Rulemaking

Whether you are an individual consumer or a small business, everyone has the right to become an active participant in agency rulemaking on regulations that may affect you.

Congress provides the Commission authority to enact regulations in the area of consumer product safety. By law, the Commission must follow a standard process for federal government rulemaking, known as the Administrative Procedure Act (APA). The APA requires the Commission to solicit input from the public on proposed regulations and to respond to public comments in issuing its regulations. This means that when a new regulation is proposed, you have the right to provide a comment, and the agency must consider your comment (individually or grouped with other similar comments) and address your concerns in writing. Your comment may be found to be persuasive and the regulation may be adjusted as a result of your comment, or your comment may be found not to be persuasive, and the regulation may not be adjusted. This process is called "notice and comment rulemaking," and it is explained in more detail below.

Your comments are very important in helping the Commission to understand how the proposed regulation may affect you and others if the regulation is adopted by the Commission. We encourage you to get involved and participate.

Consumers needing help with making comments can contact the Consumer Ombudsman for more assistance.

The following discussion provides an overview of the requirements for the Commission's rulemaking activities that directly affect products. For any particular action that is contemplated by the Commission, the Office of the General Counsel will provide a detailed analysis of the applicable legal procedures and requirements for taking that action.

The Administrative Procedure Act (APA) defines a "rule," in relevant part, as "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency." Rulemaking under the APA generally involves publication in the Federal Register of a notice of proposed rulemaking (NPR), which explains the proposed rule, provides an opportunity for public comment on the proposed rule, includes agency consideration of the public comments, and then the agency's issuance of the final rule. This process is called "notice and comment rulemaking" and it is sometimes also known as "two-stage rulemaking" or "informal rulemaking."1

The statutes administered by the Commission provide specific requirements for issuance of the CPSC's major safety rules (i.e., product standards and bans). Until recently, the Consumer Product Safety Act (CPSA), the Federal Hazardous Substances Act (FHSA), and the Flammable Fabrics Act (FFA) required the use of a three-stage rulemaking process. This process began with the publication in the Federal Register of an advance notice of proposed rulemaking (ANPR), describing the risk to be addressed, the regulatory alternatives being considered, and any relevant existing standards, and inviting public comment. The ANPR also invited any person to submit an existing standard for consideration as a proposed rule or a statement of intention to develop a voluntary standard to address the risk. The ANPR would be followed by an NPR and public comment before the Commission issued a final rule. The Consumer Product Safety Improvement Act of 2008 (CPSIA) amended these statutes to make use of an ANPR optional.

Child-resistant packaging standards are issued under the Poison Prevention Packaging Act (PPPA), using APA notice and comment rulemaking.

A general description of the steps involved in rulemaking is attached at the end of this document.

In order for the Commission to issue standards or bans under the CPSA, FHSA, or FFA, detailed analyses and findings must be made concerning costs and benefits, regulatory alternatives, issues raised by the public comments, and the adequacy of any relevant voluntary standards. (These analyses are not necessarily required for rules under the CPSIA.) When such rules are issued, persons adversely affected may seek judicial review in a court of appeals.

The major statutory authorities that the Commission uses to issue rules for the safety of products are listed below. In addition, the Commission may issue interpretive or procedural rules, as needed.

CPSA

Section 7, "Consumer Product Safety Standards," (used in conjunction with section 9, "Procedure for Consumer Product Safety Rules");
Section 8, "Banned Hazardous Products," (used in conjunction with section 9,
"Procedure for Consumer Product Safety Rules");
Section 9, "Procedure for Consumer Product Safety Rules";
Section 14, "Product Certification and Labeling";
Section 16, "Inspection and Recordkeeping"; and
Section 27(e), "Additional Functions of Commission" (allows the Commission, by rule, to require manufacturers of consumer products to provide performance and technical data).

