HBA-NMO H.B. 2638 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2638 By: Gray Public Health 4/5/1999 Introduced BACKGROUND AND PURPOSE Current law requires the Texas Board of Health (board) to regulate hazardous substances. H.B. 2638 amends flammability standards set forth by the board for certain products; provides for the labeling of certain toys and games and art materials as hazardous substances; and provides special packaging standards for hazardous substances. This bill also provides criminal, administrative, and civil penalties for violation of the law regulating hazardous substances. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Board of Health in SECTION 3 (Section 501.021, Health and Safety Code) and SECTION 6 (Sections 501.0231, 501.0232, and 501.0233, Health and Safety Code) of this bill; and rulemaking authority previously delegated to the Texas Board of Health is modified in SECTION 7 (Section 501.024, Health and Safety Code) and SECTION 8 (Section 501.025, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 501.001, Health and Safety Code, to define "commissioner" as the commissioner of public health. Includes a hazardous substance or a toy that is not properly packaged in the definition of "misbranded hazardous substance." Makes conforming changes. SECTION 2. Amends Sections 501.002(a) and (d), Health and Safety Code, as follows: (a) Includes a substance or mixture of substances that is extremely flammable or combustible in the list of what is a hazardous substance. (d) Provides that a substance or article is extremely flammable, flammable or combustible if it is defined as so by rule of the Texas Board of Health (board). Requires the board to define the terms as defined by the certain federal law and regulations, unless it determines that the health, safety, and welfare of persons in this state requires a different definition. Provides that terms each have the meaning assigned by federal law and regulation until the board adopts another definition. Deletes language providing that a substance is flammable if it has a flash point of 80 degrees Fahrenheit or less, as determined by the Tagliabue Open Cup Tester. SECTION 3. Amends Section 501.021, Health and Safety Code, as follows: Sec. 501.021. New Title: FLAMMABILITY STANDARDS; DETERMINATION OF FLAMMABILITY. Requires the board, by rule, to establish flammability standards for solids, fabrics, children's clothing, household furnishings, and the contents of selfpressurized containers. Provides that the standards must conform to standards prescribed by certain federal law and regulations, unless the board determines that the health, safety, and welfare of persons in this state requires a different definition. Provides that the flammability standards are the standards prescribed by federal law and regulations, until the board adopts different standards. Authorizes the Texas Department of Health (TDH) to obtain samples of the article regulated by this section and determine the flammability of the articles for compliance with applicable standards. Makes conforming changes. SECTION 4. Amends Section 501.022(a), Health and Safety Code, to make conforming changes. SECTION 5. Amends the heading for Section 501.023, Health and Safety Code, as follows: Sec. 501.023. New Title: GENERAL LABELING AND PACKAGING REQUIREMENTS. Adds "general" and "and packaging requirements" to the title. SECTION 6. Amends Subchapter B, Chapter 501, Health and Safety Code, by adding Sections 501.0231-501.0233, as follows: Sec. 501.0231. LABELING OF CERTAIN TOYS AND GAMES. (a) Requires the labeling of toys or games intended for use by children, including the parts of those toys or games, in a the manner required by rule of the board. Requires the consistency of the board's rules under this subsection with certain federal guidelines and regulations, unless the board determines that the health, safety, and welfare of persons in this state requires a deviation from federal standards. Requires the labeling to follow certain federal guidelines and regulations, until the board adopts rules under this subsection. (b) Requires the labeling of latex balloons, small balls, marbles, and any toy or game that contains such a balloon, ball, or marble in a manner required by rule of the board. Requires the consistency of the board's rules under this subsection with certain federal guidelines and regulations, unless the board determines that the health, safety, and welfare of persons in this state requires a deviation from federal standards. Requires the labeling to follow certain federal guidelines and regulations, until the board adopts rules under this subsection. Sec. 501.0232. REVIEW AND LABELING OF HAZARDOUS ART MATERIALS. Requires the review of art materials by a toxicologist. Requires art materials to be labeled in the manner required by rule of the board. Requires the consistency of the board's rules under this subsection with certain federal law and regulations, unless the board determines that the health, safety, and welfare of persons in this state requires a deviation from federal standards. Requires that the labeling of art materials follow certain federal law and regulations, until the board adopts rules under this section. Sec. 501.0233. PACKAGING OF HAZARDOUS SUBSTANCES. Requires the packaging of hazardous substances in the manner required by special packaging rules adopted by the board. Requires the consistency of the board's rules under this subsection with certain federal law and regulations, unless the board determines that the health, safety, and welfare of persons in this state requires a deviation from federal standards. Requires that the packaging of hazardous substances follow certain federal law and regulations, until the board adopts rules under this subsection. SECTION 7. Amends