CONSUMER PROTECTION ACT OF 1975

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP77M00144R001100190003-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 101
• Document Creation Date: December 19, 2016
• Document Release Date: April 14, 2005
• Sequence Number: 3
• Publication Date: April 9, 1975
• Content Type: REPORT

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Calendar No. 59
94Th CONGRESS l
1st Session I
REPORT
No. 94-66
CONSUMER PROTECTION ACT OF 1975
REPORT
OF THE
COMMITTEE ON GOVERNMENT OPERATIONS
UNITED STATES SENATE
TO ACCOMPANY
S. 200
TO ESTABLISH AN INDEPENDENT CONSUMER AGENCY TO
PROTECT AND SERVE THE INTEREST OF CONSUMERS
AND FOR OTHER PURPOSES
SUPPLEMENTAL, INDIVIDUAL, AND
MINORITY VIEWS
50-2140
*(Star Print)
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1976
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COMMITTEE ON GOVERNMENT OPERATIONS
ABRAHAM RIBICOFF, Connecticut, Chairman
JOHN L. DIcCLELLAN, Arkansas CHARLES H. PERCY, Illinois
HENRY M. JACKSON, Washington JACOB K. JAVITS, New York
EDMUND S. MUSKIE, Maine WILLIAM V. BOTH, JR., Delaware
LEE METCALF, Montana BILL BROCK, Tennessee
JAMES B. ALLEN, Alabama LOWELL P. WEICKER, JR., Connecticut
LAWTON CHILES, Florida
SAM NUNN, Georgia
JOHN GLENN, Ohio
RICHARD A. WEGMAN, Chief Counsel and Staff Director
PAUL HOFF, Counsel
CLIFTON LEONHARDT, Counsel
PAUL L. LEVENTHAL, Counsel
ELI E. NOBLEMAN, Counsel
MATTHEW SCHNEIDER, Counsel
J. ROBERT VASTINE, Chief Counsel to the Minority
BRIAN CONBOY, Special Counsel to the Minority
MARILYN A. HARRIS, Chief Clerk
ELIZABETH A. PREAST, Assistant Chief Clerk
HAROLD C. ANDERSON, Editor
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CONTENTS
Page
Purpose --------------------------------------------------
3
Background -----------------------------------------------
3
Major differences between S. 707 as introduced and S. 200 as re-
ported by the committee---------------------- -----------
6
Description and needs-------------------------------------
9
Section-by-section analysis---------------------------------
13
Changes in existing law------------------------------------
57
Estimated costs---------------------------------------------
58
--------------------------- -----
Record votes in committee---------------------------------
Supplemental views of Senator Metcalf----------------------
58
59
Supplemental views of Senator Weicker--------------------
63
Individual views of Senator Nunn-------------------------
65
Minority views of Senator Allen-----------------------------
67
Text of S. 200, as reported-----------------------------------
81
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alendar No. 59
94TH CONGRESS SENATE
1st Session
REPORT
No. 94-66
CONSUMER PROTECTION ACT OF 1975
Mr. RIBICOFF, from the Committee on Government Operations,
submitted the following
REPORT
together with
SUPPLEMENTAL AND MINORITY VIEWS
[To accompany S. 200]
The Committee on Government Operations, to which was referred
the bill (S. 200), to establish an independent consumer agency to pro-
tect and serve the interests of consumers, and for other purposes,
having considered the same, reports favorably thereon with amend-
ments and recommends that the bill as amended do pass.
The amendments are as follows :
On page 2, line 1, after the word "Government;" insert the follow-
ing : "that regulations have been adopted and statutes have been en-
acted by the Federal Government without first securing available
information as to the estimated costs and benefits of such regulations
and statutes;".
On page 2, line 11, after the word "marketplace." insert the follow-
ing new sentence : "Federal programs which fail to provide benefits
that are commersurate with the costs thereof may be a factor in the
economic problems of the United States."
On page 4, line 4, strike out "and".
On page 4, line 6, strike the word "Consumers." and insert in lieu
thereof "consumers ; and"
On page 4, between line 6 and 7, insert the following new subpara-
graph : "(G) providing of estimates of the costs and benefits of pro-
grams and activities established by Federal Government regulations
and legislation."
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On page 4, between lines 9 and 10, insert the following new para-
graph: "(4) It is the purpose of section 24 of this Act to establish a
means for estimating in advance the costs and benefits of Federal
legislation or rules that have substantial economic impact, in order to
determine which Government programs entail unreasonable or ex-
cessive costs."
".
On page 4, line 15, redesignate paragraph "(4)" as paragraph" (5)
On page 14, line 4, change the word "provide" to "provides".
On page 16, line 5, after the word "justice.", insert the following
sentence: "When the Administrator initiates a judicial proceeding
arising out of a Federal agency proceeding or activity in which he did
not intervene or otherwise participate, he shall file a statement setting
forth the reasons why he did not so intervene or otherwise participate
in such proceeding or activity, for the court's consideration in con-
nection with whether the initiation of such proceeding would impede
the interests of justice."
On page 18, line 1, delete the word "with", and substitute the fol-
lowing words : "with, providing information to, or providing assist-
ance requested by any"
On page 20, lines 23 and 24, delete the following words : "or the com-
plaint is unsigned,".
On page 20, line 26, change the word "public." to "public;"
On page 21, line 1, insert the following new subparagraph :
"(4) no unsigned complaints shall be placed in the public document
room."
On page 22, line 9, delete the word "and" and substitute the word
"or".
On page 23, line 25, following the words "discovery of", insert the
following words : "consumer fraud or".
On page 24, line 10, delete the words "that (A)" and substitute the
word "that,".
On page 24, line 14, after the word "average", insert the word
"annual".
On page 24, lines 17, 18, and 19, delete the following words: "loss),
and (B) has had over the preceding two years an average number of
full time employees not in excess of twenty-five." and substitute the
word "loss).".
On page 28, line 14, after the words "SFc. 11. (a) ", strike the remain-
der of the paragraph and insert the following : "Except as provided in
this section, section 552 of title 5, United States Code, shall govern the
release of information by any officer or employee of the Agency."
On pages 28 and 29, strike all of paragraph (1).
On page 29, line 3, strike "(2) ", and insert "(b) No officer or em-
ployee of the Agency shall disclose to the public or to any State or
local agency".
On page 29, line 14, strike "(b) ", and insert "(c) ".
On page 29, line 15, after the word "information" insert "by the
Administrator".
On page 30, line 1, change "11(a) (2) " to "11(b) ".
On page 31, line 1, strike " (c) " and insert "(d) ".
On page 31, line 6, change "(a) (2)"to"(b) ".
On page 36, lines 20, through 22, delete the following words : "to
any agency action in the Federal Communications Commission with
respect to the renewal of any radio or television broadcasting licensee,".
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On page 39, after line 2, insert the following new subparagravh :
"(5) For the purpose of this section, the term `small business shall
have the same meaning as provided in section 10 (a) (4) of this Act."
On page 39, line 8, strike the word "Act" and insert the following :
"Act, except Section 24,".
On page 44, after line 11, insert the section 24 entitled "Cost and
Benefit Assessment Statements".
On page 51, line 24, redesignate section "24" as "25".
On page 51, line 24, delete the word "Act" and insert "Act, other
than section 24 of this Act,".
On page 52, line 11, redesignate section "25" as "26".
PURPOSE
The purpose of this bill is to protect the interests of consumers and
to promote consumer protection in the United States.
To achieve this purpose, the bill creates an' independent Agency for
Consumer Advocacy (ACA) to represent and advocate the interests
of consumers before other Federal agencies and Federal courts. The
Agency for Consumer Advocacy will also receive and transmit com-
plaints from consumers, and develop and disseminate information con-
cerning interests of consumers.
One of the most important reasons for the failure of Federal pro-
grams to provide full protection to consumers has been the absence of
qualified and vigorous representation of the consumer interest before
the agencies which conduct and plan programs affecting consumers.
The ACA is designed to remedy this by guaranteeing that the inter-
ests of consumers will be represented before federal agencies and
courts.
The Agency for Consumer Advocacy will function as an advocate
and spokesman for consumer interests. It will have no authority to di-
rectly regulate activities affecting the interests of consumers. Nor may
it dictate in any way how other Federal agencies act on matters of in-
terest of consumers.
13ACKGROUND
The concepts embodied in this bill have been developed in the course
of hearings and legislative proposals for more than a decade. The bill
represents a synthesis of the best and most practical ideas put forward
during that period.
In 1961, Senator Estes Kefauver introduced a bill (S. 1688) to es-
tablish a Department of Consumers to represent the economic inter-
ests of consumers. In 1965, Representative Benjamin Rosenthal intro-
duced a bill (H.R. 7179) to create a Cabinet level Department of Con-
sumer Affairs. The House Subcommittee on Executive and Legislative
Reorganization held hearings on this proposal, during which various
approaches to improve consumer protection were explored. Hearings
on consumer protection, during this formative stage, were also held by
the House Subcommittee on Intergovernmental Relations, and the
House Government Operations Committee. (See House Reports 87-
141, 88-445, 88-921, 90-1851, and 91-733).
In March 1969, the Senate Subcommittee on Executive Reorganiza-
tion commenced hearings on S. 860, a bill introduced by Senator Gay-
lord Nelson to establish a Department of Consumer Affairs. This
Cabinet level department would have been both an advocate for con-
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sumer interests before courts and agencies and a regulator of activities
effecting the interests of consumers.
Most of the witnesses who appeared before the Subcommittee were
opposed to the creation of a Department of Consumer Affairs. Dr.
James Goddard, former Commissioner of the Food and Drug Admin-
istration, told the Subcommittee :
I do not believe that the rearrangement of boxes on a table
of organization will automatically rearrange the administra-
tive, scientific, or judgmental sets * * * if the proposed De-
partment of Consumer Affairs were established, it would ab-
sorb a number of less-than-effective programs carried out by
less-than-committed employees.
Following the hearings, a number of new consumer protection bills
were introduced, reflecting a refinement of the proposal which had
been discussed at the hearings. Senator Joseph Montoya introduced
S. 3165, a bill to create an independent Bureau of Consumer Protec-
tion in the executive branch. Senator Charles Percy introduced
S. 3097, which would have established an Office of Consumer Affairs in
the Executive Office of the President and authorized the director of
the Office to advocate the interests of consumers before other Federal
departments and agencies.
Senator Jacob Javits, on behalf of the Administration, introduced
S. 3240 to establish both an Office of Consumer Affairs in the Exec-
utive Office of the President, and a Consumer Protection Division in
the Department of Justice.
The Subcommittee on Executive Reorganization held hearings on
these proposals in January and February 1970.
On October 12, 1970, the Committee on Government operations
reported a clean bill, S. 4459, incorporating a number of ideas from
previous proposals. The Committee decided that the advocacy func-
tions on behalf of the interests of consumers should be placed in an
independent agency.
S. 4459 reflected not only the ideas in the proposed legislation before
the Committee, but also many concepts from other legislation. Senator
Lee Metcalf's Utility Consumer bill (S. 2959) and Senator Edward
Kennedy's Public Counsel Corporation bill (S. 343.1) both incorpo-
rated the idea of an independent advocate for the interests of con-
sumers. The coordination function given the Office of Consumer
Affairs derived not only from the bills introduced by Senators Percy,
Nelson and Javits, but also from a bill introduced by Senators Birch
Bayh and Joseph Tydings (S. 2045) to establish a permanent Office
of Consumer Affairs.
In addition, S. 4459, is reported by the Committee on Government
Operations, created a program of grants to aid State and local con-
sumer protection programs. This concept originated with S. 861 intro-
duced by Senator Javits.
After the Committee on Government Operations reported the bill,
it was referred to the Committee on Commerce where a number of
amendments were added which strengthened the bill. The Commerce
Committee reported the bill on November 25, 1970 (see Senate Report
91-1365). On December 1, 1970, the Senate passed S. 4459 by a vote
of 74-4.
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During the 91st Congress, a similar bill, H.R. 18214, introduced
by Representative Rosenthal was reported by the House Government
Operations Committee by a vote of 31-4. In the Rules Committee,
however, the bill failed by a tie vote to obtain. a rule to permit floor
consideration.
In the 92nd Congress, Representatives Holified, Dwyer, Rosenthal,
and other members of the Committee on Government Operations intro-
duced identical bills, H.R. 14, 15, and 16 similar to the legislation
reported by that Committee in the previous Congress. After hearings
and executive consideration, the Subcommittee on Legislation and
Military Operations reported a clean bill, H.R. 10835. The bill was
reported on September 30, 1971. On October 14, 1971, the House passed
it by a vote of 344-44.
Similarly, in the 92nd Congress, the Subcommittee on Executive
Reorganization and Government Research held hearings on S. 1177
co-sponsored by Senators Ribicoff, Javits, and Percy. On August 17,
1972, the Committee on Government Operations ordered reported S.
3970, a clean bill. S. 3970 was reported on September 8, 1972 (see
Senate Report, 92-1100), and debated during September, 1972. Three
motions to invoke cloture failed and the legislation was not again
considered in the 92nd Congress.
In the 93rd Congress, Senators Ribicoff, Javits, Percy, Magnuson,
Moss, and Cook introduced S. 707 on February 1, 1973. Senators
Allen, Bennett, Helms, Sparkman, Talmadge and Thurmond intro-
duced S. 1160 on March 8, 1973. Joint hearings before the Subcom-
mittee on Reorganization, Research and International Organizations
of the Committee on Government operations, and the Subcommittee
on Consumers of the Committee on Commerce, took place on March 21,
22, 27, 28, April 5 and June 28, 1973.
On March 28, 1974, the Subcommittee on Reorganization, Research,
and International Organizations ordered reported to the full Com-
mittee on Government Operations, S. 707, with an amendment in the
nature of a substitute. The bill so reported deleted or modified a num-
ber of the major provisions contained in S. 707 as originally
introduced.
On April 2, 9 and 10, 1974, the Committee on Commerce considered
S. 707 in executive session and ordered S. 707 reported with an amend-
ment in the nature of a substitute.
The full Committee on Government Operations considered S. 707
in open session on May 16, 1974, and ordered S. 707 reported with
amendments on May 16, 1974. S. 707 as reported by the full Committee
was identical in most respects to the bill approved by the Reorganiza-
tion Subcommittee and by the Commerce Committee.
S. 707 was reported on May 28, 1974 (See Senate Report, 93-883)
and debated during July, August and September, 1974. Four motions
to invoke cloture failed-fourth motion on a vote of 64 to 34-and the
legislation was not again considered in the 93rd Congress.
In the 94th Congress, Senator Ribicoff introduced S. 200 on January
17, 1975, for himself and 38 co-sponsors. (Since introduction, four
additional co-sponsors have been added). Hearings before the Com-
mittee on Government Operations took place on February 20 and 24
and March 6, 1975.
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On March 10 and 12,1975, the Committee on Government Operations
considered S. 200 in executive session and ordered S. 200 reported with
amendments.
S. 200 does differ in a number of significant respects from S. 707
as introduced on February 1, 1973. The amendments made in the bill
since 1973 reflect many of the suggestions for changes that have been
made in connection with this legislation. A brief summary of the
differences between the present legislation and S. 707 is provided
below :
MAJOR DIFFERENCES BETWEEN S. 707 AS INTRODUCED AND S. 200 AS
REPORTED BY TIIF. COMMITTEE.
(1) Consumer Council
S. 707, provided for a Council of Consumer advisors, in the
Executive Office of the President, to set priorities on consumer
matters and review impact of Federal programs.
S. 200 deletes the Council entirely.
(2) State and local proceedings
S. 707 authorized the consumer agency to intervene or par-
ticipate in State or local agency or court proceedings, on request
of State officials or the State or local agency or court.
S. 200 denies ACA such authority, but specifically empowers
the _ICA to communicate with, provide information to, or pro-
vide assistance requested by any Federal, State or local agency
or court.
(3) Grant Program
S. 707 authorized grants to State and local public agencies to
promote consumer interests and education. It provided for $20
million in the first fiscal year and $40 million in the second fiscal
year after enactment.
S. 200 contains no grant program.
W) Name of agency
S. 707 designated Consumer Protection Agency (CPA) as
name of the Agency.
S. 200 designates Agency for Consumer Advocacy (ACA) as
name of the Agency.
(5) Budget By-Pass
S. 7107 provided that the Administrator's proposed budget esti-
mates, and recommendations or testimony on legislation be sub-
mitted to Congress at the same time they are submitted to Office
of Managament and Budget.
S. 200 deletes this provision.
(6) Informal proceedings
S. 707 provided that the Administrator of the Consumer Pro-
tection Agency could "as of right participate" in informal agency
proceedings which substantially affect consumers. It was under-
stood that the participation would be equal to that of others.
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S. 200 does not require agencies to allow ACA to participate in
their informal proceedings simultaneously or equally with others.
ACA may present "written and oral submissions", and Federal
agencies must give "full consideration" to such ACA submissions.
(7) Subpoenas
S. 707 required the Federal host agency to issue subpoenas under
its authority where the consumer agency was intervening or par-
ticipating in an agency proceeding or activity.
S. 200 limits host agency issuance of subpoenas requested by
ACA to agency proceedings.
(8) Judicial review
S. 707 allowed consumer agency, where it did not participate
below, to seek judicial review unless the court determined it would
be detrimental to the interests of justice. S. 707 also required the
Administrator to petition the agency for reconsideration prior to
seeking judicial review of an agency decision whenever the Fed-
eral agency's laws required such petition, and the Administrator
had not participated at the agency level.
S. 200 requires the court to make a determination as to whether
or not the ACA's institution of a proceeding in court would im-
pede the interests of justice. When initiating such appeal the Ad-
ministrator must state his reasons for not participating at the
agency level. S. 200 also requires the Administrator to petition the
agency for reconsideration before initiating an appeal whenever
such a petition is authorized by agency laws and the Adminis-
trator had not participated in the proceeding at the agency level.
(9) Interrogatories-small business
S. 707 contained no exemption from the interrogatory section
for small businesses.
S. 200 exempts from the interrogatory section, except in the case
of an imminent and substantial danger to health or safety, any
business with assets under $71/2 million, net worth under $21/2 mil-
lion, and average annual net income under $250,000.
(10) Access to agency records
S. 707 allowed the consumer agency full access to Federal
agency records, with exceptions only for national security infor-
mation, policy recommendations, and administrative and person-
nel records.
S. 200 imposes much more stringent limitations on ACA access.
In addition to the original protections, it prohibits ACA from
obtaining trade secrets which an agency could obtain only by
agreeing to keep them confidential. It prohibits ACA from obtain-
ing prosecutorial recommendations from law enforcement agen-
cies. It prohibits ACA access to bank examination reports to the
same extent other agencies are denied access to such information.
And it prohibits ACA access to information which would disclose
the financial condition of individuals who are customers of finan-
cial institutions.
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(11) Farmers
S. 707 did not include farmers within the definition of con-
sumers.
S. 200 redefines consumers to include farmers, and specifically
directs the Administrator to promote the interests of farmers "in
obtaining a full supply of goods and services at a. fair and equit-
able price". It also contains a provision requiring the Adminis-
trator to consider the interests of both farmers and consumers
before intervening in any Department of Agriculture proceeding.
(12) Protection for Small Business
S. 707 contained no special protection for small business.
S. 200 requires ACA to take the views of small business into
account in setting ACA's priorities, and requires ACA to solicit
advice from small business before promulgating any rules or
regulations under the Act.
(13) Exemptions
S. 707 contained no explicit. provision barring the consumer
agency from participating in labor-management relations cases
before the NLRB, although accompanying committee report
stated such cases would be exempt.
S. 200 adopts the labor-management exemption contained in
the bill passed by the House in 1974.
(14) GAO Review
S. 707 contained no provision for GAO review.
S. 200 requires GAO to review all of ACA's activities, and
provide a full report to Congress within three years of the date
of enactment, with an evaluation of ACA's effectiveness and
recommendations for any modifying legislation.
(15) Consumer Complaints
S. 707 permitted the ACA to place anonymous complaints in
the public document room but allowed the withholding of such
complaints if the Administrator determines that the complaint is
frivilous, or that publication is detrimental to the complainant or
that for good cause the complaint should be withheld.
S. 200 provides that no unsigned complaint shall be placed in
the public document room.
(16) Limitations on Disclosures
S. 707 prohibited the ACA from publicly disclosing any trade
secret or other confidential commercial or financial information
obtained from a person unless disclosure is necessary to protect
health or safety.
S. 200 puts the ACA in the same position as any other govern-
ment agency, in this respect, by making the provisions of the
Freedom of Information Act applicable to the ACA. Under the
Freedom of Information Act, the ACA may withhold such
information from the public.
(17) Cost and Benefit Assessment Statements
S. 707 contained no provision for the preparation of cost and
benefit assessment statements by Federal agencies.
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S. 200 provides for the preparation of cost and benefit assess-
ment statements by Federal agencies issuing rules or proposing
legislation which have a substantial economic impact.
Agencies of the Federal Government makes decisions every day
which have a direct impact on consumers. These decisions are reached
under statutes which require the decisionmaker to act in the best inter-
est of the public, including the over 210,000,000 Americans who are
consumers. Yet in many cases, Government agencies now act without
even directly hearing from consumer representatives. This legislation
will help Federal agencies better meet their present statutory respon-
sibilities by assuring that before such agencies act, they will be
familiar with the views and interests of the consumer.
Despite the importance to the country's welfare that the Federal
Government protect the interests of consumers, committees of Con-
gress, the General Accounting Office and other Federal agencies,
special commissions, consumer organizations, responsible business
organizations, and newspapers are continually documenting the fail-
ure of Federal programs to adequately consider the interests of
consumers. The Committee is convinced, on the basis of numerous
hearings it has held over the last 5 years, that a chief reason for this
failure is the present lack of effective representation of consumer
interests before Federal agencies. The major factor responsible for the
absense of effective consumer representation is the unique nature of
such interests.
Consumers are usually poorly organized, underfunded, and ill-
equipped to present an effective case before Federal agencies. Fre-
quently, consumers never even learn until it is too late about decisions
the Federal Government is proposing to take affecting consumers.
Those who are informed and who do feel strongly about any particular
consumer interest all too often feel powerless when they consider the
difficulty of organizing into an effective group, like-minded citizens
scattered across the whole country. Even if consumers succeed in mak-
ing their views known in one case, there are thousands of other matters
affecting consumers which must at the same time be ignored.
On the other hand, effective representation by business interests
in matters affecting consumers is virtually assured since the same
decision that may make only 2 cents or 3 cents difference to a
consumer, may determine whether a business or an entire industry is
able to increase its profits. Business interests can thus concentrate
on the few matters affecting consumers which are of direct concern
to them. In these cases they are financially able and ready to undergo
great expense to assure that their views are' heard.
The imbalance between consumer and business representation be-
fore Federal agencies is chiefly responsible for the failure of the Fed-
eral Government to consider adequately the interests of consumers.
Federal agencies are confronted with the difficult task of balancing
a number of different interests. Often, as well, they take action in
areas where decisions must rest on a great deal of detailed and highly
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technical information. In the absence of participation by other in-
formed parties, the agencies thus become dependent on the industries
themselves to provide and interpret the necessary information and
proposals for action. Understandably, such agencies find it difficult
to reach a decision in the best interests of the entire public when they
thus hear from only one or two sides of a many faceted problem. No
decisionmaker, no matter how honest and competent, can be expected
to take full and accurate acccount of interests if their views are not
presented in an effective manner.
The ACA in no way overlaps with the consumer offices or bureaus
presently located in Federal agencies. The ACA will possess a unique
set of authorities to protect consumer interests which these other
offices lack. Furthermore, because it will be acting as an independent
agency, the ACA will be in a better position to promote consumer
interests than offices that are part of other Federal agencies with
decisionmaking authority. In the annual report AC1 will submit to
Congress, the Administrator should assess the effectiveness of the
other offices with responsibilities in the consumer area, and. make
recommendations for any further legislation that appears necessary.
DESCRIPTION OF TILE LEGISLATION
The Committee has concluded that there is only one effective way
to remedy the inevitable imbalance between representation of busi-
ness and consumer interests. To assure an effective voice for con-
sumers in the regulatory process, it is necessary to create a consumer
advocate authorized to speak on behalf of the consumer.
The solution proposed by this legislation avoids creating yet an-
other large Government agency with authority to issue its own rules
or regulations, or to have any other power to regulate commerce in
order to directly protect the interests of consumers. The Commit-
tee believes that the solution to the problem does not lie in expanding
yet further the size and budgets of existing agencies. No matter how
big it becomes, or how much money it spends, no single Federal
agency can be expected to act adequately as both a decisionmaker and
as a critic of its own decisions.
This Act seeks to avoid creating further large bureaucracies, or ex-
panding present ones, by assuring that there will be in the Federal
Government a relatively small number of professionals who can, on a
case by case basis, provide Federal agencies with information and data
on behalf of the consumer which the Federal agency needs to make a
fully-informed decision. This legislation thus rests on the traditional
belief in this country that the way to assure as fair a decision as pos-
sible is to let advocates for the different sides make the best argu-
ments each can. It will be up to the regulatory agency or other decision-
maker, not the ACA, to decide from among the arguments made
where the best solution to the problem lies.
The Committee thus wishes to emphasize strongly that the Agency
for Consumer Advocacy will have no regulatory or decisionmaking
authority. The legislation neither grants to the ACA any regulatory
authority taken from any existing authority, nor changes any of the
substantive law which regulatory agencies now apply. The new agency
will have no authority to overrule on its own the decision of any other
agencies.
In order to effectively r re t consumer interests the get rovides
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the Administrator of the. ACA with the authority to participate in
both formal and informal proceedings of other Federal agencies.
When the ACA intervenes as a party in formal agency proceedings, it
will enjoy the same rights, and suffer the same restraints, as any other
party in the proceedings.
Many agency decisions, however, are not made in formal proceed-
ings. One expert on administrative law has in fact estimated that as
much as 90 percent of the Government's work is conducted outside
the boundaries of the Administrative Procedure Act. In some in-
stances, the most important agency decisions insofar as consumers are
concerned may involve decisions not to investigate or take other action.
The act therefore also gives the Administrator the right to participate
by submitting written or oral views, and other relevant material, to the
agency considering in an informal proceeding a matter affecting con-
sumers. Participation by ACA in informal proceedings parallels the
opportunity private persons now have to consult informally with
agency officials about matters affecting them.
To make ACA's role as an advocate complete, the act also gives the
ACA the right, like any other person aggrieved by a final agency
action, to seek judicial review of agency decisions. Similarly, it per-
mits the ACA to intervene in suits already brought involving agency
proceedings affecting consumers. When both a Federal agency and
private persons present arguments before a court which do not ade-
quately consider the rights of consumers, the ACA will be able to argue
for the consumer.
Apart from its responsibility to represent the interests of consumers,
the Agency for Consumer Advocacy will also act as a clearinghouse for
complaints individual consumers have against business enterprises.
Again, the ACA will have no authority to force business to take any
action in response to such complaints. Rather, the ACA will only make
sure that the appropriate Federal and State agencies with authority
to take any necessary action, and the business enterprise complained
about, know about the complaint.
Finally, the ACA will have authority to collect and disseminate pub-
licly information of interest to consumers.
To assure that the ACA will have the information it needs, the Act
gives the Agency access to certain data held by other agencies. If it
cannot obtain the information from other agencies or public sources,
the ACA. may also solicit directly from private parties answers to
specific questions. Detailed safeguards are established to assure that
the confidentiality of any information is guarded, and that in all re-
spects ACA is not able to act in a way that injuries the rights of busi-
nesses or other private persons. Small businesses are exempted from
compulsory disclosure of information except in the case of imminent
and substantial danger to consumer health or safety. The ACA will
thus have a variety of means, other than actually participating in
agency or court proceedings to promote the interests of consumers. It
is the Committee's intent that the ACA will rely on these alternative
means whenever possible.
The act provides that the Administrator shall be appointed for a
specific term of years. The Committee include this provision because
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the unique status of the ACA as an advocate for consumers before
other Federal agencies requires that it be independent. Otherwise, the
Agency's status as an advocate for consumers could be sacrificed by a
desire on the part of the executive branch to promote policies that do
not adequately consider the interests of consumers. Similarly, the entire
executive branch should not have to be associated with views of the
ACA with which it may not agree.
Since the Agency will have no responsibility for establishing govern-
ment policies, there is no countervailing need to make the Admin-
istrator subject to the same direct supervision and control as policy-
making officials.
It is evident that the Federal government makes every day a large
number of decisions that substantially affect the interests of consum-
ers. Because of its limited resources, the ACA will not be able to
represent the interests of consumers in every case.
In most instances, such as in an FTC ,false or misleading adver-
tising case, the consumer interest is clear and unitary. However, the
Committee also recognizes that on occasion there may be more than
one possible consumer interest involved in proceedings in which the
ACA participates. Where these interests are not conflicting, the ACA
will be able, if it wishes, to represent all such interests at the same
time. If a conflict does arise, the ACA may be able to propose a solu-
tion which reconciles the differing consumer interests; or, one consumer
interest may already be represented by another party, thereby per-
mitting the ACA to concentrate on the important consumer interest
that is being ignored. It may happen that an instance might arise in
which none of these solutions will be available to the Agency. In such
circumstances, the ACA may conclude that the best way to advance
consumer interests is to assure that the decisionmaker is aware of all
the important, conflicting consumer interests without advocating that
any one of the interests be favored at the expense of the others.
The Committee does not believe that the large number, diversity,
and occasionally conflicting nature of consumer interests present a
serious problem. Rather, this fact guarantees that the ACA will set
its priorities for action with extreme care so as to make best use of
its limited resources.
This act is not intended in any way to replace the role now played
by other consumer representatives. Because the yearly number of
agency proceedings affecting interests of consumers is many times
what ACA, with its limited resources, could possibly participate in,
other consumer representatives both in and out of government will
still have a very important role to play. One long-range purpose of
this legislation is, in fact, to encourage consumers to represent their
own interests before Government agencies, so that the ACA's role
may be kept to a minimum.
Finally, it is important to emphasize that this act is intended as
a "pro good business" as well as "pro consumer" bill. As the interests
of consumers are more fully articulated, it is hoped that it will become
apparent to all businesses that the interests of consumers and busi-
ness need not be inimical to each other. By helping to eliminate the
few examples of bad business practices wherever they occur, and by
helping to educate and inform the consumer, the ACA will also help
the great majority of honest businesses in any industry which sell good,
dependable products and services. The Act should promote business by
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giving the consumer confidence to rely on the products and services
he buys and the sellers he does business with.
