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                                                       Calendar No. 498
105th Congress                                                   Report
                                SENATE

 2d Session                                                     105-267
_______________________________________________________________________


 
                         FASTENER QUALITY ACT

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                               H.R. 3824





                 July 27, 1998.--Ordered to be printed


       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred fifth congress
                             second session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             WENDELL H. FORD, Kentucky
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA SNOWE, Maine                 JOHN F. KERRY, Massachusetts
JOHN ASHCROFT, Missouri              JOHN B. BREAUX, Louisiana
BILL FRIST, Tennessee                RICHARD H. BRYAN, Nevada
SPENCER ABRAHAM, Michigan            BYRON L. DORGAN, North Dakota
SAM BROWNBACK, Kansas                RON WYDEN, Oregon
                       John Raidt, Staff Director
                       Mark Buse, Policy Director
                  Martha P. Allbright, General Counsel
     Ivan A. Schlager, Democratic Chief Counsel and Staff Director
             James S. W. Drewry, Democratic General Counsel



                                                       Calendar No. 498
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-267
_______________________________________________________________________


                         FASTENER QUALITY ACT
                                _______
                                

                 July 27, 1998.--Ordered to be printed

_______________________________________________________________________


       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                        [To accompany H.R. 3824]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (H.R. 3824) ``A Bill amending the 
Fastener Quality Act to exempt from its coverage certain 
fasteners approved by the Federal Aviation Administration for 
use in aircraft'', having considered the same, reports 
favorably thereon with amendments and recommends that the bill 
as amended do pass.

                          Purpose of the Bill

  The purpose of the bill, as reported, is to amend the 
Fastener Quality Act (FQA), 15 U.S.C. 5401 et seq., to exempt 
from coverage certain fasteners approved by the Federal 
Aviation Administration (FAA), and to delay the effective date 
of regulations implementing the FQA until June 1, 1999, or 120 
days after the Secretary of Commerce (Secretary) has issued a 
report on changes needed to the law, whichever is later.

                          Background and Needs

  Every year billions of special high-strength bolts, screws, 
and other fasteners are sold in the United States which carry 
grade identification markings. The markings indicate that the 
fasteners conform with specifications set by consensus 
standards organizations. These grade-marked fasteners are used 
in critical applications like highway bridges and aircraft 
where failure of a fastener could jeopardize public safety.
  The FQA was enacted in 1990 and applies to all threaded, 
metallic, through-hardened fasteners of one-quarter inch 
diameter or greater that directly or indirectly reference a 
consensus standard. Under the FQA, such fasteners must be 
tested or documented bya laboratory that is certified by the 
National Institute of Standards and Technology (NIST).
  Despite the passage of time since its enactment, regulations 
to carry out the provisions of the FQA have never been 
implemented. NIST's most recent rule was published April 14, 
1998 and includes revisions to earlier proposed regulations 
which reflect legislative changes to the FQA adopted in 1996 as 
part of the National Technology Transfer and Advancement Act 
(Public Law 104-113). The April 14 rule currently is scheduled 
to take effect on October 26, 1998.
  Since the passage of the FQA in 1990, fastener quality 
control procedures have evolved substantially from the lot-
sampling procedure that forms the basis for the current law. In 
the April 14 rule, NIST attempted to accommodate the new 
``process control'' quality approaches in the FQA regulations. 
However, fastener manufacturers and major industrial users 
report that the NIST rule is overly restrictive and does not 
fully accommodate advances in quality control procedures.
  In addition, proprietary fasteners of aviation manufacturers 
currently are subject to the quality assurance programs of the 
FAA. Under these programs, aviation manufacturers already are 
required to demonstrate to the FAA that they have a quality 
control system which ensures that their products, including 
fasteners, meet design specifications. Consequently, the 
application of FQA requirements to such fasteners could create 
duplicative and potentially confusing regulations that would 
not assist federal efforts to ensure the safety of the flying 
public. Furthermore, neither the FAA nor the National 
Transportation Safety Board is aware of any fatal aviation 
accidents caused by a substandard proprietary fastener.

                          Legislative History

  H.R. 3824 was referred to the Committee on Commerce, Science, 
and Transportation on June 24, 1998. There have been no Senate 
hearings on the legislation. However, bill provisions are 
similar to language included in S. 1325, the Technology 
Administration Authorization Act. S. 1325 was approved by the 
Committee at its April 30, 1998 executive session and was 
reported on May 22, 1998.
  On July 9, 1998, the Committee met in executive session and, 
by a voice vote, ordered H.R. 3824 to be reported with 
amendments. The package of amendments, offered by Senator Ford 
for Senators Hollings and Rockefeller, broadens and clarifies 
the scope of the study called for in the bill. It requires that 
the study include a comparison of the FQA to other applicable 
regulatory programs and an identification of any duplication.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 14, 1998.
Hon. John McCain,
Chairman, Committee on Commerce, Science and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3824, an act 
amending the Fastener Quality Act to exempt from its coverage 
certain fasteners approved by the Federal Aviation 
Administration for use in aircraft.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark Hadley.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 3824--An act amending the Fastener Quality Act to exempt from its 
        coverage certain fasteners approved by the Federal Aviation 
        Administration for use in aircraft

