1) The Secretary, acting through the Director, 
        shall issue regulations which shall include--
                  [(A) procedures and conditions, including 
                sampling procedures referred to in section 5, 
                for the accreditation by the Institute of 
                laboratories engaged in the inspection and 
                testing of fasteners under section 5;
                  [(B) procedures and conditions (which shall 
                be consistent with the procedures and 
                conditions established under subparagraph (A)), 
                using to the extent practicable the 
                requirements of national or international 
                consensus documents intended to govern the 
                operation of accreditation bodies, under which 
                private entities may apply for approval by the 
                Secretary to engage directly in the 
                accreditation of laboratories in accordance 
                with the requirements of this Act; and
                  [(C) conditions (which shall be consistent 
                with the procedures and conditions established 
                under subparagraph (A)), under which the 
                accreditation of foreign laboratories by their 
                governments or organizations recognized by the 
                Director shall be deemed to satisfy the 
                laboratory accreditation requirements of this 
                section.
          [(2) Upon establishing a laboratory accreditation 
        program under paragraph (1), the Secretary shall 
        publish a notice in the Federal Register stating that 
        the Secretary is prepared to accept applications for 
        accreditation of such laboratories.
          [(3) No accreditation provided under the terms of 
        this subsection shall be effective for a period of 
        greater than 3 years.
  [(b) Laboratory Accreditation Procedures.--Existing Institute 
accreditation procedures stated in part 7 of title 15, Code of 
Federal Regulations, as in effect on the date of enactment of 
this Act, supplemented as the Secretary considers necessary, 
shall be used to accredit laboratories under the accreditation 
program established under subsection (a).
  [(c) Ensuring Compliance.--
          [(1) The Secretary shall ensure that--
                  [(A) private entities accrediting 
                laboratories under procedures and conditions 
                established under subsection (a)(1)(B) comply 
                with such procedures and conditions, and
                  [(B) laboratories accredited by such private 
                entities, or by foreign governments pursuant to 
                subsection (a)(1)(C), comply with the 
                requirements for such accreditation.
          [(2) The Secretary may require any such private 
        entity or laboratory to provide all records and 
        materials that may be necessary to allow the Secretary 
        to carry out this subsection.
  [(d) Operation of Laboratory Accreditation Program.--
          [(1) The Director may hire such contractors as are 
        necessary to carry out the accreditation program 
        established under subsection (a).
          [(2) Costs to the Institute and to the Secretary for 
        the establishment and operation of the accreditation 
        program under this section shall be fully reimbursable 
        to the Institute or to the Secretary, as appropriate, 
        through fees or other charges for accreditation 
        services under such program.
  [(e) Recommendations to Consensus Standards Organizations.--
The Director shall periodically transmit to appropriate 
consensus standards organizations any information or 
recommendations that may be useful in the establishment or 
application by such organizations of standards and 
specifications for fasteners.

[SEC. 7. SALE OF FASTENERS SUBSEQUENT TO MANUFACTURE.

                            [15 U.S.C. 5406]