In many cases ACA may actively support the same position as one
of the various business interests which are parties to an agency pro-
ceeding. For instance, it may join with industry representatives in
opposing an ICC route change for trucks which could increase the
price of consumer goods. The door of the ACA will always be open to
representatives of business, as well as consumers, who wish to make
their views known to the Agency. The bill specifically refers to the
importance of the ACA taking the views of small businesses into
account.
CONCLUSION
When the Federal Government acts without adequately consider-
ing the interests of consumers, the welfare of the whole country suffers,
for such decisions directly affect the prosperity, the safety, and the
health of the entire country. When a plane crashes because of defective
equipment which a Federal agency knew about, but failed to order re-
placed, the entire country pays a terrible price in the number of lives
lost. When the Justice Department improperly exempts two or more
companies from the antitrust laws, competition is weakened, prices
rise, and the whole economy suffers.
Representation of an interest so vital to the public welfare as that of
the consumer is too important to be left to chance, or to Federal agen-
cies whose chief area of responsibilities and chief contacts are not
with consumers, but with business interests.
The ACA represents a positive step forward righting this imbalance
at a fraction of the cost already spent by Federal agencies on the
regulation or promotion of business interests. There should be no con-
cern that the ACA could create an undue bias in Government agencies
in favor of consumers, or that the agency will hamper the ability of
the Federal Government to operate effectively.
The only power the Agency will have will be derived from the
strength and validity of the arguments it advances on behalf of the
consumer. Its actions will be governed by legal rules and precedents
developed over inany years to protect the interests of all parties and to
assure the smooth functioning of Government.
This country has traditionally relied on the adversary system to
produce governmental and judicial decisions that are as fair, and as
consistent with the public interest, as possible. This act does no more
than to make this adversary process more complete by including in it
representatives of interests heretofore largely neglected.
SECTION-BY-SECTION ANALYSIS
SECTION 1. SHORT TITLE
This section provides that the Act may be cited as the "Consumer
Protection Act of 1975".
SECTION 2. STATEMENT OF FINDINGS AND PURPOSES
The Congress finds that the interests of the American consumer are
inadequately represented and protected within the Federal Govern-
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ment, and that such representation and protection are essential to the
fair and efficient functioning of a free-market economy. As a result of
this lack of effective representation before Federal agencies and courts,
consumers suffer personal injury, economic harm, and other adverse
consequences.
The Congress declares that an ACA could help the Federal agen-
cies in the exercise of their statutory responsibilities in a manner con-
sistent with the public interest by protecting and promoting the inter-
ests of American consumers. To this end, it is the purpose of the ACA
to represent the interests of consumers before Federal agencies and
courts, receive and transmit consumer complaints, develop and dis-
seminate information of interest to consumers, and perform other
functions to protect and promote the interests of consumers.
The authority granted to the Agency for Consumer Advocacy is
not to be construed to supersede, supplant, or replace the jurisdiction,
functions, or powers of any other agency to discharge its own statutory
responsibilities according to law.
Specifically, the purpose of the Act is to promote protection of con-
sumers with respect to the safety, quality, purity, potency, healthful-
ness, durability, performance, reparability, effectiveness, dependabil-
ity, and cost of real or personal property or tangible or intangible
goods, services, or credit.
The objectives of the Act include the preservation of consumer
choice in a competitive market, prevention of unfair or deceptive
trade practices, maintenance of truthful and fair advertising, promo-
tion, and sales practices by a producer, distributor, lender, retailer, or
other supplier of property, goods, services and credit. The Act is also
designed to promote the protection of consumers through encouraging
the furnishing of full, adequate, and clear instructions, warnings, and
other information by suppliers concerning their property, goods, serv-
ices and credit offered or sold, and through encouraging the protection
of the legal rights and remedies of consumers.
In all cases, the purpose of the Act is to be carried out through ad-
vocacy before Federal agencies and Federal courts, and through
developing and providing the public with information of interest to
it. In no way does the Act grant power to the Agency for Consumer
Advocacy to regulate commerce.
The Congress also finds that some regulations have been adopted
and some legislation has been enacted by the Federal Government
without the applicable Federal agency securing, prior to adoption
or enactment, available information regarding the estimated costs
and benefits of such regulations or statutes. Such regulations and leg-
islation by failing to provide benefits which are commensurate with
costs, may be a factor in the economic problems of the United States.
Because of this, the purpose of section 24 of this Act is to establish a
means for estimating, in advance, the costs and benefits of Federal
legislation or regulations which have a substantial economic impact,
in order to determine which programs entail unreasonable or exces-
sive costs. This finding and purpose relate only to section 24 of the
Act and in no way affect the jurisdiction or mandate of the Agency for
Consumer Advocacy.
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As stated in section 2 (b) (4) of the Act, it is the intent of the Com-
mittee that Federal. Agencies be required to prepare a cost and bene-
fit assessment "in order to determine which government programs
entail unreasonable or excessive costs." It is expected that the cost and
benefit assessments prepared pursuant to section 24 will assist the
agency in its consideration of a proposed rule or proposed legislation.
This section establishes the Agency for Consumer Advocacy as an
independent agency of the United States within the executive branch.
The term "independent" reflects the belief that the agency shall be inde-
pendent of the remaining agencies in the Executive branch as must
indeed be the case. ACA could not be an effective advocate if it were
subject to direction by other offices in the Executive Branch.
The term "non-regulatory," which was used to describe the agency
in S. 707, to distino'uish the ACA from the regulatory agencies, has
been deleted from . 200. The deletion is purely technical, and does
not represent any change in intent by the Committee. The act specifi-
cally states in Section 24b) (2) that the authority granted the ACA
under this act shall not `supersede, supplant, or replace the jurisdic-
tion, functions, or powers of any other agency to discharge its own
statutory responsibilities according to the law.'
With respect to the name of the new agency, which was "Consumer
Protection Agency" in S. 707, some concern has been expressed by
certified public accounts over the possible confusion if the agency were
designated by the acronym CPA. To avoid such confusion, the name
of the agency in S. 200 has been changed to "Agency for Consumer
Advocacy.",
The agency is to be headed by an Administrator, appointed by the
President, by and with the advice and consent of the Senate, for a
term coterminous with the President, but not more than four years.
The Administrator may be reappointed. The appointee is to be an indi-
vidual who, by reason of his training, experience, and attainments, is
especially qualified to represent the interests of the consumers inde-
pendent of any business or consumer interest group in the private
sector, and independent of other executive branch agencies.
The establishment of a term. coterminous with the term of the Pres-
ident provides a new chief executive with the prerogative of filling
the position with an individual of his own preference. If the Admin-
istrator leaves office for any reason before the expiration of his term,
the President may nominate a person to be Administrator only for
the unexpired portion of the previous Administrator's term. Upon
completion of his term of office, an Administrator may continue to
serve as Administrator until the Senate has given its advice and con-
sent to the nomination of his successor, although it is the Committee's
intent that an Administrator will serve no more than 30 to 60 days
after the expiration of his term without being either replaced or re-
appointed, consistent with the provisions of 5 U.S.C. ? 345-348.
A Deputy Administrator appointed by the President by and with the
advice and consent of the Senate, shall perform such functions, powers
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and duties as may be prescribed by the Administrator and shall act
for him during his absence.
The Administrator may be removed only for inefficiency, neglect of
duty, or malfeasance in office. Since the ACA is an independent agency
and the Administrator is appointed for a term of years, this would
likely be the case in any event. So as to leave no doubt on this point,
however, the language is explicit. This provision should further help
to insulate the Administrator from political influence of any kind
whatsoever.
Section 3(b) prohibits any officer or employee of the Agency for
Consumer Advocacy from having any conflict of interest while serv-
ing in his official position.
This subsection bars an ACA employee from engaging in "other
interests, inconsistent with his official responsibilities." The definition
of "interest of consumers" in section 14(11) sets the bounds of ACA's
jurisdiction and authority, and the prohibition of section 3(b) should
be read in conjunction with this definition. Other Federal statutes
establishing conflict of interest law for Federal employees, such as 18
U.S.C. 208, shall govern the Agencys' responsibility under this section.
Such provisions will permit the Administrator to publicy waive the
conflict of interest laws under certain specified conditions.
It is envisioned that the Administrator will establish conflict of in-
terest regulations which clearly delineate the limitations on an em-
ployee's outside business activities or employment. Such regulations
will ensure that no individual is employed by the ACA if his back-
ground, experience, and interests are inconsistent with the public
interest.
Section 3 (c) provides for the appointment of a general counsel by
the Administrator to serve as the chief legal officer of the Agency for
Consumer Advocacy.
Section 3(d) authorizes the Administrator to appoint as many as
5 assistant administrators who shall have such responsibilities as the
Administrator designates.
SECTION 4. POWERS AND DUTIES OF THE ADMINISTRATOR
Section 4(a) states that the Administrator is responsible for the
exercise of the powers and the discharge of the duties of the Agency.
Section 4(b) states that in addition to any other authority conferred
upon him by this Act, the Administrator is given the following custo-
mary administrative powers and responsibilities conferred upon Fed-
eral agency heads : appointing and supervising of personnel, including
experts and consultants, in accordance with the Civil Service and ad-
ministrative expense laws; appointing of members of advisory com-
mittees; promulgating rules necessary to carry out his functions;
utilizing, with their consent, the services or personnel or facilities of
other Federal, State, regional, local and private agencies; entering
into contracts; accepting voluntary services; adopting an official seal;
establishing necessary regional offices; conducting conferences and
hearings; accepting unconditional gifts or donations; designating
representatives to serve or assist on appropriate committees ; and per-
forming other administrative activities which are necessary for effec-
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tive fulfillment of the Administrator's duties and functions under the
Act.
Section 4(c) states that Federal agencies, upon request of the Ad-
ministrator, are to provide the ACA services and other support to the
greatest extent practicable.
Section 4(d) requires the Administrator to submit an annual report
simultaneously to the Congress and the President. This report is to be
submitted directly by the Administrator without prior clearance or
review by any other agency. In addition to reviewing the ACA activ-
ities, the report will cover major Federal administrative and court
actions affecting the interests of consumers, and the assistance given
to the ACA by other Federal agencies, in carrying out its statutory
mission. It will also address the. performance of Federal agencies and
the adequacy of their resources in enforcing consumer protection laws
and in otherwise protecting the interests of consumers.
The report will also indicate the present level of funding of the
ACA, the distribution of appropriated funds for the current fiscal
year, an estimate of the amount needed by the Agency for the next
three fiscal years, including a description of the estimated agency
appropriation request for the next year, and evaluation of the extent
of participation by consumers, and the effectiveness of representation
of consumers before Federal agencies. The report will also include
suggestions for additional alternative programs and authority.
The purpose of this annual report is to provide Congress, on a
yearly basis, with a detailed document which will facilitate Congres-
sional oversight of the Consumer Protection Act. It is expected that
the report will include whatever information is necessary for the
President and Congress to evaluate comprehensively, the effect of the
Federal Government's policies on the interests of consumers. It will
discuss not only how well existing programs are functioning, but also
what resources will be necessary for them to function better.
SECTION 5. FUNCTIONS OF THE AGENCY
Section 5 (a) states that the ACA shall advise the Congress and the
President on matters affecting the interests of consumers; and shall
protect and promote the interests of the people of the United States
as consumers of goods and services made available to them through
trade and commerce. In order to carry out the mandate of the Agency,
the Administrator is assigned the principle functions of the Agency.
Section 5 (b) describes the principal functions of the Administrator.
- Paragraphs 1 thru 6 refer to the following specific functions author-
ized in other sections and described in detail elsewhere in this report :
(1) represent the interests of consumers before Federal agen-
cies and Federal courts;
(2) conduct and support research, studies, and testing;
(3) submit annual recommendations to the Congress and the
President on measures to improve the Federal Government pro-
tection. and promotion of consumer interests;
(4) obtain information and publish and distribute materials
to inform consumers of matters of interest to them ;
(5) receive and transmit complaints from consumers;
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(6) conduct conferences, and investigations including economic
surveys, concerning the needs, interests, and problems of
consumers.
Paragraph (7) directs the Administrator to cooperate with State
and local governments and encourage private enterprise in the promo-
tion and protection of the interests of consumers. While, under sec-
tion 6(g), the Administrator is specifically prohibited from formally
intervening in State or local agency or court proceedings, it is the in-
tention of the Committee that the Agency assist in the promotion of
the interests of consumers at the State and local levels to the extent
that budgetary priorities allow. As will be discussed, section 6(h)
specifically empowers the agency to provide such assistance;
Paragraph (7) also requires the Administrator to encourage private
enterprise in the protection of consumers. American business can play
an important role in improving consumer protection in this country,
and many businesses are already doing so. This provision emphasizes
that the goals of the ACA will be entirely consistent with the inter-
ests of the vast majority of business interests and that the promotion
of good business is not only good for the consumer but also good for
business ;
Paragraph (8) specifies the role of Congress in functions of the
ACA. This paragraph requires the Administrator to inform the ap-
propriate committees of Congress fully and currently of the activities
of the ACA and to testify upon request or upon his own initiative
before the appropriate committees of the Congress on matters affect-
ing the interests of consumers.
This language makes clear that the Administrator has an affirma-
tive obligation to keep Congress informed of his activities and about
all matters substantially affecting the interests of consumers. The
Administrator need not await a formal invitation to testify before
Congressional committees, but he may request the opportunity to ap-
pear. In view of the ACA's need for independence, the Committee
would expect that testimony prepared or submitted by the ACA is not
subject to prior clearance or review by any other agency. The Admin-
istrator may not withhold information from individual members of
Congress.
The Committee is of the strong opinion that this provision is not a
license to lobby the Congress with appropriated funds. The ACA will
be subject to the same limitations on lobbying as other Federal agen-
cies (e.g. see 18 U.S.C. 1913 and 31 U.S.C. 15).
One of the reasons for the failures of administrative agencies to per-
form well has been the lack of Congressional involvement in over-
sight after passage of the legislation establishing the agencies. Reg-
ular consultations with the appropriate Congressional committees and
members will help both the ACA and the Congress to perform their
jobs. Appropriate committees will include not only the committees
reporting this legislation, but also the committees overseeing the per-
formance of agencies before which the Administrator is appearing.
Paragraph (9) directs the Administrator to publish a consumer
register to provide consumers with information useful to them, in-
cluding impending Federal governmental actions which may affect
the interests of consumers. This publication, written in language
readily understandable by consumers, will better enable consumers
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and consumer groups to be present and participate in hearings and
discussions on matters of interest to consumers. Publication of this
register and encouragement of participation by consumers in the
governmental decisionmaking process, is fully consistent with the
purposes of this legislation. The ACA will not be the sole advocate
of the interest of consumers. The ACA will not have the resources
to perform so large a job, nor would it be desirable to centralize
all consumer advocacy in a government agency. In this and in many
other places in this Act, the intent is to preserve and encourage private
participation by consumers in governmental processes.
Paragraph (10) directs the Administrator to encourage the adop-
tion and expansion of effective consumer education programs.
Paragraph (11) directs the Administrator to encourage the appli-
cation and use of new technology, including patents and inventions,
for the promotion and protection of the interests of consumers. This
information can be especially useful in agency and court proceedings
involving technical and scientific questions.
Paragraph (12) provides that the Administrator shall encourage
the establishment and development of informal dispute settlement
procedures involving consumers. A number of corporations and other
groups are already experimenting with methods to improve the proc-
essing and satisfaction of consumer complaints.
Paragraph (13) requires the Administrator to encourage mean-
ingful participation by consumers in the activities of the ACA.
Paragraph (14) requires the Administrator to promote the con-
sumer interests of farmers in obtaining a full supply of goods and
services at a fair and equitable price.
Paragraph (15) grants the Administrator authority to perform
such other related activities as he deems necessary in order to fulfill
his duties and functions. This provision, for example, confirms the
Administrator's authority to attend meetings of advisory committees,
consumer boards, task forces or groups associated with the Federal
Government where interests of consumers are not adequately repre-
sented.
The Administrator is granted a broad range of actions to enable
him to use his resources as judiciously as possible. In some instances
consumer education efforts might be the most effective means of
esponsibilities under the Act. In each case the Ad-
carrying out his responsibilities-
ministrator will seek means of furthering the consumer's interests in
the most efficient way possible.
SECTION 6. REPRESENTATION OF CONSUMERS
Section 6 defines the Administrator's authority to represent the in-
terests of consumers before Federal agencies and courts.
Section 6 (a) (1) states the general requirements which the Adminis-
trator must meet in order to intervene or otherwise participate in any
Federal agency proceeding or activity. The Administrator may in-
terfere or participate whenever he determines that the result of a
Federal agency proceeding or activity may substantially affect an
interest of consumers.
The Administrator is further required to comply with Federal
agency statutes and rules of procedure of general applicability govern-
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ing the timing of intervention or participation in and the conduct of a
proceeding or activity. Finally, this subsection states that the interven-
tion or participiation of the Administrator shall not affect the Federal
agencies obligation to assure procedural fairness to all participants.
Section 6 (a) (2) states the Administrator's right to intervene or par-
ticipate in so-called formal, or structured proceedings. In proceedings
subject to 5 U.S.C. 553, 554, 556, or 557, that define the procedural re-
quirements for structured agency proceedings subject to the provisions
of the Administrative Procedure Act, the Administrator is granted
authority to intervene as of right as a party or otherwise participate
for the purpose of representing the interests of consumers. This will
include adjudicative or rule-making hearings, licensing proceedings,
and similar agency activities.
This subsection extends to the Administrator the same right to par-
ticipate in any other proceeding held pursuant to the similar pro-
cedural requirements of other statutes, or pursuant to agency practice
or procedure, or which for any reason are conducted on the record after
an opportunity for an agency hearing or public comment. The phrase
"a hearing pursuant to the administrative procedural requirements of
any other statute, regulation, or practice" is designed to cover agency
proceedings which involve a hearing whose procedural requirements
are specified by a statute, regulation, or practice, but which are not
specifically subject to the Administrative Procedure Act. Such pro-
cedures may clearly have a substantial impact on consumers, and the
ACA should have the opportunity to intervene or otherwise partici-
pate. The wording of section 6(a) (2) guarantees that opportunity.
In some proceedings covered by section 6(a) (2), such as proceedings
governed by 5 U.S.C. 553 (notice and comment rulemaking), there
are no formal parties. In such cases, the Administrator will not, of
course, be able to intervene as a party, but will participate in a manner
which is appropriate to the nature of the proceeding. In other proceed-
ings where there are formal parties, such as adjudications under 5
U.S.C. 554, and some formal rulemaking on the record, the Adminis-
trator is authorized to intervene as a party. The language which allows
the Administrator to so intervene as a party means that he has the
right to intervene as a full party; a host agency may not restrict the
Administrator to intervention as a party for limited purposes if he
seeks to intervene as a full party.
Full party status in proceedings carries with it an important collec-
tion of rights, such as those listed in 5 U.S.C. 554(b), 554(c), 554(d),
555(b). 555(e), 556(b), 556(d), 556(e), and 557(c).
The resources of the Agency for Consumer Advocacy, however, can
best be employed if the Administrator uses his authority judiciously.
Ile should involve himself in proceedings only to the extent necessary
to represent the interests of consumers adequately. The Act, therefore,
requires the Administrator to participate in a proceeding in some
manner short of intervening as a party, unless he determines that his
intervention as a party is necessary to represent adequately an interest
of consumers.
This determination must be made by the Administrator on a case
by case basis. No blanket provision can adequately govern every case.
The language in section 6(a) (2) is intended to allow the Adminis-
trator full discretion to participate in any manner short of full party
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status, including participation as an atmicus curiae or participation as
a party for limited purposes, if he believes that such limited par-
ticipation is adequate to represent the interests of consumers. The
choice of the manner and extent of participation is the administrators.
No matter what manner or extent of involvement the Administrator
chooses, as noted above, section 6 (a) (1) specifically states that the host
agency retains the authority to structure its proceedings in a fair,
expeditious, and orderly manner and to require the Administrator to
present his views in accordance with agency rules. While the Federal
agency cannot exclude the Administrator from intervening or partici-
pating, except where he does not comply with the timeliness rule, it
can require that he abide by its procedural rules in doing so, including
such rules applicable to additional participation pursuant to section
21(a) of this Act. If, for example, the rules require that every party
submitting evidence be subject to cross-examination by other parties,
the Administrator may not exercise his authority to submit evidence
without becoming subject to cross-examination. If agency rules require
a party to file briefs in triplicate, the Administrator must file his
briefs in triplicate. If agency rules prohibit the introduction of here-
say evidence, the Administrator may not introduce heresay evidence.
If the Administrator seeks to intervene as a party near the end of a
proceeding, he could not require the agency to recall a witness who had
testified previously so that he could cross-examine him unless such a
procedure were within the rules governing the proceeding.
The host agency's authority over the conduct of its proceeding is not
inconsistent with the Administrator's right to intervene or participate.
A host agency could not, for example, apply a flat rule against inter-
vention by third parties or against participation of any kind of anyone
other than a party to exclude intervention or participation by the
Administrator. If such a rule existed, it would be inconsistent with the
provisions of this Act and invalid as it applied to the Act. Nor may an
agency invoke its rules governing intervention or participation in its
proceedings or other activities in an arbitrary or unreasonable manner
so as to thwart the ACA's rights under this subsection. An agency may
not promulgate an unreasonable, time limit rule aimed at arbitrarily
limiting the Administrator's intervention. Nor may an agency act un-
reasonably by invoking a timeliness rule if it has failed to respond to
a specific request by the Administrator for a notice of the applicable
proceedings pursuant to section 12.
Section 6(a) (3) describes the right of the Administrator to partic-
ipate, by written or oral submissions, in agency activities which are
informal or unstructured. It provides for the Administrator's partic-
ipation in only those agency activities or proceedings not covered by
subsection 6(a) (2). This category includes agency activities which are
not subject to the provisions of the Administrative Procedure Act, con-
tained in 5 U.S.C. 553, 554, 556, or 557, or the administrative proce-
dures of other statutes, or which are not conducted on the record after
an opportunity for an agency hearing or public comment. This cate-
gory includes informal agency processes or activities. Such activities
are characterized by an enormous diversity and often by the absence of
any structured framework comparable to the rules of a hearing on the
record.
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A substantial number of important administrative policy decisions
are made by informal action, yet often times informal action may occur
without any prior notice or participation by the general public. Im-
portant policy decisions are often made by agencies through informal
processes. Among the activities which might be described as informal
activities are the decisions by a Federal agency whether or not to
investigate a particular party or a particular subject, action of
any kind with respect to negotiation, settlement, publication, ap-
plication of informal pressure, advising, contracting, dealing, dis-
closing, planning, recommending, and supervising; also a decision riot
to undertake any of the proceedings. Such a list of activities is not
meant to be exhaustive, however. If a Federal agency activity does not
fall within the coverage of section 6 (a) (2), it is automatically covered
by section 6(a) (3).
In the overwhelming number of actions taken by Federal agencies,
ACA will not choose to take any part in informal activities. This pro-
vision is so worded to assure, however, that the ACA may participate
ing any agency activities if the Administrator believes that it involves
a matter which may substantially affect an interest of consumers, as
required by section 6 (a) (1).
The Administrator, under Subsection 6(a) (3), has the right to
participate through submission of written or oral information at all
stages of an agency activity. The fact that he has participated in the
investigatory phase of an activity does not impair his right to par-
ticipate in a later phase of the activity, such as the reaching of a
settlement, the decision to initiate formal proceedings, or even a
decision to discontinue the investigation. The fact that the Adminis-
trator may use his authority under Subsection 6(a) (3) at one stage
of an activity does not preclude him from using his authority under
Subsection 6(a) (2) at other stages of the same proceedings, and vice
versa. Many agency processes move from informal or unstructured to
formal or structured in character; some move in both directions at
different times. Thus, the Administrator will have continuous author-
ity under Subsections 6(a) (2) and 6(a) (3) to represent the interests
of consumers in an agency activity.
The provision gives the Administrator considerable flexibility in
determining how ACA should submit its views. There is no require-
ment, however, that a representative of the ACA be allowed to inject
himself into normal agency discussion with third parties. To make
this clear, Subsection 6(a) (3) specifically provides that a Federal
agency is not required to grant a representative of the ACA the right
to be present at a meeting the agency holds with another person inter-
ested in the same agency activity. The Administrator may in his discre-
tion, and subject to applicable agency rules, determine whether the
submission will be written, oral, or both.
This subsection would, under certain circumstances, permit par-
ticipation to consist of a telephone call. In other cases, the Adminis-
trator may decide he should submit a detailed written statement in
order to represent adequately the interests of consumers. In such event,
this subsection authorizes the submission of such a document.
Subsection 6(a) (3) also specifically requires that in exercising his
right to participate through written or oral submissions, the Admin-
istrator shall do so in an orderly manner and without causing undue
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delay. This provision recognizes the need of a Federal agency to per-
form its job without unreasonable delay or disruption. A Federal
agency has a legitimate interest in preserving the orderly conduct of
its process. The Administrator should not, for example, be able to
demand unreasonably lengthy delays while he prepares his arguments
in situations where prompt agency action is required. Nor should the
Administrator be able to present information in a piecemeal and
disorganized manner. While the Administrator has a right to par-
ticipate in a meaningful way at, every stage of an agency process, this
does not mean that he must continually be provided with an oppor-
tunity to comment on every statement made by every party during the
course of negotiations.
In this way the agency will continue to be able to operate informally
and, where necessary, expeditiously without fear that the rights pro-
vided the ACA under this subsection will unduly hamper its
operations.
The provision does require, however, that the ACA have a full op-
portunity to submit its views to the decisionmaking authority before
any decision is made either to take, or not take, certain action, where
the ACA determines a substantial consumer interest is at stake. The
specific requirement that the agency give full consideration to the
ACA's submission is intended to insure that the rights extended by
this subsection are meaningful. The Federal agency may not brush
aside such submissions arbitrarily, capriciously, or in a pro forma
manner. Nor is the agency's obligation to afford full consideration to
ACA's submission dependent upon the extent of participation, if any,
by other persons.
Representatives of various interests are in daily contact with do-
cisionmaking officials to assure fair treatment of their interests. This
contact is a legitimate and important source of information, both for
private, interests and for Federal agencies. In no way is it intended
that this bill would limit contact or representation of any legitimate
interests.
Section 6(c) authorizes the Administrator to appear in Federal
courts to secure judicial review, or to intervene as of right, or other-
wise participate in civil proceedings involving the review or enforce-
ment of any Federal agency action which may substantially affect
an interest of consumers. The section is applicable only to proceedings
in Federal courts. It grants the Administrator no authority to initiate,
or intervene in State court proceedings.
The subsection grants standing to the Administrator, under certain
specified conditions discussed below, either to initiate, or to intervene
or otherwise participate in, judicial review of any Federal agency
action reviewable under law which may substantially affect an interest
of consumers.
The subsection also gives the Administrator the additional right to
intervene or otherwise participate in any proceeding involving the
enforcement of agency action where such action substantially affects an
interest of consumers. The Administrator does not have the right to
initiate such enforcement actions; however he may petition the agency
to initiate an enforcement action.
Under Section 6 (c) (1), if the ACA intervenes or otherwise partici-
pates in an agency action or activity, the Administrator may as of
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right and in the manner prescribed by law, initiate a civil proceeding
to review a Federal agency action if the Administrator determines that
the agency action may substantially affect an interest of consumers.
This provision is necessary because very often important issues involv-
ing substantial consumer interests which are raised and considered at
the agency level are not definitively resolved prior to judicial review.
Therefore, the power to seek judicial review of an agency action is
necessary to make ACA's participation at the agency level meaningful.
The ACA is also permitted to initiate a. proceeding for judicial re-
view under certain circumstances, and to intervene or otherwise par-
ticipate in judicial proceedings, without having participated at the
agency level. This is analogous to 5 U.S.C. 702, which grants standing
to private parties alleging a "legal wrong", whether or not they in-
tervened in the agency activity. It is also consistent with section. 6(a,)
(1) which requires the Administrator to refrain from intervening at
the agency level unless such intervention is necessary to protect the
interests of consumers. That subsection encourages the Administrator,
wherever feasible, to participate in a manner short of intervention.
This principle-that the ACA should only get involved when and
to the extent that it is necessary to represent a substantial interest of
consumers-would be undercut if the Administrator were to be given
standing only where he had participated at the agency level. If such
were the case, the Administrator would be encouraged to intervene or
participate in every agency action in order to preserve his right to
participate at the judicial level.
It is expected that the Agency will exercise with restraint its right
to initiate a judicial review proceeding where he did not participate
in the agency action below. There may be occasion however, when it
is necessary for the Agency to initiate such proceedings. For example,
the nature or extent of the consumer interest may not be apparent
until the agency has issued a final agency order, at which time it would
be too late for the ACA to participate at the agency level.
Before the Administrator may initiate a judicial review of an
agency action in which he did not intervene or otherwise participate
at the agency level, the Administrator must determine that the agency
action may substantially affect an interest of consumers, and, prior to
initiating the judicial review proceeding, file, subject to the rules
of the agency, a timely petition for rehearing or reconsideration if
such a petition is authorzed by law.
This provision places a greater burden on the Administrator than
must be borne by any other person seeking review. Any other person
must file for rehearing or reconsideration only where such a petition
is specifically required by statute or agency rules. In all other cases,
section 10(e) of the Administrative Procedure Act makes clear that
an application for rehearing or reconsideration is not required before
going to court. This additional burden was placed on ACA because
the Committee believes that the host agency should have an oppor-
tunity to consider ACA's views before being called into court to
defend its decision. This provision is consistent with the principles
of the doctorine of exhaustion of administrative remedies. Its pur-
pose is to relieve the courts of responsibility for questions which can
be resolved in the administrative process.
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If the agency requires that such petition for reconsideration must
be filed within a certain number of days of final agency action, the
Administrator would be required to do likewise. The Federal agency
accordingly petitioned for a rehearing is required to act upon the
Administrator's petition within at least 60 days of the date on which
it is filed. During the dependency of a petition for rehearing or re-
consideration by the Administrator, the period of time for appeal
shall be tolled in order to preserve the Administrator's right of appeal.
The Administrator may initiate the judicial review proceeding
prior to completion of the sixty day period, even if the agency has
not acted, if lie determines it is necessary to do so in order to pre-
serve his right to obtain effective judicial review of the Federal agency
action. For example, if an agency issues an order permitting
a business to take an action in 30 days which the Administrator be-
lieves may cause permanent or irreversible damage to the health or
safety of consumers, the Administrator must have the right to initiate
the appeals process prior to the time the goods are shipped, even if
the agency has not acted within that time on the Administrator's
petition.
