than just the Chairman. I feel it is my duty and my responsibility to find the means by which the CPSC most effectively fulfills its obligations. That is the fundamental reason why Commissioner Dawson and I introduced a set of general policies last year. One of its provisions would have enhanced the accountability of the CPSC's senior staff to the entire Commission. Unfortunately, it became mired in conflicting legal interpretations which had the practical effect of weakening rather than strengthening the senior staff's accountability to the whole Commission.

2. Question: If we should decide to retain the collegial structure of CPSC, do you believe the act should be amended or clarified to strengthen the authority of the collegial body?

Answer: (Scanlon): No. The only change I would suggest, to reduce the potential for future administrative mischief, would be to eliminate the phrase by the general policies of the Commission and . . .” from Section 4(f)(2) of the CPSA. This would clarify the administrative authority of the Chairman without compromising the right of the full Commission to make regulatory decisions.

Answer: (Dawson): Yes, if the Congress chooses to retain the collegial nature of the Commission, there need to be clarifications, such as discussed above, to address the problems which have been apparent.

Answer: (Graham): Yes, if the Congress decides to retain the collegial structure of the CPSC, some clarifications in the Consumer Product Safety Act would be helpful in order to remove any confusion as mentioned above over the authority of the collegial body.

3. Question: Do either or both of the Commissioners believe that an amendment to provide for dismissal authority could help in resolving staff accountability problems?

Answer: (Scanlon): Section 4(g)(1) of the CPSA already grants to all the Commissioners the right to approve, in advance, certain individuals the Chairman nominates to serve in key staff positions. As a consequence, Commissioners other than the Chairman already have a say in the selection of those employees most likely to influence the development and implementation of Commission projects and support activities. To give a majority of the Commission the right to later remove such a person, or to remove those whose appointments were not subject to full Commission confirmation in the first place, without the concurrence of the Chairman would effectively erode not only the Chairman's supervisory authority but the supervisory authority of all the career staff managers within the Commission. Instead of carrying out instructions, staff members would understandably be tempted to count Commission votes before taking action. Clearly, such a situation would be untenable. Not only is there a need for clear lines of authority at the CPSC but a diffusion of supervisory responsibility would ultimately raise questions of accountability.

Answer: (Dawson): Yes. In Section 4, appointments to certain key positions already require majority concurrence. It would be logical to extend that authority to include majority dismissal as well, so long as due process procedures were observed and all relevant Civil Service laws complied with.

Answer: (Graham): Yes, I think it would be a logical step to include majority dismissal of any individual in a senior level position which presently requires majority approval when he or she is appointed.

4. Question: In your statement, you mentioned problems associated with having a three member quorum when there are only three members serving. How has that affected the Commission's ability to address important issues?

Answer: (Scanlon): The existence of a three member quorum has not, in my opinion, had a major, negative impact on the Commission's ability to conduct business. Since I reassumed the Chairmanship last July, the Commission has voted on over 50 different matters of concern and the Commission's compliance and enforcement activities have remained at or close to previous years' levels.

Of course, a problem could arise if, under the current system, one of the Commissioners were to become incapacitated and rendered unable to participate in any Commission business. But reducing the quorum size from three to two is not the best antidote for that eventuality; the principal effect of such a move would most likely be an increase in the need for official meetings. A much more effective approach would be to effectively reduce the quorum requirement to one by converting the Commission into a single administrator Agency; not only would that improve the odds of meetings taking place when first scheduled but it would address many of the other inefficiencies associated with the collegial body.

Answer: (Dawson): In one significant matter, when the Commission was attempting to resolve certain internal management disputes, the Chairman was able to prevent full Commission consideration by not attending meetings-eliminating the full three member quorum required to do business.

Answer: (Graham): A three member quorum when there are only three members serving has seriously affected the functioning of the Agency. It has the practical effect of one Commissioner single-handedly being able to block a majority of the Commission from taking any significant action with which he disagrees.

Last year's debate over a set of general policies proposed to enhance the accountability of the Commission staff, insure the free flow of valid information and encourage the collegial body structure Congress mandated illustrates this problem. Because the Chairman was absent from several Commission meetings scheduled to decide what course of action to take with regard to these substantial management issues, the Commission was unable to resolve them for over six months.