FHSA

Sections 2(f)(1)(D), "Definitions," and 3(e), "Regulations Declaring Hazardous Substances and Establishing Variations and Exemptions" (allows the Commission to determine that any toy or other article intended for use by children presents an electrical, mechanical, or thermal hazard);
Sections 2(q)(1)(B) and 3(f) through (i) (allows the Commission to classify any hazardous substance as a "banned hazardous substance");
Section 3(a) (allows the Commission to issue a rule declaring a substance or mixture to be a hazardous substance); and
Section 3(b) (allows the Commission to issue rule specifying variations or additions to usual labeling requirements).

FFA

Section 4, "Regulations of Flammable Fabrics" (allows the Commission to find that a new or amended flammability standard or other regulation for a fabric, related material, or product may be needed to protect the public against unreasonable risk of the occurrence of fire leading to death or personal injury).

PPPA

Section 3, "Special Packaging Standards," and Section 5 "Proceedings" (allows the Commission to establish packaging standards for household substances if special packaging is required to protect children from serious personal injury or serious illness resulting from handling, using, or ingesting such substance and the special packaging to be required is technically feasible, practicable, and appropriate for such substance).

The CPSIA not only granted new regulatory powers to the Commission, but it also mandated the issuance of a number of rules and other documents. While many CPSIA provisions are amendments to the CPSA, certain provisions in the CPSIA depart from the standard rulemaking process. For example:

• Section 101 of the CPSIA imposes precise lead limits for children's products. If the Commission determines that the 100 ppm limit is not technologically feasible for a product or product category, the Commission, by regulation, must establish an amount that is the lowest amount of lead. The Commission also must periodically review and revise downward the limits "no less frequently than every 5 years" after the promulgation of a regulation establishing a lead limit
• Section 102 of the CPSIA requires the Commission to issue "notices of requirements" to establish the accreditation requirements for third party conformity assessment bodies to assess a product's conformity with a children's product safety rule. The notices of requirements are exempt from the APA until August 2011.
• Section 104 of the CPSIA, pertaining to durable nursery products, establishes requirements for the number of rulemakings and their frequency. The statute requires the Commission to begin rulemaking for two categories of durable infant or toddler products "not later than 1 year" after the CPSIA's enactment and to promulgate standards for "no fewer than 2 categories of durable infant or toddler products every 6 months thereafter . . .." Additionally, the rulemaking required for consumer registration cards is exempt from the Paperwork Reduction Act.2

The Commission's rulemakings also are affected by other statutes and Executive Orders. These include:

The Regulatory Flexibility Act

Whenever the agency issues a proposed rule, it must prepare and publish an initial regulatory flexibility analysis (RFA), describing the impact of the proposed rule on small entities (including small businesses, organizations, and governmental jurisdictions), unless the Commission certifies that the proposed rule will not "have a significant economic impact on a substantial number of small entities." This certification, when made, is based on information prepared by CPSC staff. If an initial RFA is published, the final rule must be published with a final RFA that summarizes and responds to issues raised by the comments on the initial RFA.

The Paperwork Reduction Act (PRA)

The PRA provides that agencies "shall not conduct or sponsor the collection of information without first obtaining the approval of the Office of Management and Budget" (OMB). The PRA covers information submitted to an agency, whether the submission is voluntary or mandatory, and it also covers recordkeeping and information disclosed to third parties. In general, before publishing a proposed rule in the Federal Register, an agency submits the proposed rule and supporting information to OMB. OMB has 60 days to approve the "collection of information" or file comments. If OMB files comments, the agency must resubmit the requirement at the final stage of rulemaking. OMB has 60 days from publication of the final rule to disapprove the collection of information. Independent agencies, like the CPSC, may vote to override OMB's disapproval. If a collection of information is approved, denied but overridden, or not acted upon by OMB within 60 days, it receives an OMB control number. OMB regulations establish the procedures for obtaining OMB approval under the PRA. It should be noted that, under OMB's regulations, "no person shall be subject to any penalty for failing to comply with a collection of information" that has not received OMB approval.