  [(a) Domestically Produced Fasteners.--It shall be unlawful 
for a manufacturer to sell any shipment of fasteners covered by 
this Act which are manufactured in the United States unless the 
fasteners--
          [(1) have been manufactured according to the 
        requirements of the applicable standards and 
        specifications and have been inspected and tested by a 
        laboratory accredited in accordance with the procedures 
        and conditions specified by the Secretary under section 
        6; and
          [(2) an original laboratory testing report described 
        in section 5(c) and a manufacturer's certificate of 
        conformance are on file with the manufacturer, or under 
        such custody as may be prescribed by the Secretary, and 
        available for inspection.
  [(b) Fasteners of Foreign Origin.--
          [(1) Except as provided in paragraph (2) of this 
        subsection, it shall be unlawful--
                  [(A) for any person to sell to any importer, 
                and
                  [(B) for any importer to purchase,
        any shipment of fasteners which are manufactured 
        outside the United States unless delivery of such 
        shipment to such importer is accompanied by a 
        manufacturer's certificate as described in subsection 
        (a), an original laboratory testing report described in 
        section 5(c), with respect to each lot from which such 
        fasteners were taken, and any other relevant lot 
        identification information.
          [(2) The requirement under paragraph (1) of this 
        subsection that the delivery of such a shipment to such 
        importer be accompanied by an original laboratory 
        testing report shall not apply in the case of fasteners 
        imported into the United States--
                  [(A) as products manufactured within a nation 
                which is party to a congressionally-approved 
                free trade agreement with the United States 
                that is in effect, so long as the Secretary 
                certifies that satisfactory arrangements have 
                been reached by which purchasers within the 
                United States can readily gain access to an 
                original laboratory testing report for such 
                fasteners; or
                  [(B) as Canadian-origin products under the 
                United States-Canada Automobile Pact for use as 
                original equipment in the manufacture of motor 
                vehicles.
  [(c) Option for Importers and Private Label Distributors.--
          [(1) Notwithstanding section 5(a) and subsections (a) 
        and (b) of this section, delivery of a lot, or portion 
        of a lot, of fasteners may be made to an importer or 
        private label distributor without the required original 
        copy of the laboratory testing report if--
                  [(A) the manufacturer provides to the 
                importer or private label distributor a 
                manufacturer's certificate certifying that the 
                fasteners have been manufactured according to 
                the requirements of the applicable standards 
                and specifications; and
                  [(B) the importer or private label 
                distributor assumes responsibility in writing 
                for the inspection and testing of such lot or 
                portion by a laboratory accredited in 
                accordance with the procedures and conditions 
                specified by the Secretary under section 6.
          [(2) If the importer or private distributor assumes 
        the responsibility in writing for the inspection and 
        testing of such lot or portion, the provisions of 
        section 5(a) and subsections (a) and (b) of this 
        section shall apply to the importer or private label 
        distributor in the same manner and to the same extent 
        as to a manufacturer; except that the importer or 
        private label distributor shall provide to the testing 
        laboratory the manufacturer's certificate described 
        under paragraph (1) of this subsection.
  [(d) Alterations Subsequent to Manufacture.--
          [(1) Any person who significantly alters a fastener 
        so that such fastener no longer conforms to the 
        description in the relevant test report issued under 
        section 5(c), and who thereafter offers for sale or 
        sells such altered fastener, shall be treated as a 
        manufacturer for purposes of this Act and shall cause 
        such altered fastener to be inspected and tested under 
        section 5 or this section as though it were newly 
        manufactured, unless delivery of such fastener to the 
        purchaser is accompanied by a written statement noting 
        the original lot number, disclosing the subsequent 
        alteration, and warning that such alteration may affect 
        the dimensional or physical characteristics of the 
        fastener.
          [(2) Any person who knowingly sells an altered 
        fastener and who did not alter such fastener shall 
        provide to the purchaser a copy of the statement 
        required by paragraph (1).
  [(e) Commingling.--It shall be unlawful for any manufacturer, 
importer, or private label distributor to commingle like 
fasteners from different lots in the same container, except 
that such manufacturer, importer, or private label distributor 
may commingle like fasteners of the same type, grade, and 
dimension from not more than two tested and certified lots in 
the same container during repackaging and plating operations. 
Any container which contains fasteners from two lots shall be 
conspicuously marked with the lot identification numbers of 
both lots.
  [(f) Subsequent Purchaser.--If a person who purchases 
fasteners for any purpose so requests either prior to the sale 
or at the time of sale, the seller shall conspicuously mark the 
container of the fasteners with the lot number from which such 
fasteners were taken.]

SEC. 4. SALE OF FASTENERS.