Section 501.024, Health and Safety Code, to include persons who import a hazardous substance in this state and persons who distribute a hazardous substance in this state under the person's private brand name among those persons who are required to have a registration statement on file with TDH. Requires the board, by rule, to detail the registration requirements, in addition to prescribe the contents of the registration statement. Requires the person to file the registration statement with TDH in each succeeding year the person continues business in this state, not later than the anniversary of the initial filing, rather than September 1 of each year after the initial filing. Provides that the registration fee is prescribed by the board, rather than $150. Provides that a hazardous substance is subject to seizure and disposition under Section 501.033 if the person who manufactures, imports, repacts, or distributes the hazardous substance does not, after notice by TDH, register with TDH and make timely payment of the fee. Makes conforming changes. SECTION 8. Amends Section 501.025, Health and Safety Code, to authorize the board to adopt reasonable rules necessary for the efficient administration, in addition to enforcement, of this chapter. Makes conforming changes. SECTION 9. Amends Subchapter B, Chapter 501, Health and Safety Code, by adding Section 501.026, as follows: Sec. 501.026. FEES. Requires the board, by rule, to set reasonable registration fees in an amount designed to recover not more than the costs to TDH of administering, monitoring compliance with, enforcing, and conducting tests under this chapter. Requires the deposit of all registration fees received by TDH to the credit of a dedicated account in the general revenue fund. Authorizes the appropriation of money in the account only to TDH to implement this chapter. SECTION 10. Amends Section 501.031(b), Health and Safety Code, to authorize TDH to obtain, rather than pay for, samples of any materials, packaging, labeling, or finished product. SECTION 11. Amends Section 501.033(b), Health and Safety Code, to requires TDH to petition a district court of Travis County or of the county, rather than the district court of the county, in which the article is located to authorize the destruction of the article. SECTION 12. Amends Section 501.034, Health and Safety Code, by adding Subsections (g) and (h), as follows: (g) Prohibits a person from manufacturing, importing, or repacking a hazardous substance that is to be distributed in this state or otherwise distribute a hazardous substance in this state without complying with Section 501.024. (h) Prohibits a person from packaging a hazardous substance in a new or reused food, drug, or cosmetic container that is identifiable as a food, drug, or cosmetic container by its labeling or other identification. SECTION 13. Amends Sections 501.035(a) and (b), Health and Safety Code, to provide that a person commits a Class A, rather than Class B, misdemeanor if the person violates, rather than intentionally, knowingly, or recklessly violates, this chapter (Hazardous Substances) or a rule adopted under this chapter. Deletes language providing that an offense under this chapter is a Class A misdemeanor if it is shown on trial that the person's intent was to defraud another. SECTION 14. Amends Subchapter C, Chapter 501, Health and Safety Code, by adding Sections 501.036-501.042, as follows: Sec. 501.036. INJUNCTION. (a) Authorizes the commissioner, if it appears that a person has violated, is violating, or is threatening to violate this chapter or a rule adopted or order issued under this chapter, to request the attorney general or a district, county, or city attorney of the county or municipality in which the violation has occurred, is occurring, or may occur to institute certain civil action. (b) Provides that venue for a suit brought under this section is in the county or municipality in which the violation occurred or in Travis County. (c) Authorizes the commissioner and either the attorney general or the district, county, or city attorney, as appropriate, to each recover from the violator reasonable expenses incurred in obtaining injunctive relief under this section, including investigative costs, court costs, reasonable attorney's fees, witness fees, and deposition expenses. Authorizes the appropriation of expenses recovered by the commissioner only to TDH to administer and enforce this chapter. Authorizes appropriation of expenses recovered by the attorney general only to the attorney general. Sec. 501.037. RECALL ORDERS. (a) Authorizes the commissioner, in conjunction with the detention of an article under Section 501.033, to order that a hazardous substance be recalled from commerce. Sets forth recall procedure. Authorizes the commissioner to request the attorney general to bring an action in a district court of Travis County to recover costs of the recall. Authorizes the court, in a judgment in favor of the state, to award costs, attorney's fees, and court costs related to the recall together with interest on those costs from the time an expense was incurred through the date TDH is reimbursed. Sec. 501.038. ADMINISTRATIVE PENALTY. Authorizes TDH to assess an administrative penalty against a person who violates this chapter or a rule adopted or order issued under this chapter. Requires TDH to consider certain factors in determining the penalty. Prohibits the penalty from exceeding $25,000 a day for each violation. Provides that each day of a continuing violation constitutes a separate violation. Provides that a proceeding for the assessment of an administrative penalty under this chapter is a contested case under Chapter 2001 (Administrative Procedure), Government Code. Sec. 501.039. ADMINISTRATIVE PENALTY: NOTICE; REQUEST FOR