The Congressional Review Act (CRA)

The CRA requires agencies to send a copy of each new final rule (and certain analyses that they may undertake related to the rule) to both Houses of Congress (for transmittal to the appropriate authorizing committees) and to the U.S. Government Accountability Office ("GAO") before the rule can take effect. When an agency sends a rule to Congress and GAO, the agency is to indicate whether the rule is "major" or not. OMB's Office of Information and Regulatory Affairs determines whether the rule is major-that is, whether the rule is likely to result in an annual effect on the economy of more than $100,000,000, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S.-based enterprises to compete with foreign-based enterprises. Unless exempted, a major rule may not take effect until 60 days after it has been submitted to Congress. GAO is to provide a report to the agency's authorizing committee on each major rule. Regardless of whether a rule is "major," Congress has 60 legislative days-during which it may use expedited procedures-to disapprove a rule.

The National Environmental Policy Act (NEPA)

NEPA directs agencies to include in any proposal for "major Federal actions significantly affecting the quality of the human environment," a detailed environmental impact statement (EIS). The EIS is subject to judicial review. Where an EIS is not required, a less rigorous environmental assessment (EA) may be required. As required by NEPA, the CPSC has regulations establishing categorical exclusions from the need for an EIS or EA, where the agency has identified actions that will have no significant affect on the environment. See 16 CFR 1021.

The Information Quality Act (IQA)

This Act requires OMB to issue guidance to federal agencies to help ensure and maximize the "quality, objectivity, utility, and integrity" of information disseminated by federal agencies. Agencies also must issue their own information quality guidelines and establish administrative mechanisms that allow affected persons to seek and obtain correction of information maintained and disseminated by the agencies that does not comply with OMB guidance.

Generally, independent regulatory agencies like the CPSC are not required to comply with Executive Orders. However, for various reasons, the CPSC complies with the following:

Executive Order 12866, "Regulatory Planning and Review." The provisions of this order, requiring a semiannual regulatory agenda and a regulatory plan, do apply to the Commission. The provisions requiring OMB's review of draft proposed rules do not apply to the CPSC.

Executive Order 12889, "Implementation of the North American Free Trade Agreement." This executive order requires a 75-day comment period on any proposed federal technical regulation or any federal sanitary or phytosanitary measure of general application.

Executive Order 12988, "Civil Justice Reform." Regulations must specify in clear language, the preemptive effect (if any) to be given to the regulation.

Executive Order 13272, "Proper Consideration of Small Entities in Agency Rulemaking." This executive order requires agencies to establish procedures and policies to promote compliance with the Regulatory Flexibility Act. It also instructs agencies to notify the U.S. Small Business Administration's Chief Counsel for Advocacy of any draft rules that may have a significant impact on a substantial number of small entities. The notification is to be "at a reasonable time prior to the publication of the rule by the agency." The executive order also instructs agencies to give "every appropriate consideration" to any comments provided by the Chief Counsel for Advocacy.

Executive Order 13563, "Improving Regulation and Regulatory Review." This order supplements and reaffirms Executive Order 12866. It emphasizes the importance of public participation; requires an "open exchange" of information among government officials, experts, stakeholders, and the public; calls for greater coordination across agencies; requires agencies to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public; requires agencies to ensure the integrity of scientific and technological information used to support the agency's regulatory actions; and requires agencies to develop a plan for retrospective analyses of rules "that may be outmoded, ineffective, insufficient, or excessively burdensome; and to modify, streamline, expand, or repeal them in accordance with what has been learned. While Executive Order 13563 is directed to executive agencies, Executive Order 13579, "Regulation and Independent Regulatory Agencies," urges independent agencies to comply with the provisions of Executive Order 13563.

OMB Final Information Quality Bulletin for Peer Review. This bulletin states that important scientific information must be peer reviewed before it is disseminated by the federal government. The bulletin establishes different obligations for "influential scientific information" and "highly influential scientific assessments" disseminated by agencies. ("Influential scientific information" is defined as "scientific information the agency reasonably can determine will have or does have a clear and substantial impact on important public policies or private sector decisions," while "highly influential scientific assessments" are defined as influential scientific information that the agency determines to be a scientific assessment having a potential impact of more than $500 million in any year, or "is novel, controversial, or precedent-setting or has significant interagency interest.") OMB issued the bulletin pursuant to its authority under the Information Quality Act.

