On Aug. 14, President Bush signed into law the Consumer Product Safety Improvement Act of 2008. This law will significantly change the regulatory framework for manufacturers attempting to comply with U.S. product safety requirements and is a major rewrite of the federal Consumer Product Safety Act and other federal consumer product safety laws. The changes are so important that AHAM, in partnership with the Air-Conditioning, Heating and Refrigeration Institute and the Consumer Electronics Association, held a special seminar on Oct. 8 in Washington D.C. for association members to get a first hand briefing from CPSC officials on how to comply with the new law. Some of the most important features of the bill are summarized below.

Penalties: The law substantially increases civil and criminal penalties. Individual civil penalties have been raised significantly from $5,000 to $100,000 per violation. Maximum penalties have been raised from $1.25 million to $15 million. During consideration in Congress, there was a proposal at one time to raise penalties to $100 million, which we vigorously opposed. And, for the first time, the CPSC is required to adopt a penalty policy, as AHAM has urged for years. The Commission must consider in this penalty policy “the nature, circumstances, extent and gravity of violation,” including the number of products distributed and how to mitigate adverse economic impacts on small businesses.

State Attorneys General: The law also expands the role of state attorneys general in product safety. State attorneys general already had enforcement powers under previous law, but they now have fuller and more explicit authority. The new authority clarifies that state attorneys general can take legal action to enforce CPSC requirements, but not for voluntary safety standards such as UL or CSA standards.

Public Disclosure of Information: All existing statutory deadlines for CPSC to process requests for public disclosure of information, and deadlines for manufacturers, retailers and distributors to respond to such requests have been shortened. In many cases, such requests for public disclosure involve confidential business information or otherwise protected information about identified, branded consumer products. But, AHAM took a leadership role in protecting such information from automatic or undue disclosure. CPSC has been given new authority, however, to accelerate the timetable for industry to seek judicial review of its decision to publish sensitive information, as well as new exclusions from non disclosure and other tighter deadlines. The law also mandates a public CPSC web database on product safety information and public complaints. It must include information about product reports filed by consumers, governments, healthcare, professionals, child providers and public safety entities, but, based on our advocacy, not the information the manufacturer must submit to the CPSC.

Compliance with Refrigerator Safety Act: Newly discovered under a “children’s products” provision is a requirement that refrigerator manufacturers certify compliance with the Refrigerator Safety Act. Compliance with the safety standard has not been a problem for 50 years; AHAM is working hard on minimizing this new paperwork burden.

Information Sharing with Governments: The law encourages CPSC to share information with federal, state, local and foreign government agencies if such jurisdictions have laws and regulations in place to protect confidential information. As we argued, CPSC would be authorized, but not required, to abrogate such agreements if confidential information is disclosed.

Product Recalls: To date, it has been very rare that corrective actions or recalls are mandatory. This may change in the future. The law provides the CPSC with more authority to specify the elements of corrective actions if it decides to issue mandatory recall decisions, including redoing a recall if it’s not “effective.”

Safety Standards: CPSC now has new fast-track authority to adopt parts, or all, of voluntary safety standards as mandatory federal standards. This authority may prove to be positive or troublesome depending on how it is used.

More Commissioners: The Commission has been given significant new funding authorization. Most significantly, Congress strongly encourages the President to increase the number of commissioners to five. Presently there are two commissioners; in the past two administrations there have usually been three. This would certainly result in a more active commission.

AHAM has been active in this effort since its inception. At the same time this new Consumer Product Safety law is being implemented in the U.S., similar legislation is being considered in Canada. AHAM’s goal is to make North American safety requirements reasonable and consistent.