Where the Administrator conforms with the requirement's de-
scribed above, it can then initiate an appeal of an agency action in
which it did not participate, unless the court determines that the
Administrator's initiation of such judicial proceeding would impede
the interests of justice.
In making such a determination under this subsection, it is an-
ticipated that the court will consider a number of factors, such as
the extent to which the suit will burden the parties, the nature of the
consumer interest being asserted, the possible consequences of the
agency action to consumers, to business, or to the government, and
the reasons given by the Administrator for his not participating at
the agency level.
The Committee intends that the Administrator's failure to partici-
pate in the proceedings at the agency level should be one factor weigh-
ing against the Administrator where the Administrator was fully
aware of the true significance of the agency proceeding to consumers
and had adequate resources to participate, but specifically decided
not to participate for the express purpose of obtaining a more favor-
able forum in which to advocate consumer interests. This would
amount to a kind of "forum shopping" which the requirement of a
statement of reasons by the Administrator to the court pursuant to
section 6(c) (1) seeks to prevent. On the other hand, the ACA will
have a very modest budget, it will not have adequate resources to mon,
itor all federal agency activities which may have a substantial effect
on consumer interest, and it clearly will not have adequate resources to
get involved in all such agency activities. In addition, as noted earlier,
there may be instances where the effect of the proceeding on a con-
sumer interest will not be apparent during the course of the agency
proceeding. It is expected that where an agency failed to participate
at the agency level because budgetary priorities* required it to concen-
trate on other cases which seemed, at the time, to be more important,
the Administrator would still have the right to initiate it review pro-
ceeding under this subsection.
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Section 6 (c) (2) gives the Administrator the right to intervene or to
otherwise participate in any Federal Court proceeding which involves
the review or enforcement of a Federal agency action that the Admin-
istrator determines may substantially affect an interest of consumers.
This right is not conditioned on whether the Administrator partici-
pated at the agency level, since it does not involve the burden of the
initiation of a iiew proceeding. Under section 6(c) (2), the Admin-
istrator would be participating in a judicial proceeding which would
continue regardless of whether the ACA intervened or participated.
This provision is necessary in order to allow the ACA to follow through
on its participation at the agency level and because, as noted previ-
ously, very often many issues are not resolved definitively until there
has been judicial review.
The right of the ACA under section 6(c) (2) to intervene or other-
wise participate in civil proceedings involving the enforcement of Fed-
eral agency actions which have a substantial affect on an interest of
consumers, is an important authority in the Act. Enforcement pro-
ceedings include those judicial proceedings initiated to enforce compli-
ance with agency regulations, standards, or orders involving enforce-
ment of an agency action.
As is the case with judicial review of agency actions, it is essential
to permit the ACA to intervene or otherwise participate in judicial
proceedings to enforce agency actions, in order to insure that its par-
ticipation at the agency level is meaningful. Similarly, as discussed
previously, it is important that the ACA have the right to intervene or
otherwise participate in such proceedings where it did not participate
at the agency level. These cases, such as an injunction action to enforce
compliance with an agency rule, often involve the interpretation of
basic statutory authority or rules and challenges to the validity of
agency action, they are an important form of administrative law-mak-
ing. It is not contemplated that the Administrator would intervene in
such enforcement actions where the proof and arguments he has avail-
able merely duplicate those of the Federal agency. In some cases, how-
ever, the Administrator might wish to argue for a different interpreta-
tion of a statute or agency rule which has an important effect on an
interest of consumers. Thus, the Administrator should not be fore-
closed from presenting his arguments to a court whose interpretation
of statutes will be binding on Federal agencies.
In seeking to obtain judicial review or to intervene pursuant to
sections 6(c) (1) or 6(c) (2), the Administrator is required to do so in
the manner prescribed by law. This provision means that his appeal
must be lodged within the time permitted by statute for appeal, if the
action is of the type so governed by such provision, and that he must
fulfill all applicable procedural requirements in presenting his case.
The Administrator's right to intervene as a party in a court proceed-
ing, as well as an agency proceeding, carries with it the right to partici-
pate as amieu$ curiae, or as a party for limited purposes, as the Ad-
ministrator deems appropriate. Where this section does not permit the
Administrator so to participate as a matter of right, the court may still
permit it pursuant to section 21(a).
There is no authority for the Administrator to intervene in or initi-
ate criminal proceedings. Additionally, the Administrator, upon inter-
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vention in civil cases in Federal courts, would have the same rights as
any person under Rule 24 of the Federal Rules of Civil Procedure.
This section governs only the Administrator's standing in judicial
proceedings. As such, for example, it overrides any existing statute
that may require a person seeking judicial review to have been a party
to the proceedings at the agency level. Nothing in this section, how-
ever, permits the Administrator to obtain judicial review if an agency
has acted pursuant to a statute which precludes judicial review in any
form. Similarly, even where agency actions are reviewable, the stand-
ard which the court will apply upon review is not changed. The section
should be read, however, in conjunction with section 21(b) (1), which
makes certain actions of other Federal agencies subject to review by
the Administrator in connection with the Administrator's right to en-
force his authority under this Act.
Section 6(c) (3) explicitly states that participation by the Admin-
istrator does not alter or affect the scope of judicial review otherwise
applicable to any agency action.
To the extent that appeals are taken in the courts of appeals, the
standing of the ACA is to be governed by the applicable jurisdic-
tional statutes concerning such appeals in lieu of the requirements of
28 U.S.C. 1345.
Section 6(d) permits the Administrator to request a Federal
agency to initiate a proceeding or activity or to take such other action
as may be within the authority of the host agency. For example, where
agency rules permit a person to file a formal complaint, the Admin-
istrator may also do so. Of course, the Administrator must first deter-
mine that his request would be in the interest of consumers. This
determination would be made in the same manner as that under sub-
sections 6(a) (2) and 6(a) (3). The subject matter of the request can
concern any action-whether substantive or procedural-that the
Federal agency has the legal authority to undertake.
The Administrator has no more authoirty than any other person
to compel an agency to take an action under this subsection. The Ad-
ministrator has no power to override on his own authority any action
the Federal agency does take. If a Federal agency declines to take the
action requested by the Administrator, it must notify him promptly
of the reasons for the refusal, and such notice must be made a matter
of public record. The host agency should respond as soon as possible
to the Administrator's request. In most instances, a response should
take not more than 30 to 60 days. If agency rules mandate a shorter
period, those rules will govern. The Administrator may appeal a final
agency action denying his request or petition, pursuant to section 6 (c)
and the Administrative Procedures Act.
Section 6 (e) provides that appearances by the ACA in Federal
agency or court proceedings pursuant to this Act shall be in its own
name and are to be made by qualified representatives designated by
the Administrator. Such representatives may be attorneys or other
qualified representatives provided that such persons are permitted by
law to act as designated representatives. Such persons may be on
the staff of the ACA or individuals hired specifically for the pur-
pose of representation. It is the intent of this legislation that the ACA
direct and control its own representation of the interests of consum-
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ers. While many government agencies are represented by the Depart-
ment of Justice in their litigation, the committee feels strongly that
such an arrangement would be entirely inappropriate for the ACA.
It would infringe on the ACA's independence and would be unten-
able in those instances where the ACA is advocating a position in op-
position to that of another Federal agency represented by the Depart-
ment of Justice.
Subsection 6(f) allows the Administrator to request a Federal
agency to use its discovery process where he is intervening or participa-
ting in an agency proceeding pursuant to section 6 (a) (2' )7. The Federal
agency is to make use of appropriate powers to obtain information
or the appearance of witnesses requested by the ACA, but the extent
of discovery is dependent upon the extent of the Federal agency's
statutory authority, for the ACA is limited to the discovery authority
of the Federal agency before which it is appearing.
The host agency is required to issue such orders for witnesses, mate-
rials and information within its statutory powers if the Administrator
satisfies the agency's applicable rules of procedure with regard to the
general relevance and reasonable scope of the evidence sought.
Discovery may extend to the summoning of witnesses, copying of
documents and records, production of books and papers, submission of
information in writing, and anything else to which an agency's discov-
ery power extends. When an order is issued pursuant to this-section, it
may be enforced in Federal court by the agency issuing the order.
If necessary, the Administrator may seek through mandamus to re-
quire the agency issuing the order to seek enforcement of it.
The committee's formulation does not require the Administrator
to be a party before being allowed to have discovery. To require him to
become a full party in order to obtain discovery rights would be con-
trary to the committee's belief that he should become a party only
where necessary, and that he should not be given additional incen-
tives for doing so. It is expected that ordinarily he will have already
participated to a substantial degree before he requests discovery, and
that he will not seek discovery where his interest in a proceeding
continues to be minimal.
This subsection does not empower the ACA to utilize the discovery
authority of the host agency where the ACA is making written or
oral submissions in connection with informal agency activities pur-
suant to section 6(a) (3). The right of the ACA to utilize the host
agency's discovery powers extends only to those instances where it
is intervening or otherwise participating in agency proceedings pur-
suant to section 6 (a) (2).
The Administrator is entitled to judicial review of an agency's
refusal to grant a subpena and the recipient is, of course, entitled to
judicial review either on a motion to quash the subpena in Federal
court, or in a proceeding brought in Federal court to enforce the
subpena, or other discovery, but Section 21(b) (1) (A) specifies that
the Administrator may obtain judicial review to enforce such discov-
ery rights only upon final agency action on the matter in which the
Administrator participated, and only to the extent that the Federal
agency's disposition of the Administrator's discovery request may
have affected the agency's decision.
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Section 6 (g) specifically prohibits the ACA from formally inter-
vening in proceedings or actions before State or local agencies and
courts.
However, section 6 (h) specifically affirms the Administrator's au-
thority to communicate with, provide information to, or provide
assistance requested by any Federal, State, or local agencies and
courts at any time and in any manner consistent with law. The nature,
form and extent of such communication, presentations, and submis-
sions will be determined by the particular situation although it must
be in a manner consistent with other law. It is anticipated that the
Administrator will consult with Federal, State and local agencies and
courts on a wide variety of matters. In addition to providing such
agencies and courts with information and technical services, the ACA
will be able to express its views in an appropriate manner, such as an
amicus curiae, on particular matters currently under consideration by
such agencies or courts.
Subsection 6(i) provides that each agency shall review its general
rules of procedure in consultation with the Administrator and shall
issue such additional rules as may be necessary to provide for orderly
intervention or participation by the Administrator. This should in-
clude rules governing the Administrator's discovery rights in accord-
ance with subsection 6 (f) . It is recognized that some Federal agencies
may wish to operate under more specific rules of procedure to govern
the Administrator's intervention or participation. These rules may
elaborate the standards under Subsection 6(a) (2) and 6(a) (3), and
they may facilitate implementation of the Administrator's rights, but
they may not limit or expand these rights in a manner inconsistent
with sections 6 (a) (2) and 6 (a) (3), or in derogation of the rights of
other parties in interest.
This subsection requires each Federal agency to issue rules which
define those circumstances under which the Administrator may be
allowed to make simultaneous submissions under subsection (a) (3)
of this section. This will insure that the ACA submissions pursuant to
section 6(a) (3) are made with adequate preparation to insure maxi-
mum usefulness.
The subsection is intended to direct the Federal agencies to work
out with the Administrator the most efficient means of structuring the
Administrator's intervention or participation. It can also serve to
adapt the ACA's involvement to the respective practices and pro-
cedures of each Federal agency. Any additional rules which Federal
agencies develop in order to provide for the Administrator's orderly
intervention or participation, shall be published in both proposed and
final form in the Federal Register so as to provide an opportunity for
comment by the public.
Section 6 (j ) provides that, when a written petition from a substan-
tial number of persons is submitted to the Administrator, requesting
that he represent an interest of consumers, the Administrator must
notify the principal sponsors of the petition within a reasonable period
of time with respect to any action he has taken on the request. If lie
declines to act, he must provide a written statement of his reasons.
This subsection underscores the responsibility of the Agency for
Consumer Advocacy to be responsive to suggestions from all segments
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of the public in areas where the interests of consumers need to be rep-
resented. Persons or organizations initiating a request need not them-
selves be, nor represent, consumers. The Administrator should also be
responsive to requests from the business community.
The Administrator, under this subsection, is under no obligation
to act in accordance with any petition or request. Furthermore, the
Committee does not in any way intend that a petition under this sub-
section is required in order for the ACA to represent an interest of
consurrrers. Nevertheless, it is important that the Administrator act
in a timely manner in the disposition of any such petitions. The Ad-
Ininistrator's response must be based solely on the interests of
consrnlle r s.
SEC'TIOS 7. (1oxSU-1IF.R (`o3IPL.IINTs
While the Administrator's primary responsibility is to serve as the
advocate or representative of the interests of consumers before Federal
agencies and courts, he is also expected to serve as the focal point in the
Government for complaints by consumers. The responsibility for this
function will promote a greater awareness by the Administrator of
the actual prohleiiis of the consumer, and it will, by keeping him
informed about rail problems, increase the likelihood that his activities
will benefit the interests of consumers. In addition, centralizing this
function in the Administrator will also provide a greater capacity for
monitoring the responsiveness of other agencies to consumer problems,
enhance the likelihood of such complaints reaching the appropriate
authority, and promote effective action by other Federal agencies.
Since the Administrator will also be responsible for forwarding the
complaints received to business enterprises cited in the complaints,
the ACA may also be in a position to promote practicies for the in-
formal resolution of complaints filed by consumers. Such informal
resolutions of complaints would avoid the necessity of other Federal
and State agencies, or private persons, spending large sums of money
to settle complaints best resolved informally by the parties themselves.
While the ACA is to act as a clearinghouse for complaints, the ACA
has no authority to impose any resolution of such complaints on any
person or Government agency.
The Administrator has broad discretion to determine what is, and
what is not, a "complaint or other information" for the purposes of
this section. This phrase does not require the Administrator to trans-
mit or make available to the public reports, documents, papers, records,
studies, recommendations, and other information which he develops,
obtains, or contracts for in the course of performing his other func-
tions under this bill. This section provides only a broad outline for
the procedures which the ACA will follow in processing such com-
plaints. The Agency has the authority to issue rules, consistent with
this section, to establish the specific procedures.
Section 7(a) requires the Administrator to transmit to appropriate
Federal, State, or local agencies, any complaint, or other information
disclosing an apparent violation of Federal or State law, rule, or order,
or a judgment of a Federal or State court, relating to an interest of
consumers, or a commercial, trade or other practice-that appears detri-
mental to an interest of consumers, unless the Administrator deter-
mines that the complaint is frivolous. This provision-will help to assure
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that consumer complaints ultimately reach the proper agency and
should serve to improve the knowledge of such agencies about the
problems of consumers. The ACA is not obligated to forward com-
plaints for which there is no agency with the power to take remedial
action.
Section 7 (a) further requires Federal agencies to keep the Adminis-
trator informed to the greatest practicable extent of any action they
are taking on complaints which he has transmitted to them. In the
absence of unusual circumstances, periodic reports should be sufficient.
The same requirement is not imposed on State agencies, but it is ex-
pected that the ACA can work out with State agencies, on a voluntary
basis, some procedures for keeping the ACA informed about the out-
come of complaints forwarded to State agencies.
Section 7(b) requires the Administrator to notify any producer,
lender, retailer, distributor, or other supplier of goods and services of
all complaints which lie receives concerning such supplier, unless the
Administrator determines that such disclosure would prejudice or
impede an action, investigation, or prosecution concerning an alleged
violation of law. Copies need not be sent each day as received, but may
be delivered in a timely manner at appropriate intervals. Although
very often the best way for a consumer to get quick action on a com-
plaint is to allow persons who are the subject of the complaint an op-
portunity to respond to the complainant, in a limited number of
instances the interests of justice would not be served by such a process.
For example, if a, complaint alleges criminal conduct, the Administra-
tor may decide to refer the complaint to the Justice Department with-
out notifying the person complained against, thereby giving him an
opportunity to destroy or conceal potential evidence of criminal con-
duct. For this reason, the Administrator is given limited discretion to
withhold notification of some complaints.
Section 7(c) provides for the ACA to make written complaints and
other information available for convenient public inspection and copy-
ing without charge or, at it reasonable charge, not to exceed cost, in a
public document room. The Administrator may choose to make this in-
formation available through general computer printouts, rather than
by separate filing of each complaint, although the full contents of the
complaint shall be available, if requested.
Before making it complaint available, if the Administrator decides
to forward the complaint to the person complained against he must
provide a reasonable time for such person to comment. This will in-
volve sending him a copy of the complaint and giving him a period of
time to answer it. The bill requires the Administrator to make the com-
ments of the person complained against available, together with the
complaint, in order to provide a fair presentation.
This subsection also requires the Administrator to permit any agency
to which it complaint was transmitted a reasonable time to comment on
such complaint before the Administrator makes the complaint avail-
able to the public. If the agency transmits its comments to the Admin-
istrator within a reasonable time, its comments are to be made avail-
able together with the complaint.
Copies of the complaint should be transmitted simultaneously to the
agency and to the person complained against pursuant to this section,
and ordinarily the same time for comment should be allowed to each.
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There is no obligation to allow time for the agency or the complainant
to comment on the reply of the person complained against, and no obli-
gation to allow the person complained against time to reply to the
agencies, before the complaint is made publicly available.
The Administrator for "good cause" may determine not to make the
complaint publicly available as, for instance, where he determines the
complaint is frivolous, or libelous or where lie determines that making
the complaint available would be detrimental to the complainant, such
as by subjecting him to retaliation. Unsigned complaints may not be
placed in the public document room, although they otherwise may be
utilized and forwarded by the ACA. Signed complaints, where the
complainant has requested that his identity be protected, shall be
placed in the public document room without revealing the identity of
the complaint.ant or information which would reasonably lead to
disclosure of the identity of the complainant. However the Adminis-
trator shall place on such complaints an appropriate designation
indicating that the complainant has requested that his identity be
protected. Where the complainant has requested that his identity be
kept confidential, the ACA may also decline to forward the com-
plaint to the person complained about, unless it can do so in a way
which preserves the complainant's anonymity. When a consumer com-
plains to the Administrator, the consumer is acting pursuant to a
Federal statute and should be encouraged to do so; consequently, def-
amation or other suits against consumers for filing complaints under
the Act which are later placed on public record would be against public
policy. In no event should the Administrator destroy any complaint
received.
It is the committee's intention that the safeguards to both businesses
and complainants incorporated in this subsection will protect busi-
nesses from injury to reputation resulting from scurilous attacks by
competitors or others seeking to damage such businesses while en-
couraging individuals with knowledge of wrongdoing by businesses to
come forward without fear of retaliation. The committee is particu-
larly concerned that a complainant who is an employee of the business
being complained about be encouraged to come forward without fear-
ing loss of his job.
The provisions of section 11(c) are not intended to apply to the pub-
lic disclosure of complaints and agency responses pursuant to this sub-
section. In making complaints available, the Administrator is perform-
ing a ministerial function and is dealing with information which is or
may be placed in the public domain. This does not amount to a release
of information contemplated by section 11 (c). This subsection estab-
lishes adequate safeguards for the person complained against by giv-
ing him and any agency to which the complaint is transmitted a rea-
sonable time to comment before the complaint is made available to the
public.
SECTION 8. CONSUMER INFORMATION AND SERVICES
Section 8 requires the ACA to develop on its own initiative, gather
from other sources-both Federal and non-Federal--and disseminate
in effective form to the public, information concerning its own func-
tions; information about consumer products and services; information
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about problems encountered by consumers generally, including annual
reports on interest rates and commercial and trade practices which ad-
versely affect consumers; and notices of Federal hearings, proposed
and final ,rules and orders, and other pertinent activities that affect
consumers. This section sets forth a general responsibility to gather
information and disseminate it. Other sections of the Act, as discussed
below, provide the Administrator with additional powers to assist
him in meeting these responsibilities.
All Federal agencies which possess information which would be use-
ful to consumers are authorized and directed to cooperate with the
ACA in making such information available to the public.
SECTION 9. STUDIES
Section 9 authorizes the Administrator to conduct, support, and
assist research, studies, investigations, conferences, and surveys con-
cerning the interests of consumers. Research, for example, includes
such diverse activities as the compilation of published or unpublished
materials, interviews, laboratory testing, demonstrations, and analyses
of materials. The Administrator may either conduct these activities
himself or support them by contracts.
With activities involving substantial outlays of money for opera-
tions and equipment, or particular expertise in a narrow or technical
subject, it will probably be preferable for the Administrator to con-
tract for these activities.
The Administrator could not, through contracts, underwrite all of
the administrative expenses of a government or non-government orga-
nization whose exclusive purpose is representation of consumer inter-
ests. Rather, it is envisioned that the Administrator might contract
with a government or non-government organization to conduct specific
research projects, studies, conferences, and/or innovative or experi-
mental programs aimed at demonstrating ways of protecting the in-
terests of consumers.
SECTION 10. INFORMATION GATHERING
This section grants the Administrator authority to gather informa-
tion for specified purposes. Together with Sections 6(f), 9 and 12, it
allows the Administrator to collect the information necessary to carry
out his functions effectively. Because the interests of consumers are
affected by so many different factors, the Administrator will require
a wide range of information to use his resources wisely and effectively.
Accordingly, the Administrator is given considerable latitude by Sec-
tion 10 to gather information, subject to stringent safeguards to pro-
tect legitimate interests.
Section 10(a) gives the Administrator authority, in a limited set
of circumstances, to gather information by requesting from persons
reports or answers to specific questions, such as are contained in inter-
rogatories. This section does not provide for the issuance of subpoenas
or the inspection or copying of books, records, or papers, or the com-
pulsory appearance of any person, or require the disclosure of
information that would violate any relationship privileged under law,
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such as a lawyer-client or husband-wife privilege, or the privilege
against self-incrimination.
The Administrator is authorized to gather information to the extent
necessary to help protect the health or safety of consumers or to dis-
cover consumer fraud or substantial economic injury to consumers.
Consumer fraud, in this circumstance, is not restricted to technical vio-
lations of law but is intended to refer to all deceptive, unfair, or
fraudulent practices. Thus, for example, the ACA could gather infor-
mation on the amount of into repair work improperly or needlessly
done, or economic loss to consumers from ineffective or impotent drugs.
Where information is sought in the form of identical questionnaires
to 10 or more persons, it is to be gathered in compliance with the
applicable provisions of the Federal Reports Act governing independ-
ent Federal regulatory agencies. For the purposes of the Federal
Reports Act the ACA is to be considered in the same category as an
independent Federal regulatory agency. This section is not intended
to make the Federal Reports Act applicable in any instance, such as
the issuance of interrogatories, which would not otherwise be gov-
erned by the Federal Reports Act.
Before using the authority granted by this subsection, the Admin-
istrator must first set forth with particularity the consumer interest
to which the information sought pertains, and the purpose for which
the information is sought. The Committee intends these statements to
be reasonably extensive and not mere perfunctory recitations of
broad, general concepts.
Having defined the parameters of his inquiry, the Administrator
may then address requests for information consistent with those
parameters to any person engaged in industry, trade, or business
which substantially affects interstate commerce and whose activity
the Administrator determines may substantially affect an interest of
consumers.
The Administrator may ask only for information concerning activ-
ities and other related information which he determines may sub-
stantially affect an interest of consumers. Such information may in-
clude data relating to production processes, commercial and financial
information, ownership records, or other information concerning
trade practices, commercial and financial data, and comparable
information. This act gives a person no right to decline to provide
information sought by the ACA on the grounds that such information
pertains to trade secrets or is otherwise confidential.
The Administrator is not to employ his authority under this sub-
section at the request of any private organization, other than an
organization contracting to perform scientific or technical services
under this act.
Section 10(a) (2) provides that the Administrator shall not exercise
the authority granted herein if the information sought is already
a matter of public record or can be obtained from another Federal
agency pursuant to section 10(b) (see below). Section 10(a) also
provides that the Administrator shall not exercise the authority to
obtain the information if the information sought is specifically to be
Used in connection with the Administrator's intervention as a party in
any agency proceeding, then pending, brought against the person to
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whom the request for information is addressed. This exemption is
included because in such instances, the Administrator will have an
opportunity to use the full range of discovery rights extended parties
in such proceedings. The Administrator's additional use of the au-
thority under this subsection would be unnecessary and duplicative.
The Administrator may require that reports or answers to questions
be submitted under oath and be filed with him within such reasonable
time as he may prescribe. The time prescribed for answering will, of
course, vary with the nature of the information sought. Pursuant to
subsection 10(a) (3), the Administrator may enforce these requests for
information by petitioning a district court of the United States within
the jurisdiction in which the respondent is personally served with
process or in which the respondent has his principal place of business.
A respondent may bring an action to quash an order issued by the
Administrator pursuant to this section in any such district court or in
the District Court for the District of Columbia.
In order to enforce his order in court, or to resist the motion to quash,
the Administrator must carry the burden of proving in court that the
order (1) is for information that substantially affects the health or
safety of consumers or is necessary in the discovery of consumer fraud
or substantial economic injury to consumers and (2) is relevant to the
purposes for which the information. is sought.
Even if the Administrator makes the necessary showing, the person
need not provide the requested information, if he shows that the
request is unnecessarily or excessively burdensome.
If a court finds that the Administrator's order is valid, it shall
order the respondent to obey the order, on such conditions as it deems
just. The court may, for example, extend the time for an answer,
require that certain questions be restated,, or even in an extraordinarly
case, apportion court cost as it deems just.
Section 10(a) (4) exempts small businesses from the requirement to
produce or disclose data or other information under this section.
"Small business" is defined as a business that together with it affiliates,
including those businesses in a franchise relationship, does not have
assets exceeding $7,500,000, net worth in excess of $2,500,000, or aver-
age annual net income for the preceding two years in excess of
$250,000.
This subsection is not intended to prevent small businesses from dis-
closing information requested by the Administrator. However, the dis-
closure of such information may not normally be compelled from
small business under this section. The Administrator is empowered
to compel disclosure of information from a small business if such
disclosure is necessary to prevent imminent and substantial danger to
the health or safety of consumers and the Administrator has no other
effective means of action.
The intent of the subsection is to exempt from the compulsory
information gathering authority of the ACA, those persons which are
businesses which would be unduly burdened by having to comply with
such requests for information because of their small size and lack of
personnel. In considering whether any person is a small business under
the definition, it is necessary to look at the totality of the business
entity.
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In order to insure that this exemption does not interfere with the
ability of the ACA to carry out its responsibilities under the Act, the
Administrator is required to submit to Congress, not later than eigh-
teen months after the effective date of the Act, a report on the effect of
this exemption on the ACA. On the basis of this report, the Congress
will consider the possible necessity of narrowing the scope or appli-
cation of the exemption.
The committee believes that the authority of the Administrator
under this subsection is necessary in order for him to discharge his
responsibilities effectively. To be a competent representative of the
interests of consumers, he must have full access to information con-
cerning those interests. The committee has provided him with that
access, but placed appropriate limitations on his authority. The au-
thority granted by this section does not extend to the production of
documents or appearance of individuals. It is not subpena authority,
which is granted to most other Federal agencies. It is the authority,
under clear restrictions, to obtain information shown to be necessary
from persons who will not be unduly burdened by such requests. The
restrictions in this subsection will preclude unwarranted reliance by
the Administrator on this authority. The Committee is satisfied that
this authority will adequately serve his needs without overburdening
other persons.
Section 10(b) prop-ides for the Administrator's access to informa-
tion possessed by other Federal Agencies. This access is extremely
important in insuring that the Administrator will have adequate in-
formation to carry out his responsibilities.
Federal agencies are required to allow the ACA access to informa-
tion and furnish copies of requested documents, papers, and records,
at cost. It. is expected that agencies will transmit copies of specific,
identifiable documents and other information upon reasonable requests
by the Administrator, but the Administrator may also, at his discre-
tion, decide to take responsibility for copying the documents himself.
In such case the host agency is expected to fully cooperate with the
Administrator's wishes.
It is believed that much valuable information can be obtained from
Federal agencies. In order for the Administrator to be fully informed
about matters affecting the interests of consumers, the Administrator
should have the power to draw upon this vast reservoir of information.
There are, however, several necessary exceptions to the Administrator's
access authority. These limitations :it-(- contained in paragraphs
(1)-(7).
Paragraph (1) exempts documents classified in the interest of na-
tional defense or national security pursuant to applicable Executive
Orders and statutes and restricted data, the dissemination of which
is controlled pursuant to the Atomic Energy Act (42 U.S.C. 2011 et
seq.).
Paragraph (2) exempts policy and prosecutorial recommendations
made by agency personnel. and intended for internal use only. Dis-
closure of the full and frank presentation of opinions by agency per-
sonnel in the development of any agency position could inhibit this
kind of discussion. Many documents consist partly of such policy rec-
ommendations and partly of other material. In such cases, the exemp-
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tion applies only to the policy recommendations, not to the entire
document. It should be possible for an agency to remove the policy
recommendations from documents before making the documents avail-
able to the Administrator. This is a narrow exception : A listing of
policy options is not a policy recommendation. The recitation of facts,
test results, or expert technical or scientific opinion on which a rec-
ommendation is based is not a, policy recommendation.
Paragraph (3) exempts information concerning routine executive
and administrative functions which are not otherwise a matter of
public record. These are matters of internal management of Federal
agencies and concern, for example, such activities as the routing of
papers, and the assignment of duties.
Paragraph (4) parallels a similar exception in the Freedom of In-
formation Act. It exempts from disclosure personnel or medical files
and similar files, the public disclosure of which would constitute a
clearly unwarranted invasion of personal privacy.
Paragraph (5) exempts information which the Federal agency is
prohibited by statute or judicial decision from disclosing to any other
Federal agency, including but not limited to bank examinations and
similar financial reports prepared by or for Federal banking agencies
relating to the examination, operation or condition of individual finan-
cial institutions. This paragraph is not intended to change present law
on this subject.
Paragraph (6) exempts information which would disclose the
financial condition of individuals who are customers of financial
institutions.
Paragraph (7) exempts trade secrets and commercial and financial
information described in 5 U.S.C. 552(b) (4). Under applicable judi-
cial interpretations of 5 U.S.C. 552(b) (5) this exemption applies to
trade secrets and information obtained from a person which are privi-
leged or confidential. With respect to such information obtained prior
to the effective date of this Act, a Federal agency need not disclose it to
the ACA if such Federal agency had agreed to treat, and has treated,
such information as privileged or confidential and states in writing to
the Administrator that, taking into account the nature of the assur-
ances previously given, the character of the information requested, and
the stated purpose for which access is sought, to permit such access
would constitute a breach of faith by the agency. In effect, this is a
"grandfather clause" which extends an exemption to certain trade
secrets and other information described in 5 U.S.C. 552 and submitted
to an agency prior to enactment.
