OFFlCE OF THE ATTORNEY GENERllL STATE OF TEYhS 

JOHN CORNYN 

August 11,1999 

William R. Archer III, M.D. 

Commissioner of Health 

Texas Department of Health 

1100 W. 49th Street 

Austin, Texas 78756-3 199 

Opinion No. JC-0093 

Re: Constitutionality of section 501.024 of the 

Health and Safety Code, which requires manufacturers 

and distributors of hazardous substances to register 

annually with the Texas Department of Health and pay 

a fee of $150.00 (RQ-1221) 

Dear Dr. Archer: 

You have requested our opinion regarding the constitutionality of section 501.024 of the 

Texas Health and Safety Code, which requires manufacturers and distributors of hazardous 

substances to register annually with the Texas Department of Health and pay a fee of $150. We 

conclude that this provision is neither preempted by federal law nor contravenes the Commerce 

Clause of the United States Constitution. 

Section 501.024 of the Health and Safety Code provides, in relevant part: 

(a) A person who manufactures or repacks a hazardous substance 

that is distributed in this state or who distributes a hazardous 

substance in this state shall have on tile with the department a 

registration statement as provided by this section. 

(b) The board by rule shall prescribe the contents of the 

registration statement. 

(c) The person must tile the registration statement with the 

department before: 

(1) beginning business in this state as a manufacturer, 

repacker, or distributor of a hazardous substance; and 

(2) not later than September 1 of each year after the initial 

tiling. 
William R. Archer III, M.D. - Page 2 (JC-0093) 

(d) The initial registration statement and each annual registration 

statement must be accompanied by a fee of $150. 

The Toy Manufacturers of America (“TMA”), an organization of manufacturers of small balls, 

balloons, marbles, and other toys and games that contain small parts, contends that section 501.024 

contravenes the Federal Constitution in two respects: 1) it is preempted by federal statute, 

specifically 15 U.S.C. 5 1261, et seq., and thus invalid under the Supremacy Clause; and 2) it is 

inconsistent with the Commerce Clause. We shall address these arguments in turn. 

The Federal Hazardous Substances Act (“FHSA”), 15 U.S.C. $5 1261 - 1277 (1995), was 

initially enacted in 1960 and has been extensively amended. See Federal Hazardous Substances Act 

of 1960, Pub. L. No. 86-613, 74 Stat. 372 (1960). It provides in detail for the regulation of 

“hazardous substances” by the Federal Consumer Product Safety Commissionwith particular regard 

to labeling. The term “hazardous substance” is defined to include, inter alia, 

Any toy or other article intended for use by children which the 

Commission by regulation determines, in accordance with section 

1262(e) of this title, presents an electrical, mechanical, or thermal 

hazard. 

15 USC. § 1261(f)(l)@) (1995) (emphasis added). Ontheotherhand, the Child Safety Protective 

Act (“CSPA”), id. $1278, was enacted only in 1994, as another amendment to the FHSA. See Child 

Safety Protective Act of 1994, Pub. L. No. 103-267,108 Stat. 722 (1994). The CSPA is addressed, 

not to children’s toys or games that present an “electrical, mechanical, or thermal hazard,” but to 

those that pose a “choking hazard.” It imposes extensive labeling requirements for toys or games 

that constitute or contain small parts, balloons, small balls, or marbles, including labels warning that 

certain items are “not for children under 3 years.” 

The Texas Hazardous Substances Act (“THSA”), chapter 501 of the Health and Safety Code, 

was first enacted in 1971. Act of May 27, 1971, 62d Leg., R.S., ch. 1033, 1971 Tex. Gen. Laws 

3372. It is clearly derived from the FHSA, and it defines “hazardous substance” with regard to toys 

in language virtually identical to that of the federal statute: 

a toy or other article, other than clothing, that is intended for use by 

a child and that presents an electrical, mechanical, or thermal hazard. 

TEX. HEALTH & SAFETY CODE ANN. 5 501.002(a)(2) (Vernon 1992). Texas has not, however, 

adopted a statute in any way equivalent to the CSPA. Thus, the registration and fee requirements 

of section 501.02&the subject of your inquiry--are applicable only to manufacturers and 

distributors of toys that pose electrical, mechanical, or thermal problems. 

Article VI of the United States Constitution provides that the laws of the United States “shall 

be the supreme Law of the Land any Thing in the Constitution or Laws of any State to the 
William R. Archer III, M.D. - Page 3 (JC-0093) 

Contrary notwithstanding.” U.S. CONST. art. VI, cl. 2. As the Supreme Court said in Cipollone Y. 

