U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

19–010

" SENATE ! 108TH CONGRESS

1st Session 

REPORT

2003

108–128

Calendar No. 252

THE CONSUMER PRODUCT SAFETY COMMISSION REAUTHORIZATION ACT OF 

2003

REPORT

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION

ON

S. 1261

AUGUST 26, 2003.—Ordered to be printed

Filed, under authority of the order of the Senate of July 29 (legislative 

day, July 21), 2003


congress.#13
(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

JOHN MCCAIN, Arizona, Chairman 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

ERNEST F. HOLLINGS, South Carolina 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK LAUTENBERG, New Jersey 

JEANNE BUMPUS, Staff Director and General Counsel 

ANN BEGEMAN, Deputy Staff Director 

ROBERT W. CHAMBERLIN, Chief Counsel 

KEVIN D. KAYES, Democratic Staff Director and Chief Counsel 

GREGG ELIAS, Democratic General Counsel 

Calendar No. 252

108TH CONGRESS REPORT " SENATE ! 1st Session 108–128

THE CONSUMER PRODUCT SAFETY COMMISSION 

REAUTHORIZATION ACT OF 2003

AUGUST 26, 2003.—Ordered to be printed

Filed, under authority of the order of the Senate of July 29 (legislative day, July 

21), 2003

Mr. MCCAIN, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

[To accompany S. 1261]

The Committee on Commerce, Science, and Transportation, to 

which was referred the bill (S. 1261) ‘‘A Bill To reauthorize the 

Consumer Product Safety Commission, and for other purposes’’, 

having considered the same, reports favorably thereon with an 

amendment in the nature of a substitute and recommends that the 

bill (as amended) do pass. 

PURPOSE OF THE BILL

S. 1261 would amend the Consumer Product Safety Act (CPSA) 

(15 U.S.C. 41 et seq.) and authorize appropriations for the Consumer Product Safety Commission (CPSC) for Fiscal Years 2004 

through 2007. In addition, S. 1261 would increase the Commission’s statutory civil penalties cap and enable the CPSC to provide 

recall notification to consumers regarding certain hazardous products in the event that the Commission determines that a manufacturer is unable to do so. 

BACKGROUND AND NEEDS

The CPSC is an independent regulatory agency that was created 

in 1972 under the CPSA, which became effective in 1973. While the 

CPSC is authorized to have five commissioners under the CPSA, 

Congress has only appropriated funding for three commissioners 

2

1 15 U.S.C. 1261 et seq. 2 15 U.S.C. 1471 et seq. 3 15 U.S.C. 1191 et seq. 

since 1987. All commissioners are appointed by the President for 

staggered seven-year terms with the consent and approval of the 

Senate. The chairman of the Commission is designated by the 

President. Currently, the Commission is comprised of two Republican commissioners, Chairman Hal Stratton and Commissioner 

Mary Sheila Gall, and one Democrat, Commissioner Thomas 

Moore. 

The CPSC has jurisdiction over more than 15,000 consumer 

products (e.g., household products, sporting goods) and is charged 

under the CPSA with the duty to protect consumers ‘‘against unreasonable risks of injuries associated with consumer products.’’

The Commission fulfills its statutory responsibilities by developing 

voluntary standards with industry, issuing mandatory standards, 

researching potential product hazards, banning products, obtaining 

recalls of products or ensuring their repair, and informing and educating consumers. The Commission administers four statutes: the 

CPSA, the Federal Hazardous Substances Act (FHSA),1 the Poison 

Prevention Packaging Act,2 and the Flammable Fabrics Act (FFA).3

The CPSC employs approximately 471 full-time employees. Most 

are located at the Commission’s headquarters in Bethesda, MD. 

There are about 130 CPSC investigators, compliance officers, and 

consumer information specialists throughout the country. Six offices report directly to the Chairman, including: Congressional Affairs, Equal Employment and Minority Enterprise, General Counsel, Inspector General, Secretary, and Executive Director. The Executive Director directs and oversees Commission policy and administration, which are implemented by the offices that report to 

the Executive Director: Compliance, Hazard Identification and Reduction, Field Operations, Administration, Budget, Human Resources, Information and Public Affairs, Information Services, and 

Planning and Evaluation. 