Event

Optional Step: Advance Notice of Proposed Rulemaking

Staff directed to prepare briefing package for possible advance notice of proposed rulemaking (ANPR)

Staff completes ANPR briefing package (including description and market information about product; discussion of incidents involving product; summary of any existing standards; overview of alternatives to address risk). Package is reviewed by the Office of the General Counsel (OGC) (which prepares a legal memorandum as part of the package) and transmitted to the Commission via the Office of the Secretary

Staff briefs Commission

Commission decision meeting directing staff to prepare ANPR

Staff transmits draft ANPR to Commission

Commission votes by ballot to publish ANPR

ANPR published in the Federal Register

Public comment period on ANPR closes

Notice and Comment Rulemaking or Informal Rulemaking: The Proposed Rule Stage

Staff directed to prepare briefing package for possible notice of proposed rulemaking (NPR)

Staff completes NPR briefing package (includes draft proposed technical standard; justification for proposed requirements; response to significant issues raised by ANPR comments (if ANPR exists); preliminary regulatory analysis; analysis of potential impact on small business). Package is reviewed by the OGC (which prepares a legal memorandum as part of the package) and transmitted to the Commission via office of the Secretary

Staff briefs Commission

Commission decision meeting directing staff to prepare draft NPR

Staff transmits draft NPR to Commission

Commission votes by ballot to publish NPR

NPR published in the Federal Register

Public comment period on NPR closes

Notice and Comment Rulemaking or Informal Rulemaking: The Final Rule Stage

Staff completes final rule briefing package (includes final technical standard; justification for final requirements; responses to significant issues raised by NPR comments; final regulatory analysis; analysis of potential impact on small business). Package is reviewed by the OGC (which prepares a legal memorandum as part of the package) and transmitted to the Commission via office of the Secretary

Staff briefs Commission

Commission decision meeting directing staff to prepare draft final rule

Staff transmits draft final rule to Commission

Commission votes by ballot to publish final rule

Final Rule published in the Federal Register

Staff briefs Commission

Commission decision meeting directing staff to prepare draft final rule

Staff transmits draft final rule to Commission

Commission votes by ballot to publish final rule

Final Rule published in the Federal Register

Please note that under the Administrative Procedure Act, mechanisms exist for issuing "interpretive" rules and for dispensing with notice and comment procedure when an agency, "for good cause," finds that notice and comment procedure are "impracticable, unnecessary, or contrary to public interest." For example, if a statute instructed an agency to change a regulatory limit from one specific value to another specific value, the agency might dispense with a proposed rule on the grounds that notice and public comment is unnecessary, given the clear statutory direction. As another example, if an emergency situation existed, an agency might issue an "interim final rule," which creates a binding legal obligation but still provides an opportunity for public comment on the grounds that issuing a proposed rule would be "contrary to the public interest" in addressing the emergency. However, such exceptions are rare.

Additionally, please note that the time required to complete a rulemaking depends on multiple factors, including the complexity of the problem to be addressed; the volume of public comments responding to the ANPR or proposed rule; time constraints imposed by other federal statutes, executive orders, or other administrative obligations; agency resources; and competing agency priorities.

1 In contrast, "formal" rulemaking, sometimes also known as "on the record" rulemaking, normally involves hearing-like procedures before an administrative law judge or hearing officer.

2 Public Law 112-28 amended the CPSIA by creating a mechanism whereby revisions to certain voluntary standards, themselves, may become mandatory consumer product safety standards if the Commission does not object within 90 days after receiving notice of the revised standard. Absent such action by the Commission, the revised voluntary standard is considered to be a consumer product safety standard, effective 180 days after the voluntary standards organization has provided notice (of the revised standard) to the Commission.