Liggett Group, 505 U.S. 504 (1992), since the 1819 decision inM’Culloch v. Maryland, 17 U.S. 316 

(1819), “it has been settled that state law that conflicts with federal law is ‘without effect.“’ 

Cipollone, 505 U.S. at 516. Since, however, “the historic police powers ofthe States [are] not to be 

superseded by . . Federal Act unless that [is] the clear and manifest purpose of Congress,” 

preemption analysis begins with a determination of congressional intent. Id. As the Texas Supreme 

Court said in HyundaiMotor Co. v. Alvarado, 974 S.W.2d 1 (Tex. 1998): 

A state law is preempted and “without effect” if it conflicts with 

federal law. A federal law may expressly preempt state law. 

Additionally, preemption may be implied if the scope of the statute 

indicates that Congress intended federal law to occupy the field 

exclusively or when state law actually conflicts with federal law. A 

state law presents an actual conflict with federal law when “it is 

impossible for a private party to comply with both state and federal 

requirements” or where state law “stands as an obstacle to the 

accomplishment and execution of the full purposes and objectives of 

Congress.” 

Hyundai, 974 S.W.2d at 4 (citations omitted); see also Tex. Att’y Gen. Op. Nos. JC-0052 (1999); 

JC-0007 (1999). 

A letter submitted by the TMA contends that section 501.024 is preempted by both the CSPA 

and the FHSA. With respect to the former, it is clear that no preemption exists, because there is no 

preempting Texas statute. The THSA and the CSPA, as we have noted, impose entirely different 

labeling requirements. Texas has no statute requiring labeling of toys that present a “choking 

hazard.” With regard to such items, federal law prevails in this state without challenge. 

As to the FHSA, we must consider three kinds of preemption: (1) express; (2) conflict; and 

(3) occupation of the field. In enacting that statute, Congress specifically addressed the matter of 

preemption. The statutory notes accompanying the 1976 amendments to the FHSA provide: 

(b)(l)(A) Except as provided in paragraphs (2) and (3), if a 

hazardous substance or its packaging is subject to a cautionary 

labeling requirement under section 2(p) or 3(b) [subset. 2(p) of this 

section or section 1262(b) of this title] designed to protect against a 

risk of illness or injury associated with the substance, no State or 

political subdivision of a State may establish or continue in effect a 

cautionary labeling requirement applicable to such substance or 

packaging and designed to protect against the same risk of illness or 

injury unless such cautionary labeling requirement is identical to the 

labeling requirement under section 2(p) or 3(b) [subset. (p) of this 

section or section 1262(b) of this title]. 
William R. Archer III, M.D. - Page 4 (X-0093) 

(B) Except as provided in paragraphs (2), (3), and (4), if under 

regulations of the Commission promulgated under or for the 

enforcement of section2(q) [subset. (q) ofthis section] a requirement 

is established to protect against a risk of illness or injury associated 

with a hazardous substance, no State or political subdivision of a 

State may establish or continue in effect a requirement applicable to 

such substance and designed to protect against the same risk of 

illness or injury unless such requirement is identical to the 

requirement established under such regulations. 

See Federal Hazardous Substances Act Amendments of 1976,§ 17(a), Pub. L. No. 94-284,90 Stat. 

510 (statutory note addressing Effect Upon Federal and State Law) (emphasis added). Paragraph 

(b)(l)(A) preempts only “cautionary labeling requirements,” which section 50 1.024 clearly does not. 

The TMA argues that the registration and fee are requirements applicable to a hazardous substance 

and designed to protect against the same risk of illness or injury, and thus, that section 501.024 is 

preempted under paragraph (b)(l)(B). But paragraph (b)(l)(B) applies only to “regulations of the 

Commission promulgated under 2(q) [subset. (q) of this section].” 

Subsection (q) relates to “banned hazardous substances,” which it defines as 

(A) any toy, or other article intended for use by children, which is 

a hazardous substance, or which bears or contains a hazardous 

substance in such manner as to be susceptible of access by a child to 

whom such toy or other article is entrusted; or (B) any hazardous 

substance intended, or packaged in a form suitable, for use in the 

household, which the Commission by regulation classifies as a 

“banned hazardous substance” on the basis of a finding that, 

notwithstanding such cautionary labeling as is or may be required 

under this chapter for that substance, the degree or nature of the 

hazard involved in the presence or use of such substance in 

households is such that the objective of the protection of the public 

health and safety can be adequately served only by keeping such 

substance, when so intended or packaged, out of the channels of 

interstate commerce. 