S. 1261 would authorize funding for the Commission to carry out 

its functions, powers, and duties in amounts not to exceed 

$60,000,000 for fiscal year 2004, $66,800,000 for fiscal year 2005, 

$70,000,000 for fiscal year 2006, and $73,600,000 for fiscal year 

2007. The bill would allow the Commission to maintain its current 

staffing level of up to 471 throughout the authorization period. 

S. 1261 also would authorize an increase in the Commission’s 

current statutory cap on civil penalties from $1,250,000 to 

$20,000,000, and it would provide authority for the CPSC to notify 

consumers of defects of hazardous products in the event that the 

Commission determines that the manufacturer of such products is 

not able to perform its statutory obligation to provide recall notification. 

LEGISLATIVE HISTORY

The CPSC was last reauthorized in the Consumer Product Safety 

Improvement Act of 1990 (1990 Act) (P.L. 101–608), which authorized funding for Fiscal Years 1991 ($42,000,000) and 1992 

($45,000,000). Since the expiration of that authorization, the 

3

CPSC’s funding has increased by approximately five to six percent 

each year through appropriations acts. 

In the 1990 Act, Congress amended the CPSA to: (1) require, 

among other things, that the President consider individuals with 

consumer product safety backgrounds when making appointments 

to the Commission; (2) allow a three-member Commission to constitute a quorum; (3) revise and add to the list of personnel to be 

appointed exclusively by the Chairman; and (4) direct the Commission to establish an agenda and priorities for its actions prior to 

each fiscal year. 

The 1990 Act also amended the CPSA, the FHSA, and the FFA 

to require the Commission to devise procedures to monitor compliance with certain voluntary safety standards, and to prohibit the 

termination of proceedings to promulgate a consumer product safety rule when a voluntary standard has been first approved by the 

Commission. 

In addition, the 1990 Act amended the CPSA to obligate a manufacturer to provide notice to the Commission when: (1) the manufacturer becomes aware of its failure to comply with a voluntary 

standard; (2) the manufacturer becomes aware of its creation of an 

unreasonable risk of serious injury or death; or (3) the manufacturer becomes party to certain civil actions for death or grievous 

bodily injury. These were in addition to then-existing triggers for 

providing notice to the CPSC. The 1990 Act declared that the reporting of a civil action shall not constitute an admission of liability 

under any statute or common law and prohibited the Commission 

from disclosing information about a civil action, including under 

legal process, except if requested by specified congressional committees. 

On June 17, 2003, the Consumer Affairs and Product Safety Subcommittee held a reauthorization hearing to examine possible 

changes to the CPSA, and to discuss key issues before the CPSC. 

Senator Fitzgerald presided. The hearing witnesses were: CPSC 

Chairman Hal Stratton and CPSC Commissioners Mary Sheila 

Gall and Thomas Moore; Dr. R. David Pittle, Senior Vice President, 

Technical Operations, Consumers Union; Ms. Rachel Weintraub, 

Assistant General Counsel, Consumer Federation of America; Mr. 

Alan Korn, Director of Public Policy, National SAFE Kids; Mr. Stephen Gold, Vice President, National Association of Manufacturers; 

and Mr. Gary Kline, Senior Vice President, Government Legal and 

Regulatory Affairs, Toy Industry Association. Senators McCain and 

Fitzgerald introduced S. 1261, the Consumer Product Safety Commission Reauthorization Act of 2003, on June 13, 2003. 

On June 19, 2003, the Committee met in open executive session 

to consider an amendment in the nature of a substitute to S. 1261 

offered by Senators McCain and Hollings. The substitute amendment contained the authorization provisions regarding both the 

civil penalty increase and CPSC recall notification when a manufacturer is unable to meet its recall responsibilities. 

ESTIMATED COSTS

In compliance with subsection (a)(3) of paragraph 11 of rule 

XXVI of the Standing Rules of the Senate, the Committee states 

that, in its opinion, it is necessary to dispense with the requireVerDate jul 14 2003 05:57 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6601 E:\HR\OC\SR128.XXX SR128
4

ments of paragraphs (1) and (2) of that subsection in order to expedite the business of the Senate. 

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

The legislation would make no material change to the number of 

persons as already affected by the Commission’s authority. 

ECONOMIC IMPACT

The economic impact of this legislation would be minimal. 

PRIVACY

The impact on the personal privacy of the persons covered by 

this legislation is expected to be minimal. 