Paragraph (7) further provides that with respect to information ob-
tained by a Federal agency subsequent to the effective date of the Con-
sumer Protection Act, trade secrets or commercial and financial infor-
mation described in 5 U.S.C. 552(b) (4) shall not be disclosed if the
Federal agency had agreed in writing, as a condition of receipt of such
information, to treat the information as privileged or confidential.
Such a prospective caveat providing for confidentiality must be set
forth in writing by the Federal agency. It may only be used to bar
access to such information by the ACA if the Federal agency reason-
ably found, and so set forth in the agreement, that such information
was not obtainable from the supplier of the information or any other
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source without such a pledge of confidentiality and that failure to ob-
tain such information would seriously impair the carrying out of the
agency's function. If the Federal agency did not make these two spe-
cific findings before obtaining the information or did not act reasona-
bly in doing so, it may not deny the Administrator access to the
information.
Additionally, the agency is required to notify the person who pro-
vided trade secrets and commercial or financial information described
in 5 U.S.C.. 552 (b) (4) of its intention to provide access to the Admin-
istrator and the reasons therefor, and shall, notwithstanding section
21(b), provide the person who provided such information a reason-
able opportunity, not to exceed 10 days, to comment or to seek injunc-
tive relief.
On those occasions when access to information is denied to the Ad-
ministrator by a Federal agency pursuant to Section 10(b), the head
of the Federal agency should work with the Administrator to find a
way to provide as much information as possible in such other form as
will meet the agency's objections.
An agency may, in its discretion, waive the restrict ion contained in
Section 10(b) and disclose information protected by this subsection to
the ACA, except when other laws specifically prohibits disclosure of
such informaiton to another agency.
Section 10(c) restates the provisions of 26 U.S.C. 7213 prohibiting
the disclosure by any Federal agency of any information concerning
the amount or source of income, profits, losses, expenditures, or any
particular thereof which is disclosed solely in an income tax return
except as otherwise provided by statute or regulation. The Adminis-
trator is also precluded from obtaining a copy of, or any book con-
taining any abstracts or particulars of, a Federal income tax return
filed pursuant to the provisions of title 26. The provisions of this sub-
section concern not only the obtaining, but also the examining or view-
ing of such privileged information by the Administrator.
SECTION 11. LIMITATIONS ON DISCLOSURE
This section sets forth rules governing disclosure of information
to the public by the ACA. Because the Administrator will have broad
access to information derived from other Federal agencies, and because
the release of information by the Administrator could have a substan-
tial effect upon a Federal agency or a business, certain specific limita-
tions have been imposed on his authority to release information. These
limitations strike a balance which will allow the Administrator to
disclose information essential to the most important interests of con-
sumers, with appropriate safeguards to protect other interests im-
mediately concerned.
Subsection 11(a) states that except as otherwise provided in this
section, the Freedom of Information Act shall govern the release of
information by the ACA to members of the public. Under the Freedom
of Information Act, Federal agencies are required to disclose any
information in their possession to members of the public who request
it, except for information which falls within one of -nine exemptions
listed in Section 552, Title 5, U.S.C. If requested information does fall
within an exempted category, the agency may withhold it.
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Thus, under this subsection, the Administrator is required to dis-
close all information required to be disclosed by the Freedom of In-
formation Act, but he may, in his discretion, withhold information
governed by the exceptions to the Freedom of Information Act, sub-
ject to the same restrictions applicable to other Federal agencies.
Section 11(b) deals with the disclosure of information which the
Administrator has obtained from another agency.
Pursuant to section 10(b), the Administrator has a right of access
to all information in the possession of a Federal agency which the Ad-
ministrator deems necessary for the performance of his functions,
except information within the seven excepted categories. The Admin-
istrator, however, is prohibited from disclosing to the public or to a
State or local agency, information which is received solely from a
Federal agency when such agency has notified the Administrator that
the information is within the exceptions stated in section 552(b) of
Title 5, U.S.C., and the Federal agency has determined that the infor-
mation should not be made available to the public. While the Adminis-
trator should have access to this information, the decision whether or
not to release it to the public should remain with the source agency. If
the Administrator gathers information solely from another agency
and the agency specifies that such information is exempted from dis-
closure under 5 U.S.C. 552(b) and the source agency has determined
the information should not be discolsed and the agency informs the
Administrator of such determination in writing, the Administrator is
bound by that determination and may not disclose the information.
The obligation to make these determinations and to communicate them
to the Adiministrator remains with the Federal agency from which
the information is gathered..
This subsection also states that, if the information is exempted from
required disclosure under 5 U.S.C. 552(b), but the agency has decided
that it may be disclosed in a particular form or manner, the Adminis-
trator may disclose such information in compliance with the form and
manner so prescribed.
Section 11 (c) seeks to assure that the Administrator will act fairly
in releasing information to the public. It provides general rules which
shall govern the release of information pursuant to any authority
conferred by the Act, except for information released through the
presentation of evidence in a Federal agency or court proceeding
pursuant to section 6.
Paragraph (1) states that in releasing information concerning
consumer products and services, the Administrator shall determine
that such information is accurate, to the extent practicable, and that
no part of such information is prohibited from disclosure by law. In
addition, this paragraph restates the requirement of section 11(b) that
the Administrator shall comply with any notice by a Federal agency
that particular information should not be made available to the public
or should be disclosed only in a particular form or manner, if such
notice is within such agency's authority under the Freedom of Infor-
mation Act. ACA disclosure of information should be made respon-
sibly and in good faith.
Paragraph (2) provides that when the ACA on its own initiative
is disseminating test results or other similar information resulting
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from research for which the ACA is responsible and which directly
or indirectly discloses product names, the ACA shall do so in a fully
accurate context. This limitation on disclosure would not apply to re-
quests for the test results themselves under the Freedom of Informa-
tion Act.
Specifically, if all products in a similar category to the named prod-
uct have not been compared, the Administrator shall make such an
indication. Furthermore, lie shall indicate that there is no intent to
rate products tested over those not tested or to imply that products
tested are superior or preferable in quality over those not tested. This
provision should not be read as prohibiting the Administrator from
making any statement comparing the relative characteristics of any
product or service. Ile may make objective comparisons of perform-
ance or of certain qualities of a product or service. Frank, factual, and
meaningful discussion of various products and services by the Admin-
istrator are not precluded by this subsection.
Paragraph (3) requires that chaiiges or additional information
which would affect the fairness of information previously dissemi-
nated will be promptly disseminated in a similar mariner. The inten-
tion of this provision is that whenever a serious misstatement has been
made, that adversely affects a person to a substantial degree, the
Administrator should promptly issue a retraction or such additional
information as may be necessary to correct the error. Furthermore,
in order to insure that the correction receives the same attention as the
original dissemination, this paragraph requires that such correction
be disseminated in the same manner as the original erroneous
information.
Paragraph (4) requires that where the Administrator is about to
release information likely to cause substantial injury to the reputa-
tion or goodwill of any person, such as a company, or its products or
services, lie is required to give notice of the information lie is about to
release, so as to afford the person an opportunity, not to exceed ten
days, to comment or seek injunctive relief, unless, immediate release
of the information is necessary to protect the health or safety of the
public. This does not require the ACA to provide Cie, full ten days.
The circumstances of each case will determine the lenth of time
afforded. The objective of this provision is to enable the' person to
move promptly for a temporary restraining order or a preliminary
injunction. It applies only where the injury to reputation or goodwill
is both substantial and likely to occur. In order for the injury to be
considered substantial there must be substantial likelihood of signifi-
cant economic harm. Typically, the information involved in such a
situation will identify a brand or company name specifically rather
than speaking of a generic type of product. The Administrator's re-
sponsibility to release information which will protect the health or
safety of the public, however, takes precedence over the restrictions in
this situation.
Subsection 11(d) deals with suits by persons under the Freedom of
Information Act. This subsection provides that when the Adminis-
trator is sued to disclose information that he has obtained from an-
other agency, and that agency has specified that such information is
not to be released, then that agency will be substituted for the Ad-
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ministrator as the defendant in the case. This provision is a corollary
to the principle that allows the Federal agency providing information
to the ACA to retain authority under the Freedom of Information
Act to withhold certain exempted information from public disclosure.
SECTION 12. NOTICE
Section 12 deals with the. notice that Federal agencies must give to
the Administrator of the Agency for Consumer Advocacy in order to
facilitate his intervention and participation. This section is intended
to provide a workable system under which the Administrator will be
informed of agency proceedings and activities which may affect the
interests of consumers, without overburdening the operations of those
agencies.
Section 12(a) provides that every Federal agency considering any
action which may substantially affect the interests of consumers shall,
upon request of the Administrator, notify him of any proceeding or
activity at such time as public notice is given.
The term "public notice" includes not only publication of notice in
the Federal Register, but also any generalized notification such as a
press release, a public statement by a responsible agency official, or
other notification either to the general public or to substantial groups
of persons.
The Administrator's request under this subsection maybe
generic.
He may ask the FDA, for example, for notice when public notice is
given, of proceedings and activities involving over-the-counter drugs,
without specifying a particular drug. This subsection should not be
read to require the Administrator to reference his request to pro-
ceedings or activities about which he has no knowledge. However, the
Administrator is expected to use all published sources of informa-
tion available-for example, subscribing to the Federal Register, to
trade publications, and being on the general mailing list of all Fed-
eral agencies-to minimize the need for specific notification to him.
The Administrator also is expected to keep his requirements for
notice within reasonable limits in order to minimize the burden im-
posed upon Federal agencies.
Section 12(b) sets forth the responsibility of Federal agencies to
provide other notice to the Administrator in cases where public notice
is not given. Because many important decisions are made in forums
that are not publicly announced, the Administrator will generally
learn of these activities only if notified by Federal agencies that such
activities are under way. The Federal agency's responsibilities under
this subsection are activated by a "specific" request by the Administra-
tor for information concerning a particular agency activity or a more
precise category of activities than required in subparagraph (a). In
response the Federal agency will give a "status report" and other
relevant information. The Administrator is expected to exercise his
authority under this subsection with due regard to the resources and
responsibilities of other Federal agencies. When notifying the Admin-
istrator of an agency action which may substantially affect an interest
of consumers, the Federal agency should include a decision not to act
which is included in the definition of "agency action" in section 14(3).
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Paragraph (1) requires that the Federal agency promptly provide
the Administrator a brief status report. The report is to contain a
full statement of the subject at issue and a summary of any previous
or proposed procedures and actions concerning it. This report may be
written or oral, and may be as simple as a single telephone conversa-
tion, depending on the complexity of the subject matter and the degree
of the Administrator's interest. Federal agencies are expected to be
as responsive as possible in complying with this paragraph.
Paragraph (2) allows the Administrator to request such other rele-
vant notice and information, the provision of which would not be
unreasonably burdensome to the agency. Such information could in-
clude sending the Administrator requested documentary material from
agency files, summaries of meetings, notice of outside contracts, and
other data. This additional notice and information may be requested
when the Administrator deems it necessary in order to facilitate his
participation under section 6.
Under both section 12(a) and (b), in determining when to notify
the Administrator, agencies will inevitably be involved in deciding
whether an action may substantially affect an interest of consumers.
The Committee expects agencies to construe this language broadly
and to resolve doubtful cases in favor of notifying the Administrator.
The requirements of the notice provisions in section 12 shall not be
construed as affecting the authority or obligations of the Administra-
tor of the Agency for Consumer Advocacy or any Federal agency
under Section 10 (b) and Section 11 of this Act.
SECTION 13. SAVINGS PROVISIONS
Section 13(a) provides that nothing in this Act affects the duty of
the Administrator of General Services to represent the interests of the
Federal Government pursuant to Section 201 (a) (4) of the Federal
Property and Administrative Act of 1949 (40 U.S.C. 481 (a) (4) ).
Under that Act, the Administrator of the General Services Adminis-
tration represents the Federal Government in the Government's role as
a consumer of goods and services. This bill is not intended to affect the
performance of this function.
Section 13 (b) restates a central concept of the bill : responsibility for
the interests of consumers is not confined to the Agency for Consumer
Advocacy. The creation of the ACA does not relieve any existing
agency of its responsibility to consumers.
Section 13(c) preserves the right of any consumer or group or class
of consumers to intervene and participate in Federal agency or court
proceedings. The ACA will be an agency with serious limitations on
its staff, resources, and time.
Thus, this provision is intended to prevent ACA's actions from fore-
closing any other person or group representing consumer interests.
SECTION 14. DEFINITIONS
This section contains definitions of terms used in the bill.
Section 14 (1) provides that the definition of "Administrator" means
the Administrator of the Agency for Consumer Advocacy created by
this Act.
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Paragraph (2) defines the term "Agency" to mean the Agency for
Consumer Advocacy. This term should be read in conjunction with
paragraph (8) in which the term "Federal agency" or "agency" is
defined by the Administrative Procedure Act (5 U.S.C. 551). The
definition in paragraph (8) is worded so as to specifically include the
U.S. Postal Service, the Postal Rate Commission, and any other au-
thority of the United States which is a corporation and which receives
any appropriated funds.
"Federal agency" includes every entity which is covered by the
definition of "agency" in the Administrative Procedure Act. Federal
entities which are specifically excluded by the Administrative Proce-
dure Act definition-such as the Congress, the courts of the United
States, the governments of the territories and possessions, the govern-
ment of the District of Columbia, agencies composed of representatives
of the parties to the disputes determined by them, courts martial and
military commissions, military authority exercised in the field in time
of war or in occupied territory-are thereby excluded from the defini-
tion of "Federal agency" in this bill. The definition of "Federal
agency" or "agency" does not include the ACA.
Certain Federal entities have been granted a specific exemption in
their statutes from some or all of the provisions of the Administrative
Procedure Act. Such an exemption from the Administrative Proce-
dure Act, however, is not an exemption from the definition of "Federal
agency" in this bill.
As defined in the Administrative Procedure Act (5 U.S.C. 551), the
definition of "agency action" in Paragraph (3) includes the whole or
part of an agency rule, order, license, sanction, relief, or the equivalent
or denial thereof, or failure to act.
The definition of "agency activity" in paragraph (4) compromises
all agency processes, or phase thereof, including undertakings of Fed-
eral agencies which are not subject to the provisions of 5 U.S.C. 553,
554, 556, or 557, or which do not involve a hearing pursuant to the
administrative procedural requirements of a statutory regulation, or
practice, or which are not conducted on the record after an opportunity
for an agency hearing. This category includes any agency activity or
process, or phase thereof, even if it does not result in an "agency action"
or involve an "agency proceeding" as defined in paragraph (3) or (5)
of this section.
The term "agency proceeding" in paragraph (5) is taken from the
Administrative Procedure Act (5 U.S.C. 551) which includes rule-
making, adjudication and licensing activities. As used in this bill, any
"agency proceeding" is also an `agency activity," but an "agency
activity" is not always an "agency proceeding." While the definition of
"agency proceeding" is derived from the Administrative Procedure
Act, the Act authorizes the Administrator to intervene or participate
in agency proceedings whether or not they are actually subject .to the
Administrative Procedure .Act.
The term "commerce" in paragraph (6) is defined to mean commerce
among, between, or within the several States, and commerce with
foreign nations. The inclusion of foreign nations in the definition of
the term "commerce" reflects the intention that the Agency for Con-
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sumer Advocacy be permitted to fulfill its responsibilities in activities
which may involve foreign trade.
The term "consumer" in paragraph (7) is defined as any individtal
who uses, purchases, acquires, attempts to purchase or acquire, or is
offered or furnished any real or personal property, tangible or intangi-
ble goods, services, or credit for personal, family, agricultural, or
household purposes. This definition is deliberately broad. It is intended
to cover the individual in all his relations to the goods and services he
obtains or uses. It excludes, however, the transactions in which a corpo-
ration or other similar entity is acting as a consumer. It also excludes
the price any individual, such as a farmer, may get for the goods or
services he produces or sells commercially.
The term "Federal agency" or "agency" in paragraph (8) has been
discussed supra in conjunction with the term "Agency" in paragraph
(9).
The term "Federal court" means any court of the United States
including, but not limited to, the Supreme Court of the United States,
any United States court of appeals, any United States district court
established under Chapter 5 of title 28, United States Code, the District
Court of Guam, the District Court of the United States Customs
Court, the United States Court of Customs and Patent Appeals, the
United States Tax Court and the United States Court of Claims.
The term "individual" in paragraph (10) means any human being.
The term "interest of consumers" in paragraph (11) is defined to
include any health, safety, or economic matter which might be import-
ant to individuals in their role as consumers. In order to be an "interest
of consumers", a concern must be related in some way to a business,
trade, commercial, or marketplace offer or transaction. The words
"business, trade, commercial, or marketplace transaction" include any
portion of the entire process-whether for consideration or not-by
which tangible or intangible goods change hands, real or personal
property is offered, furnished, purchased or acquired, services are
rendered or denied, or credit is extended or refused. The concern need
not be tied to a transaction, but must have a reasonable relation to it.
There must be a rational link in the chain of causation between the
concern and the transaction. The definition provides that the offer or
transaction in question need not involve the payment or promise of a
consideration so as to make clear that an offer of a free gift made by a
businessman in connection with a promotional schemeis included with
the meaning of a consumer's interest. A rate or route decision of the
CAB, a deceptive advertising case before the FTC, commercial prod-
uct. standards established by the National Bureau of Standards, the
rise in the regulated price of oil, and FCC cable television rulemaking
proceedings would be a few examples of cases clearly within the scope
of the ACA's activities.
The term "participation" means any form of submission and would
include oral, written, telephonic, or any other form of submission. In
conjunction with this definition, the term "submission" defined in
paragraph (15) means participation through the presentation or
communication of relevant evidence, documents, arguments, or other
information.
The term "person" includes any individual, corporation, partner-
ship, firm, association, institution, or public or private organization
other than a Federal agency.
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The term "State" means each of the several States of the United
States, the District of Columbia, the Commonwealth of Puerto Rico,
the Virgin Islands, Canal Zone, Guam, American Samoa, and the
Trust Territory of the Pacific Islands.
Paragraph (15) defines the term "submission" as stated above.
SECTION 15. CONFORMING AMENDMENT
Section 15 establishes Executive Schedule pay levels for the Ad-
ministrator, Deputy Administrator, General Counsel, and Assistant
Administrators. The Administrator will hold an Executive III posi-
tion, the Deputy Administrator an Executive IV position, and the
General Counsel and Assistant Administrators Executive Level V
positions.
SECTION 16. EXEMPTIONS
Section 16 provides that the Act shall not apply to all. the activities
of certain Federal agencies and to some of the activities of other
Federal agencies. While there are specific reasons for each agency or
activity exempted, generally, it is believed that it would be inappro-
priate for the ACA to be involved in such agency's activities. Were
these exemptions not included in the Act, it would nevertheless be
highly unlikely that the ACA would seek to involve itself in such
agency's activities, since the jurisdiction of the ACA extends only
to those agency functions which may have a substantial effect on
an interest of consumers as defined in section 19:(11). Because of the
nature of the activities of these particular agencies, it was felt that it
would be best to explicitly include the specific exemptions in the Act.
The Act shall not apply to the Central Intelligence Agency, the
Federal Bureau of Investigation, the National Security Agency, or
the national security or intelligence functions, including procure-
ment related to such national security or intelligence functions of the
Departments of Defense and State. (including the Departments of
the Army, Navy and Air Force) and the Military Weapons Program
of the Energy Research and Development Administration. It should
be noted that many of the purchasing decisions of the Department of
Defense may concern consumer goods and do affect the interests of
consumers. Such activities are not exempted from the Act. Similarly,
activities of the Departments of State which do not relate to national
security or intelligence. functions are not exempted from the Act.
Likewise, the activities of the Energy Research and Development
Administration which do not relate to the Military Weapons Pro-
grain are not. exempted from the Act.
The functions and agencies which are exempted obviously do not
involve interests of consumers as defined in the Act; and because of the.
specialized and sensitive nature of their responsibilities, the Commit-
tee believes that such exemptions are warranted.
The Act does not apply to labor disputes within the meaning of 29
U.S.C. 113 or 29 U.S.C. 152, or to it labor agreement within the mean-
ing of 29 U.S.C. 171. The purpose of this exemption is to provide that
the ACA is not to intervene in proceedings concerning labor-manage-
ment matters before such agencies as the National Labor Relations
Board or the National Mediation Board, in similar labor-management
proceedings such as those under the Railway Labor Act, or in proceed-
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ings pursuant to the Fair Labor Standards Act. This is consistent with
the underlying philosophy of the Act, which is that the ACA should be
participating or intervening in proceedings which affect a "interest
of consumers" as that term is defined in section 14 (11) of the Act-that
is, matters which touch on a concern of consumers arising out of a mar-
ketplace transaction. These exempted matters have no appreciable
relationship to any marketplace transaction.
This provision preserves a principle, a reflected in continuing Con-
gressional intent over the past 40 years, that Federal agencies not get
involved in the substance of private labor-management contract nego-
tiations. In the words of a leading Supreme Court opinion, the Fed-
eral agencies which oversee labor-management relations and contracts
should not "sit in judgment upon the substantive terms of collective-
bargaining agreements" (Porter Company v. N.L.R.B., 397 U.S. 99,
106). The National Labor Relations Act itself specifically provides
that nothing in the Act "shall be construed to authorize the Board to
appoint individuals for the purpose of . . . economic analysis"
(N.L.R.A., section 4). The provision recognizes the distinction between
the labor market, and the product and service market. The ACA's
principal concern is with the product and service market, and where
unions intervene in the product and service market, they are as much
subject to S. 200 as anyone else. But where a matter is concerned
exclusively with labor-management disputes or contracts, and falls
under the exclusive jurisdiction of a Federal agency overseeing labor-
management relations, that matter is beyond any authority expressly
granted by this Act to the ACA.
The Committee voted to remove from the Act a provision which
would have prohibited the ACA from intervening or otherwise par-
ticipating in license renewal proceedings of the Federal Communica-
tions Commission. It was the Committee's judgment that a broad,
across the board exemption should not be explicitly provided for in
the Act. The Committee's decision not to include the provision should
not be interpreted, however, as expressing an intent that the Act's
definition of consumer interest be interpreted in such a way to include
license renewal proceedings. In license renewal proceedings generally,
the issues contested involve questions of free speech, fairness in broad-
casting, equal time provisions, racial discrimination, and other aspects
of the broadcasters obligation to serve the public adequately. Such
issues do not relate to market place transactions, and since there is no
commercial transaction involved between a licensee and a consumer,
there is not -direct consumer interest involved in the license renewal
proceeding. FCC rulemaking proceedings may have a substantial effect
on an interest of consumers and in such instances the ACA may seek to
become involved.
Pursuant to section 16 (b), the Administrator is required to consider
the consumer's interest in an adequate supply of food and the inter-
est of farmers in maintaining an adequate level of income and produc-
tion prior to intervening in any United States Department of Agri-
culture proceeding. This subsection is not intended to exempt the
United States Department of Agriculture from the Act. It is not in-
tended to affect the definition of "interest of consumers" in section
14(11). It in no way limits the authority of the ACA, nor does it re-
quire any statement by the ACA. It is included in order to reflect
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growing Congressional concern over the price and adequacy of our
nation's supply of food.
SECTION 17. SEx DISCRIMINATION
Section 11 states that no individual shall be discriminated against
on the ground of sex in any way in any program or activity carried
on under the Act. The provision is to be enforced through agency
provisions and rules similar to those already established with respect
to racial and other discrimination, under title VI of the Civil Rights
Act of 1964. However, this remedy is not to be considered exclusive
and will not prejudice or cut off any other legal remedies available to
a person alleging discrimination.
SECTION 18. FAIRNESS FOR SMALL BUSINESS
Section 18 encourages all. Federal agencies to take the varied needs
of small businesses into account when implementing the provisions of
this Act. The Small Business Administration is directed to provide
small businesses with information concerning this Act and its imple-
mentation, and to provide Congress with a summary of the effect of the
Act on small businesses. To the extent feasible, the Administrator of
the ACA is required to consult with the representatives of small busi-
nesses before establishing the agency's general priorities or policies,
and before implementing general procedural rules ar regulations
which may affect small businesses. The provision also provides that the
Administrator of the ACA should give due consideration to the unique
problems of small businesses when acting under this Act, and to re-
spond in an expeditious manner to the views, requests, and all other
filings made by small business enterprises.
In the past, some have felt that Federal regulatory agencies have
devoted a disproportionately large portion of their resources to chal-
lenging actions taken by small businesses ; or that such agencies have
imposed unduly burdensome reporting requirements on small busi-
nesses. The limited financial resources of small businesses have made
them especially vulnerable to such possible abuses. This section is in-
tended to impress upon the ACA the importance of avoiding any
action which snakes it appear that it is unfairly burdening small busi-
nesses, while avoiding actions involving larger companies.
Of course, this provision is not intended in any way to prevent the
ACA from intervening or participating in agency proceedings or court
actions substantially affecting the interests of consumers just because
such actions affect small businesses. The ACA in the final analysis must
be guided by its good faith determination of what actions must be-
taken to protect the interests of consumers.
For the purposes of Section 18, the term "small business" shall have
the same meaning as provided in Section 10(a) (4) of the Act.
SECTION 19. AUTHORIZATION OF APPROPRIATIONS
This section provides that there are authorized to be appropriated
not to exceed $15 million for the fiscal year ending June 30, 1976, not
to exceed $20 million for the fiscal year ending June 30, 1977, and not
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to exceed $25 million for the fiscal year ending June 30, 1978. The Act
specifies that subsequent legislation for the authorization of appro-
priations shall be referred in the Senate to both the Government Oper-
ations Committee and the Commerce Committee. At; that time, these
Committees can review the economy, efficiency, and effectiveness of the
ACA, and make whatever legislative recommendations they deem
appropriate.
SECTION 20. EVALUATION BY THE COMPTROLLEi: GENERAL
To assist Congress in evaluating the efficiency and effectiveness with
which the ACA has performed and in determining what legislative or
other changes, if any, should be made in the activities of the Agency,
the General Accounting Office is required by Section 20 to submit to the
Congress a report on the ACA.
The report of the GAO is to be a detailed, comprehensive documenta-
tion of the manner in which the provisions of this Act have been
carried out by the ACA. It should include, where appropriate, rec-
ommendations such as, (1) possible additional or substitute means of
achieving effective representation of the interests of consumers in
Federal agency proceedings, or (2) expanding, ending, or restricting
any of its authorities.
SECTION 21. MISCELLANEOUS PROVISIONS
Section 21(a) states that nothing in this Act shall be construed to
limit the discretion of any Federal agency or court within its authority,
including a court's authority under Rule 24 of the Federal Rules of
Civil Procedure, to permit the Administrator to participate in any
proceeding or activity to a greater extent than he is entitled to under
section 6 or to provide him more notice or information than is re-
quired by section 12 or 10 (6). This subsection will assure that a Federal
agency or court will remain free, for example, to allow the Administra-
tor to participate in a particular meeting at which Section 6(a) (3)
does not give the Administrator the right to be present or to allow the
ACA to intervene or participate in a de novo court proceeding if such
participation is not otherwise authorized by this Act.. An agency or
court may exercise its discretion to allow further participation as
liberally as possible, consistent with proper, fair, and orderly conduct
of its proceedings and activities in such proceedings as de novo ac-
tions where a Federal agency seeks an immediate injunction without
any prior agency action.
Section 21(b) (1) establishes that actions of the Administrator and
other agencies under sections 6 (a), (d), (f), (i), and (j) and sections
7, 10, 11, and 12 of this Act shall not be subject to judicial review to the
extent specifically provided in paragraphs (A), (B) and (C) of
section 21(b) .
The actions taken by the ACA or any other person involving other
sections of the Act will be subject to review to the extent provided by
the Administrative Procedure Act, other provisions of this Act, or
other applicable statutes. Subsection 21(b) does not refer to, and in
no way affects, the Administrator's rights under Section 6(c) to. ini-
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tiate, intervene, or otherwise participate in judicial proceedings in-
involving agency actions substantially affecting the interests of
consumers.
Subparagraph (A) provides that the Administrator may obtain
judicial review to enforce his authority under sections 6 (a) (d), (f),
(i) and (j) and sections 10, and 12 of the Act. This includes, for
example, the Administrator's right to intervene as a party in certain
agency proceedings, under section 6 (a) (2) and the right under section
10(b) to obtain certain information from other Federal agencies.
However, the Administrator may obtain judicial review of a Federal
agency determination under section 6(f) of this Act, only after final
agency action and only to the extent that such determination affected
the validity of such action.
Subparagraph (B) concerns review by other parties of the Admin-
istrator's intervention or participation in an agency proceeding or
activity. It makes judicial review of the Administrator's actions avail-
able only on the grounds that the Administrator's intervention or par-
ticipation results in prejudicial error to another party or participant.
It requires that such review await the, outcome of the proceeding or
activity and that it be considered by the court in reviewing the entire
proceeding or activity. Judicial review is available only where the
proceeding or activity is of the type reviewable by law.
This subsection, of course, does not affect judicial review based on
grounds unrelated to the Administrator's intervention or participation.
For example, if an agency decision in a proceeding in which the Ad-
ministrator intervened is not supported by substantial evidence on the
record considered as a whole, and the decision is reviewable under the
substantial evidence standard, a court may still take whatever action it
would have taken regardless of the Administrator's intervention.
Subparagraph (C) grants a right of review to any person substan-
tially and adversely affected by the Administrator's action under Sec-
tions 6(f) (discovery by the Administrator) ; 10(a) (information-
gathering) and 11 (public disclosure of information), unless the court
determines that judicial review would be detrimental to the interests
of justice. This condition is designed to relieve the Administrator from
the burden of devoting limited resources to unnecessary and time-con-
suming litigation.
Section 21 (b) (2) states that the Administrator's initial determina-
tion pursuant to section 6, that the effect of an agency proceeding or
activity substantially affects an interest of consumers, is deemed not to
be a final agency action and thus not subject to judicial review, except
where the Administrator's intervention or participation is considered
as art
as b) (1) ($je review of final. agency action permitted by subsection
This subsection is intended to apply au orderly framework for ju-
dicial review arising from the Administrator's intervention and par-
ticipation in agency proceedings and activities.
