(1) by striking ‘‘If’’ in the first sentence and in-
serting ‘‘Subject to the last 2 sentences of this sub-
section, if’’; and
(2) by adding at the end the following: ‘‘If the
Commission determines (after affording opportunity
for an informal hearing) that the action that the
manufacturer, distributor, or retailer has elected to
take under paragraph (1), (2), or (3) is not in the
public interest, the Commission shall order the man-
ufacturer, distributor, or retailer to take whichever
other action specified in paragraph (1), (2), or (3)
that the Commission determines to be in the public
interest. If the Commission determines that both of
the remaining actions specified in paragraph(1), (2),
or (3) are in the public interest, the Commission
shall order the manufacturer, distributor, or retailer
to take whichever of those actions the manufacturer,
distributor, or retailer elects.’’.
(b) Section 15(b) of the Federal Hazardous Sub-
stances Act (15 U.S.C. 1274(b)) is amended—
(1) by striking ‘‘If’’ in the first sentence and in-
serting ‘‘Subject to the last 2 sentences of this sub-
section, if’’; and
(2) by adding at the end the following: ‘‘If the
Commission determines (after affording opportunity
for an informal hearing) that the action that the
manufacturer, distributor, or dealer has elected to
take under paragraph (1), (2), or (3) is not in the
public interest, the Commission shall order the man-
ufacturer, distributor, or dealer to take whichever
other action specified in paragraph (1), (2), or (3)
that the Commission determines to be in the public
interest. If the Commission determines that both of
the remaining actions specified in paragraph (1),
(2), or (3) are in the public interest, the Commission
shall order the manufacturer, distributor, or dealer
to take whichever of those actions the manufacturer,
distributor, or dealer elects.’’
(c) Section 15(c)(2) of the Federal Hazardous Sub-
stances Act (15 U.S.C. 1274(c)(2)) is amended—
(1) by striking ‘‘If’’ in the first sentence and in-
serting ‘‘Subject to the last 2 sentences of this sub-
section, if’’; and
(2) by adding at the end the following: ‘‘If the
Commission determines (after affording opportunity
for an informal hearing) that the action that the
manufacturer, distributor, or dealer has elected to
take under subparagraph (A), (B), or (C) is not in
the public interest, the Commission shall order the
manufacturer, distributor, or dealer to take which-
ever other action specified in subparagraph (A), (B),
or (C) that the Commission determines to be in the
public interest. If the Commission determines that
both of the remaining actions specified in subpara-
graph (A), (B), or (C) are in the public interest, the
Commission shall order the manufacturer, dis-
tributor, or dealer to take whichever of those actions
the manufacturer, distributor, or dealer elects.’’.
SEC. 3. CIVIL PENALTIES.
(a) Section 20(a) of the Consumer Product Safety
Act (15 U.S.C. 2069(a)) is amended to read as follows:
‘‘(a) AMOUNT OF PENALTY.—
‘‘(1) Any person who knowingly violates section
19 shall be subject to a civil penalty not to exceed
$7,000 for each such violation. Subject to paragraph
(2), a violation of paragraph (1), (2), (4), (5), (6),
(7), (8), (9), (10), or (11) of section 19(a) shall con-
stitute a separate offense with respect to each con-
sumer product involved. A violation of section
19(a)(3) shall constitute a separate violation with re-
spect 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 con-
stitute a separate offense.
‘‘(2) The second sentence of paragraph (1) shall
not apply to violations of paragraph (1) or (2) of
section 19(a)—
‘‘(A) if the person who violated such para-
graph is not the manufacturer or private labeler
or a distributor of the product involved, and
‘‘(B) if such person did not have either—
‘‘(i) actual knowledge that such per-
son’s distribution or sale of the product
violated such paragraph; or
‘‘(ii) notice from the Commission that
such distribution or sale would be a viola-
tion of such paragraph.
‘‘(3)(A) The penalty amount authorized in
paragraph (1) shall be adjusted for inflation by in-
creasing the amount referred to in paragraph (1) by
the cost-of-living adjustment for the preceding 5
years. Any increase determined under the preceding
sentence shall be rounded up to—
‘‘(i) in the case of a penalty amount less
than or equal to $10,000, the nearest multiple
of $1,000;
‘‘(ii) in the case of a penalty amount great-
er than $10,000, the nearest multiple of
$5,000.
‘‘(B) Not later than December 1, 2005, and
December 1 of each 5th calendar year thereafter,
the Commission shall prescribe and publish in the
Federal Register the authorized penalty amount that
shall apply for violations that occur after January 1
of the year immediately following such publication.
‘‘(C) For purposes of subparagraph (A):
‘‘(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 5 years’ means the percentage
by which—
‘‘(I) the Consumer Price Index for the
month of June of the calendar year pre-
ceding 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.’’.