PAPERWORK

The impact on paperwork is expected to be minimal. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short Title 

This section would designate the legislation as the ‘‘Consumer 

Product Safety Commission Reauthorization Act of 2003.’’

Section 2. Authorization of Appropriations 

This section would amend section 32(a) of the CPSA to authorize 

appropriations for the CPSC not to exceed $60,000,000 for fiscal 

year 2004, $66,800,000 for fiscal year 2005, $70,000,000 for fiscal 

year 2006, and $73,600,000 for fiscal year 2007. 

Section 3. FTE Staffing Levels 

This section would amend section 4(g) of the CPSA to authorize 

the Commission to hire and maintain a full-time equivalent staff 

of 471 persons throughout the reauthorization period. 

Section 4. Executive Director and Officers 

This section would amend section 4(g) of the CPSA to conform 

the Commission’s employee position titles that currently exist but 

that have not been formally authorized. No staff title changes entail the re-designation of career staff as political staff, or vice versa. 

Section 5. Substantial Product Hazard Recalls 

This section would amend section 15 of the CPSA to authorize 

the Commission to conduct defective product recall notification otherwise required of a manufacturer, retailer, or distributor under 

the CPSA. Pursuant to this section, in the event that the Commission makes a preliminary hazard determination that there exists a 

Class A or B product hazard (as defined in the CPSC handbook), 

5

and the Commission finds that the manufacturer, retailer, or distributor is financially unable to provide adequate notification to the 

consumers of the product as required by the CPSA and that such 

notification is the public interest, then the Commission may provide notification. This section would require that within 120 days 

of enactment, the Commission prescribe strict standards for determining when a manufacturer is financially unable to effect adequate notifications required by the CPSA. 

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): 

CONSUMER PRODUCT SAFETY ACT 

SEC. 4. CONSUMER PRODUCT SAFETY COMMISSION. 

[15 U.S.C. 2053]

(a) ESTABLISHMENT; CHAIRMAN.—An independent regulatory 

commission is hereby established, to be known as the Consumer 

Product Safety Commission, consisting of five Commissioners who 

shall be appointed by the President, by and with the advice and 

consent of the Senate. In making such appointments, the President 

shall consider individuals who, by reason of their background and 

expertise in areas related to consumer products and protection of 

the public from risks to safety, are qualified to serve as members 

of the Commission. The Chairman shall be appointed by the President, by and with the advice and consent of the Senate, from 

among the members of the Commission. An individual may be appointed as a member of the Commission and as Chairman at the 

same time. Any member of the Commission may be removed by the 

President for neglect of duty or malfeasance in office but for no 

other cause. 

(b) TERM; VACANCIES.—

(1) Except as provided in paragraph (2), (A) the Commissioners first appointed under this section shall be appointed for 

terms ending three, four, five, six, and seven years, respectively, after the date of the enactment of this Act, the term of 

each to be designated by the President at the time of nomination; and (B) each of their successors shall be appointed for a 

term of seven years from the date of the expiration of the term 

for which his predecessor was appointed. 

(2) Any Commissioner appointed to fill a vacancy occuring 

prior to the expiration of the term for which his predecessor 

was appointed shall be appointed only for the remainder of 

such term. A Commissioner may continue to serve after the expiration of his term until his successor has taken office, except 

that he may not so continue to serve more than one year after 

the date on which his term would otherwise expire under this 

subsection. 

6

(c) RESTRICTIONS ON COMMISSIONER’S OUTSIDE ACTIVITIES.—Not 

more than three of the Commissioners shall be affiliated with the 

same political party. No individual (1) in the employ of, or holding 

any official relation to, any person engaged in selling or manufacturing consumer products, or (2) owning stock or bonds of substantial value in a person so engaged, or (3) who is in any other manner pecuniarily interested in such a person, or in a substantial supplier of such a person, shall hold the office of Commissioner. A 

Commissioner may not engage in any other business, vocation, or 

employment. 

(d) QUORUM; SEAL; VICE CHAIRMAN.—No vacancy in the Commission shall impair the right of the remaining Commissioners to exercise all the powers of the Commission, but three members of the 

Commission shall constitute a quorum for the transaction of business, except that if there are only three members serving on the 

Commission because of vacancies in the Commission, two members 

of the Commission shall constitute a quorum for the transaction of 

business, and if there are only two members serving on the Commission because of vacancies in the Commission, two members 

shall constitute a quorum for the six month period beginning on 

the date of the vacancy which caused the number of Commission 

members to decline to two. The Commission shall have an official 

seal of which judicial notice shall be taken. The Commission shall 

annually elect a Vice Chairman to act in the absence or disability 

of the Chairman or in case of a vacancy in the office of the Chairman. 