SECTION 22. TRANSFER OF CONSUMER PRODUCT INFORMATION
C00RDINATING CENTER
This section transfers the officers, employees, assets, liabilities, con-
tracts, property, and records used in connection with the functions of
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the Consumer Product Information Coordinating Center (CPICC)
within the General Services Administration. The Office of Manage-
ment and Budget will have responsibility for determining what should
be transferred under this section.
Section 22(b) (2) provides that employees transferred shall serve in
positions within the ACA without reduction in classification or com-
pensation, except for cause, for at least 1 year.
SECTION 23. PUBLIC PARTICIPATION
Section 23(a) provides that each Federal agency shall issue appro-
priate regulations and rules of procedure concerning the procedural
rights of individuals who may be affected by agency action. All Fed-
eral agencies are required by this provision to conduct a complete re-
view of their applicable rules, interpretations, guidelines, standards
or the like in order to determine whether they can, by changing or
adding to such material, increase participation in agency activities by
private representatives of consumers and other interests. This section
requires each agency in the Federal Government to have rules that de-
scribe the right persons have to-
(1) petition the agency for action ;
(2) receive notice of the agency proceedings;
(3) file official complaints with the agency;
(4) obtain information from the agency; and
(5) participate in agency proceedings.
Federal agencies are not required by this section to issue any rules
which an agency lacks the authority to issue under other laws.
In order to provide the public with an opportunity to comment
on the agency's proposed rules, the provision requires that all changes
or additions an agency propose to make in its standards, procedural
rules, interpretations, guidelines or the like in order to increase public
participation shall be published in the Federal Register.
Section 23(b) requires each Federal agency to take all reasonable
measures to reduce or wave procedural requirements for individuals
for whom such requirements would be financially burdensome, or
which would impede or prevent effective participation in agency pro-
ceedings. For example, such agency rules should, where appropriate,
waive or reduce the cost of transcripts; eliminate the requirement
in some agency statutes that participants must serve papers on all
parties to any formal proceedings; and require the agency's technical
staff to help participants obtain any information contained in agency
documents and records that is needed for use in agency proceedings.
Section 23(c) requires that rules of procedure of the nature de-
scribed by this section be published and disseminated in a manner
best designed to inform and be understood by the general public. This
should include such rules adopted by Federal agencies prior to enact-
ment of this Act.
SECTION 24. COST AND BENEFIT ASSESSMENT STATEMENTS
Section 24(a) requires that each Federal agency which is authorized
to promulgate rules (as defined in section 551(4) of title 5, United
States Code) prepare a cost and benefit assessment statement with
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respect to any rule governed by section 553 (b) of title 5, United States
Code, which is likely to have a substantial economic impact. No agency
shall be required to comply in any way with section 24 with respect
to rules which, in that agency's sole discretion, are judged not likely to
have a substantial economic impact. It is within each agency's discre-
tion to determine the applicability of the word "substantial" as used
in this subsection to its rules. Each cost and benefit assessment state-
ment shall be short and concise and shall be accompanied by such
supporting documentation as the agency, in its discretion, determines
to be necessary or appropriate. Each statement shall consist of three
elements: (1) a brief description of the estimated costs that are fore-
seeable as a result of the effective implemenation of such rule; (2) a
description of the estimated benefits that are foreseeable as a result
of the effective implementation of such rule; and (3) a statement, of
the apparent relationship, if any, between such foreseeable benefits
and such foreseeable costs.
To the extent deemed practicable by the agency responsible for its
preparation, each cost and benefit assessment statement shall indicate
in an appendix, the assumptions, if any, which were made by the.
agency regarding the means, or alternative means, and attendant costs
of compliance with the proposed rule, including any manufacturers'
costs and consumer costs reflected in the price of any product affected
by such rule. This requirement is included, because in order for an
agency to estimate the economic costs of the implementation of a pro-
posed rule, that agency will, of necessity, be making certain assump-
tions with regard to the various means of compliance with the rule.
The agency is free to make whatever assumptions it believes appro-
priate with respect to the means by which the rule will be complied
with-including, if possible the most cost effective means of com-
pliance-but in assessing costs of compliance, the agency should dis-
close both the origin and nature of its assumptions with regard to
such costs. For example, in assessing the cost to a manufacturer of a
production modification, the estimate of the cost of such modification
to the manufacturer would be an assumption which the agency should
describe. (Adequate authority is provided in subsection (d) to enable
the agency to obtain such information.) If the agency seeks to esti-
mate the direct economic cost of such modification to the consumer,
the percentage of the markup from the cost of production to the
manufacturer would be another assumption which the agency should
describe. If estimating a particular markup is unfeasible or would
have any undesirable effect such as stifling competitive market forces
with regard to the consumer price of such modification, the agency
should refrain from expressing an estimated consumer cost. In such
instances, the agency may still express the cost of the modification in
terms of estimated production costs even where it is unfeasible to in-
clude the cost to the consumer. In all cases, however, the agency should
critically evaluate production cost data submitted by any person.
The Committee does not intend that the requirements of this sec-
tion shall place any unreasonable burden on any Federal agency or
interfere in any way with any agency's ability to fulfill its responsi-
bilities under the law. The inclusion of this section in this Act reflects
the Committee's belief that Federal agencies, when promulgating
rules which have a substantial economic impact, should attempt to
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estimate the, foreseeable economic and noneconomic costs and benefits
of the implementation of such rules. At the same time, the Committee
feels very strongly that the requirements of this sect ion should not in
any way modify or affect the substantive laws governing the agency's
rude-making authority. Subsection (k), discussed below, is intended
to make. this clear.
Subsection (b) requires a Federal agency to include in a Federal
Register notice of proposed rule-making regarding a rule for which
the agency intends to issue a cost and benefit assessment statement, a
request to interested persons to submit to the agency, in writing, com-
ments, materials, data, information, and other presentations relevant
to the preparation of the cost and benefit assessment statement.
Subsection (c) states that within the time prescribed for considera-
tion of the proposed rule for which the agency is preparing a cost and
benefit assessment statement, such agency shall seek to obtain from
other Federal agencies and persons, whatever information or mate-
rials it deems relevant to the costs and benefits likely to ensue from the
effective implementation of such proposed rule. In addition, this sub-
section makes clear the intent of the Committee that no requirement
tinder this section contribute to any delay in any agency consideration
of any regulation. To this end, no extensions of time for comment shall
be granted by any agency solely for the purpose of receiving any in-
formation or materials to be utilized in the preparal ion of a cost and
benefit assessment statement.
Subsection (d) requires any person who contends that a proposed
rule, if implemented, will result in increased or decreased costs, to
furnish to the promulgating agency all information upon which it
bases its assertion if such information is in his control. In addition,
the promulgating agency is authorized to require the submission of
information, or materials which it deems relevant to the preparation
of a cost and benefit assessment statement from a person who may
be directly affected by the promulgation of the proposed rule, if such
information is in the possession or control of such person. Any person
who knowingly and willfully falsifies, conceals or covers up or makes
any false, fictitious, or fraudulent statements or representation, or who
in any way violates section 1001 of title 18, United States Code, in
connection with any materials or information, submitted pursuant to
this subsection, shall be liable for prosecution under section 1001 of
title 18, United States Code.
If a person who makes a contention under this subsection is un
illing or unable to supply the necessary information and materials
two justify such contention, the promulgating agency need not con-
sider the contention of such person in its estimation of the costs and
benefits of the proposed rule. Whenever an agency is requesting in-
formation from a person under this subsection, the agency may seek
to compel disclosure of such information or production of such re-
quested materials by issuance of a subpoena or other appropriate order,
which order shall be enforceable in court if the order is not needlessly
broad and if the materials and information sought are relevant to the
preparation of it cost and benefit assessment statement. As subsection
(j) makes clear, a court's inquiry would be limited to the enforce-
ability of the subpoena.
Subsection (e) requires that all cost and benefit assessment state-
ments prepared by an agency be initially published in one yearly report
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in the Federal Register. Publication in the manner required by this
subsection will provide a means for interested persons, the Congress
and other government agencies to assess the performance of the agency
with respect to the estimated costs and benefits of promulgated reg-
ulations which have a substantial economic impact. This requirement
seeks to provide a means for determining which government programs
entail unreasonable or excessive costs, as stated in the declaration of
purposes in section 2 (b) (4).
Any agency preparing a statement, pursuant to this section, should
make available to interested persons as much information relevant to
a cost and benefit assessment statement as is possible, consistent with
the Freedom of Information Act. The Freedom of Information Act
will, of couse, govern the agency's authority to withhold any informa-
tion. Where, for example, it is possible for an agency to release infor-
mation without compromising the confidentiality of the holder of a
trade secret, the agency is encouraged to release the information in a
way which provides such protection. Other requirements of the Free-
dom of Information Act, including the publication of a listing of
available materials, are expected to be complied with by each agency.
Each agency should implement this section in a way which reflects a
principal purpose of this section, that all interested persons be pro-
vided with all information necessary to evaluate the costs and benefits
of rules for which assessment statements have been prepared.
Subsection (f) requires the President to issue regulations provid-
ing guidelines for Federal agencies regarding the nature and con-
tent of the cost and benefit assessment statement and regulations
which insure that any agency preparing such a statement shall be
able to obtain information which it deems necessary or appropriate
to the preparation of such a statement. The regulations providing
guidelines should give the agencies a maximum amount of discretion
with regard to the nature and content of the required statements so
that each agency can implement the requirements of this section con-
sistent with that agency's particular statutory mandates. It is the in-
tent of the Committee that the regulations which insure that the agen-
cies shall have access to necessary information shall be written in a
way which guarantees maximum access by the agencies to relevant
information.
The President is required to promulgate regulations on the basis of
recommendations submitted to the President by, the Office of Manage-
ment and Budget, the General Accounting Office, and the Agency for
Consumer Advocacy. It is the intent. of this subsection that the Presi-
dent will consider from among the diverse proposals for regulations
which are submitted by the three named agencies and the public. Four
fundamental principles stressed through this section should be incor-
porated into regulations issued by the President. They are :
(1) that the requirements of this section shall not in any way
alter the mandate of any agency, or impose any additional criteria
or prerequisites for agency rule-making.
(2) that the requirements of this section shall not impose any
unreasonable or excessive burden in the administrative process;
and
(3) that interested persons have maximum access to informa-
tion, materials and data used in the preparation of a cost and
benefit assessment statement and
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(4) that agencies have maximum access to information and
materials for use in connection with the preparation of cost and
benefit assessment statements.
The President is required to promulgate the required regulations
in accordance with procedures set forth in subsection (b) and (c) of
the new section inserted by sections 202(a) of Public Law 93-637. The
procedures established by these subsections will insure that all inter-
ested persons have an opportunity to present relevant comments on
proposed regulations. The President is required to give public notice
of proposed rule-making under this subsection within sixty days after
the effective date of this Act.
The President is required to transmit the regulations issued by
the Congress, and is required to submit in addition the recommenda-
tions submitted to the President by the Office of Management and
Budget, the General Accounting Office, and the Agency for Consumer
Advocacy. The Congress shall have 90 legislative days to consider the
proposals for regulations after which time the relations shall go into
effect unless either House of Congress by resogulution of disapproval
disapproves such regulations. However, Congress may by concurrent
resolution make such changes in such regulations as it deems appro-
priate within such 90 legislative day period in which case such regula-
tions will take effect in such modified form. A regulation or guideline
which conflicts with any statutory requirement of an agency should not
be considered applicable to that agency as stated in subsection (1).
Subsection (g) requires each Federal agency, or officer, that pro-
poses legislation to the Congress which is likely if enacted, to have a
substantial economic impact, to accompany such legislative proposal
with a cost and benefit assessment statement prepared in accordance
with the provisions of subsection (a). A committee of Congress having
jurisdiction over such legislative proposal may permit an agency sub-
mitting such proposal to postpone compliance with this subsection for
up to 30 days from the date of submission to the Congress of such
legislation.
Subsection (h) defines the terms "rule", "legislation", "benefit" and
"cost" as used in this section. In drafting these definitions, the Com-
mittee has attempted to define both "cost" and "benefit" in the broadest
way possible. It is for each agency preparing a statement under this
section to decide which aspects of the definitions of "cost" and "benefit"
are relevant to a particular promulgated rule or legislative proposal.
If, in an agency's judgment, the particular benefits of a proposed rule
are noneconomic benefits, such as benefits to the health and safety of
individuals or benefits to the quality of life, the agency is not required
or encouraged to necessarily seek to quantify such benefits or to ex-
press such noneconomic benefits in economic terms; although such
agency may do so if it believes that such is necessary in order to present
the benefits fairly.
Subsection (a) requires the agency to include in the statement the
apparent relationship, if any, between foreseeable benefits and costs.
Because of the breadth of the definitions of "costs" and "benefits" and
the broad discretion which the agency is expected to exercise in de-
termining which costs and which benefits are significant with respect
to a proposed regulation or legislative proposal, it may be that in some
instances there would not be an apparent relationship between the costs
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and the benefits which could be expressed in a meaningful way. In
such instances, it will suffice for the agency to set forth the costs, to set
forth the benefits, and to state that it would not be feasible or useful
to seek. to state a relationship between the costs and the benefits.
In computing the estimated costs of a proposed regulation which
would involve any production modification, the Committee intends, as
stated previously, that the cost of such production modification be ex-
pressed in a way that discloses the estimated cost to any person re-
quired to make such modification. While the agency, of course, may
estimate the cost of such production modification to the consumer, in
such instances, it is important that the statement indicate assumptions
which were made by the agency with regard to cost differential be-
tween the cost to the manufacturer and the cost to the consumer-i.e.-
the mark-up. It may be, in some instances, that the agency will deem
it unfeasible to estimate the cost of such modification to the consumer.
In such a case, the agency is not required to snake such an estimate.
Subsection (i) requires the Comptroller General of the United
States to prepare a study of the implementation of this section three
years after the effective date of this section, and to submit such study
to the Congress. The report: shall include an evaluation of the advan-
tages and disadvantages of cost and benefit assessment statements and
the nature and extent of Federal agency compliance with this section.
Among other recommendations, the report shall include the Comp-
troller General's recommendations with regard to the necessity or ad-
visability of the provisions of this section and of the need to amend
subsection (j) which prohibits any- judicial review of any of the pro-
visions under this section.
Subsection (j) prohibits any court from reviewing in any way any
cost and benefit assessment statement prepared pursuant to the re-
quirements of this section or the extent of compliance of any such
statement with the requirements of this section or the compliance by
any agency with any requirement of this section. Pursuant to subsection
(j), judicial review of final agency rules themselves will of course
continue to be available under 5 U.S.C. 702.
Furthermore, since the statements prepared pursuant to this section
are nonreviewable, it is the intention of the Committee that no state-
ment prepared pursuant to this section be considered by any court as
a ground for invalidating any aspect of any rule promulgated by any
agency. However, where an agency is currently required to make an
assessment of the costs and benefits of a particular proposed regula-
tion, and where such assessment is currently admissable with respect to
a review of the validity of such regulation, in such case, a reviewing
court shall continue to consider Such assessment prepared pursuant to
any other authority without regard to any provision of this section.
No officer or agency of the United States other than the agency re-
sponsible for the preparation of a cost and benefit assessment state-
ment and the duly authorized committees of the Congress shall have
authorty to review, in any way, any cost and benefit assessment state-
ment or the extent of compliance of any such statement with the
requirements of this section or with regulations promulgated under
subsection (g) of this section. This provision is intended to emphasize
the strong belief of this Committee that each agency responsible for
the preparation of cost and benefit assessment statements under this
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6
section shall have complete independence and full control over all
aspects of the preparation and dissemination of such statements. While
the Committee recognizes that uniformity is often necessary for the
smooth functioning of our massive Federal bureaucracy in order to
avoid any unreasonable burden or delay, the Committee believes that,
with respect to the requirements of this section, each agency should
control the implementation of this section, and that the regulations
promulgated pursuant to subsection (g) of this section should reflect
this.
Subsection (k) states that the requirements of this section shall
supercede any existing executive orders pertaining to the preparation
of any economic, cost and/or benefit, inflationary or other like state-
ment which an agency may presently be required to prepare. Execu-
tive Order 11821 dated November 17, 1974 would require all executive
agencies to issue inflationary impact statements. The Committee be-
lieves it would be unreasonable and overly burdensome to require such
agencies to prepare both cost and benefit assessment statements and
inflationary impact statements.
The Committee does not intend for this section to change, in any
way, the responsibilities of any agency to promulgate particular rules.
In order to leave no doubt about this very important point, Subsec-
tion (k) specifically provides that enactment of this section shall not
in any way supercede or alter the substantive standards governing the
applicable agency's rulemaking authority. These standards are em-
bodied in "statute, regulation, or lawful practices." The latter phrase
refers to practices established by, or pursuant, to statutes, regulations,
or court decisions.
The provision assures that enactment of this section will not alter
any applicable statute, regulation, or lawful practice which may now
govern the extent to which an agency may consider the costs or bene-
fits of its proposed action in exercising its rule-making authority. In
a number of Instances, agency statute, regulation, or lawful practice
require that other considerations be paramount. For instance, the
statute governing the Food and Drug Administration's regulation of
food additives, the Delaney Amendment (21 U.S.C. 348) specifically
provides that an additive shall be declared unsafe if it causes cancer
in animals. The statutory standard leaves little or no discretion to
the Agency to take economic matters into account in establishing
standards of safety under this provision. Similarly, the law requires
the Nuclear Regulatory Commission to place preeminent emphasis on
safety when regulating nuclear power plants. Thus, if agency consid-
eration in connection with its rule-making of a statement prepared
pursuant to this section would be inconsistent, in any way, with the
agency's statutes, regulations or lawful practices, then the provisions
of subsection (k) would apply. Where the requirements of the statute
are broader and explicitly contemplate the consideration of costs by
the agency, then the cost and benefit assessment will assist the agency
in its consideration of a proposed rule or proposed legislation.
Finally, subsection (k) also specifies that if, with respect to any
promulgated rule, the promulgating agency is required by law to issue
any statement which would include an assessment of the estimated
costs and benefits of such rule or legislative proposal, such as in the
case of a National Environmental Policy Act Statement, the agency
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shall be relieved of any responsibility to prepare any cost and benefit
assessment statement pursuant to Ibis section.
Subsection (1) states that the provisions of this section shall be-
come effective upon the effective date of implementing regulations
submitted by the President pursuant to subsection (g). Necessary
sums are authorized to be appropriated for the fiscal years 1976,
1977, and 1978. It is the intention of the Committee that the manner
of implementation of the requirements of this section by an agency
shall be dependent on the amount of funds appropriated by the Con-
gress to carry out the provisions of this section. No agency shall be
required to expend funds not appropriated under this subsection to
carry out the requirements of this section, if such expenditures would
hinder such agency's ability to carry out its other responsibilities.
This section provides that the Act, will take effect, except for section
24, 90 calendar days following the date of its enactment or before,
should the President prescribe an earlier time for the establishment of
the Agency. The section also provides that officers of the Agency are
subject to be paid at the rates provided for in the Act, at any time after
the date of enactment of the Act.
This section is a separability clause which provides that, if any
part of the Act is declared invalid, the remainder of the Act will
continue in force.
CHANGES IN EXISTING LAW
In compliance with subsection 4 of rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill, as
reported, are shown as follows (existing law proposed to be omitted
is enclosed in black brackets, new matter is printed in italic, and exist-
ing law in which no change is proposed is shown in roman) :
SUBOIIAPTER II OF CHAPTER 53 OF TITLE 5, UNITED STATES CODE
? 5314. Positions at Level M.
(60) Administrator, Agency for Consumer Advocacy.
* * * * * *
? 5315. Positions at Level IV.
* * * * * * *
(100) Deputy Administrator, Agency for Consumer Advocacy.
* * * * * * *
? 5316. Positions at Level V.
(135) General Counsel, Agency for Consumer Advocacy.
(136) Assistant Administrators, Agency for Consumer Advocacy
(5).
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58
ESTIMATED COSTS
In accordance with section 252(a) of the Legislative Reorganiza-
tion Act of 1970 (Public Law 91-510), the Committee estimates that
the costs of implementation of S. 200 would be as follows :
First year ------------------------------------------ $15,000,000
Second year------------------------------------- 20,000,000
Third year----------------------------------------- 25,000,000
March 12, 1975
In compliance with section 133 of the Legislative Reorganization
Act of 1946, as amended, rollcall votes taken during. Committee con-
sideration of this legislation are as follows :
Vote on Amendment to delete from section 16 exemption for FCC
license renewal proceedings : 5 years-3 nays.
Yeas : Nays :
Allen Percy
Chiles Javits
Nunn Ribicoff
Brock
Weicker
Vote on Amendment to delete from section 16 ee%emption for pro-
ceedings concerning labor-management relations : 6 yeas-7 nays.
Yeas : Nays :
Allen Jackson
Chiles Percy
Nunn Javits
Brock Ribicoff
Weicker Glenn
(Proxy) (Proxy)
McClellan Muskie
Metcalf
FINAL PASSAGE : Ordered reported : 1 8 yeas-1 nay.
Yeas : Nays :
Chiles Allen
Glenn
Percy
Javits
Brock
Weicker
Ribicoff
Roth
(Proxy)
Jackson
Muskie
Metcalf
'Committee rules provide that on "Final Passage" proxies may be allowed solely for
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SUPPLEMENTAL VIEWS OF MR. METCALF
The Consumer Protection bill reported by this committee in 1972
included two basic provisions for supporting state consumer activities.
One provided grants-in-aid to improve the enforcement and imple-
mentation of consumer protection laws, promote consumer education,
and strengthen the professional competence of State regulatory agen-
cies. The other authorized the Federal Administrator to intervene in
State or local proceedings only on the. request of the governor, an
official duly authorized by a State to represent consumers, or by a
State or local agency or court.
It is most unfortunate. that the committee did put these provisions
into the bill this year. One of the major criticisms voiced over and
over by opponents is that the measure before. us would concentrate
administrative powers in Washington. My amendments recognize
the role of the States and local governments in consumer protection
and provide incentives for State and local enforcement and public
policy in this critical area of governmental action.
Ten governors supported the Federal intervention approach to con-
sumer protection which was in the 1972 version of the bill. They were :
Forrest II. Anderson (Mont.), John A. Burns (Hawaii), Jimmy Car-
ter (Ga.), Daniel J. Evans (Wash.), Wendell. II. Ford (Ky.), Wil-
liam L. Guy (N.D.), Stanley K. Hathaway (Wyo.), Milton J. Shapp
(Pa.), George C. Wallace (Ala.) and John C. West (S.C.). Governor
Ronald Reagan (Cal.) was the only governor to express opposition.
Such intervention by the Federal Administrator (and the expertise
and resources he brings with him) would be only at the request of the
states and such Federal Administrator would always have the option
to determine whether or not he could respond to such requests. There
is no requirement in my provision that the Administrator intervene in
State and local proceedings. He must determine that the proceedings
may substantially affect interests of consumers and he must assess his
own capability to represent adequately his position before the State
or local agency or court. Finally, he is permitted to come in only if
he receives a request in writing from the governor or any officials
designated by the governor for such purpose, the head of an agency or
an official duly authorized by a State to represent the interests of
consumers or the head of any State or local agency or judge of a court
conducting a proceeding.
Thus, any constitutional problems as to Federal interference with
the jurisdiction of State and local governments are averted by the
restricted nature of the provision.
A $900 billion consumer expenditure is projected for this year. This
will be about two thirds of our gross national product. The lion's
share of that expenditure will be subject to State and local laws, regu-
lations, and other controls. Transportation, food, the gas and electric
(59)
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bill, intra-state telephone service, personal effects and charges and in-
surance premiums are a few of these consumer items.
Just four industries-electric, telephone, natural-gas and insurance
companies-collect some one hundred and fifty billion dollars a year
(1972 data) from consumers. Almost 90 percent of that $150,000,000,-
000 is regulated by State, rather than Federal, commissions. The
States are where the action is on protection of the everyday, checkbook
items in the consumer's budget. It is the State commissions, and the
consumer interests which need representation before them, that must
be strengthened if Congress is to provide meaningful consumer
protection.
Testimony in the S. 200 hearing record shows that State officials
want help from the Federal Government in presenting the consumers'
case in proceedings before State commissions. Massachusetts Lt. Gov.
Thomas P. O'Neill, Jr. and Rhode Island Attorney General Julius
Michaelson, in testifying for amendments which would provide such
help, stated that electric rates were the main consumer concern in their
states. Assistance to the States was also advocated by Ralph Nader and
witnesses from the Consumer Federation of America and United Au-
tomobile Workers. Similar viewpoints were presented to the Com-
mittee last fall, during our hearings on regulatory reform, by former
Federal Power Commission Chairman Lee White, I'emisylvania Pub-
lic Service Commissioner Herb Denenberg, and the IIon. William
Doub, who has served on both State and Federal regulatory commis-
sions.
The grant section, designed to strengthen the capacity of the States
in their consumer protection work, would have had a ceiling authoriza-
tion of $20 million in fiscal 1976, $40 million in fiscal 1977 and $50
million in fiscal 1978.
Cost of the amendment authorizing intervention in State and local
proceedings would have been included in the over-all authorized spend-
ing limits in S.200, which are $15 million for fiscal 1976, $20 million
for fiscal 1977 and $25 million for fiscal 1978. The $2> million for 1978,
for all of the agency's programs, costs, and activities, is less than what
some 200 electric utilities reported spending on regulatory commission
expenses in 1972.
In regulatory matters it is necessary to spend money in order to save
far greater amounts for consumers of services provided by regulated
corporations. Virginia State Senator Clive L. Duval, 2d, in his state-
ment to the Committee in support of both the grants and intervention
amendment, stated that the two large utilities-electric and tele-
phone-in his state probably spend about a quarter of a million dol-
lars in connection with each rate increase application to the State regu-
latory commission. Speaking as an experienced legislator who for years
has intervened in State commissions at his own expense on behalf of
his constituents he stated that he cannot take the time to prepare prop-
erly for these cases and "even more important, we do not have the fi-
nancial resources to hire expert witnesses-accountants, engineers, fi-
nancial experts-to rebut the well-prepared case presented by the
utility in support of the rate increase."
The study recently conducted by the Subcommittees on Reports,
Accounting and Management and Intergovernmental Relations, in co-
operation with the Congressional Research Service and State utility
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commissions, determined that last year investor-owned electric and gas
utilities were granted more than $3 billion in rate increases in the gen-
eral rate increase proceeding which Senator Duval described. These
utilities received more than twice that amount through fuel adjust-
ment clauses, for a total of $9.6 billion in rate increases in 1974, more
than one and a half times is much as they had been granted in the pre-
vious quarter of a century. The complicated fuel adjustment clause in-
creases are even more difficult to analyze and combat than general rate
increase requests. Therefore the widespread use of fuel adjustment
clauses adds compelling urgency for meaningful Federal assistance
to consumers and State commissions in utility matters.
The wording of Section 6(g) of S. 200 is abjectly negative with
reference to intervention. Section 6(h), however, permits communica-
tion with and provision of information and assistance to the States,
but this is insufficient. There is no positive authority for the Adminis-
trator to intervene as can be found in 50 USC 481 (a) 4 where the
General Services Administrator and the DOD are authorized to rep-
resent Federal agencies in proceedings before Federal and State reg-
ulatory bodies. I)OD and GSA have intervened in hundreds of State
commission proceedings during the past twenty six years. I have never
hoard any suggestion or inference that this Federal intervention has
been improper. These agencies have saved the Federal Government
hundreds of millions of dollars.
If the GSA can intervene in a utility rate case on behalf of the Gov-
ernment without seeking permission, why cannot the Administrator
intervene on behalf of the U.S. consumer upon request of the States?
It should be noted that the Administration is now attempting to get
the GSA not to intervene in electric utility rate cases, as Congress
authorized the agency to do a quarter of a century ago.
The need and support for Federal intervention in State commis-
sions and courts on behalf of consumers has been documented in many
volumes of hearings by the committee and its subcommittees during
the 91st, 92nd and 93rd Congresses. The case is more compelling in
the 94th Congress, because of the massive increases in utility bills. But
the position taken by the Committee is a giant step backward from
the responsive and constructive approach it took in the consumer pro-
tection bill it approved in 1972.
LEE METCALF.
50-214 0 - 75 - 5
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SUPPLEMENTAL VIEWS OF MR. WEICKER
S. 200 comes as a breath of fresh air to the American consumer.
This bill would create an independent consumer advocate who will
represent all Americans and will strive to secure for them the equity
and impartiality of regulatory proceedings. I strongly support the
overall objectives of this legislation; however, I cannot in conscience
vote to provide exclusions from its provisions to any individual, group
of individuals, federal or private organizations. Asa practical matter,
the Agency for Consumer Advocacy would probably not involve it-
self in the activities of the CIA, FBI, or the types of labor/man-
agement proceedings outlined in section 16. What concerns me is the
continuance of a practice to provide exemptions for the powerful. One
of the greatest issues in this country is whether there are two levels of
the law; one which applies to the economically and/or numerically
strong, and one that applies to the average citizen who does not have
the wherewithal to stand up and be heard. The purpose of S. 200 is to
provide that voice for the average citizen and on that basis I will
vote to strike all exemptions from this bill. To do otherwise would
deny equal application of the principals set forth in S. 200 and damage
the credibility of this new Agency from the outset. For the Congress
to legislate such exemptions further damages our credibility: Neither
consumerism nor democracy need exemptions.
LOWELL P. WEICKER.
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INDIVIDUAL VIEWS OF MR. NUNN
While I have grave reservations about the governmental principles
embodied in this legislation, I voted to report the Consumer Protec-
tion Act favorably because of two amendments adopted by the Com-
mittee. My vote on final passage will depend to a large extent on
whether these amendments are retained in the bill.
The first of these amendments provides that each rule, regulation
and law proposed by Federal agencies be accompanied by a statement
assessing its cost and benefit to consumers. In my estimation, this re-
quirement should provide a picture of the true cost of government
programs in economic terms, enabling consumers to understand for
the first time the actual cost of their Federal Government. I feel that
this amendment is of great importance to the free enterprise system
of our Nation.
The second amendment broadens the exemption of small businesses
from the information-gathering powers of the Agency for Consumer
Advocacy under section 10 of the bill. As introduced, the bill pro-
vided that small businesses with not more than 25 employees would be
exempt if they met certain other criteria now used by the Small Busi-
ness Administration. I believe that it is unreasonable to set a limit
based on the number of employees, because it provides little indication
of the true financial condition or size of a business. As a result of this
amendment, only those businesses with sufficient financial resources
will be subject to the information-gathering powers of the ACA,
which in my opinion presents the major potential source of harass-
ment for the average American businessman from this new agency.