On March 18, 1987, a number of general policies in regard to the management issues mentioned above were approved. Commissioner Dawson and I felt the minimum required for the Commission to function properly was the policy statement we put forward in January (which was a compromise from our earlier ones). However, we concluded that with the current quorum problem, the Chairman would probably ignore any provision adopted by the Commission with which he disagreed. Thus, we ended up with the lowest common denominator in the interest of reaching temporary accord for the good of the institution.

5. Question: Would changing the statute to provide for a two member quorum provide safeguards to the Commissioners in exercising their responsibilities under the statute?

Answer: (Scanlon): If the Congress feels the quorum requirement should be changed to two, then it should also require that one of the two be the Chairman. That would help safeguard the administrative prerogatives of the Chairman without compromising the right of the other Commissioners to establish regulatory policy. However, when viewed from a broader perspective, such a change could do more harm than good. Due to the provisions of the Government in the Sunshine Act a quorum of two would mean that no two Commissioners could ever meet to discuss issues without notice being provided to the public at least a week in advance. For all practical purposes, that would require that more official meetings be held (which would mean more delays) or would result in more business being conducted behind the scenes by staff. Either way I question whether the public would be as well served as it would be by a single administrator or as it is now by the existence of a three member quorum.

Answer: (Dawson): Yes, it makes sense to change the quorum to two so that official business can be conducted when one member is absent.

Answer: (Graham): Yes, if the Commission is to be limited to three members, the statute should also be changed to indicate a quorum requirement of two members rather than all three. Such an action is imperative if the Commission is to conduct its business in a expeditious manner. Presently, any one member can prevent the Commission from being able to discharge its responsibilities mandated by law.

Mr. BARTON. If I could make just one brief statement, I am very concerned about this ATV problem. I personally think that three and four wheel ATV's ought to have roll bars or not be allowed to be sold. I will be happy to work with the Chairman, and the Commission, the Justice Department and whoever else, to make that happen.

Thank you.

Mr. FLORIO. Thank you very much.

The gentleman from Utah.

Mr. NIELSON. Thank you. I would like unanimous consent to put in the record a statement by Thomas Bliley, a member of the Health and Environment Subcommittee, which had jurisdiction for the first 6 years.

Mr. FLORIO. Without objection, so ordered.

[Mr. Bliley's statement follows:]

STATEMENT OF HON. THOMAS J. BLILEY, JR.

Mr. Chairman and Members of the Subcommittee: I welcome this opportunity to participate in this subcommittee's hearing concerning the reauthorization of the Consumer Product Safety Commission (CPSC).

My interest in the CPSC is a result of my service as a member of the Subcommittee on Health and Environment which had legislative and oversight jurisdiction over this independent regulatory Agency in previous Congresses.

I understand much criticism has been leveled at the Commission for not doing enough about consumer product safety hazards. I am certain the subcommittee will hear testimony to that effect today.

But let's look at some past regulatory actions of the CPSC that ought to give this subcommittee some pause before rushing to put the CPSC back into the business of creating the regulatory excesses of the past.

One case will illustrate my point. In 1976, the Commission entered the business of investigating and regulating home insulation products, including urea formaldehyde foam (UFFI). In April, 1982, the CPSC concluded a 6 year investigation of UFFI, an alleged human carcinogen, and sought to ban the product from consumers' homes and schools.

The Commission concluded that UFFI presented an unreasonable risk of irritation and cancer to consumers and that no standard existed to protect the consuming public from these hazards. Accordingly, the CPSC voted to ban the product's use in both our homes and schools.

The result, like many of the other instances the Commission waded into the regulatory pool, was predictable. During the period 1974 to 1983 portions of at least 9 Commission mandatory standards were successfully challenged in court based upon insufficient evidence, or flawed testing procedures. Only 2 CPSC rules were left totally intact following judicial review. That is hardly a track record to point to with pride-even less of a track record to warrant greater regulatory authority.

On April 7, 1983 in a unanimous opinion, the U.S. 5th Circuit Court of Appeals overturned the Commission's ban because of bad science, and bad law.