(b) Section 5(c) of the Federal Hazardous Substances
Act (15 U.S.C. 1264(c)) is amended to read as follows:
‘‘(c) CIVIL PENALTIES.—
‘‘(1) Any person who knowingly violates section
4 shall be subject to a civil penalty not to exceed
$7,000 for each such violation. Subject to paragraph
(2), a violation of subsection (a), (b), (c), (d), (f),
(g), (i), (j), or (k) of section 4 shall constitute a sep-
arate offense with respect to each substance in-
volved. A violation of section 4(e) shall constitute a
separate violation with respect to each failure or re-
fusal to allow or perform an act required by section
4(e), and if such violation is a continuing one, each
day of such violation shall constitute a separate of-
fense.
‘‘(2) The second sentence of paragraph (1) of
this subsection shall not apply to violations of sub-
section (a) or (c) of section 4—
‘‘(A) if the person who violated such sub-
section is not the manufacturer, importer, or
private labeler or a distributor of the substance
involved; and
‘‘(B) if such person did not have either—
‘‘(i) actual knowledge that such per-
son’s distribution or sale of the substance
violated such subsection, or
‘‘(ii) notice from the Commission that
such distribution or sale would be a viola-
tion of such subsection.
‘‘(3) In determining the amount of any penalty
to be sought upon commencing an action seeking to
assess a penalty for a violation of section 4, the
Commission shall consider the nature of the sub-
stance, the severity of the risk of injury, the occur-
rence or absence of injury, the amount of the sub-
stance distributed, and the appropriateness of such
penalty in relation to the size of the business of the
person charged.
‘‘(4) Any civil penalty under this subsection
may be compromised by the Commission. In deter-
mining the amount of such compromised penalty or
whether it should be remitted or mitigated and in
what amount, the Commission shall consider the ap-
propriateness of such penalty to the size of the busi-
ness of the persons charged, the nature of the sub-
stance involved, the severity of the risk of injury, the
occurrence or absence of injury, and the amount of
the substance distributed. The amount of such pen-
alty when finally determined, or the amount agreed
on compromise, may be deducted from any sums
owing by the United States to the person charged.
‘‘(5) As used in the first sentence of paragraph
(1), the term ‘knowingly’ means—
‘‘(A) having actual knowledge, or
‘‘(B) the presumed having of knowledge
deemed to be possessed by a reasonable person
who acts in the circumstances, including knowl-
edge obtainable upon the exercise of due care to
ascertain the truth of representations.
‘‘(6)(A) The penalty amount authorized in
paragraph (1) shall be adjusted for inflation by in-
creasing the amount referred to in paragraph (1) by
the cost-of-living adjustment for the preceding 5
years. Any increase determined under the preceding
sentence shall be rounded up to—
‘‘(i) in the case of a penalty amount less
than or equal to $10,000, the nearest multiple
of $1,000;
‘‘(ii) in the case of a penalty amount great-
er than $10,000, the nearest multiple of
$5,000.
‘‘(B) Not later than December 1, 2005, and
December 1 of each 5th calendar year thereafter,
the Commission shall prescribe and publish in the
Federal Register the authorized penalty amount that
shall apply for violations that occur after January
1 of the year immediately following such publication.
‘‘(C) For purposes of subparagraph (A):
‘‘(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 5 years’ means the percentage
by which—
‘‘(I) the Consumer Price Index for the
month of June of the calendar year pre-
ceding 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.’’.
SEC. 4. CRIMINAL PENALTIES.
(a) Section 21 of the Consumer Product Safety Act
(15 U.S.C. 2070) is amended to read as follows:
‘‘(a) Any person who knowingly violates section 19
shall be fined under title 18, United States Code, or be
imprisoned not more than 1 year, or both, if such person
is an individual, or fined under title 18, United States
Code, if such person is an organization (as the term ‘orga-
nization’ is defined in section 18 of title 18, United States
Code). Any person who knowingly and willfully violates
section 19 of this Act shall be fined under title 18, United
States Code, or be imprisoned not more than 3 years, or
both, if such person is an individual, or fined under title
18, United States Code, if such person is an organization.
‘‘(b) Any individual director, officer, or agent of a
corporation who authorizes, orders, or performs any of the
acts or practices constituting in whole or in part a viola-
tion of subsection (a) shall be subject to penalties under
this section without regard to any penalties to which that
corporation may be subject under subsection (a).’’.
(b) Section 5(a) of the Federal Hazardous Sub-
stances Act (15 U.S.C. 1264(a)) is amended to read as
follows:
‘‘(a) CRIMINAL PENALTIES.—Any person who vio-
lates any of the provisions of section 4 shall be guilty of
a misdemeanor and shall on conviction thereof be subject
to a fine under title 18, United States Code, or to impris-
onment for not more than one year, or both, if such person
is an individual, or to a fine under title 18, United States
Code, if such person is an organization (as the term ‘orga-
nization’ is defined in section 18 of title 18, United States
Code); but for offenses committed willfully, or for second
and subsequent offenses, the penalty shall be imprison-
ment for not more than 3 years, or a fine under title 18,
United States Code, or both, if such person is an indi-
vidual, or a fine under title 18, United States Code, if
such person is an organization.’’.
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