  (a) General Rule.--It shall be unlawful for a manufacturer or 
distributor, in conjunction with the sale or offer for sale of 
fasteners from a single lot, to knowingly misrepresent or 
falsify--
          (1) the record of conformance for the lot of 
        fasteners;
          (2) the identification, characteristics, properties, 
        mechanical or performance marks, chemistry, or strength 
        of the lot of fasteners; or
          (3) the manufacturer's insignia.
  (b) Representations.--A direct or indirect reference to a 
consensus standard to represent that a fastener conforms to 
particular requirements of the consensus standard shall not be 
construed as a representation that the fastener meets all the 
requirements of the consensus standard.
  (c) Specifications.--A direct or indirect contractual 
reference to a consensus standard for the purpose of 
identifying particular requirements of the consensus standard 
that serve as specifications shall not be construed to require 
that the fastener meet all the requirements of the consensus 
standard.
  (d) Use of Accredited Laboratories.--In the case of fasteners 
manufactured solely to a consensus standard or standards, end-
of-line testing required by the consensus standard or 
standards, if any, for the purpose of verifying that a lot of 
fasteners conforms with the grade identification marking called 
for in the consensus standard or standards to which the lot of 
fasteners has been manufactured shall be conducted by an 
accredited laboratory.

SEC. [8.] 5. MANUFACTURERS' INSIGNIAS.

                            [15 U.S.C. 5407]

  [(a) General Rule.--No fastener which is required by the 
standards and specifications to which it was manufactured to 
bear a raised or depressed insignia identifying its 
manufacturer or private label distributor shall be offered for 
sale or sold in commerce unless the manufacturer or private 
label distributor of such fastener has complied with the 
requirements prescribed by the Secretary in connection with the 
program established under subsection (b) of this section.]
  (a) General Rule.--Unless the specifications provide 
otherwise, fasteners that are required by the applicable 
consensus standard or standards to bear insignia identifying 
their manufacturer shall not be offered for sale or sold in 
commerce unless--
          (1) the fasteners bear such an insignia; and
          (2) the manufacturer has complied with the insignia 
        recordation requirements established under subsection 
        (b).
  (b) Recordation.--The Secretary shall establish, by 
regulation, a program to provide for the recordation of the 
insignias of manufacturers [and private label distributors 
described in subsection (a), to ensure the traceability of a 
fastener to its manufacturer or private label distributor.] 
described in subsection (a).

SEC. [9.] 6. REMEDIES AND PENALTIES.

                            [15 U.S.C. 5408]