HEARING. (a) Requires TDH, if after investigation of a possible violation of this chapter or a rule adopted or order issued under this chapter and the facts surrounding that possible violation it determines that a violation has occurred, to give written notice of the violation to the person alleged to have committed the violation. Sets forth the composition of the notice. Authorizes the person notified, not later than the 20th day after the date the notice is received, to accept the determination of TDH made under this section, including the amount of the proposed penalty, or make a written request for a hearing on that determination. Requires the commissioner or the commissioner's designee, if the person accepts the determination of TDH, to issue an order approving the determination and ordering that the person pay the proposed penalty. Sec. 501.040. ADMINISTRATIVE PENALTY: HEARING; ORDER. Requires TDH, if the person notified under Section 501.039 requests a hearing, to set the matter for a hearing; give written notice of the time and place of the hearing to the person; and designate a hearings examiner to conduct the hearing. (b) Requires the hearings examiner to make findings of fact and conclusions of law and promptly issue to the commissioner or the commissioner's designee a proposal for decision as to the occurrence of the violation and a recommendation as to the amount of the proposed penalty, if a penalty is determined to be warranted. (c) Authorizes the commissioner or the commissioner's designee, by order, to find that a violation has occurred and authorizes assessment of a penalty, or finding that no violation has occurred, based on the findings of fact and conclusions of law and the recommendations of the hearings examiner. Sec. 501.041. NOTICE AND PAYMENT OF ADMINISTRATIVE PENALTY; JUDICIAL REVIEW; REFUND. (a) Requires TDH to give notice of the order under Section 501.040 to the person affected by the order. Sets forth composition of the notice. (b) Requires the person, not later than the 30th day after the date the decision is final as provided by Chapter 2001, Government Code, to pay the penalty; pay the penalty and file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both; or without paying the penalty, file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both. (c) Authorizes a person who without paying the penalty, files a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both, within the 30-day period to stay enforcement of the penalty by certain means, or request the court to stay enforcement of the penalty by filing a specific affidavit. (d) Authorizes TDH, if it receives a copy of an affidavit under Subsection (c), to file with the court, within five business days after the date the copy is received, a contest to the affidavit. Requires the court to hold a hearing on the facts alleged in the affidavit as soon as practicable and to stay the enforcement of the penalty on finding that the alleged facts are true. Provides that the person who files an affidavit has the burden of proving that the person is financially unable to pay the penalty or give a supersedeas bond. (e) Authorizes TDH, if the person does not pay the penalty and the enforcement of the penalty is not stayed, to refer the matter to the attorney general for collection of the penalty. (f) Provides that judicial review of an order issued under Section 501.04 is instituted by filing a petition as provided by Subchapter G (Contested Cases; Judicial Review), Chapter 2001, Government Code; and is under the substantial evidence rule. (g) Authorizes the court, if it sustains the occurrence of the violation, to uphold or reduce the amount of the penalty and order the person to pay the full or reduced amount of the penalty. Requires the court, if it does not sustain the occurrence of the violation, to order that no penalty is owed. (h) Requires the court, when the judgment of the court becomes final, to follow procedures set forth regarding the reduction of penalties, the accrual and payment of interest, and refunds . Sec. 501.042. RECOVERY OF COSTS. (a) Authorizes TDH to assess reasonable expenses and costs against a person in an administrative hearing if, as a result of the hearing, the person's registration is denied, suspended, or revoked or if administrative penalties are assessed against the person. Requires the person to pay expenses and costs assessed under this subsection not later than the 30th day after the date the order of the commissioner or the commissioner's designee requiring the payment of expenses and costs is final. Authorizes TDH to refer the matter to the attorney general for collection of the expenses and costs. (b) Authorizes the attorney general, if the attorney general brings an action against a person to enforce an administrative penalty assessed under this chapter and the person is found liable for the administrative penalty, to recover, on behalf of the attorney general and TDH, reasonable expenses and costs. (c) Provides that "reasonable expenses and costs," for purposes of this section, include expenses incurred by TDH and the attorney general in the investigation, initiation, or prosecution of an action, including reasonable investigative costs, court costs, attorney's fees, witness fees, and deposition expenses. (d) Authorizes the apportionment of expenses recovered by TDH under this section only to TDH to administer and enforce this chapter. Authorizes appropriation of expenses recovered by the attorney general under this section only to the attorney general. SECTION 15. Effective date: September 1, 1999. SECTION 16. (a) Makes application of a change in law made by this Act relating to the criminal, civil, or administrative enforcement of Chapter 501, Health and Safety Code, prospective. SECTION 17. Emergency clause.