SAM NUNN.
(65)
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MINORITY VIEWS OF MR. ALLEN
Ignoring a chance to let loose the eagle of regulatory reform, the
Committee continues to hurl skyward, again and again, a dodo bird
which it hatched six years ago. This pitiful, flightless thing has been
bruised and battered beyond recognition in the process.
Frustrated supporters, so intent on proving that the creature can fly,
appear to forget why they wished it to be airborne in the first place.
There is no interest in the facts which show that we are dealing with
an aberration doomed to return to extinction soon after it is left alone.
If only it would be left alone.
This bill to create an Agency for Consumer Advocacy is a poor idea
badly drafted. It should be rejected because it is not what was intended,
not what is needed and certainly not suitable to become a law of which
we can be proud. That this is so can be demonstrated beyond refutation
with facts we no longer can afford to ignore.
S. 200 IS NOT WHAT IS INTENDED
1. It is Not a Proper Vehicle for Regulatory Reform
As originally conceived, the ACA was intended to "reform the entire
governmental apparatus." 1 Almost everybody forgets this, and per-
haps i.t is good that they do. A comparison of this bill with some of
the genuine attempts to Initiate a much needed comprehensive regula-
tory reform effort could prove embarrassing.2 No one continues to con
tend seriously that the ACA is to be the agency to accomplish regula-
latory reform.
2. It is Not TVhat Consumers Want
Then we were told by self-appointed representatives, in expensive
full-page advertisements in leading newspapers, that an ACA is needed
to fulfill a demand of "the American consumer"--"All 210 million of
us." 3
If that money were put into an effort to take a nation-wide poll to
find out what was demanded by real consumers, these "representatives"
would be joining me today in opposing this bill; they would, that is,
if they take their representation function seriously. Such a poll was
taken this year by the respected Opinion Research Corporation of
Princeton, New Jersey; some of the results were as follows:4
Only 20 percent of the total population had heard of the pro-
posed consumer advocacy agency, and of these relatively few
could tell the researchers what the agency was designed to do.
' Statement of Ralph Nader, Hearings on H.R. 6037 Before a Subcomm. of the House
Comm. an Government Operations, 91st Cong., 1st Sess., 175 (1969).
2 See, e.g., my bill to establish a temporary National Commission on 'Regulatory Reform,
S.J. Res. 7, 94th Cong., 1st Sess.
2 See, e.g., the advertisement of the National Consumers League, Washington Post,
Sept. 18, 1974, at A-23.
4 "Government and the Consumer," A Public Opinion Study Conducted for the Business
Roundtable by Opinion Research Corporation (March, 1975), Summary of Principal Find-
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68
On the direct question as to whether they would support or
oppose setting a consumer advocacy agency up over all existing
consumer-related agencies, 75 percent of consumers said that they
would oppose doing this and would favor, instead, making exist-
ing agencies work better.
Of the 13 percent who did favor setting up the new agency, 6
percent (almost half) withdrew their support upon finding that
the proposed cost of the new agency would be at least $60 million
for the first three years.
Thus, 81 percent of consumers oppose this bill, a bill that some con-
sumer "representatives" claim to be supported by all consumers. Is
this the type of consumer "representation" that could be expected by
the ACA? Of course it is.
3. It Has Been Adulterated
Perhaps the most frequently stated argument in the long history of
the consumer advocacy proposals leading up to S. 200 is this one :
Consumers have no central agency to represent their interests, but the
vested special interests do-farmers are represented by the Department
of Agriculture, workers by the Department of Labor and businessmen
by the Department of Commerce.'
If anyone continues to make that argument in support of S. 200, you
can be sure that person has not read this mangled bill. Consider the
following :
S. 200 specifically requires the ACA to protect and promote the
interests of commercial farmers as well as ultimate consumers of
farm products (imagine the ACA appealing a milk marketing
order decision on the grounds that the price was not high
enough)."
S Statements of this argument in the hearings, alone, are as follows : Hearings on S. 1571
Before the Subcomm. on Reorganization and International Organizations of the Senate
Comm. on Government Operations, 86th Cong., 2d Sess., at 28 (Sen. Kefauver). 42 (Sen.
Keating), 53 (twice; Sen. Engle), 123 and 125 (Cooperative League, USA), 133 (North-
west Public Power Association) ; Hearings on H.R. 7179 Before a Subcomm. of the House
Comm. on Government Operations, 89th Cong., 1st Sess., at 31 (Rep. Rosenthal) !136, 37
(Consumers Union), 83 (Wisconsin Att'y Gen.), 94 (Rep. Erlenborn), 124, 127 (Sen. R.
Kennedy), 131 (Sen. Javits), 144 (Persia Campbell), 155 (Frank O'Conner, NYC City Coun-
cil), 207 (Nat'l Retail Merchants Ass'n), 242, 243, 244 (Rep. Rosenthal) ; Hearings on
H.R. 6037 and Related Bills Before a Subcomm. of the House Comm. on Government Op-
erations, 91st Cong., 1st Sess, at 82 (Rep. Mikva), 126, 132 (Ill. F'ed. of Consumers), 149
(Rep. Rosenthal), 151 (William Kaye), 187 (Consumers Union). 218 (Rep. Rosenthal),
263 (Rep. Biaggi), 268 (Rep. Eilberg), 271 (Rep. Friedel), 272 (Rep. Pepper) ; Hearings
on S. 3434 and 2544 Before the Subcomm. on Administrative Practice and Procedures of
the Senate Comm. on the Judiciary, 91st Cong., 2d Sess., at 50 (Ralph Nader) ; Hearings
on S. 2045, S. 3097, S. 3165, S. 3240 Before the Subcomm- on Executive Reorganization and
Government Research of the Senate Comm. on Government Operations, 91st Cong., 2d Sess.,
at 145 (Chamber of Commerce), 316 (Sen. Montoya) ; Hearings on H.R. 6037 (Revised)
Before a Subcomm. of the House Comm. on Government Operations, 91st Cong., 2d Sess.,
at 56, 57 (Rep. Rosenthal), 61, 62 (Rep. Dwyer), 62, 63 (Chamber of Commerce), 62, 63
(Rep. Rosenthal) ; Hearings on S. 860 and S. 2045 Before the Subcomm. on Executive
Reorganization of the Senate Comm. on Government Operations, 91st Cong., 1st Sess, at
17 (Rep. Rosenthal), 507 (Bess Myerson Grant), 775 (National Telephone Cooperative
Ass'n) ; Hearings on S. 1177 and H.R. 10835 Before the Subcomm. on Executive Reorgani-
zation and Government Research of the Senate Comm. on Government Operations, 92d
Cong., 1st Seas., at 28 (Rep, Rosenthal) ; Hearings on H.R. 16, H.R. 3809, H.R. 254, H.R.
1015, and Related Bills Before a Subcomm. of the House Comm. on Government Opera-
tions, 92d Cong., 1st Sess., at 557, 558 (Rep. Corman) ; Hearings on S. 707 and S. 1160
Before the Subcomm. on Reorganization, Research and International Organizations of the
Senate Comm. on Government Operations, 93d Cong., 1st Sess., at :348 (Betty Furness and
Sen. Allen), 519, 520 (Consumers Union), 539, 540 (Sen Javits) : Hearings on H.R. 14,
H.R. 21 and 564 Before a Subcomm. of the House Comm. on Government Operations,
93d Cong., 1st Seas., at 189, 190 (Rep. Holifleld), 208 (Consumers Union), 229 (Mary
Gardiner Jones), 328 (Rep. Holifield).
6 Those who use any goods or services for agricultural purposes are expressly defined
as "consumers" for the purposes of the bill. See S. 200, ? 14(7). Thus, the mandate of this
bill to protect and promote the "interests of consumers" is synonymous with protecting
and promoting the "interests of farmers." The fact that these important interests may be
diametrically opposed in some situations is one of many problems left for ACA resolution.
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S. 200 specifically prohibits the ACA from usin any-any-of
its powers in relation to labor disputes all labor agreements
(imagine a dock strike affecting the entire east coast and the ACA
not even able to make mention of it in its consumer information
releases).?
S. 200 exempts from certain ACA functions small businesses
(think of the real problem consumers have with fly-by-night op-
erators).8
A provision to exempt from ACA advocacy any radio or tele-
vision broadcast license renewal proceeding by the Federal Com-
munications Commission was struck from S. 200 in Committee,
and the majority views of this report state that the exemption
still applies, even though we struck it down (see the last para-
graph of the explanation of section 16).
It is obvious that significant segments of the economy greatly (and
justifiably) fear this bill, and, if they shout loudly enough, the stand-
ard procedure is to give them special treatment. In other words, do
anything to get the dodo to fly, even if you have to clip its already
inadequate wings to save weight.
4. It Contradicts Itself
Finally, there are two parallel arguments supporters of S. 200 make
relating to the. present Federal administrative process. The first is
that Federal agencies do not operate as they were intended ; they abuse
the authority granted to them."
I agree with that, as a generalization. Unfortunately, those who use
it to support this bill conveniently ignore two very important facts-
(1) this is a bill to create yet another Federal agency which, if
they are correct in their underlying assumption, will abuse the
power granted to it, and
(2) the opportunity for abuse (that is, the amount of discre-
tion to be granted to the ACA) would be greater than ever has
been granted by Congress to any agency, a fact that will be made
obvious by reading these views.
The parallel argument is that, even where present federal agencies
do not actively abuse their authority, they all too often only hear one
side of the story before they make decisions affecting consumers; the
consumer voice is never heard because consumers lack the time, money
and expertise to appear, and, therefore, the decisionmaking process is
defective.-
Again, two critically important factors are overlooked-
(1) If consumers do not have the time, money or expertise to
appear before an agency such as the Federal Power Commission
(to use a frequently cited agency as an example), this bill cer-
tainly will not confer upon these same consumers the needed time,
4 See S. 200, ? 16(a).
8 See, e.g., S. 200, ?? 10(a) (4) and 18.
U See, e.g., prepared statement of Ralph Nader, Hearings an S. 200 Before the LYenato
Comm. on Government Operations, 94th Cong., 1st Sess., 3 (Feb. 24, 1975) : "Thousands
to a consumers both in docurnentothe liars rulaintory abuses which
avoidable risks oahealth atnd
of aes of unnecessary harm Congressional
in
safety.'
io See, e.g., the statement of Carol Foreman for the Consumer Federation of America,
Hearings on S. 200 Before the Senate Com. on Government Operations, 94th Cong., 1st
Sess., 54 (transcript of Feb. 20, 1975) : "The agency or commission bases its decisions
present adequate data marial the other side of industry the issue." the consumer has
Oil c il yx to economic
no ab
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money and expertise to appear before the ACA to tell it what
should be told to the FPC, and
(2) The drafters and supporters of this bill clearly appear to be
afraid that some real consumers might disagree with the ACA's
views on what is in their interest; they have taken steps to assure
that the view of the ACA will always prevail, even over the views
of real consumers the bill provides that the ACA's determination
of the consumer interest in any matter cannot be challenged in
court by anyone.11
Thus, we have a situation where the ACA can, by law, state without
fear of successful contradiction that it is speaking for 210 million con-
sumers, even when a majority of these consumers oppose what the
ACA is advocating. No regulatory agency has such sweeping power
that is unchallengeable. This is a very serious defect in the bill and its
underlying concept.
The "interests of consumers" is a vast, uncliartered, constantly
shifting area subject to many conflicting interpretations. Supporters
of this bill claim that there are, however, many situations where the
interests of consumers would be abundantly clear, and that it is in these
situations where the ACA would concentrate its advocacy.
Perhaps it would be more than interesting to cite just one of these
situations, as described by a leading consumer representative in con-
sumer advocacy agency hearings during the last Congress. This sup-
porter of S. 200, who does not own an automobile, stated that the
ACA's position on mandatory seat belt devices in automobiles would
be "quite clear"-it would use its considerable powers to advocate in-
stallation of such devices in the interest of consumers.12
I recoil at the thought of having an ACA Administrator with such
clarity of thought unencumbered by knowledge of what those he rep-
resents want. But that, of course, is what we must have if this bill is
to be put into operation, since consumers do not have the time, money
or expertise to appear before Federal agencies.
1. It Is An ,4nachronism
The concept of a Federal consumer advocacy agency was born dur-
ing the New Deal, tried then in varying specialized temporary forms,
and pronounced unsuccessful to the point where President Franklin D.
Roosevelt rejected proposals for a permanent agency for these
purposes.13
To those wedded to the concept of creating Federal agencies to solve
all or most of society's problems, it may appear to be a logical step
to create a watchdog agency to watch the errant watchdogs that they
felt were necessary in the first place. But this is drab and doctrinaire
thinking.
Big Government which has become bad Government, in large part
because of its bigness, cannot be made better by making it bigger. It
is odd that many of those who support this bill do not see the irony
11 See S. 200, $ 21(b).
12 Hearings on H.R. 14, H.R. 21 and H.R. 564 Before a Subcomra. of the House Comm.
on Government Operations, 93d dong., 1st Sees., 278 (Statement of Ralph Nader) ; see
also the reply of Rep. Erlenborn on the general public's view of electronic ignition inter-
lock system for seat belts which were then required, id., at 279.
13 For the history of this proposal .t see Leighton, Consumer Protection Agency Proposals:
The Origin of the Species, 25 Ad. L. Rev. 2,69 (American Bar Association, 1973).
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when they attack the business community with their antitrust theories
on bigness is badness, while at the same time justifying this proposed
method of pervasively controlling business activity from its inception.
2. It Is Inflationary
In fact, it is well-documented that this country suffers from a serious
overregulation of commerce: 4 It is now undisputed that it fair share
of the blame for our current inflationary spiral must be laid at the
many doorsteps of the Federal Government, that one of the most in-
sidious contributors to inflation is well-intentioned increasing control
over the operations of the marketplace which increases the costs of
production and distribution "
A reading of this bill and any of the many hearings on it or its
predecessors clearly will demonstrate that its supporters desire and
envision more regulation, more pervasively applied, to be the result
of S. 200-not less. The ACA is to be a primer for the bureaucratic
pump.
Thus, the initial suggested funding of $60,000,000 for the first three
years of the ACA is just to be an expensive rut leading to yet another
fiscal rat hole. Added to these millions will be the millions in increased
costs borne by other Federal agencies due to the demands and advocacy
of the ACA and, especially the increased costs in the marketplace of
,more Federal regulation. A free lunch. this is not.
And, of course, we cannot ignore the natural Federal growth factor.
The rarified atmosphere of Washington can be counted on to ensure,
that the ACA will blossom into the biggest, most litigious law firm ever
known.
In fact, supporters of this bill may be counting on this inevitability.
In testimony on the Public Council Corporation bill, the concept of
which was merged into this bill,lf one of the leading proponents of
S. 200 testified that he imagined a federal advocacy agency with 400
to 500 lawyers petitioning for 20 to 30 rulemaking actions per week
in other agencies.' "
That's 1,040 to 1,560 new regulatory proceedings in a year, assuming,
as we must, that no one else would have the time, money, expertise or
inclination to so petition. Yet supporters of S. 200 stoutly maintain
that they favor the concept of regulatory reform, and that the ACA
could aid in ,this effort.'8
In addition. the majority report makes clear what many of us have
long expected; this is truly a frill employment act for lawyers. In its
explanation of section 6(e), the majority notes that the ACA will be
hiring private attorneys to do its advocating under contract.
3. It Is the Wrong Approach
To solve the problem of abuse of authority by Federal agencies, it
is proposed to create another agency capable of greater abuse but with
no power to fire existing officials who abuse their power.
14 See generally, Weidenbaum, Government-Mandated Price Increases (American Enter-
prise Institute for Public Policy Research, 1975).
15 Id.
16 S. REP. No. 883, 93d Cong., 2d Sess. (Part 1), at '3.
17 Hearings on S. 3434 and S. 2544 Before the Subcomm. On
gist Cong., Administrative
(state-
and Procedures of the Senate Comm. on the Judiciary,
ment of Ralph Nader).
18 See, e.g., Hearings on S. 200 Before the Senate Comm. on Government Operations,
94th Cong., 1st Sess., 56 (transcript of Feb. 20, 1975 ; Consumer Federation of America).
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To solve the problem caused by the fact that consumers do not
appear in large numbers before Federal agencies, it is proposed that
we create another agency before which consumers also will not appear,
and have that new agency appear before the old agencies as a con-
sumer.
To help solve, the problem caused by Federal. agencies issuing too
many regulations, it is proposed that we create an agency which will
prod other agencies to issue more regulations.
The difference, promoters of S. 200 ask us to believe, is that this
ACA will never abuse its authority, always know exactly what the
consumer wants or needs, always petition for regulations that are
needed and always fight against those which are not. Who said caveat
emptor was dead?
The longer we continue to ignore reality this way, the more diffi-
cult it is going to be when we decide, finally, to exercise our responsi-
bility correctly-find out in detail what is wrong with these agencies
and take direct action on behalf of consumers to solve the problems.
If parents of a large family find themselves too busy to care prop-
erly for their many children, and the children, in turn, misbehave,
would you recommend that the parents attempt to have yet another
child in the hope that it would learn to discipline and tell stories on
its older sisters and brothers? This bill not only follows that concept,
it leaves it up to the new child to determine for itself what is and is
not misbehavior.
S. 200 IS A DISGRACE TO TIIE SENATE
A poorly conceived idea often is reflected by the difficulty one. has in
converting it from intuition into materiality. Very few good, timely
ideas take more than six years to get enacted by Congress, and vir-
tually none get more and more removed from reality over such a
period. Yet that has happened to this bill, and opposition to it has
been steadily on the increase since 1970.
1. The Special Interest Labor Amendment Is "Cynical"
The exemption for labor disputes and labor agreements illustrates
well the regressive nature of this bill. The New York Times edi-
torialized strongly against this provision, calling it "a special-interest
exemption that is foreign to the whole concept of independence for
the new" ACA, and saying that is was "politics at its most cynical." 19
S. 200 presently provides that, "This Act shall not apply to .
a labor dispute . . . or to a labor agreement.. " 20 That means, of
course, that no authority granted to the ACA in S. 200 may be used
in relation to labor disputes or agreements.
For example, it could not intervene in National Labor Relations
Board or Federal Mediation and Conciliation Service activities or any
other Governmental effort concerning these matters or concerning
the development of policy in these areas. The ACA could not even use
its information gathering and dissemination powers to inform con-
sumers of what the Government is doing in these areas-The Freedom
of Information Act, available to any private citizen, would not even
be available to the ACA to get information in these areas.
10 March 14, 1975, at 38.
IS. 200, 1 16(a).
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How did this sweeping exemption come about? The history of the
provision symbolizes all that is wrong with this bill.
During the debate on the first consumer advocacy agency bill ever
to pass a chamber of Congress, the 1970 Senate Consumer Protection
Agency bill, prominent mention was made by a leading sponsor of a
Library of Congress report on the 34 Federal agencies conducting con-
sumer programs which would be covered by that bill.21
This Report, titled "Mlajor Consumer Activities and Programs of
Federal Departments and Agencies," is found in the 1969 Senate hear-
ings on consumer advocacy proposals.22 It is, for the most part, a sum-
mary of a 1961 House Committee report on 33 agencies and their
programs which gave consumer advocacy proposals (especially early
proposals for a Department of Consumer Affairs) a considerable
boost.23
References to these reports are so numerous during the long history
of consumer advocacy proposals, that space allows room for a footnote
to only the references in the hearings.24 They are, beyond a doubt, the
most popular used source materials to "prove" the need for a central-
ized Federal consumer agency.
I go to some length to point all this out for a very good reason.
Among the agencies and their "Major Consumer Activities" cited in
these source materials which are.widely quoted by supporters of an
ACA are the following, and I quote : 25
21 116 CONG. REIC. S19048 (daily ed., Nov. 30, 1970, remarks of Sen. Percy).
23 Reprinted in Hearings on S. 860 and S. 2045 Before the Subcomm. on Executive Reor-
ganixatioin of the Senate Comm. on Government Operations, 91st Cong., let Sess., 67, et seq.
23 See Ti. REP. NO. 1241, 87th Cong. 1st Sess.
24 Hearings on H.R. 7179 Before a Subcomm. of the House Comm. on Government Opera-
tions, 89th 'Gong., 20 Sess., at 31 (Rep. Rosenthal), 34 (Rep. Erlenborn), '36, 38 (Con-
sumers Union), 61 (Rep. Brown), 64 (Rep. Erlenborn) 86 (Wisconsin Att'y Gen.), 89
(Rep. Erlenborn), 109 (Nat'l Consumers League), 124 (Sen. R. Kennedy), 1'37, 149
(Rep. Erlenborn), 194 (Rep. Harvey), 198 (Sen. Hart), 202 204 (Chamber of Com-
merce), 204 (Metropolitan New York Consumer Council) 241 237 (Rep.. Rosenthal),
241 (Bur. of Budget), 244, 245 (Rep. Rosenthal), 306 (Itep. Erlenborn) ; Hearings on
H.R. 60,37 and Related Bills Before a Subcomm. of the House Comm. on Government
Operations, 91st Cong., 1st Sess., at 40 (Rep. Rosenthal), 81 (Rep. Dwyer) 100 (Rep.
Rosenthal), 101 (Esther Peterson), 122 (N.Y. Att'y Gen.), 126 (Ill. Fed. of Oonsumers)
150 (William Kaye), 174 (Rep. Rosenthal), 175 (Ralph Nader), 201
(Rep. Rosenthal), 232 (Justice Dept.), 261 (Rep. Addabbo) 261 (Rep. Annunzio), 262
(Rep. Bell), 263 (Rep. Biaggi), 263, 264 (Rep. Dulski), 267, 268 (Rep. Eilberg), 269
(Rep. Frazer), 272 (Rep. Halpern), 274 (Rep. Hanna), 277 (Rep. Long), 278 (Rep. Mac-
Donald), 280 (Rep. Murphy), 28-6 (Nat'l Grange) ; Hearings on S. 3434 and 21544 Before
the Subcomm. on the Judiciary, 91st Cong., 2d Sess., at 2 (Sen. E. Kennedy) ; Hearings
on S. 2045, S. 3097, S. 3165, S. '3240 Before the Subcomm. on Executive Reorganization
and Government Research of the Senate Comm. on Government Operations, 31st Cong.,
2d Sess. at 315 (Sen. Montoya) ; Hearings on IT. R. 6037 (Revised) and Related Bills
Before a Subcomm. of the House Comm. on Government Operations, 91st Cong., 2d Sess.,
at 54 (Chamber of Commerce) ; -Hearings on S. 860 and S. 2045 Before the Subcomm.
on Executive Reorganization of the Senate Comm. or. Government Operations, 91st 'Gong.,
1st Sess. at 1 (Sen. Ribicoff), 8 (Sen. Nelson), 1.2 (Sen. Gurney), 13 (Sen. Nelson), 17,
19, 23 (hiep. Rosenthal), 67-72 (Libra of Commerce), 76 (Sen. Nelson), 345 (Betty
Furness), 573 (James Goddard), 786 (W. Forte.) ; Hearings on S. 1177 and H.R. 10835
Before the Subcomm. on Executive Reorganization and Government Research of the
Senate Comm. on Government Operations, 92d Con9., 1st Sess., at 19 (Rep. Rosenthal) ;
Hearings on H.R. 16, H.R. 3809, H.R. 254, H.R. 101'0 and Related Bills Befcre a Subcomm.
of the House Comm. on Government Operations, 92d Cong., 1st Sess., at 223 (N.Y. Att'y
Gen.), 340 (National Consumer Law Center), 358, 359 (Rep. Corman) 558 (Rep. Cough-
lin), 560 (Rep. Eilberg), 563 (Rep. Gonzalez), 565, 566 (Rep. Morse) ; hearings on S. 707
and S. 1160 Before the Subcomm. on Reorganization, Research and International Organi-
zations of the Senate Comm. on Government Operations, 9:3d Cong., 1st Sess., at 765
(Bay Area Grocers Ass'n), 781 (National Consumer Finance Ass'n), 861 (Trebilcock) ;
Hearings on H.R. 14, H.R. 21, and H.R. 564 Before a Subcomm. of the House Comm. on
Government Operations, 9'3d Cong., 1st Sess., at 262 (Rep. Rosenthal), 657 (N.Y. Att'y
Gen.).
21 Quoting from reprint of Library of Congress Report, see note 22, at pages 68, 71, 72.
(Emphasis added.)
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Federal Mediation and Conciliation Service: 1. Avoidance
or,minimization of labor disputes by providing mediation
services.
National Labor Relations Board : 1. Minimization or pre-
vention of disruption to interstate commerce resulting from
labor disputes.
National Mediation Board : 1. Achievement of peaceful set-
tlement of labor disputes in the airlines and railroad
industries.
Thus, from the inception of the consumer advocacy concept, it was
specifically recognized that Federal involvement in labor disputes and
agreements had a "major" impact on the interests of consumers and it
was specifically intended that the consumer advocacy agency should
make a contribution in these areas.
Then, during the 1971 House hearings, the AFL-CIO witness was
asked to supply for the record a legal memorandum on whether the
proposed consumer advocacy agency (then called a Consumer Protec-
tion Agency) might wish to intervene on behalf of consumers against
a umon in an NLRB case.
The response from the AFL-CIO associate General Counsel was
succinct : "I think that it is possible to imagine instances in which the
Consumer Protection Agency might wish to intervene in a proceeding
before the NLRB to take a position contrary to the interest of a
union." 26
The legal opinion then went on to say that it was "rather unlikely"
that the CPA could make a finding required of it by that bill prior to
intervention. That restrictive finding was one of many safeguards
found in earlier bills which have long since disappeared. Thus, in
relation to bills like S. 200, the AFL-CIO's answer to the question of
whether the consumer advocacy agency would wish to intervene in
NLRB proceedings to protect consumers was an unqualified "Yes."
The House passed its CPA bill 14 days after reporting it. The report
on that 1971 bill, as had the report on the 1970 House CPA bill and
the report on the 1970 Senate CPA bill, highlighted the 33-agency
study of major consumer protection activities which expressly in-
cluded the lar-related activities mentioned earlier.27 No special ex-
emption relating to labor disputes or agreements was in the 1971
House-passed bill or the 1970 Senate-passed bill.
One would have thought at that time the labor issue was settled-
labor disputes and agreements affecting consumers clearly were within
the jurisdiction of the consumer advocacy agency. But something or
somebody, was silently afoot.
The CPA bill reported by this Committee in 1972 was silent on the
labor issue, but the Committee report, mysteriously, stated that NLRB
proceedings and FCC license renewal proceedings "are beyond the
jurisdiction of the CPA." 2e This gratuitous legislative history to an
ill-fated bill did not miss the trained eye of the very distinguished
former Senator Sam J. Ervin, who declared and proved in his Minority
Views that such proceedings were definitely covered by that bill.29
2a Hearings on H.R. 16, H.R. 3809, H.R. 254 and H.R. 1015 before a Subcommittee of
the House Committee on Government Operations, 92d Cong., 1st Sesa., at 258.
27 H. Rep. No. 542, 92d 'Cong., 1st Sess., at 3; H. Rep. No. 1361, 91st Cong., 2d Sess.,
at 3; S. Rep. No. 1331, 91st Cong.. 2d Sess., at 5.
28 S. Rep. No. 1100, 92d Cong., 2d Sees., at 62.
21 Id., at 80, et seq.
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Since the closet "exemptions" were then exposed by one of the
Senate's leading lawyers, there was little point in hiding them in the
93d Congress. The House bill, which passed that chamber, had a com-
plete exemption for labor disputes and agreements.36 The Senate bill,
which did not pass, had a partial exemption-it only prohibited the
ACA from using its advocacy rights in relation to labor disputes, but
the ACA could still gather and disseminate information about such
matters.3"
As was seen at the beginning of this discussion, our bill now has a
complete exemption rather than a limited one. The bill continues to
get less powerful in relation to favored special interests.
We are asked to believe that labor disputes and agreements have no
relation to marketplace transactions. It is hoped that we forget that
the National Labor Relations Act, under which the now exempted
NLRB and the Federal Mediation and Conciliation Service fall, ex-
pressly says that such activities can burden interstate commerce to the
point of restraining the availability of consumer goods and affecting
their prices.32
We are asked to believe that Federal adjudications of labor disputes
are private matters. It is hoped that we forget that the Supreme Court
and other courts have held just the opposite, that they are public
interest matters affecting consumers greatly.33
We are asked to believe that the "adversarial" relationship between
big business and big labor in labor disputes serves as adequate pro-
tection for consumers. It is hoped that we forget the New York Times
editorial pointing out that, "The records of the National Labor Re-
lations Board and the courts abound in cases in which unions on their
own or in collusion with employers disregard the public interest push-
ing up prices or limiting competition." 34
We are asked to believe that the ACA will be a prudent agency,
never treading where it does not belong. It is hoped that we forget
that organized labor does not believe a word of this, and insists
that unions expressly be protected from, to use one AFL-CIO official's
statement, "another government agency intervening in labor-man-
agement relations, sticking its nose into our affairs." 35
We are asked to believe that "this labor exemption first started
with big business support" in the form of testimony by the Ford
Motor Company in the 11ouse.36 It is hoped that we forget that the
cited testimony was in total opposition to the creation of any ACA,
and that problems arising from ACA intervention in labor disputes
was just one example of why we should have no ACA, rather than an
ACA with a labor exemption.""
We are asked to believe that Congress never intended to subject
these labor activities to ACA scrutiny. It is hoped that we forget our
own, much cited studies and the fact that Senator Edward Kennedy's
0 H.R. 13163, ? 17 (93d Cong., 2d Sess.).
ai S. 707 ? 6(a) (11).
3a 29, U.S.C. ? 151.
3? See, e.g., N.L.R.B. v. Font Hill Co., 360 U.S. 301 (1959) ; NLRB v. United Packinghouse
Workers of America, AFL-CIO, 275 F. 2d 816 (1960).
3? March 14, 1975, at 38.
3? 120 CONG. REC. 812761 (daily ed., July 17, 1972; Statement of AFL-CIO Legislative
Director).
38 Hearings on S. 200 Before The Senate Comm. on Government Operations, 94th Cong.,
1st Sess., 25 (transcript of Feb. 24, 1975 ; testimony of Ralph Nader).
37 See the testimony of Ford Motor Company, Hearings on H.R. 14, 11.R. 21 and H.R. 564
Before a Subcomm. of the Comm. on Government Operations, 93d Cong., 1st Sess., 251.