  (a) Civil Remedies.--
          (1) The Attorney General may bring an action in an 
        appropriate United States district court for 
        appropriate declaratory and injunctive relief against 
        any person who violates this Act or any regulation 
        under this Act.
          (2) An action under paragraph (1) may not be brought 
        more than 10 years after the date on which the cause of 
        action accrues.
  (b) Civil Penalties.--
          [(1) Any person who is determined by the Secretary, 
        after notice and an opportunity for a hearing, to have 
        violated this Act or any regulation under this Act 
        shall be liable to the United States for a civil 
        penalty of not more than $ 25,000 for each violation.]
          (1) Any person who is determined by the Secretary, 
        after notice and an opportunity for a hearing, to 
        have--
                  (A) negligently violated section 7 or any 
                regulation under section 7 shall be liable to 
                the United States for a civil penalty of not 
                more than $10,000 for each violation;
                  (B) committed gross negligence in violating 
                section 7 or any regulation under section 7 
                shall be liable to the United States for a 
                civil penalty of not more than $35,000 for each 
                violation;
                  (C) recklessly or intentionally violated 
                section 7 or any regulations under section 7 
                shall be liable to the United States for a 
                civil penalty of not more than $50,000 for each 
                violation;
                  (D) violated section 4(a) or any regulation 
                under section 4(a) shall be liable to the 
                United States for a civil penalty of not more 
                than $50,000 for each violation; or
                  (E) violated any other provision of this Act 
                or any other regulation under this Act shall be 
                liable to the United States for a civil penalty 
                of not more than $25,000 for each violation.
          (2) The amount of the penalty shall be assessed by 
        the Secretary by written notice. In determining the 
        amount of the penalty, the Secretary shall consider the 
        nature, circumstances, and gravity of the violation 
        and, with respect to the person found to have committed 
        the violation, the degree of culpability, any history 
        of prior violations, the effect on ability to continue 
        to do business, any good faith attempt to achieve 
        compliance,ability to pay the penalty, and such other 
        matters as justice may require.
          (3) Any person against whom a civil penalty is 
        assessed under paragraph (2) [of this section] of this 
        subsection may obtain review thereof in the appropriate 
        court of the United States by filing a notice of appeal 
        in such court within 30 days from the date of such 
        order and by simultaneously sending a copy of such 
        notice by certified mail to the Secretary. The findings 
        and order of the Secretary shall be set aside by such 
        court if they are found to be unsupported by 
        substantial evidence, as provided in section 706(2) of 
        title 5, United States Code.
          (4) The Secretary may arbitrate, compromise, modify, 
        or remit, with or without conditions, any civil penalty 
        which is subject to imposition or which has been 
        imposed under this section prior to referral to the 
        Attorney General under paragraph (5).
          (5) A civil penalty assessed under this subsection 
        may be recovered in an action brought by the Attorney 
        General on behalf of the United States in the 
        appropriate district court of the United States. In 
        such action, the validity and appropriateness of the 
        final order imposing the civil penalty shall not be 
        subject to review.
          (6) For the purpose of conducting any hearing under 
        this section, the Secretary may issue subpoenas for the 
        attendance and testimony of witnesses and the 
        production of relevant papers, books, and documents, 
        and may administer oaths. Witnesses summoned shall be 
        paid the same fees and mileage that are paid to 
        witnesses in the courts of the United States. In case 
        of contempt or refusal to obey a subpoena served upon 
        any person pursuant to this paragraph, the district 
        court of the United States for any district in which 
        such person is found, resides, or transacts 
        business,upon application by the United States and 
        after notice to such person, shall have jurisdiction to 
        issue an order requiring such person to appear and give 
        testimony before the Secretary or to appear and produce 
        documents before the Secretary, or both, and any 
        failure to obey such order of the court may be punished 
        by such court as a contempt thereof.
  (c) Criminal Penalties.--
          (1) Whoever knowingly certifies, marks, offers for 
        sale, or sells a fastener in violation of this Act or a 
        regulation under this Act shall be fined under title 
        18, United States Code, or imprisoned not more than 5 
        years, or both.
          (2) Whoever intentionally fails to maintain records 
        relating to a fastener in violation of this Act or a 
        regulation under this Act shall be fined under title 
        18, United States Code, or imprisoned not more than 5 
        years, or both.
          (3) Whoever negligently fails to maintain records 
        relating to a fastener in violation of this Act or a 
        regulation under this Act shall be fined under title 
        18, United States Code, or imprisoned not more than 2 
        years, or both.
  (d) Enforcement.--
          (1) The Secretary may designate officers or employees 
        of the Department of Commerce to conduct investigations 
        pursuant to this Act. In conducting such 
        investigations, those officers or employees may, to the 
        extent necessary or appropriate to the enforcement of 
        this Act, exercise such authorities as are conferred 
        upon them by other laws of the United States, subject 
        to policies and procedures approved by the Attorney 
        General.
          (2) The Secretary shall establish and maintain a 
        hotline system to facilitate the reporting of alleged 
        violations of this Act, and the Secretary shall 
        evaluate allegations reported through that system and 
        report any credible allegations to the Attorney 
        General.

SEC. [10.] 7. RECORDKEEPING REQUIREMENTS.

                            [15 U.S.C. 5409]

  [(a) Laboratories.--Laboratories which perform inspections 
and testing under section 5(b) shall retain for 5 years all 
records concerning the inspection and testing, and 
certification, of fasteners under section 5.
  [(b) Manufacturers, importers, private label distributors, 
and persons who make significant alterations. Manufacturers, 
importers, private label distributors, and persons who make 
significant alterations shall retain for 5 years all records 
concerning the inspection and testing, and certification, of 
fasteners under section 5, and shall provide copies of any 
applicable laboratory testing report or manufacturer's 
certificate upon request to the subsequent purchaser of 
fasteners taken from the lot to which such testing report or 
manufacturer's certificate relates.]
  Manufacturers and importers shall retain the record of 
conformance for fasteners for 5 years, on paper or in 
photographic or electronic format in a manner that allows for 
verification of authenticity. Upon request of a distributor who 
has purchased a fastener, or a person who has purchased a 
fastener for use in the production of a commercial product, the 
manufacturer or importer of the fastener shall make available 
information in the record of conformance to the requester.