(e) OFFICES.—The Commission shall maintain a principal office 

and such field offices as it deems necessary and may meet and exercise any of its powers at any other place. 

(f) FUNCTIONS OF CHAIRMAN; REQUEST FOR APPROPRIATIONS.— (1) The Chairman of the Commission shall be the principal 

executive officer of the Commission, and he shall exercise all 

of the executive and administrative functions of the Commission, including functions of the Commission with respect to (A) 

the appointment and supervision of personnel employed under 

the Commission (other than personnel employed regularly and 

full time in the immediate offices of commissioners other than 

the Chairman), (B) the distribution of business among personnel appointed and supervised by the Chairman and among 

administrative units of the Commission, and (C) the use and 

expenditure of funds. 

(2) In carrying out any of his functions under the provisions 

of this subsection the Chairman shall be governed by general 

policies of the Commission and by such regulatory decisions, 

findings, and determinations as the Commission may by law be 

authorized to make. 

(3) Requests or estimates for regular, supplemental, or deficiency appropriations on behalf of the Commission may not be 

submitted by the Chairman without the prior approval of the 

Commission. 

ø(g) EXECUTIVE DIRECTOR; OFFICERS AND EMPLOYEES.—(1)(A) 

The Chairman, subject to the approval of the Commission, shall appoint as officers of the Commission an Executive Director, a General Counsel, an Associate Executive Director for Engineering 

Sciences, an Associate Executive Director for Epidemiology, an AsVerDate jul 14 2003 05:57 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00008 Fmt 6659 Sfmt 6601 E:\HR\OC\SR128.XXX SR128
7

sociate Executive Director for Compliance and Administrative Litigation, an Associate Executive Director for Health Sciences, an Associate Executive Director for Economic Analysis, an Associate Executive Director for Administration, an Associate Executive Director for Field Operations, a Director for Office of Program, Management, and Budget, and a Director for Office of Information and 

Public Affairs. Any other individual appointed to a position designated as an Associate Executive Director shall be appointed by 

the Chairman, subject to the approval of the Commission. The 

Chairman may only appoint an attorney to the position of Associate 

Executive Director of Compliance and Administrative Litigation except the position of acting Associate Executive Director of Compliance and Administrative Litigation.¿

(g) EXECUTIVE DIRECTOR; OFFICERS AND EMPLOYEES.—(1)(A)The 

Chairman, subject to the approval of the Commission, shall appoint 

as officers of the Commission an Executive Director, a General 

Counsel, an Associate Executive Director for Engineering Sciences, 

an Associate Executive Director for Laboratory Sciences, an Associate Executive Director for Epidemiology, an Associate Executive 

Director for Health Sciences, an Assistant Executive Director for 

Compliance, an Associate Executive Director for Economic Analysis, 

an Associate Executive Director for Administration, an Associate Executive Director for Field Operations, an Assistant Executive Director for Office of hazard Identification and Reduction, an Assistant 

Executive Director for Information Services, and a Director for Office of Information and Public Affairs. Any other individual appointed to a position designated as an Assistant or Associate Executive Director shall be appointed by the Chairman, subject to the approval of the Commission. The Chairman may only appoint an attorney to the position of Assistant Executive Director for Compliance, but this restriction does not apply to the position of Acting Assistant Executive Director for Compliance.

(B)(i) No individual may be appointed to such a position on an 

acting basis for a period longer than 90 days unless such appointment is approved by the Commission. 

(ii) The Chairman, with the approval of the Commission, may remove any individual serving in a position appointed under subparagraph (A). 

(C) Subparagraph (A) shall not be construed to prohibit appropriate reorganizations or changes in classification. 

(2) The Chairman, subject to subsection (f)(2), may employ such 

other officers and employees (including attorneys) as are necessary 

in the execution of the Commission’s functions. 

(3) In addition to the number of positions authorized by section 

5108(a) of title 5, United States Code, the Chairman, subject to the 

approval of the Commission, and subject to the standards and procedures prescribed by chapter 51 of title 5, United States Code, 

may place a total of twelve positions in grades GS–16, GS–17, and 

GS–18. 