Millions of taxpayer dollars had been spent [or rather wasted]. Thousands of small home insulation businesses closed and workers lost their jobs. Literally hundreds of homeowners faced problems trying to resell their homes after the disastrous government publicity about this home insulation's alleged carcinogenic hazard.

Just let me quote briefly from the synopsis of the reasoned and thoughtful legal analysis by the Chief Judge:

"On petitions for review of an order of the Consumer Product Safety Commission, the Court of Appeals, held that: (1) the record developed before the Commission did not contain the substantial evidence necessary to support the Commission's ban on the use of urea-formaldehyde foam insulation, and (2) the record being totally devoid of evidence to support extension of the ban to schools, the Commission improperly proceeded under Consumer Product Safety Act, and Commission's desire to avoid complex and lengthy nature of rulemaking proceeding that would be required under the Federal Hazardous Substances Act was not sufficient reason to proceed under CPSA."

I would ask the subcommittee to review completely the Appellate Court's opinion. What I just read, speaks volumes about the runaway regulatory disposition of the Commission past. The only real hazard present in the UFFI case was to economically devastated American workers, American homeowners, American jobs and an American industry. More to the point, consumers did not benefit one iota!

I wonder if the smalltown home insulation worker in Minnesota who lost the business that was helping to put his kids through college, thought kindly of CPSC's handiwork. Or would the consumer who can't sell his home in Northern Virginia without all kinds of legal forms and disclosures on the materials installed 8 to 10 years ago, which present no hazard, urge Congress to loosen this regulatory monster on the American public without adequate checks and balances.

Mr. Chairman, back then, the Commission wasn't even operating under the right statute, never mind the lack of evidence of human carcinogenicity of the product they sought to ban.

I urge the subcommittee to proceed cautiously and to avoid rushing back to the age of regulation without rationale.

There is a proposal before this subcommittee to delete the exemption that currently exists on the CPSC's jurisdiction over tobacco products, which is found in Section 3(a)(1)(B) of the Consumer Product Safety Act. I am not sure what the sponsor's intent is with that proposal. Is it to have the CPSC recall tobacco products, label tobacco products, or ban tobacco. As the members of the subcommittee know, this is an issue which I will watch with the greatest interest.

As the Fifth Circuit Court UFFI opinion makes clear, the CPSC's efforts in the area protecting human health leave much to be desired.

In a 1973 UCLA Law Review article on the "Procedural Aspects of the Consumer Product Safety Act" then Chairman of the Administrative Conference, Antonin Scalia, now a distinguished Supreme Court Justice, said, in talking of the regulatory process under the Consumer Product Safety Act, "The key question, which time alone can answer, is whether these vague procedural opportunities will prove to be a greater benefit to consumers or to the affected commercial interests."

Mr. Chairman, nearly 14 years later the answer is in. Neither the consumer nor industry has benefited from the regulatory zeal of the past. I suggest that the wisdom Congress exercised in 1981 by promoting the voluntary standard over the mandatory approach, and by placing limits on the dissemination of inaccurate and misleading information on product safety hazards, strikes the necessary balance that protects both consumers and manufacturers. I might add that the current Commission has taken these 1981 amendments to heart, and brought a needed sense of reason to the Commission's activities, despite much of the hysterical criticism of many who yearn to return to the misguided regulatory zeal of the past.

I urge that you carefully weigh any changes in this delicate balance. The judgment in the past, and I am sure the future, requires Congress to move carefully, thoroughly and cautiously. I hope this subcommittee will do just that.

Thank you for extending this opportunity to me.

Mr. NIELSON. Thank you. I have a number of questions. The Chairman has asked a lot of them. But let me go back to Mr. Lacy again.

Is there any action contemplated against the department store which sold this in the toy department?

Mr. LACY. Well, I would have to answer that by saying that, yes, we would certainly-we are putting together the information now, as the director of compliance has said. This case hasn't come into my office yet, because of the procedures at the Commission. The director of compliance is collecting information on this, and it is conceivable that-it is certainly conceivable and I think, if necessary, steps will be taken.

Mr. NIELSON. Is there any action contemplated against the manufacturer for having an illegal warning?