SEC. [11.] 8. RELATIONSHIP TO STATE LAWS.

                            [15 U.S.C. 5410]

  Nothing in this Act shall be construed to preempt any rights 
or causes of action that any buyer may have with respect to any 
seller of fasteners under the law of any State, except to the 
extent that the provisions of this Act are in conflict with 
such State law.

SEC. [12.] 9. CONSTRUCTION.

                            [15 U.S.C. 5411]

  Nothing in this Act shall be construed to limit or otherwise 
affect the authority of any consensus standards organization to 
establish, modify, or withdraw any standards and specifications 
under any other law or authority [in effect on the date of 
enactment of this Act].

[SEC. 13. REGULATIONS.

                            [15 U.S.C. 5412]

  [The Secretary shall issue such regulations as may be 
necessary to implement this Act.

           *       *       *       *       *       *       *


[SEC. 15. APPLICABILITY.

                            [15 U.S.C. 5414]

  [(a) Transitional Rule.--The requirements of this Act shall 
be applicable only to fasteners fabricated 180 days or more 
after the Secretary issues final regulations required under 
sections 5, 6,and 8, except that the Secretary may extend such 
time period if the Secretary determines that an insufficient 
number of laboratories have been accredited to perform the 
volume of inspection and testing required. Upon any such 
extension, and every 6months thereafter during such extension, 
the Secretary shall submit are port to the Congress explaining 
the reasons for such extension and the steps being taken to 
ensure the accreditation of a sufficient number of 
laboratories.
  [(b) Aircraft Exemption.--
          [(1) In general.--The requirements of this Act shall 
        not apply to fasteners specifically manufactured or 
        altered for use on an aircraft if the quality and 
        suitability of those fasteners for that use has been 
        approved by the Federal Aviation Administration, except 
        as provided in paragraph (2).
          [(2) Exception.--Paragraph (1) shall not apply to 
        fasteners represented by the fastener manufacturer as 
        having been manufactured in conformance with standards 
        or specifications established by a consensus standards 
        organization or a Federal agency other than the Federal 
        Aviation Administration.]

SEC. 10. CERTIFICATION AND ACCREDITATION.

  (a) Certification.--A person publishing a document setting 
forth guidance or requirements for the certification of 
manufacturing systems, including fastener manufacturing 
systems, by an accredited third party may petition the Director 
to approve such document for use as described in section 
3(7)(B)(iii)(I). The Director shall act upon a petition within 
180 days after its filing, and shall approve such petition if 
the document provides equal or greater rigor and reliability as 
compared to ISO/IEC Guide 62.
  (b) Accreditation.--A person publishing a document setting 
forth guidance or requirements for the approval of 
accreditation bodies to accredit third parties described in 
subsection (a) may petition the Director to approve such 
document for use as described in section 3(7)(B)(iii)(I). The 
Director shall act upon a petition within 180 days after its 
filing, and shall approve such petition if the document 
provides equal or greater rigor and reliability as compared to 
ISO/IEC Guide 61.
  (c) Laboratory Accreditation.--A person publishing a document 
setting forth guidance or requirements for the accreditation of 
laboratories may petition the Director to approve such document 
for use as described in section 3(1)(A). The Director shall act 
upon a petition within 180 days after its filing, and shall 
approve such petition if the document provides equal or greater 
rigor and reliability as compared to ISO/IEC Guide 25.
  (d) Approval of Accreditation Bodies.--A person publishing a 
document setting forth guidance or requirements for the 
approval of accreditation bodies to accredit laboratories may 
petition the Director to approve such document for use as 
described in section 3(1)(B). The Director shall act upon a 
petition within 180 days after its filing, and shall approve 
such petition if the document provides equal or greater rigor 
and reliability as compared to ISO/IEC Guide 58.

SEC. 11. APPLICABILITY.

  The requirements of this Act shall be applicable only to 
fasteners fabricated 180 days or more after the date of the 
enactment of this Act, except that if a manufacturer or 
distributor of fasteners fabricated before that date prepares a 
record of conformance for such fasteners, representations about 
such fasteners shall be subject to the requirements of this 
Act.

                                  
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