(4) The appointment of any officer (other than a Commissioner) 

or employee of the Commission shall not be subject, directly or indirectly, to review or approval by any officer or entity within the 

Executive Office of the President. 

8

(5) The Commission is authorized to hire and maintain a full 

time equivalent staff of 471 persons in each of fiscal years 2004 

through 2007. 

(h) [Omitted] 

(i) CIVIL ACTION AGAINST THE UNITED STATES.—Subsections (a) 

and (h) of section 2680 of title 28, United States Code, do not prohibit the bringing of a civil action on a claim against the United 

States which— (1) is based upon— (A) misrepresentation or deceit on the part of the Commission or any employee thereof, or 

(B) any exercise or performance, or failure to exercise or 

perform, a discretionary function on the part of the Commission or any employee thereof, which exercise, performance, or failure was grossly negligent; and 

(2) is not made with respect to any agency action (as defined 

in section 551(13) of title 5, United States Code. In the case of 

a civil action on a claim based upon the exercise or performance of, or failure to exercise or perform, a discretionary function, no judgment may be entered against the United States 

unless the court in which such action was brought determines 

(based upon consideration of all the relevant circumstances, including the statutory responsibility of the Commission and the 

public interest in encouraging rather than inhibiting the exercise of discretion) that such exercise, performance, or failure to 

exercise or perform was unreasonable. 

(j) AGENDA AND PRIORITIES; ESTABLISHMENT AND COMMENTS.—At 

least 30 days before the beginning of each fiscal year, the Commission shall establish an agenda for Commission action under the 

Acts under its jurisdiction and, to the extent feasible, shall establish priorities for such actions. Before establishing such agenda and 

priorities, the Commission shall conduct a public hearing on the 

agenda and priorities and shall provide reasonable opportunity for 

the submission of comments. 

SEC. 15. SUBSTANTIAL PRODUCT HAZARDS. 

[15 U.S.C. 2064]

(a) ‘‘SUBSTANTIAL PRODUCT HAZARD’’ DEFINED.—For purposes of 

this section, the term ‘‘substantial product hazard’’ means— (1) a failure to comply with an applicable consumer product 

safety rule which creates a substantial risk of injury to the 

public, or 

(2) a product defect which (because of the pattern of defect, 

the number of defective products distributed in commerce, the 

severity of the risk, or otherwise) creates a substantial risk of 

injury to the public. 

(b) NONCOMPLIANCE WITH APPLICABLE CONSUMER PRODUCT

SAFETY RULES; PRODUCT DEFECTS; NOTICE TO COMMISSION BY

MANUFACTURER, DISTRIBUTOR, OR RETAILER.—Every manufacturer 

of a consumer product distributed in commerce, and every distributor and retailer of such product, who obtains information 

which reasonably supports the conclusion that such product—

(1) fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard 

upon which the Commission has relied under section 9; 

9

(2) contains a defect which could create a substantial product 

hazard described in subsection (a)(2); or 

(3) creates unreasonable risk of serious injury or death, shall 

immediately inform the Commission of such failure to comply, 

of such defect, or of such risk, unless such manufacturer, distributor, or retailer has actual knowledge that the Commission 

has been adequately informed of such defect, failure to comply, 

or such risk. 

(c) PUBLIC NOTICE OF DEFECT OR FAILURE TO COMPLY; MAIL NO- TICE.—If the Commission determines (after affording interested 

persons, including consumers and consumer organizations, an opportunity for a hearing in accordance with subsection (f) of this section) that a product distributed in commerce presents a substantial 

product hazard and that notification is required in order to adequately protect the public from such substantial product hazard, 

the Commission may order the manufacturer or any distributor or 

retailer of the product to take any one or more of the following actions: 

(1) To give public notice of the defect or failure to comply. 

(2) To mail notice to each person who is a manufacturer, distributor, or retailer of such product. 

(3) To mail notice to every person to whom the person required to give notice knows such product was delivered or sold. 

Any such order shall specify the form and content of any notice 

required to be given under such order. 