15 U.S.C. $1261(q) (1995). It is obvious that, if a hazardous substance is “banned” under section 

1261, subsection (q), it cannot be deemed “a hazardous substance that is distributed in this state,” 

and consequently, it is not a substance for which registration and payment of the fee is required. 

Thus, federal law does not expressZy preempt the registration and fee requirement of section 

501.024 of the Health and Safety Code. Neither is conflict preemption present: it is possible to fully 

comply with both federal and state law by, on the one hand, observing the federal labeling 

requirements and, on the other, registering in Texas and paying the annual fee. Finally, the very 
William R. Archer III, M.D. - Page 5 (JC-0093) 

language of the federal statute indicates that Congress contemplated that states could legislate in this 

area, provided they complied with the mandated restrictions. Accordingly, it cannot plausibly be 

maintained that “Congress intended federal law to occupy the field.” 

A 1995 letter prepared by the Assistant General Counsel for Regulatory Affairs ofthe United 

States Consumer Product Safety Commission specifically considered whether section 501.024 of 

the Texas Health and Safety Code was preempted by the FHSA, and concluded that no preemption 

exists: 

We do not believe that these [registration] requirements would 

be considered “cautionary labeling requirements” under the FHSA 

preemption provision. The Texas law requires one to file 

a registration statement for a hazardous substance and to pay a 

fee. It does not require any registration information on the product’s 

label. Nor does it appear that the registration requirement would 

be preempted by section 18(b)(l)(B) of the FHSA. Section 2(q) 

authorizes the Commission to ban or otherwise restrict a hazardous 

substance. In contrast, the Texas law’s registration provision seems 

to be an administrative mechanism to provide the state with 

information about firms manufacturing or distributing hazardous 

substances in the state and to charge a fee. The registration provision 

does not prescribe restrictions necessary to ensure the safety of a 

hazardous substance, as does section 2(q) of the FHSA. Based on the 

limited information you have provided, we do not believe that this 

registration requirement would address “the same risk” as any 

particular regulation under section 2(q). 

Letter from Stephen Lemberg, Asst. Gen. Counsel for Regulatory Affairs, U.S. Consumer Product 

Safety Comm’n, to H. Allen Irish, Gov’t Affairs Counsel, Nat’1 Paint & Coatings Ass’n 2, 3 

(Sept. 15, 1995) (on file with Opinion Committee). An agency’s interpretation of a statute it is 

charged with implementing is entitled to considerable deference, provided it is reasonable and does 

not clearly conflict with the statute. Chemical Manufacturers Ass ‘n v. Natural Resources Defense 

Council, Inc., 470 U.S. 116,150 (1985). In our opinion, this letter fully supports our conclusion that 

section 501.024 is neither expressly preempted by federal law nor an obstacle to enforcement of the 

federal statute. We conclude that section 501.024 is not preempted by the FHSA. 

The TMA also suggests that the fee requirement of section 501.024 contravenes the 

Commerce Clause of the Federal Constitution. As the Supreme Court has frequently observed, the 

language of the Commerce Clause “contain[s] a further, negative command, known as the dormant 

Commerce Clause, prohibiting certain state taxation even when Congress has failed to legislate on 

thesubject.” Oklahoma Tax Comm ‘n v. JeffersonLines,Znc., 514U.S. 175,179 (1995). Lump SUITI 

annual fees imposed by a state have been described by the Supreme Court as “flat taxes.” American 

Trucking Ass’n, Inc. Y. Scheiner, 483 U.S. 266, 271 (1987). The Court has held that a state tax 
William R. Archer III, M.D. - Page 6 (X-0093) 

imposed on interstate commerce must, in order to be valid, pass a four-part test: the tax must be (1) 

applied to an activity with a substantial nexus to the taxing state; (2) fairly apportioned; (3) 

nondiscriminatory against interstate commerce; and (4) fairly related to the services provided by the 

state. Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977). In Scheiner, the Supreme Court 

invalidated an annual “axle tax” imposed by the State of Pennsylvania on interstate trucks that used 

its highways. 

Not all state taxes on interstate commerce, however, are subject to the test of Brady. The 

Supreme Court has drawn a distinction between “user fees” and general revenue taxes. “‘User fees’ 

are taxes or other fees collected by the state as reimbursement for use of state-owned or stateprovided facilities or services.” Centerfor Auto Safety v. Athey, 37 F.3d 139, 142 (4th Cir. 1994). 

Because user fees “are purportedly assessed to reimburse the State for costs incurred in providing 

specific quantifiable services,” they are not true revenue measures and the considerations 

applicable to ordinary tax measures do not apply.” Id. at 142 (citing Commonwealth Edison Co. v. 