Mr. LACY. Well, because the warning appears to be illegal, certainly steps would be taken, yes.

Mr. NIELSON. So, you contemplate those two actions?

Mr. LACY. Yes.

Mr. NIELSON. Now, I would like to ask a few other questions. First of all, I would like to ask all three Commissioners, you have mentioned you have Commission enforcements as good as last year, in fact you have some improvement in the Commission enforcements, in recalls and so forth. And I commend you for that. Has there been any drop between going from five to three? Has that hurt you at all in terms of your functioning?

Mr. SCANLON. From five Commissioners to three Commissioners? Mr. NIELSON. Yes. Has that really hurt?

Mr. SCANLON. What I said in my personal statement, Mr. Nielson, is that I thought the Commission operated better with five than three.

Mr. NIELSON. How do the other Commissioners feel? Were you with it when there were five?

Ms. GRAHAM. I was.

Mr. NIELSON. Yes.

Ms. GRAHAM. And I feel that our main problem at this point is that we need a quorum change.

Mr. NIELSON. All right. Thank you.

I have a number of questions here, and I would ask permission to ask a lot of them separately. I won't have time to ask all that I have.

Let me ask a couple of questions about the reauthorization in 1981.

In 1981, there were a number of changes made. Section 6(b) was added, for example. And an attempt in 1983 to change that and remove the 6(b) was defeated in full committee, but it still came up in the Senate version in 1985.

How do you feel about section 6(b)? Is that working all right? In other words, the requirement that you notify the manufacture before you take action against him, is that still working satisfactorily, in your opinion?

Mr. SCANLON. In my opinion, yes.

Mr. NIELSON. We should not mess with that, in your opinion?
Mr. SCANLON. Keep it.

Mr. NIELSON. How do the other Commissioners feel?

Ms. DAWSON. I agree with the Chairman on that. I think it is a necessary thing.

Mr. NIELSON. Ms. Graham?

Ms. GRAHAM. I am still looking at it, and I really would like to submit an answer for the record.

Mr. NIELSON. All right.

[The following information was submitted for the record.]

COMMISSIONER GRAHAM'S RESPONSE TO MR. NIELSON'S QUESTION

1. How do you feel about 6(b) requiring notice to manufacturers prior to action? Answer: Whenever the Commission proposes to disclose information to the public from which the public can readily ascertain the identity of the manufacturer or private labeler, section 6(b) requires the Commission first to give the manufacturer or private labeler notice and an opportunity to comment. The Commission must then take reasonable steps to assure the accuracy of the information and assure that disclosure is fair in the circumstances and that disclosure effectuates the purposes of the acts the CPSC administers (15 U.S.C. Sec. 2055(6)(1)). As you are aware, the Commission has issued an extensive regulation interpreting section 6(b), 16 C.F.R. Part 1101. The regulation has been in effect since December 1983.

I believe section 6(b) is appropriate when the Commission initiates the disclosure of information. In such a situation, the Commission stands behind the information it discloses. The Commission is making a statement about a firm's products and should take the necessary steps to assure that the statement is accurate regardless of whether there is a statutory requirement.

I am troubled by section 6(b)'s application to Freedom of Information Act Disclosures (FOIA) and the cost to the Commission of processing FOIA disclosures under the procedures of section 6(b). In 1982 the Commission studied the costs of section 6(b) and it found that about $1.1 million per year was being spent on processing FOIA requests. It takes considerable professional staff time to process documents under section 6(b), time that I believe could be better spent working on the important health and safety issues facing the Commission.

When the CPSC responds to FOIA requests, it provides existing documents. In disclosing the documents, the Commission does not necessarily make a statement about those documents. I believe that some compromise should be found to address the procedures the Commission now goes through to comply with section 6(b) as it applies to FOIA requests. This procedure should reduce the administrative burden on the Commission and at the same time provide reasonable assurance to firms that inaccurate documents are not being disclosed.

Perhaps a compromise procedure to handle 6(b) applications of FOIA requests would be to allow manufacturers an opportunity to comment on documents to be disclosed and then allow the Commission simply to disclose the documents with the manufacturers' comments without the necessity of taking additional and or redun