(d) REPAIR; REPLACEMENT; REFUNDS; ACTION PLAN.—If the Commission determines (after affording interested parties, including 

consumers and consumer organizations, an opportunity for a hearing in accordance with subsection (f)) that a product distributed in 

commerce presents a substantial product hazard and that action 

under this subsection is in the public interest, it may order the 

manufacturer or any distributor or retailer of such product to take 

whichever of the following actions the person to whom the order is 

directed elects: 

(1) To bring such product into conformity with the requirements of the applicable consumer product safety rule or to repair the defect in such product. 

(2) To replace such product with a like or equivalent product 

which complies with the applicable consumer product safety 

rule or which does not contain the defect. 

(3) To refund the purchase price of such product (less a reasonable allowance for use, if such product has been in the possession of a consumer for one year or more (A) at the time of 

public notice under subsection (c), or (B) at the time the consumer receives actual notice of the defect or noncompliance, 

whichever first occurs). An order under this subsection may 

also require the person to whom it applies to submit a plan, 

satisfactory to the Commission, for taking action under whichever of the preceding paragraphs of this subsection under 

which such person has elected to act. The Commission shall 

specify in the order the persons to whom refunds must be 

made if the person to whom the order is directed elects to take 

the action described in paragraph (3). If an order under this 

subsection is directed to more than one person, the Commission shall specify which person has the election under this subVerDate jul 14 2003 05:57 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6601 E:\HR\OC\SR128.XXX SR128
10

section. An order under this subsection may prohibit the person to whom it applies from manufacturing for sale, offering 

for sale, distributing in commerce, or importing into the customs territory of the United States (as defined in general note 

2 of the Harmonized Tariff Schedule of the United States), or 

from doing any combination of such actions, the product with 

respect to which the order was issued. 

(e) REIMBURSEMENT.— (1) No charge shall be made to any person (other than a 

manufacturer, distributor, or retailer) who avails himself of 

any remedy provided under an order issued under subsection 

(d), and the person subject to the order shall reimburse each 

person (other than a manufacturer, distributor, or retailer) 

who is entitled to such a remedy for any reasonable and foreseeable expenses incurred by such person in availing himself 

of such remedy. 

(2) An order issued under subsection (c) or (d) with respect 

to a product may require any person who is a manufacturer, 

distributor, or retailer of the product to reimburse any other 

person who is a manufacturer, distributor, or retailer of such 

product for such other person’s expenses in connection with 

carrying out the order, if the Commission determines such reimbursement to be in the public interest. 

(f) HEARING.—An order under subsection (c) or (d) may be issued 

only after an opportunity for a hearing in accordance with section 

554 of title 5, United States Code, except that, if the Commission 

determines that any person who wishes to participate in such hearing is a part of a class of participants who share an identity of interest, the Commission may limit such person’s participation in 

such hearing to participation through a single representative designated by such class (or by the Commission if such class fails to 

designate such a representative). Any settlement offer which is 

submitted to the presiding officer at a hearing under this subsection shall be transmitted by the officer to the Commission for its 

consideration unless the settlement offer is clearly frivolous or duplicative of offers previously made. 

(g) PRELIMINARY INJUNCTION.— (1) If the Commission has initiated a proceeding under this 

section for the issuance of an order under subsection (d) with 

respect to a product which the Commission has reason to believe presents a substantial product hazard, the Commission 

(without regard to section 27(b)(7)) or the Attorney General 

may, in accordance with section 12(d)(1), apply to a district 

court of the United States for the issuance of a preliminary injunction to restrain the distribution in commerce of such product pending the completion of such proceeding. If such a preliminary injunction has been issued, the Commission (or the 

Attorney General if the preliminary injunction was issued 

upon an application of Attorney General) may apply to the 

issuing court for extensions of such preliminary injunction. 

(2) Any preliminary injunction, and any extension of a preliminary injunction, issued under this subsection with respect 

to a product shall be in effect for such period as the issuing 

court prescribes not to exceed a period which extends beyond 

the thirtieth day from the date of the issuance of the prelimiVerDate jul 14 2003 05:57 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00012 Fmt 6659 Sfmt 6601 E:\HR\OC\SR128.XXX SR128
11

nary injunction (or, in the case of a preliminary injunction 

which has been extended, the date of its extension) or the date 

of the completion or termination of the proceeding under this 

section respecting such product, whichever date occurs first. 

(3) The amount in controversy requirement of section 1331 

of title 28, United States Code, does not apply with respect to 

the jurisdiction of a district court of the United States to issue 

or exend a preliminary injunction under this subsection. 