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Public Counsel Corporation bill (the concept of which was purposely
merged into the ACA bill) 38 provided expressly for a Federal public
advocate to participate in NLRB proceedings.39
2. It Proposes Disruption of Agency Activity
The ACA would be granted an unchallengeable right to advocate
the interests of consumers in the unstructured activities of other agen-
cies through the presentation of views either orally or in writing.4?
Under this right, it is the ACA which determines whether it should
insert itself into the agency, and rules of practice by that agency
which might govern such ACA advocacy are subservient to that
right.41.
Further, there also is recognition that such unstructured activities
of federal agencies move from stage to stage, and, therefore, the ACA's
advocacy rights are to be considered as being renewable at each stage-
"The fact that [an ACA advocate] has participated in the investi-
gatory phase of an activity does not impair his right to participate in
a later phase of the activity, such as the reaching of a settlement, the
decision to initiate formal proceedings, or even a decision to discon-
tinue the investigation.'' 42
Finally, the provision under which this ACA advocacy right is
granted requires that the Agency holding the unstructured activity
give "full consideration" to the views of the ACA .41 That is, the ACA
must "have a full opportunity to submit its views to the decision-
making authority before any decision is made either to take, or not
take, certain action, where the [ACA] determines a, substantial con-
sumer interest is at stake." 44 [Emphasis added.]
This, of course, sounds very good in the abstract, but when it is
applied to an actual agency activity of interest to consumers some
serious questions are raised. For example, supporters of the bill have
stated that they wish the ACA to use this power to participate in
negotiations in the Middle East by the Secretary of State which con-
cern, at least in part, oil tvailabilit.y.4-1 Senator Ervin asked last
year : "Can anyone imagine the Secretary of State telling some sheik,
`Excuse me, before. I decide on your new proposition, I must contact
the Administrator of the [ACA] or one of his agents.' It would
appear that an advocate of the [ACA] will have to fly around with
the Secretary of State-that would be the only way possible to com-
ply with the letter of this proposed law." 46
To be sure, the ACA is admonished to present its case in such situa-
tions "in an orderly manner and without causing undue delay" 47
that is why an ACA agent must fly around with the Secretary of
State if he is to take his advocacy seriously-but the fact remains
that an agency's failure to recognize the ACA's rights would subject
its relevant action to judicial review.
Supra, n. 16.
S. 3434, 91st Cong., 2d Sess., proposed 5 U.S.C. ! 582(3).
40 ( 6(a) (3) and 21(b).
41 S. Rep. No. 883, 93d Cong., 2d Sess., 22.
42 Id., at 21.
43 16(a) (3).
44 S. Rep. No. 883, 93d Cong., 2d Sess., 21.
45 120 Cong. Bee. S11760 (daily ed., June 27, 1974) ; see also the extensive discussion
of this matter at 120 Cong. Rec. 812791-1279G (daily ed., July 17, 1974).
46 S. Rep. No. 883, Part 2 (Minority Views of Senators Ervin, Allen, Brock and Nunn),
03d Cong., 2d Sess., 10.
47 96(a) (3)
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Supporters of this bill tell us not to worry, however, because the
ACA "will act with discretion and prudence and will not be reck-
less." 411 But it is troubling to see that they have also argued that the
need for this bill is based in part on the fact that federal agencies are
not prudent as a whole. It is even more troubling when we are told
by the same supporters that certain special interests must be exempted
from the ACA's scope of operations because of a fear that it will
meddle where it should not, such as this statement : "Where big
business and big labor face each other in terms of the relations
between them, there the [ACA] does belong ...." 49
3. The "Dual Prosecutor" Problem
Granting the ACA the unchallengeable right to assign itself any
available advocacy status in any formal agency proceeding 50 may
cause some unexpected problems in the slim area of agency adjudi-
cations of alleged violations of law. In many of these, full party status
is limited to the two principals, the respondent charged with the viola-
tions and the agency lawyer prosecuting the complaint. Intervention
by others is usually subject to the discretion of the forum agency, and
to limitations which are not applicable to the principals.
ACA. intervention as of right as a full party in such adjudications
would allow it to be a dual prosecutor. Supporters of this concept have
objected strenuously to the term "prosecutor," on the mistaken belief
(and in disregard of our own hearing records) that agency lawyers do
not have a prosecutorial function in such proceedings.61
The House bill of last year contained a partial exemption in this
area, limiting the ACA to an amicus curiae in proceedings which seek
"primarily to impose a fine or forfeiture which the [forum] agency
may impose under its own authority for an alleged violation of" law.52
California's forward-looking consumer advocacy law, which contains
many similar provisions to the federal ACA proposals, also addresses
this problem by exempting fully from intervention by its Department
of Consumer Affairs any agency "adjudications of an alleged violation
by any person named as a defendant or respondent." 53
S. 200 contains no limitation other than a hortatory clause admonish-
ing the ACA not to intervene as a party in any federal proceeding un-
less the ACA determines that it is necessary to intervene as a party.54
The problem, as it has been briefly stated in relation to a Federal
Trade Commission adjudication, is this: 1,5
To the extent that the [ACA] follows a line of prosecution
identical to that of the FTC prosecutor, we have useless, ex-
pensive and delaying duplication; to the extent that the
[ACA's] line of prosecution diverges from that of the FTC,
we have an outsider not only usurping FTC's congressionally-
mandated responsibility, but subjecting a citizen (as of yet
innocent) to conflicting prosecutions. Very serious due process
48118 Cong. Rec. 815659 (daily ed., Sept. 21, 1972; remarks of Sen. Javits).
48120 Cong. Rec. 812766 (daily ed., July 17, 1974; remarks of Sen. Davits).
40 T?he ACA "may as of right intervene as a party or otherwise participate" in such
proceedings. ? 6(a) (2).
51 For extensive substantiation of the accuracy of this term, see 120 Cong. Rec., S12796,
at seq (daily ed., July 17, 1974).
52H.R. 13163, 93d Con., 2d Sess., ? 6(c).
63 Cal. Bus. and Prof. Code, Ch. 4, ? 320.
64 ? 6(a).
S. Rep. No. 883, Part 2 (Minority Views), 93'd Cong., 2d Sess., 12.
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questions are raised when two prosecutors see who can out
prosecute whom.
One would think that, in light of the more far-reaching exemptions
already included in the bill, this exceedingly small area would be
limited to protect due process. But no. The only agency adjudications
of law violations worthy of exemption, apparently, are NLRB
adjudications of unfair labor practices.
4. It Proposes Federal Guerrilla Warfare
The fact that the ACA is to be a nonregulatory agency with no
proprietary interests to protect sets it apart from many federal agen-
cies. It also raises a question whether it is appropriate for such an
agency to have the right to seek to overturn in court the final decisions
of the government made by regulatory agencies.
As was stated by Senator Ervin last year, this guarantees that the
ACA is to be a "Congressionally-ordained expert agency fighting
another Congressionally-ordained expert agency in an embarrassing
U.S. v. U.S. court battle to determine who speaks for the
Government." 58
Those who favor granting a broad judicial review right to the ACA
point out that government agencies challenge Bach other frequently
in the courts. They forget that these cases invariably involve an over-
lapping of regulatory or proprietary mandates given to the agencies
by Congress, but to be intentionally withheld from the ACA. As
Senator Ervin made clear, "It is one thing for the Justice Department
to challenge [another agency's approval of a] merger in court; it is
entirely another.thing for the [ACA], a nonregulatory agency, to
challenge such a merger where the Justice Department has failed to
do so." 57
This power clearly implies that. Congress does not trust the judg-
ment of the regulatory agencies which it created. All right, But can
anyone tell me why Congress is ready to trust the judgment of the
untried ACA in light of its view that other instrumentalities of its
own making cannot be trusted?
5. Its Information.-Gathering and Dissemination Powers are Over-
blown
An interesting question of whether Congress is willing to cut off its
nose to spite its face arises in relation to the information provisions
of the bill.
Under S. 200, trade secrets and other confidential business informa-
tion voluntarily submitted to a federal agency that could have ob-
tained it through subpoena or other formal action would be accessible
to the ACA as a matter of right.5" Such commercially sensitive infor-
mation then could be publicly disclosed, if the source agency did not
put any restrictions on such disclosure.59
This is bad enough, but things get considerably worse when the
ACA goes after sensitive information that is not in the hands of the
Government or otherwise on the public record. In such cases, the ACA
S. Rep. No. 883, Part 2 (Minority Views), 93d Cong., 2d Sess., 15.
67 Id., at 1"7.
?e(b) (7) (B), referring to such sensitive information described in 5 U.S.C. ? 552
%(4).
? 8 and 11(b).
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can get that information by issuing court-enforceable interrogatories
or orders for general or special reports to anyone engaged in a business,
industry or trade (except if it relates to labor disputes or agreements,
of course) .00
If the ACA, in its sole expert, opinion, decides that trade secrets and
similar information should be released immediately "to protect the
health or safety of the public," it is empowered to do so.G1 (It should
be noted that this is a regulatory function, no matter how supporters
might characterize it.)
Further, such information would be subject to discretionary release
by the ACA upon petition by anyone under the Freedom of Informa-
tion Act if it were received from private sources or from another
agency which does not expressly request that it be withheld . 132
The implications here are immense. We are asked to develop an en-
tirely new concept of trade secret law. Because of the ACA's explicit
authority to publish such information, current prohibitions on pub-
lication of such information do not apply to the ACA as they would
to regulatory agencies.63 This opens an avenue of indirect publication
by these agencies through the ACA, if they wish, and subjects the in-
formation to disclosure by the ACA to petitioners (including com-
petitors) under the Freedom of Information Act, if the ACA wished
to grant such a petition.
It is interesting that the news media is not exempted from this
provision. The ACA could demand that sources or other material ac-
cepted in confidence be revealed to it for publication. Consumers
Union, which is a publisher, called this "an important issue" some
time ago. G4 But nothing was done to resolve it ; a host of "more im-
portant" issues seems to have been brought to the attention of the
Committee by more persuasive special interests than the press.
Much more can, should-and will, I am sure--be said about this bad
idea whose time has come and gone.
To my colleagues in the Senate who agree with the idea of
establishing yet another Federal agency for consumers, all I would
ask is that you personally read this complex bill and attempt to un-
derstand its details now. If you do, I feel confident that S. 200 will be
set aside or dramatically revised when it comes to the floor.
JAMES B. ALLEN.
w ? 10(a).
o' 11(c) M. In other cases, the ACA would have to give owners of the information a
maximum of 10 days notice to allow them to attempt to stop publication ; but there ap-
pears to be few, if any grounds upon which such an injunction might be granted.
es ? 11(a).
os See, e.g., 18 U.S.C. ? 1905 which makes it a crime for Federal employees to disclose
trade secrets and similar sensitive information to any extent not authorized by law."
94 Hearings on S. 707 and S. 1160 before the Subcommittee on Reorganization, Research
and International Organizations of the Senate Committee on Government Operations, 93d
Cong., 1st Sees., 524.
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TEXT OF S. 200 AS REPORTED
A BILL To establish an independent consumer agency to protect and serve
the interest of consumers, and for other purposes
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That this Act
may be cited as the "Consumer Protection Act of 1975".
STATEMENT OF FINDINGS AND PURPOSES
SEc. 2. (a) The Congress finds that the interests of consumers are
inadequately represented and protected within the Federal Govern-
ment; that' regulations have been adopted and statutes have been
enacted by the Federal Government without first securing available
information as to the estimated costs and benefits of such regulations
and statutes ; and that vigorous representation and protection of the
interests of consumers are essential to the fair and efficient, function-
ing of afree market economy. Each year, as a result of this lack of
effective representation before Federal agencies and courts, consum-
ers suffer personal injury, economic harm, and other adverse conse-
quences in the course of acquiring and using goods and services avail-
able in the marketplace. Federal programs which fail to provide bene-
fits that are commensurate with the costs thereof may be a factor in
the economic problems of the United States.
(b) The Congress therefore declares that-
(1) A governmental organization to represent the interests of
consumers before Federal agencies and courts could help the agencies
in the exercise of their statutory responsibilities in a manner consis-
tent with the public interest and with effective and responsive govern-
ment. It. is the purpose of this Act to protect and promote the interests
of the people of the United States as consumers of goods and services
which are made available to them through commerce or which affect
commerce by so establishing an independent Agency for Consumer
Advocacy.
(2) It is the purpose of the Agency for Consumer Advocacy to rep-
resent the interests of consumers before Federal agencies and courts,
receive and transmit consumer complaints, develop and disseminate
information of interest to consumers, and perform other functions to
protect and promote the interests of consumers. The authority of the
Agency to carry out this purpose shall not be construed to supersede,
supplant, or replace the jurisdiction, functions, or powers of any
other agency to discharge its own statutory responsibilities accord-
ing to law.
(3) It is the purpose of this Act to promote protection of con-
sumers with respect to the-
(A) safety, quality, purity, potency, healthfulness, durability,
performance, repairability, effectiveness dependability availabil-
(81)
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ity and cost of any real or personal property or tangible or in-
tangible goods, services, or credit;
(B) preservation of consumer choice and a competitive market;
(C) prevention of unfair or deceptive trade practices;
(D) maintenance of truthfulness and fairness in the advertis-
ing, promotion, and sale by a producer, distributor, lender, re-
tailer, or other supplier of such property, goods, services and
credit ;
(E) furnishing of full, accurate, and clear instructions, warn-
ings, and other information by any such supplier concerning such
property, goods, services, and credit;
(F) protection of the legal rights and remedies of consumers;
and
(G) providing of estimates of the costs and benefits of pro-
grams and activities established by Federal Government regula-
tions and legislation.
(4) It is the purpose of section 24 of this Act to estabilsh a means
for estimating in advance the costs and benefits of Federal legislation
or rules that have substantial economic impact, in order to determine
which Government programs entail unreasonable or excessive costs."
(5) This Act should be so interpreted by the executive branch and
the courts so as to implement the intent of Congress to protect and
promote the interests of consumers, and to achieve the foregoing
purposes.
ESTABLTSTMENT
SEC. 3. (a) There is hereby established as an independent agency of
the United States within the executive branch of the Government the
Agency for Consumer Advocacy. The Agency shall be directed and
administered by an Administrator who shall be appointed by the
President, by and with the advice and consent of the Senate, for a term
coterminous with the term of the President, not to exceed four years.
The Administrator shall be an individual who by reason of training,
experience, and attainments is exceptionally qualified to represent the
interests of consumers. There shall be in the Agency a Deputy Admin-
istrator who shall be appointed by the President, by and with the
advice and consent of the Senate. The Deputy Administrator shall
perform such function, powers, and duties as may be prescribed from
time to time by the Administrator and shall act for, and exercise the
powers of, the Administrator during the absence or disability of, or in
the event of a vacancy in the office of, the Administrator. On the expi-
ration of his term, the Administrator shall continue. in office until he
is reappointed or his successor is appointed and qualifies. The Admin-
istrator may be removed by the President for inefficiency, neglect of
duty or malfeasance in office.
(b) No employee of the Agency while serving in such position may
engage in any business, vocation, other employment, or have other
interests, inconsistent with his official responsibilities.
(c) There shall be in the Agency a General Counsel who shall be
appointed by the Administrator.
(d) The Administrator is authorized to appoint within the Agency
not to exceed five Assistant Administrators.
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POWERS AND DUTIES OF THE ADMINISTRATOR
SEC. 4. (a.) The Administrator shall be responsible for the exercise
of the powers and the discharge of the duties of the Agency, and shall
have the authority to direct and supervise all personnel and activities
thereof.
(b) In addition to any other authority conferred upon him by this
Act, the Administrator is authorized, in carrying out his functions
under this Act, to--
(1) subject to the civil service and classification laws, select,
appoint, employ, and fix the compensation of such officers and
employees as are necessary to carry out the provisions of this Act
and to prescribe their authority and duties;
(2) employ experts and consultants in accordance with section
3109 of title 5, United States Code, and compensate individuals
so employed for each day (including traveltime) at rates not in
excess of the maximum rate of pay for Grade GS-18 as provided
in section 5332 of title 5, United States Code, and while such ex-
perts and consultants are so serving away from their homes or
regular place of business, pay such employees travel expenses and
per diem in lieu of subsistence at rates authorized by section 5703
of title 5, United States Code, for persons in Government service
employed intermittently;
(3) appoint advisory committees composed of such private
citizens and officials of the Federal, State, and local governments
as he deems desirable to advise him with respect to his functions
under this Act, and pay such members (other than those regularly
employed by the Federal Government) while attending meetings
of such committees or otherwise serving at the request of the Ad-
ministrator compensation and travel expenses at the rate provided
for in paragraph (2) of this subsection with respect to experts and
consultants : Provided, That all meetings of such committees shall
be open to the public and interested persons shall be permitted to
attend, appear before, or file statements with any advisory com-
mittee, subject to such reasonable rules or regulations as the Ad-
ministrator may prescribe;
(4) promulgate, in accordance with the applicable provisions
of the Administrative Procedure Act, title 5, United States Code,
such rules, regulations, and procedures as may be necessary to
carry out the provisions of this Act, and assure fairness to all
persons affected by the Agency's actions, and to delegate authority
for the performance of any function to any officer or employee
under his direction and supervision;
(5) utilize, with their consent, the services, personnel, and fa-
cilities of other Federal agencies and of State, regional, local, and
private agencies and instrumentalities, with or without reimburse-
ment therefor, and to transfer funds made available under this
Act to Federal, State, regional, local, and private agencies and
instrumentalities as reimbursement for utilization of such serv-
ices, personnel, and facilities;
(6) enter into and perform such contracts, leases, cooperative
agreements, or other transactions as may be necessary to carry
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out the provisions of this Act, on such terms as the Administrator
may deem appropriate, with any agency or instrumentality of the
United States, with any State, or any political subdivision thereof,
or with any person;
(7) accept voluntary and uncompensated services, notwith-
standing the provisions of section 3679 (b) of the Revised Statutes
(31 U.S.C. 665 (b) )
(8) adopt an official seal, which shall be judicially noticed;
(9) establish such regional offices as the Administrator deter-
mines to be necessary to serve the interests of consumers;
(10) conduct conferences and hearings and otherwise secure
data and expression of opinion ;
(11) accept unconditional gifts or donations of services, money
or property, real, personal, or mixed, tangible or intangible;
(12) designate. representatives to serve or assist on such coin-
mittees as he may determine to be necessary to maintain effective
liaison with Federal agencies and with State and local agencies
carrying out programs and activities related to the interests of
consumers ; and
(13) perform such other administrative activities as may be
necessary for the effective fulfillment of his duties and functions.
(c) Upon request made, by the Administrator, each Federal agency
is authorized and directed to make its services, personnel, and facilities
available to the greatest practicable extent within its capability to the
Agency in the performance of its functions.
(d) The Administrator shall prepare and submit simultaneously to
the Congress and the President, not later than April 1 of each year
beginning April 1, 1976, an annual report, which shall include a de-
scription and analysis of-
(1) the activities of the Agency, including its representation of
the interests of consumers before Federal agencies and Federal
courts ;
(2) the major Federal agency actions and Federal court deci-
sions affecting the interests of consumers;
(3) the assistance given the Agency by other Federal agencies
in carrying out the purposes of this Act;
(4) the performance of Federal agencies and the adequacy of
their resources in enforcing consumer protection laws and in
otherwise protecting the interests of consumers, and the prospec-
tive results of alternative consumer protection programs;
(5) the appropriation by Congress for the Agency, the distribu-
tion of appropriated funds for the current fiscal year, and a gen-
eral estimate of the resource requirements of the Agency for each
of the next three fiscal years; and
(6) the extent of participation by consumers in Federal agency
activities, and the effectiveness of the representation of consumers
before Federal agencies, together with recommendations for new
legislation, new budget authority for the Agency, and adminis-
trative actions to deal with problems discussed in the report, to
protect and represent the interests of consumers more effectively,
and to carry out the purposes of this Act.
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SEC. 5. (a) The Agency shall, in the performance of its functions,
advise the Congress and the President as to matters affecting the in-
terests of consumers; and shall protect and promote the interests of
the people of the United States as consumers of goods and services
made available to them through the trade and commerce of the United
States.
(b) The functions of the Administrator shall be to-
(1) represent the interests of consumers before Federal agen-
cies and courts to the extent authorized by this Act;
(2) conduct and support research, studies, and testing to the
extent authorized in section 9 of this Act;
(3) submit recommendations annually to the Congress and the
President on measures to improve the operation of the Federal
Government in the protection and promotion of the interests of
consumers;
(4) obtain information and publish and distribute material
developed in carrying out his responsibilities under this Act in
order to inform consumers of matters of interest to them, to the
extent authorized in this Act;
(5) receive, transmit to the appropriate agencies and persons,
and make publicly available consumer complaints to the extent
authorized in section 7 of this Act.
(6) conduct conferences, surveys, and investigations, including
economic surveys, concerning the needs, interests, and problems
of consumers : Provided, That such conferences, surveys, or in-
vestigations are not duplicative in significant degree of similar
activities conducted by other Federal agencies;
(7) cooperate with State and local governments and encourage
private enterprise in the promotion and protection of the interests
of consumers;
(8) keep the appropriate committees of Congress fully and
currently informed of all the Agency's activities, when asked or
on his own initiative;
(9) publish, in language readily understandable by consumers,
a consumer register which shall set forth the time, place, and sub-
ject matters of actions by Congress, Federal agencies, and Fed-
eral courts, and other information useful to consumers;
(10) encourage the adoption and expansion of effective con-
sumer education programs;
(11) encourage the application and use of new technology, in-
cluding patents and inventions, for the promotion and protec-
tion of the interests of consumers;
(12) encourage the development of informal dispute settle-
ment procedures involving consumers ;
(13) encourage meaningful participation by consumers in the
activities of the Agency;
;
(14) promote the consumer interests of farmers'in obtaining
a full suppy of goods and services at a fair and equitable price;
and
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(15) perform such other related activities as he deems neces-
sary for the effective fulfillment of his duties and functions.
SEC. 6. (a) (1) Whenever the Administrator determines that the
result of any Federal agency proceeding or activity may substantially
affect an interest of consumers, he may as of right intervene as a party
or otherwise participate for the purpose of representing an interest
of consumers, as provided in paragraph (2) or (3) of this subsection.
In any proceeding, the Administrator shall refrain from intervening
as a party, unless he determines that such intervention is necessary
to represent adequately an interest of consumers. The Administrator
shall comply with Federal agency statutes and rules of procedure of
general applicability governing the timing of intervention or partic-
ipation in such proceeding or activity and, upon intervening or partic-
ipating therein, shall comply with laws and agency rules of procedure
of general applicability governing the conduct thereof. The inter-
vention or participation of the Administrator in any Federal agency
proceeding or activity shall not affect the obligation of the Federal
agency conducting such proceeding or activity to assure procedural
fairness to all participants.
(2) Whenever the Administrator determines that the result of any
Federal agency proceeding which is subject to the provisions of sec-
tion 553, 554, 556, or 557 of title 5, United States Code, relating to ad-
ministrative procedure, or which involves a hearing pursuant to the
admininstrative procedural requirements of any other statute, regula-
tion, or practice, or which is conducted on the record after opportu-
nity for an agency hearing, or which provides for public notice and
opportunity for comment, may substantially affect an interest of con-
sumers, lie may as of right intervenue as a party or otherwise parti-
cipate for the purpose of representing an interest of consumers in
such proceeding.
(3) With respect to any Federal agency proceeding not covered by
paragraph (2) of this subsection, or any other Federal agency activity,
which the Administrator determines may substantially affect an in-
terest of consumers, the Administrator may participate by presenting
written or oral submissions, and the Federal agency shall give full con-
sideration to such submissions of the Administrator. Such submissions
shall be presented in an orderly manner and without causing undue
delay. Such submission need not be simultaneous with that of any
other person.
(b) At such time as the Administrator determines to intervene or
participate in a Federal agency proceeding under subsection (a) (2)
of this section, he shall issue publicly a written statement setting forth
his findings under subsection (a) (1), stating concisely the specific
interest of consumers to be protected. Upon intervening or participat-
ing he shall file a copy of his statement in the proceeding.
(c) To the extent that any person, if aggrieved, would by law have
such right, the Administrator shall have the right, in accordance with
the following provisions of this subsection, to initiate or participate in
any Federal court proceeding involving a Federal agency action-
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(1) The Administrator may, as of right, and in the manner pre-
scribed by law, initiate any civil proceeding in a Federal court which
involves the review of a Federal agency action that the Administrator
determines may substantially affect an interest of consumers. If the
Administrator did not intervene or otherwise participate in the Fed-
eral agency proceeding or activity out of which such agency action
arose, the Administrator, before initiating a proceeding to obtain ju-
dicial review, shall petition such agency for rehearing or reconsidera-
tion thereof, if the statutes or rules governing such agency specifically
authorize rehearing or reconsideration. Such petition shall be filed
within sixty days after the Federal agency action involved, or within
such longer period as may be allowed by applicable procedures. The
Administrator may immediately initiate a judicial review proceeding
if the Federal agency does not finally act upon such petition within
sixty days after the filing thereof, or at such earlier time as may be
necessary to preserve the Administrator's right to obtain effective
judicial review of the Federal agency action. Where the Administra-
tor did not intervene or otherwise participate in the Federal agency
proceeding or activity out of which the judicial proceeding arises,
the court shall determine whether the Administrator's initiation of
such judicial proceeding pursuant .to this subsection would impede the
interests of justice. When the Administrator initiates a judicial pro-
ceeding arising out of a Federal agency proceeding or activity in
which he did not intervene or otherwise participate, he shall file a
statement setting forth the reasons why he did not so intervene or
otherwise participate in such proceeding or activity, for the court's
consideration in connection with whether the initiation of such pro-
ceeding would impede the interests of justice.
(2) The Admininstrator may, as of right, and in the manner pre-
scribed by law, intervene or otherwise participate in any civil pro-
ceeding in a Federal court which involves the review or enforcement
of a Federal agency action that the Administrator determines may
substantially affect an interest of consumers.
(3) The initiation or other participation of the Administrator in
a judicial proceeding pursuant to this subsection shall not alter or
affect the scope of review otherwise applicable to the agency action
involved.
(d) When the Administrator determines it to be in the interest of
consumers, he may request the Federal agency concerned to initiate
such proceeding, or to take such other action, as may be authorized
by law with respect to such aency. If the. Federal agency fails to take
the action requested, it shall- promptly notify the Administrator of
the reasons therefor and such notification shall be a matter of public
record.
(e) Appearances by the Agency under this Act shall be in its own
name and shall be made by qualified representatives designated by the
Administrator.
(f) In any Federal agency proceeding in which the Administrator
is intervening or participating pursuant to subsection (a) (2) of this
section, the Administrator is authorized to request the Federal agency
to issue, and the Federal agency shall, on a statement or showing (if
such statement or showing is required by the Federal agency's rules
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of procedure) of general relevance and reasonable scope of the evi-
dence sought, issue such orders, as are authorized by the Federal
agency's statutory powers, for the copying of documents, papers, and
records, summoning of witnesses, production of books and papers,
and submission of information in writing.
(g) The Administrator is not authorized to intervene in proceedings
or actions before State or local agencies and courts.
(h) Nothing in this section shall be construed to prohibit the Ad-
ministrator from communicating with, providing information to, or
providing assistance requested by any Federal, State, or local agencies
and courts at any time and in any manner consistent with law or
agency rules.
(i) Each Federal agency shall review its rules of procedure of gen-
eral applicability, and, after consultation with the Administrator,
issue any additional rules which may be necessary to provide for the
Administrator's orderly intervention or participation, in accordance
with this section, in its proceedings and activities which may substan-
tially affect the interests of consumers. Each Federal agency shall
issue rules determining the circumstances under which the Adminis-
trator ma be allowed to make simultaneous submissions under sub-
secton (a))(3) of this section. Any additional rules adopted pur-
suant to the requirements of this subsection shall be published in pro-
posed and final form in the Federal Register.
(j) The Administrator is authorized to represent an interest of
consumers which is presented to him for his consideration upon peti-
tion in writing by a substantial number of persons or by any orga-
nization which includes a substantial number of persons. The Admin-
istrator shall notify the principal sponsors of any such petition within
a reasonable time after receipt of any such petition of the action taken
or intended to be taken by him with respect to the interest of con-
sumers presented in such petition. If the Administrator declines or is
unable to represent such interest, he shall notify such sponsors and
shall state his reasons therefor.
SEC. 7. (a) Whenever the Administrator receives from any person
any complaint or other information which discloses-
(1) an apparent violation of law, agency rule or order, or a
judgment, decree, or order of a State or Federal court relating
to an interest of consumers ; or
(2) a commercial, trade, or other practice which is detrimental
to an interest of consumers;
he shall, unless he determines that such complaint or information is
frivolous, promptly transmit such complaint or information to any
Federal, State, or local agency which has the authority to enforce any
relevant law or to take appropriate private action. Federal agencies
shall keep the Administrator informed to the greatest applicable ex-
tent of any action which they are taking on complaints transmitted by
the Administrator pursuant to this section.
(b) The Administrator shall promptly notify producers, distribu-
tors, retailers, lenders, or suppliers of goods and services of all com-
plaints of any significance concerning them received or developed
under this section unless the Administrator determines that to do so
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is likely to prejudice or impede an action, investigation, or prosecution
concerning an alleged violation of law.
(c) The Administrator shall maintain a public document room con-
taining, for public inspection and copying (without charge or at a
reasonable charge, not to exceed cost), an up-to-date listing of all con-
sumer complaints of any significance which the Agency has received,
arranged in meaningful and useful categories, together with annota-
tions of actions taken in response thereto. Unless the Administrator,
for good cause, determines not to make any specific complaint avail-
able, complaints listed shall be made available for public inspection
and copying : Provided, That-
(1) the party complained against has had a reasonable time to
comment on such complaint and such comment, when received, is
displayed together with the complaint;
(2) the agency to which the complaint has been referred has had
a reasonable time to notify the Administrator what action, if any,
it intends to take with respect to the complaint;
(3) the complainant's identity is to be protected when he has
requested confidentiality. Whenever the complainant requests that
his identity be protected, the Administrator shall place an ap-
propriate designation on the complaint before making it available
to the public;
(4) no unsigned complaints shall be placed in the public docu-
ment room.
SEC. 8. (a) In order to carry out the purposes of this Act the Ad-
ministrator shall develop on his own initiative, and subject to the other
provisions of this Act, gather from other Federal agencies and non-
Federal sources, and disseminate to the public in such manner at such
times, and in such form as he determines to be most effective, informa-
tion, statistics, and other data including, but not limited to matter
concerning-
(1) the functions and duties of the Agency;
(2) consumer products and services;
(3) problems encountered by consumers generally, including
annual reports on interest rates and commercial and trade prac-
tices which may adversely affect consumers ; and
(4) notices of Federal hearings, proposed and final rules and
orders, and other pertinent activities of Federal agencies that
affect consumers.