Montana, 453 U.S. 609,621 n.12 (1981)). 

In Athey, the Court of Appeals for the Fourth Circuit considered a challenge to a fee imposed 

by the State of Maryland on charitable organizations that solicited in the state. Relying on the 

Supreme Court’s decision in Evansville-Vanderburgh Airport Auth. Dist. v. Delta Airlines, 405 U.S. 

707, 717-20 (1972), the Fourth Circuit said that, in order to pass constitutional muster under the 

Commerce Clause, a “user fee must (1) reflect a fair, if imperfect, approximation of the cost of 

using state facilities for the taxpayer’s benefit, (2) not discriminate against interstate commerce, and 

(3) not be excessive in relation to the costs incurred by the taxing authorities.” Athey, 37 F.3d at 

142. The court upheld the user fee on all three criteria. As to the first and third, “the Commerce 

Clause does not require that user fees be precisely correlated to actual use that a party makes of 

government services,” but only that the “fee be based on a ‘fair approximation of the costs of 

benefits supplied.“’ Id. at 143. The court found that the purpose ofthe user fee was to monitor and 

administer charitable organizations. “[Clharities seeking to solicit in Maryland use the state’s 

apparatus for regulating charities, and, as a result, derive a benefit, namely the privilege of soliciting 

in Maryland where donor confidence is enhanced owing to the state’s regulation of charities.” Id. 

at 143-44 (footnotes omitted). As to the second factor, the fee doesn’t discriminate against out-ofstate charities because all charities are required to pay the fee if they operate in Maryland. Id. at 143. 

In our opinion, the registration and fee requirement of section 501.024 bears a closer 

resemblance to the kind of “user fee” considered in Athey than to the Pennsylvania axle tax struck 

down by the Supreme Court in Scheiner. As in Athey, a single fee is imposed only once per year per 

business entity (charity/toy manufacturer-distributor) rather than on every instrumentality of that 

entity (truck-axle/toy). As a result, the annual fee in both Maryland and Texas is modest compared 

to that assessed in Pennsylvania. Thus, we apply the “user fee” criteria to section 501.024. 

Just asthecharities in Maryland receive a benefit from state law, manufacturers ofpotentially 

hazardous toys likewise derive a benefit from the THSA. The Texas Board of Health is required to 

enact rules, TEX. HEALTH & SAFETY CODE ANN. 5 501.025 (Vernon 1992), to regulate hazardous 
William R. Archer III, M.D. - Page 7 (JC-0093) 

toys in various ways such as determining flammability, id. 5 501.021, and designating certain items 

as “banned hazardous substances,” id. 5 501.022. In addition, the Texas Department of Health is 

required to implement labeling standards, id. $ 501.023; conduct examinations and investigations, 

id. 5 501.031; inspect and copy records of manufacturers and distributors, id. 5 501.032; and seize 

and dispose of banned or misbranded hazardous substances, id. 5 501.033. As did the charitable 

organizations in Athey, toy manufacturers and distributors in Texas are accorded the privilege of 

doing business with consumer confidence enhanced by virtue of the state’s regulation of hazardous 

toys. We think it is likely that such a plenitude of services is more than sufficient to offset a fee of 

$150 per year. Although resolution of this matter ultimately requires a factual determination that 

we cannot make in the opinion process, we believe that the Texas Board of Health may make such 

a finding. Likewise, section 501.024 does not discriminate against interstate commerce. It is 

applicable equally to anyone who distributes in Texas and to any manufacturer or repacker whose 

product is distributed in Texas. We conclude that, under the “user fee” test, section 501.024 of the 

Texas Health and Safety Code does not offend the Commerce Clause of the United States 

Constitution. 
William R. Archer III, M.D. - Page 8 (JC-0093) 

SUMMARY 

Section 501.024 of the Texas Health and Safety Code, which 

requires persons who distribute hazardous substances in Texas, and 

manufacturers and repackers whose hazardous substances are 

distributed in Texas, to register annually with the Texas Department 

of Health and pay a fee of $150.00, is neither preempted by federal 

law nor violative of the Commerce Clause of the United States 

Constitution. 

JO L N CO>NYN 

Attorney General of Texas 

ANDY TAYLOR 

First Assistant Attorney General 

CLARK RENT ERVIN 

Deputy Attorney General - General Counsel 

ELIZABETH ROBINSON 

Chair, Opinion Committee 

Rick Gilpin 

Assistant Attorney General - Opinion Committee