(h) COST-BENEFIT ANALYSIS OF NOTIFICATION OR OTHER ACTION

NOT REQUIRED.—Nothing in this section shall be construed to require the Commission, in determining that a product distributed in 

commerce presents a substantial product hazard and that notification or other action under this section should be taken, to prepare 

a comparison of the costs that would be incurred in providing notification or taking other action under this section with the benefits 

from such notification or action.

(i) COMMISSION-FINANCED RECALLS.— (1) IN GENERAL.—The Commission may take the actions otherwise required of a manufacturer, retailer, or distributor under 

subsection (c)(1), (2), and (3) with respect to a product if the 

Commission— (A) staff makes a preliminary hazard determination that 

a product presents a substantial product hazard classified 

as a Class A or B product hazard (as defined in the Commission’s Recall Handbook) or the Commission makes a 

substantial product hazard determination classified as a 

Class A or B product hazard (as defined in the Commission’s Recall Handbook) with respect to such a product; 

and 

(B) finds that— (i) notification of the hazard is in the public interest; 

and 

(ii) the manufacturer, retailer, or distributor is financially unable to provide adequate notification. 

(2) IMPLEMENTING REGULATIONS.—Not more than 120 days 

after the date of enactment of the Consumer Product Safety 

Commission Reauthorization Act of 2003, the Commission shall 

prescribe regulations to implement paragraph (1). In promulgating such regulations, the Commission shall establish strict 

standards for ensuring that Commission funding is expended 

only on the product recall notifications of manufacturers, retailers, or distributors that are financially unable to effect adequate 

notifications required by this section. 

(3) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Commission for each fiscal year 

$2,000,000 to carry out this subsection.

SEC. 20. CIVIL PENALTIES. 

[15 U.S.C. 2069]

(a) AMOUNT OF PENALTY.— (1) Any person who knowingly violates section 19 of this Act shall be subject to a civil penalty not to exceed $5,000 for each 

such violation. Subject to paragraph (2), a violation of section 

19(a)(1), (2), (4), (5), (6), (7), (8), (9), (10), or (11) shall constitute a separate offense with respect to each consumer prodVerDate jul 14 2003 05:57 Aug 27, 2003 Jkt 019010 PO 00000 Frm 00013 Fmt 6659 Sfmt 6601 E:\HR\OC\SR128.XXX SR128
12

uct involved, except that the maximum civil penalty shall not 

exceed ø$1,250,000¿ $20,000,000 for any related series of violations. A violation of section 19(a)(3) shall constitute a separate 

violation with respect to each failure or refusal to allow or perform an act required thereby; and, if such violation is a continuing one, each day of such violation shall constitute a separate offense, except that the maximum civil penalty shall not 

exceed ø$1,250,000¿ $20,000,000 for any related series of violations. 

(2) The second sentence of paragraph (1) of this subsection 

shall not apply to violations of paragraph (1) or (2) of section 

19(a)—

(A) if the person who violated such paragraphs is not the 

manufacturer or private labeler or a distributor of the 

products involved, and 

(B) if such person did not have either (i) actual knowledge that his distribution or sale of the product violated 

such paragraphs or (ii) notice from the Commission that 

such distribution or sale would be a violation of such paragraphs. 

(3)(A) The maximum penalty amounts authorized in paragraph (1) shall be adjusted for inflation as provided in this 

paragraph. 

(B) Not later than December 1, 1994, and December 1 of 

each fifth calendar year thereafter, the Commission shall prescribe and publish in the Federal Register a schedule of maximum authorized penalties that shall apply for violations that 

occur after January 1 of the year immediately following such 

publication. 

(C) The schedule of maximum authorized penalties shall be 

prescribed by increasing each of the amounts referred to in 

paragraph (1) by the cost-of-living adjustment for the preceding 

five years. Any increase determined under the preceding sentence shall be rounded to—

(i) in the case of penalties greater than $1,000 but less 

than or equal to $10,000, the nearest multiple of $1,000; 

(ii) in the case of penalties greater than $10,000 but less 

than or equal to $100,000, the nearest multiple of $5,000; 

(iii) in the case of penalties greater than $100,000 but 

less than or equal to $200,000, the nearest multiple of 

$10,000; and 

(iv) in the case of penalties greater than $200,000, the 

nearest multiple of $25,000. 