(b) All Federal agencies which, in. the judgment of the Administra-
tor, possess information which would be useful to consumers are au-
thorized and directed to cooperate with the Administrator in making
such information available to the public.
SEC. 9. The Administrator is authorized to conduct, support, and
assist research, studies, plans, investigations, conferences, demonstra-
tion projects, and surveys concerning the interests of consumers.
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SEc. 10. (a) (1) The Administrator is authorized, to the extent re-
quired to protect the health or safety of consumers, or to discover
consumer fraud or substantial economic injury to consumers, to ob-
tain data by requiring any person engaged in a trade, business, or
industry which substantially affects interstate commerce and whose
activities he determines may substantially affect an interest of con-
sumers, by general or specific order setting forth with particularity
the consumer interest involved and the purposes for which the infor-
mation is sought, to file with him a report or answers in writing to
specific questions concerning such activities and other related infor-
mation. Nothing in this subsection shall be construed to authorize
the inspection or copying of documents, papers, books, or records, or
to compel the attendance of any person. Nor shall anything in this
subsection require the disclosure of information which would. violate
any relationship privileged according to law. Where applicable, chap-
ter 35 of title 44, United States Code, shall govern requests for reports
under this subsection in the manner in which independent Federal
regulatory agencies are subject to its provisions.
(2) The Administrator shall not exercise the authority under para-
graph (1) of this subsection if the information sought-
(A) is available as a matter of public record ; or
(B) can be obtained from another Federal agency pursuant
to subsection (b) of this section; or
(C) is for use in connection with his intervention in any
agency proceeding against the person to whom the interrogatory
is addressed if the proceeding is pending at the time the inter-
rogatory is requested.
(3) In the event of noncompliance with any interrogatories or
requests submitted to any person by the Administrator pursuant to
paragraph (1), any district court of the United States within the
jurisdiction of which such person is found, or has his principal place
of business, shall issue an order, on conditions and with such appor-
tionment of costs as it deems just, requiring compliance with a valid
order of the Administrator. The district court of the United States
shall issue such an order upon petition by the Administrator or on a
motion to quash, and upon the Administrator's carrying the burden
of proving in court that such order is for information that may sub-
stantially affect the health or safety of consumers or may be necessary
in the discovery of consumer fraud or substantial economic injury
to consumers, and is relevant to the purposes for which the informa-
tion is sought, unless the person to whom the interrogatory or request
is addressed shows that answering such interrogatory or request will
be unnecessarily or excessively burdensome.
(4) The Administrator shall not have the power to require the pro-
duction or disclosure of any data or other information under this sub-
section from any small business. For the purpose of this paragraph,
"small business" means any person that, together with its affiliates,
including any other person with whom such person is associated by
means of a franchise agreement, does not have assets exceeding $7,-
500,000, does not have net worth in excess of $2,500,000, and does not
have an average annual net income, after Federal income taxes, for
the preceding two years in excess of $250,000 (average net income
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to be computed without benefit of any carryover loss). Nothing in this
paragraph shall be construed to prohibit the Administrator from re-
questing the voluntary production of any such data or information.
Notwithstanding this paragraph, the Administrator shall have the
power, pursuant to paragraph (1) to obtain information from a small
business if necessary to prevent imminent and substantial danger to
the health or safety of consumers and the Administrator has no other
effective means of action. The Administrator shall, not later than
eighteen months after the date on which this Act becomes effective,
submit to Congress a detailed report with respect to the effect of the
limitations contained in this paragraph on the purposes of this Act,
for such action as the Congress may deem appropriate.
(b) Upon written request by the Administrator, each Federal
agency is authorized and directed to furnish or allow access to all
documents, papers, and records in its possession which the Adminis-
trator deems necessary for the performance of his functions and to
furnish at cost copies of specified documents, papers, and records.
Notwithstanding this subsection, a Federal agency may deny the
Administrator access to and copies of-
(1) information classified in the interest of national defense or
national security by an individual authorized to classify such
information under applicable Executive order of statutes, and
restricted data whose dissemination is controlled pursuant to the
Atomic Energy Act (42 U.S.C. 2011 et seq.) ;
(2) policy and prosecutorial recommendations by Federal
agency personnel intended for internal agency use only;
(3) information concerning routine executive and administra-
tive functions which is not otherwise a matter of public record ;
(4) personnel and medical files and similar files the disclosure
of which would constitute a clearly unwarranted invasion of
personal privacy;
(5) information which such Federal agency is expressly ro-
hibited by law from disclosing to another Federal agency, includ-
ing, but not limited to, such expressly prohibited information
contained in or related to examination, operating, or condition
reports concerning any individual financial institution prepared
by, on behalf of, or for the use of an agency responsible for regu-
lation or supervision of financial institutions;
(6) information which would disclose the financial condition of
individuals who are customers of financial institutions; and
(7) trade secrets and commercial or financial information de-
scribed in section 552(b) (4) of title 5, United States Code-
(A) obtained prior to the effective date of this Act by a
Federal agency, if the agency had agreed to treat and has
treated such information as privileged or confidential and
states in writing to the Administrator that, taking into ac-
count the nature of the assurances given, the character of the
information requested, and the purpose, as stated by the
Administrator, for which access is sought, to permit such
access would constitute a breach of faith by the agency; or
(B) obtained subsequent to the effective date of this Act by
a Federal agency, if the agency has agreed in writing as a
condition of receipt to treat such information as privileged or
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confidential, on the basis of its reasonable determination set
forth in writing that such information was not obtainable
without such an agreement and that failure to obtain such
information would seriously impair performance of the
agency's function.
Before granting the Administrator access to trade secrets and com-
mercial or financial information described in section 552(b) (4) of
title 5, United States Code, the agency shall notify the person who
provided such information of its intention to do so and the reasons
therefor, and shall, notwithstanding section 21(b), afford him a
reasonable opportunity, not to exceed ten days, to comment or seek
injunctive relief. Where access to information is denied to the Admin-
istrator by a Federal agency pursuant to this subsection, the head of
the agency and the Administrator shall seek to find a means of pro-
viding the information in such other form, or under such conditions, as
will meet the. agency's objections.
(c) Consistent with the provisions of section 7213 of the Internal
Revenue Code of 1954 (26 U.S.C. 7213), nothing in this Act shall be
construed as providing for or authorizing any Federal agency to
divulge or to make known in any manner whatever to the Administra-
#br, solely from an income tax return, the amount or source of income,
profits, losses, expenditures, or any particular thereof, or to permit
any Federal income tax return filed pursuant to the provisions of the
Internal Revenue Code of 1954, or copy thereof, or any book contain-
ing any abstracts or particulars thereof, to be seen or examined by the
Administrator, except as provided by law.
LIMITATIONS ON DISCLOSURES
SEC. 11. (a) Except as provided in this section, section 552 of title
5, United States Code, shall govern the release of information by any
officer or employee of the Agency.
(b) No officer or employee of the Agency shall disclose to the pub-
lic or to any State or local agency any information which was re-
ceived solely from a Federal agency when such agency has notified
the Administrator that the information is within the exceptions stated
in section 552 (b) of title 5, United States Code, and the Federal agency
has determined that the information should not be made available to
the public; except that if such Federal agency has specified that such
information may be disclosed in a particular form or manner, such in-
formation may be disclosed in such form or manner.
(c) The following additional provisions shall govern the release
of information by the Administrator pursuant to any authority con-
ferred by this Act, except information released through the presenta-
tion of evidence in a Federal agency or court proceeding pursuant
to section 6--
(1) The Administrator, in releasing information concerning
consumer products and services, shall determine that (A) such
information, so far as practicable, is accurate, and (B) no part of
such information is prohibited from disclosure by law. The Ad-
ministrator shall compl with any notice by a Federal agency
pursuant to section 11 (yb) that the information should not be
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made available to the public or should be disclosed only in a
particular form or manner.
(2) In the dissemination of any test results or other informa-
tion which directly or indirectly disclose product names, it shall
be made clear that (A) not all products of a competitive nature
have been tested, if such is the case, and (B) there is no intent or
purpose to rate products tested over those not tested or to imply
that those tested are superior or preferable in quality over those
not tested.
(3) Notice of all changes in, or any additional information
which would affect the fairness of information previously dis-
seminated to the public shall. be promptly disseminated in a
similar manner.
(4) Where the release of information is likely to cause sub-
stantial injury to the reputation or good will of a person, the Ad-
ministrator shall notify such person of the information to be
released and afford him a reasonable opportunity, not to exceed
ten days, to comment or seek injunctive relief, unless immediate
release is necessary to protect the health or safety of the public.
The district courts of the United States shall have jurisdiction
over any action brought for injunctive relief under this subsec-
tion, or under section 10(b) (7).
(d) In any suit against the Administrator to obtain information
pursuant to the provisions of section 552 of title 5, United States Code,
where the sole basis for the refusal to produce the information is that
another Federal agency has specified that the documents not be dis-
closed in accordance with the provisions of subsection (b) of this sec-
tion, the other Federal agency shall be substituted as the defendant,
and the Administrator shall thereafter have no duty to defend such
suit.
SEc. 12. (a) Each Federal agency considering any action which
may substantially affect an interest of consumers shall, upon request
by the Administrator, notify him of any proceeding or activity at
such time as public notice is given.
(b) Each Federal agency considering any action which may sub-
stantially affect an interest of consumers shall, upon specific request
by the Administrator, promptly provide him with-
(1) a brief status report which shall contain a statement of the
subject at issue and a summary of proposed means concerning
such subject; and
(2) such other relevant notice and information, the provision
of which would not be unreasonably burdensome to the agency
and which would facilitate the Administrator's timely and effec-
tive intervention or participation under section 6 of this Act.
(c) Nothing in this section shall affect the authority or obligations
of the Administrator or any Federal agency under section 10(b) of
this Act.
SEC. 13. (a) Nothing in this Act shall be construed to affect the duty
of the Administrator of General Services to represent the interests of
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the Federal Government as a consumer pursuant to section 201 (a) (4)
of the Federal Property and Administrative Services Act of 1949 (40
U.S.C. 481(a) (4)).
(b) Nothing in this Act shall be construed to relieve any Federal
agency of any responsibility to protect and promote the interests of
consumers.
(c) Nothing in this Act shall be construed to limit the right of any
consumer or group or class of consumers to initiate, intervene in, or
otherwise participate in any Federal agency or court proceeding or
activity, nor to require any petition or notification to the Administra-
tor as a condition precedent to the exercise of such right, nor to relieve
any Federal agency or court of any obligation, or affect its discretion,
to permit intervention or participation by a consumer or group or class
of consumers in any proceeding or activity.
SEc. 14. As used in this Act, unless the context otherwise requires-
(1) "Administrator" means the Administrator of the Agency
for Consumer Advocacy;
(2) "Agency" means the Agency for Consumer Advocacy;
(3) "agency action" includes the whole or part of an agency
``rule," "order," "license," "sanction," "relief," as defined in section
551 of title 5, United States Code, or the equivalent or the denial
thereof, or failure to act;
(4) ,"agency activity" means any agency process, or phase
thereof conducted pursuant to any authority or responsibility
under law, whether such Y rocess is formal or informal;
(5) "agency proceeding' means agency "rulemaking", adjudi-
cation", or "licensing", as defined in section 551 of title 5, United
States Code;
(6) "commerce" means commerce among or between the sev-
eral States and commerce with foreign nations;
(7) "consumer" means any individual who uses, purchases,
acquires, attempts to purchase or acquire, or is offered or furnished
any real or personal property, tangible or intangible goods, serv-
ices, or credit for personal, family, agricultural, or household
purposes;
(8) "Federal agency" or "agency" means "agency" as defined
in section 551 of title 5, United States Code. The term shall in-
clude the United States Postal Service, the Postal Rate Commis-
sion, and any other authority of the United States which is a
corporation and which receives any appropriated funds, and,
unless otherwise expressly provided by law, any Federal agency
established after the date of enactment of this Act, but shall not
include the Agency for Consumer Advocacy;
(9) "Federal court" means any court of the United States, in-
cluding the Supreme Court of the United States, any United
States court of appeals, any United States district court estab-
lished under chapter 5 of title 28, United States Code, the District
Court of Guam, the District Court of the United States Customs
Court, the United States Court of Customs and Patent Appeals,
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the United States Tax Court, and the United States Court of
Claims;
(10) "individual" means a human being;
(11) "interest of consumers" means any health, safety, or
economic concern of consumers involving real or personal propp-
erty, tangible or intangible goods, services, or credit, or the ad-
vertising or other description. thereof, which is or may become
the subject of any business, trade, commercial, or marketplace
offer or transaction affecting commerce, or which may be related
to any term or condition of such offer or transaction. Such offer
or transaction need not involve the payment or promise of a
consideration ;
(12) "participation" includes any form of submission;
(13) "person" includes any individual, corporation, partner-
ship, firm, association, institution, or public or private organiza-
tion other than a Federal. agency;
(14) "State" means each of the several States of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Canal Zone, Guam, American Samoa, and
the Trust Territory of the Pacific Islands; and
(15) "submission" means participation through the presenta-
tion or communication of relevant evidence, documents, argu-
ments, or other information.
SEC. 15. (a) Section 5314 of title 5, United States Code, is amended
by adding at the end thereof the following :
"(60) Administrator, Agency for Consumer Advocacy."
(b) Section 5315 of such title is amended by adding at the end
thereof the following :
"(100) Deputy Administrator, Agency for Consumer Ad-
vocacy."
(c) Section 5316 of title 5, United States Code, is amended by adding
at the end thereof the following new paragraphs :
" (135) General Counsel, Agency for Consumer Advocacy."
"(136) Assistant Administrators, Agency for Consumer Ad-
vocacy (5)."
SEC. 16. (a) This Act shall not apply to the Central Intelligence
Agency, the Federal Bureau of Investigation, or the National Security
Agency, or the national security or intelligence functions (including
related procurement) of the Departments of State and Defense (in-
cluding the Departments of the Army, Navy, and Air Force) and the
military weapons program of the Energy Research and Development
Administration, or to a labor dispute within the meaning of section
13 of the Act entitled "An Act to amend the Judicial Code and to de-
fine and limit the jurisdiction of courts sitting in equity, and for other
purposes", approved March 23, 1932 (29 U.S.C. 113), or of section 2
of the Labor Management Relations Act (29 U.S.C. 152), or to a la-
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bor agreement within the meaning of section 201. of the Labor Man-
agement Relations Act, 1947 (29 U.,S.C.171).
(b) Nothing in this Act shall be construed, and no authority in this
Act shall authorize, the Administrator to intervene in any United
States Department of Agriculture proceeding without considering
the consumers' interest in an adequate supply of food, and without
considering the interests of farmers in maintaining an adequate level
of income and production.
SEC. 17. No person shall on the ground of sex be excluded from par-
ticipation in, be denied the benefits of, or be subjected to discrimina-
tion under any program or activity carried on or receiving Federal
assistance under this Act. This provision will be enforced through
agency provisions and rules similar to those already established, with
respect to racial and other discrimination, under title VI of the Civil
Rights Act of 1964. However, this remedy is not exclusive and will
not prejudice or cut off any other legal remedies available to a person
alleging discrimination.
SEC. 18. (a) It is the sense of the Congress that small business enter-
prises should have their varied needs considered by all levels of gov-
ernment in the implementation of the procedures provided for
throughout this Act.
(b) (1) In order to carry out the policy stated in subsection (a), the
Small Business Administration (A) shall to the maximum extent pos-
sible provide small business enterprises with full information concern-
ing the procedures provided for throughout this Act which par-
ticularly affect such enterprises, and the activities of the various
agencies in connection with such provisions, and (B) shall, as part of
its annual report, provide to the Congress a summary of the actions
taken under this Act which have particularly affected such enterprises.
(2) To the extent feasible, the Administrator shall seek the views of
small business in connection with establishing the Agency's priorities,
as well as the promulgation of rules implementing this Act.
(3) In administering the programs provided for in this Act, the Ad-
ministrator shall respond in an expeditious manner to the views, re-
quests, and other filings by small business enterprises.
(4) In implementing this Act, the Administrator shall, insofar as
practicable, treat all businesses, large or small, in an equitable fashion;
due consideration shall be given to the unique problems of small busi-
ness so as not to discriminate or cause. unnecessary hardship in the
administration or implementation of the provisions of this Act.
(5) For the purposes of this section, the term "small business" shall
have the same meaning as provided in section 10(a) (4) of this Act.
AUTHORIZATION OF APPROPRIATIONS
SEC. 1.9. There are authorized to be appropriated to carry out the
provisions of this Act, except section 24, not to exceed $15,000,000 for
the fiscal year ending June 30, 1976, not to exceed $20,000,000 for the
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fiscal year ending June 30, 1977, and not to exceed $25,000,000 for the
fiscal year ending June 30, 1978. Any subsequent legislation to author-
ize appropriations under this Act for the fiscal year beginning on
July 1, 1978, shall be referred in the Senate to the Committee on
Government Operations and to the Committee on Commerce.
SEC. 20. (a) The Comptroller General of the United States shall
audit, review, and evaluate the implementation of the provisions of
this Act by the Agency for Consumer Advocacy.
(b) Not less than thirty months nor more than thirty-six months
after the effective date of this Act, the Comptroller General shall
prepare and submit to the Congress a report on his audit conducted
pursuant to subsection (a), which shall contain, but not be limited to,
the following :
(1) an evaluation of the effectiveness of the Agency's consumer
representation activities;
(2) an evaluation of the effect of the activities of the Agency
on the efficiency, effectiveness, and procedural fairness of affected
Federal agencies in carrying out their assigned functions and
duties ;
(3) recommendations concerning any legislation he deems neces-
sary, and the reasons therefore, for improving the implementation
of the objectives of this Act as set forth in section 2.
(c) Copies of the report shall be furnished to the Administrator of
the Agency for Consumer Advocacy, the chairmen of the Senate
Committees on Commerce and on Government Operations, and the
chairman of the Committee on. Government Operations of the House
of Representatives.
(d) Restrictions and prohibitions under this Act applicable to the
use or public dissemination of information by the Agency shall apply
with equal force and effect to the General Accounting Office in carry-
ing out its functions under this section.
SEC. 21. (a) Nothing in this Act could be construed to limit the
discretion of any Federal agency or court, within its authority, in-
cluding a court's authority under rule 24 of the Federal Rules of Civil
Procedure, to grant the Administrator additional participation in any
proceeding or activity, to the extent that such additional participation
may not be as of right, or to provide. additional notice to the Admin-
istrator concerning any agency proceeding or activity.
(b) (1) No act or omission by the Administrator or any Federal
agency relating to the Administrator's authority under sections 6 (a),
(d), (f), (i), and (j), 7, 10, 11, and 12 of this Act shall affect the
validity of an agency action or be subject to judicial review: Provided,
That-
(A) the Administrator may obtain judicial review to enforce
his authority under sections 6 (a), (d), (f), (i), and (j), 10, and
12 of this Act: Provided, That he may obtain judicial review of
the Federal agency determination under section 6(f) of this Act
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only after final agency action and only to the extent that such
determination affected the validity of such action;
(B) a party to any agency proceeding or a participant in any
agency activity in which the Administrator intervened or par-
ticipated may, where judicial review of the final agency action
is otherwise accorded by law, obtain judicial review following
such final agency action on the ground that the Administrator's
interventiop or participation resulted in prejudicial error to
such
party or participant based on the record viewed as a whole;
and
(C) any person who is substantially and adversely affected by
the Administrator's action pursuant to section 6(f), 10(a), or 11
of this Act may obtain judicial review, unless the court deter-
mines that such judicial review would be detrimental to the in-
terests of justice.
(2) For the purposes of this subsection, a determination by the
Administrator that the result of any agency proceeding or activity
may substantially affect an interest of consumers or that his inter-
vention in any proceeding is necessary to represent adequately an in-
terest of consumers shall be deemed not to be a final agency action.
TRANSFER OF CONSUMER PRODUCT INFORMATION COORDINATING CENTER
SEC. 22. (a) All officers, employees, assets, liabilities, contracts,
property, and records as are determined by the Director of the Office
of Management. and Budget to be employed, held; or used primarily
in connection with the functions of the Consumer Product Informa-
tion Coordinating Center in the General Services Administration are
transferred to the Agency and all functions of the Administrator of
General Services administered through the Consumer Product Infor-
mation Coordinating Center are transferred to the, Agency.
(b) (1) Except as provided in paragraph (2) of this subsection,
personnel engaged in functions transferred under this section shall be
transferred in accordance with applicable laws and regulations relat-
ing to transfer of functions.
(2) The transfer of personnel pursuant to this section shall be with-
out reduction in classification or compensation for one year after such
transfer.
SEC. 23. (a) After reviewing its statutory authority and rules of
procedure, relevant agency and judicial decisions, and other relevant
provisions of law, each Federal agency shall issue appropriate inter-
pretations, guidelines, standards, or criteria, and rules of procedure,
to the extent that such rules are appropriate and are not already in
effect., relating to the rights of individuals who may be affected by
agency action to-
(1) petition the agency for action;
(2) receive notice of agency proceedings;
(3) file official complaints (if appropriate) with the agency;
(4) obtain information from the agency; and
(5) participate in agency proceedings for the purpose of
representing their interests.
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Such interpretations, guidelines, standards, criteria, and rules of pro-
cedure shall be published in proposed and final form in the Federal
Register.
(b) Each Federal agency shall take all reasonable measures to re-
duce or waive, where appropriate, procedural requirements for indi-
viduals for whom such requirements would be financially burdensome,
or which would impede or prevent effective participation in agency
proceedings.
(c) Any rules of procedure issued by any Federal agency pursuant
to this section shall be published in a, form and disseminated Ina man-
ner that is designed to inform, and that is able to be understood by,
the general public.
COST AND BENEFPr ASSESSMENT STATEMENTS
SEC. 24. (a). In furtherance of the purpose and policy of section
2 (b) (4) of this Act, and except as otherwise provided in this Act, each
Federal agency which is authorized to promulgate rules (as defined
in section 551(4) of title 5, United States Code), shall prepare a cost
and benefit assessment statement with respect to any rules to which
section 553 (b) of title 5, United States Code is applicable, which are
likely to have a substantial economic impact. Each such statement
shall be short and concise and, together with such supporting docu-
mentation as the agency in its discretion determines to be necessary or
appropriate, shall consist of the following three elements:
(1) estimated costs, that are foreseeable as a result of the effec-
tive implementation of such rule;
(2) estimated benefits, that are foreseeable as a result of the
effective implementation of such rule; and
(3) the apparent relationship, if any, between such costs and
benefits.
To to the extent deemed practicable by the agency responsible for
its preparation, each cost and benefit assessment statement shall indi-
cate in an appendix the assumptions, if any, which were made by it
regarding the means, or alternative means, and attendant costs of
compliance with the proposed rule, including any manufacturer's costs
and consumer costs reflected in the price of any product affected by
such rule.
(b) With respect to any proposed rule subject to the requirements
of subsection (a), each Federal Register notice of proposed rule-
making shall request interested persons to submit to the applicable
agency, in writing, comments, materials, data, information and other
presentations relevant to the preparation of the required cost and
benefit assessment statement.
(c) Each such agency shall, to the extent it deems necessary or
appropriate, seek to obtain comments, materials, data, information, and
presentations relevant to the costs and benefits, if any, likely to ensue
from effective implementation of any proposed rule, within the time
prescribed for consideration of the proposed rule, from other Federal
agencies and persons. No extentions of time for comment shall be
granted solely for the purpose of receiving any such presentations
with respect to such benefits.
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(d) Each person who contends that effective implementation of a
proposed rule will result in increased or decreased costs, shall furnish
to the applicable agency the information upon which lie bases such
assertion, and which is in his possession, is known to him, or is subject
to his control. Such information shall be furnished to the agency in
such form, manner, and detail as such agency in its discretion pre-
scribes. Whenever any relevant information, which an applicable
agency deems necessary or appropriate to the preparation of a cost and
benefit assessment statement, is or may be in the possession or control
of a person who may be directly affected by the proposed rule, such
agency is authorized to request such relevant information as reason-
ably described by it, and such person shall furnish such relevant in-
formation promptly to such agency. Such request for information
shall be enforceable by appropriate orders by any court of the United
States. Such information as is furnished shall be considered a state-
ment for purposes of section 1001 of title 18, United States Code.
(e) A cost and benefit assessment statement prepared pursuant to
subsection (a) shall be first published at the end of the year in the
Federal Register in a report which shall contain all cost and benefit
assessment statements applicable to rules promulgated during the pre-
ceding 12 months. All relevant information developed or received by
the applicable agency in connection with the preparation of such state-
ment shall be available to all interested persons, subject to the provi-
sions of section 552 of title 5, United States Code.
(f) The President shall issue, pursuant to the provisions of this
subsection, (1) regulations providing guidelines for Federal agencies
as to the nature and content of any cost and benefit assessment state-
ment required by subsection (a) and (2) regulations which shall in-
sure that any agency shall be able to obtain information deemed by it
to be necessary or appropriate to the preparation of any such cost and
benefit assessment statement. Such regulations shall be issued by the
President upon the recommendations submitted to the President by
the Office of Management and Budget, the General Accounting Office,
and the Agency for Consumer Advocacy. In issuing or modifying any
regulations implementing this section, the President shall proceed in
accordance with the procedures prescribed by subsections (b) and (c)
of the new section inserted by section 202, Public Law 93-637, (88 Stat.
2193; 15 USC 57a(b), (c) ). The President shall provide public notice
of proposed rule-making to implement this subsection within 60 days
of the effective date of this Act. After issuance of any regulations im-
plementing this section, the President shall transmit them to the Con-
gress, together with all recommendations submitted to the President
pursuant to this subsection. Such regulations shall take effect 90 legis-
lative days after such transmittal to the Congress by the President,
unless either House of Congress by resolution of disapproval, pursuant
to procedures established by chapter 35, title 44, United States Code,
and by section 1017 of The Congressional Budget and Impoundment
Control Act of 1974 (31 U.S.C. 1407), disapproves such regulations,
except that Congress may by concurrent resolution modify such regula-
tions within such 90-day period, in which case such regulations shall
take effect in such modified form.
(g) No Federal officer or agency shall submit proposed legislation
to the Congress which is likely, if enacted, to have a substantial eco-
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nomic impact, unless such legislation is accompanied by a cost and
benefit assessment statement. The statement required by this subsec-
tion shall be prepared in accordance with the provisions of subsection
(a). The requirements of this subsection may be postponed upon the
request of a committee of Congress having jurisdiction over such
legislative proposal, for a period not to exceed 30 clays from the date
of submission to the Congress of such legislation.
(h) In addition to the definitions in section 14 of this Act, the fol-
lowing definitions shall apply with respect to the provisions of this
section :
(1) The term "rule" means "rule" as defined by section 441
(4) of title 5, United States code;
(2) The term "legislation" or "law" means a statute of the
United States or any amendment thereto;
(3) "benefit" includes any direct or indirect, tangible or intan-
gible, gain or advantage which the agency, in its discretion, deems
proximately related to the promulgation of a proposed regulation
or the enactment of the proposed legislation. The term shall in-
clude such nonquantifiable benefits as the agency identifies and de-
scribes. Benefits may include the costs that would be likely to
result from the agency's failure to act, but which are likely to
be avoided by the agency's action; and
(4) "cost" includes any direct or indirect expense, including
component costs of production and supply, and any loss, penalty,
or disadvantage which the agency, in its discretion, deems proxi-
mately related to the promulgation of a proposed regulation, or
the enactment of proposed legislation, the term shall include such
nonquantifiable costs as the agency identifies and describes.
(i) The Comptroller General of the United States shall monitor
and evaluate the implementation of this section. In addition to any
other reports or studies made by the Comptroller General relating to
this section, he shall, three years after the effective date of this section,
conduct a comprehensive review of this section including an evaluation
of the advantages and disadvantages of cost and benefit assessment
statements and of the nature and extent of Federal agency compli-
ance with this section. The Comptroller General shall prepare and
submit to the Congress a report based on such study and review. Such
report shall include, but need not be limited to, his recommendations
as to the necessity or advisability of the provisions of this section, and
of the need to amend subsection (k), or any other provision, of this
section.
(j) No court shall have the jurisdiction to review, or enforce or
shall review, or enforce and, except for the general review of the
effectiveness of this section provided for in subsection (i), no officer
or agency of the United States, other than the agency responsible for
the preparation of a cost and benefit assessment statement and the
duly authorized committees of the Congress, shall have the authority
to review, or enforce or shall review, or enforce, in any way the com-
pliance of any cost and benefit assessment statement with this section,
or, except where the agency preparing such a statement seeks to en-
force in court its request for information, the compliance by such
agency with any other requirement of this section, including the man-
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ner or process by which such statement is prepared. Provided, that a
Federal court may, upon the request of any interested person, review
and enforce compliance with the provisions of this subsection.
(k) The requirements of this section shall supersede the require-
ments of any existing executive order imposing any economic, cost-
benefit, inflationary or other similar impact assessment requirement.
No requirement of this section shall alter or supersede any Federal
agency statutory requirement, regulation or lawful practice which
such agency determines to be inconsistent with any of the require-
ments of this section. Further, no agency shall be required to prepare
and issue a cost and benefit assessment statement required by this sec-
tion, if information which would be contained in such statement is
encompassed within another statement required by law to be prepared
in connection with the promulgation of the applicable rule.
(1) The provisions of this section shall become effective upon the
effective date of implementing regulations submitted by the President
under subsection (g) of this section. There are hereby authorized to
be appropriated such sums as are necessary to carryout the provisions
of this section for the fiscal year 197 and 1978.
SEC. 25. (a) This act shall take effect ninety calendar days follow-
ing the date on which this Act is enacted, or on such earlier date as the
President shall prescribe and publish in the Federal Register.
(b) Any of the officers provided for in this Act may (notwithstand-
ing subsection (a)) be appointed in the manner provided for in this
Act at any time after the date of the enactment of this Act. Such
officers shall be compensated from the date they first take office at the
rates provided for in this Act.
SEC. 26.. If any provision of this Act is declared unconstitutional or
the applicability thereof to any person or circumstance is held invalid,
the constitutionality and effectiveness of the remainder of this Act
and the applicability thereof to any persons and circumstances shall
not be affected thereby.
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