(D) For purposes of this subsection: 

(i) The term ‘‘Consumer Price Index’’ means the Consumer Price Index for all-urban consumers published by 

the Department of Labor. 

(ii) The term ‘‘cost-of-living adjustment for the preceding 

five years’’ means the percentage by which—

(I) the Consumer Price Index for the month of June 

of the calendar year preceding the adjustment; exceeds 

(II) the Consumer Price Index for the month of June 

preceding the date on which the maximum authorized 

penalty was last adjusted. 

13

(b) RELEVANT FACTORS IN DETERMINING AMOUNT OF PENALTY.— In determining the amount of any penalty to be sought upon commencing an action seeking to assess a penalty for a violation of section 19(a), the Commission shall consider the nature of the product 

defect, the severity of the risk of injury, the occurrence or absence 

of injury, the number of defective products distributed, and the appropriateness of such penalty in relation to the size of the business 

of the person charged. 

(c) COMPROMISE OF PENALTY; DEDUCTIONS FROM PENALTY.—Any 

civil penalty under this section may be compromised by the Commission. In determining the amount of such penalty or whether it 

should be remitted or mitigated and in what amount, the Commission shall consider the appropriateness of such penalty to the size 

of the business of the person charged, the nature of the product defect, the severity of the risk of injury, the occurrence or absence of 

injury, and the number of defective products distributed. The 

amount of such penalty when finally determined, or the amount 

agreed on compromise, may be deducted from any sums owing by 

the United States to the person charged. 

(d) ‘‘KNOWINGLY’’ DEFINED.—As used in the first sentence of subsection (a)(1) of this section, the term ‘‘knowingly’’ means (1) the 

having of actual knowledge, or (2) the presumed having of knowledge deemed to be possessed by a reasonable man who acts in the 

circumstances, including knowledge obtainable upon the exercise of 

due care to ascertain the truth of representations. 

SEC. 32. AUTHORIZATION OF APPROPRIATIONS. 

[15 U.S.C. 2081]

(a) There are authorized to be appropriated for the purposes of 

carrying out the provisions of this Act (other than the provisions 

of section 27(h) which authorize the planning and construction of 

research, development, and testing facilities) and for the purpose of 

carrying out the functions, powers, and duties transferred to the 

Commission under section 30, not to exceed— ø(1) $42,000,000 for fiscal year 1991, and 

ø(2) $45,000,000 for fiscal year 1992. For payment of accumulated and accrued leave under section 5551 of title 5, 

United States Code, severance pay under section 5595 under 

such title, and any other expense related to a reduction in force 

in the Commission, there are authorized to be appropriated 

such sums as may be necessary.¿

(1) $60,000,000 for fiscal Year 2004; 

(2) $66,800,000 for fiscal year 2005; 

(3) $70,100,000 for fiscal year 2006; and 

(4) $73,600,000 for fiscal year 2007. 

(b)(1) There are authorized to be appropriated such sums as may 

be necessary for the planning and construction of research, development and testing facilities described in section 27(h); except that 

no appropriation shall be made for any such planning or construction involving an expenditure in excess of $100,000 if such planning or construction has not been approved by resolutions adopted 

in substantially the same form by the Committee on Energy and 

Commerce of the House of Representatives, and by the Committee 

on Commerce, Science, and Transportation of the Senate. For the 

purpose of securing consideration of such approval the Commission 

14

shall transmit to Congress a prospectus of the proposed facility including (but not limited to)— (A) a brief description of the facility to be planned or constructed; 

(B) the location of the facility, and an estimate of the maximum cost of the facility; 

(C) a statement of those agencies, private and public, which 

will use such facility, together with the contribution to be 

made by each such agency toward the cost of such facility; and 

(D) a statement of justification of the need for such facility. 

(2) The estimated maximum cost of any facility approved under 

this subsection as set forth in the prospectus may be increased by 

the amount equal to the percentage increase, if any, as determined 

by the Commission, in construction costs, from the date of the 

transmittal of such prospectus to Congress, but in no event shall 

the increase authorized by this paragraph exceed 10 per centum of 

such estimated maximum cost. 

(c) No funds appropriated under subsection (a) may be used to 

pay any claim described in section 4(i) whether pursuant to a judgment of a court or under any award, compromise, or settlement of 

such claim made under section 2672 of title 28, United States 

Code, or under any other provision of law.

Æ