    H.R. 3824 would amend existing law regarding the regulation 
of fasteners. The act would direct the National Institute of 
Standards and Technology (NIST) to submit a report to the 
Congress by February 1, 1999, on trends in manufacturing 
fasteners, on other programs that regulate fasteners, and on 
legislative changes that may be needed to reflect current 
conditions. Implementation of NIST's regulations on fasteners 
would be delayed until June 1, 1999, or 120 days after 
submission of the report, whichever is later. Under this 
legislation, fasteners made for aircraft would be exempt from 
those regulations if the suitability and quality of the 
fasteners have been approved by the Federal Aviation 
Administration.
    Based on information provided by the agency, CBO estimates 
that NIST would spend about $200,000 in 1999 to complete the 
study required by H.R. 3824, assuming appropriation of the 
necessary funds. Because H.R. 3824 would not affect direct 
spending or receipts, pay-as-you-go procedures would not apply.
    H.R. 3824 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    On May 21, 1998, CBO transmitted an estimate of H.R. 3824 
as ordered reported by the House Committee on Science on May 
13, 1998. The House version would not require NIST to report on 
other programs that regulate fasteners; therefore, CBO 
estimated that NIST would spend only about $100,000 to complete 
the study.
    The CBO staff contact for this estimate is Mark Hadley. 
This estimate was approved by Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

  H.R. 3824, as reported, would exempt from coverage certain 
FAA-approved fasteners and delay implementation of FQA 
regulations. Manufacturers and users of grade-marked fasteners 
will be affected by the FQA requirements when they are 
implemented. However, the reported bill will not subject any 
individuals or businesses affected by those requirements to any 
additional regulation.

                            economic impact

  Providing an exemption for FAA-approved fasteners will allow 
aviation manufacturers to continue their existing manufacturing 
processes without modification or cost impact. In addition, the 
delay in the implementation of NIST's FQA regulations allows 
the Secretary of Commerce to review the current law's relevance 
to today's manufacturing processes for fasteners of all kinds. 
Therefore, businesses will not be required to incur costs 
associated with FQA compliance until the later of June 1, 1999 
or 120 days after the Secretary makes the report available to 
the Congress.

                                privacy

  This legislation will not have an adverse impact on the 
privacy of individuals.

                               paperwork

  H.R. 3824, as reported, will not increase the paperwork 
requirement for private individuals or businesses. The 
legislation requires the Secretary of Commerce to submit to 
Congress a report on changes in the fastener manufacturing 
processes, an analysis of the duplication that exists between 
FQA and other regulatory programs, and recommendations for 
changes to the FQA.

                      Section-by-Section Analysis

Section 1. Amendment

  This section would amend Section 15 of the FQA (15 U.S. Code 
5414) by adding at the end a new subsection (b). The new 
subsection (b) would exempt from FQA requirements fasteners 
specifically manufactured or altered for use on aircraft if the 
quality and suitability of those fasteners, for that specified 
use, is approved by the FAA. The exemption would not apply to 
fasteners represented by their manufacturer as having been 
manufactured in conformance with standards or specifications 
established by a consensus standards organization or a federal 
agency other than the FAA.

Section 2. Delayed implementation of regulations

  This section would delay the implementation of NIST's April 
14, 1998 FQA rule until June 1, 1999, or 120 days after the 
Secretary transmits a report to Congress on recommended changes 
to the FQA, whichever is later.
  The Secretary's report would be required to include: (1) a 
discussion of changes in the fastener manufacturing processes 
that have occurred since the original enactment of FQA in 1990; 
(2) a comparison of the FQA to other regulatory programs that 
regulate the various categories of fasteners, and an analysis 
of any duplication that exists among programs; and (3) 
recommendations for changes that should be made to the FQA as a 
result of improvements in the fastener manufacturing process 
and the comparison of the FQA to other regulatory programs.
  Concerns have been raised regarding the application of the 
FQA to certain fastener categories. The bill's exemption for 
aviation fasteners regulated by the FAA responds to one such 
concern. Similar situations may exist in other industries. For 
example, some automobile manufacturers have pointed out that 
the National Highway Traffic Safety Administration's 
responsibility for the safety of automobiles could include 
fasteners. Thus, it is essential that the Secretary work 
cooperatively with other federal agencies and departments in 
completing the report required under this section.
  To ensure that the report is thorough and complete, and that 
it includes necessary information and appropriate 
recommendations for Congressional action, the Secretary also 
should seek and consider input from a variety of industry and 
manufacturing sources, both domestic and foreign. The Committee 
expects the Secretary to develop a process for receiving and 
evaluating input from the public and affected businesses, and 
that those comments will be given full consideration.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI 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 material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                    TITLE 15. COMMERCE AND TRADE \1\
---------------------------------------------------------------------------

    \1\ Section 15 of the Fastener Quality Act is reflected in the 
United States Code as section 5414 of title 15.
---------------------------------------------------------------------------

                         CHAPTER 80. FASTENERS

Sec.  5414. Applicability

  (a) Transitional Rule._The requirements of this Act shall be 
applicable only to fasteners fabricated 180 days or more after 
the Secretary issues final regulations required under sections 
5, 6, and 8, except that the Secretary may extend such time 
period if the Secretary determines that an insufficient number 
of laboratories have been accredited to perform the volume of 
inspection and testing required. Upon any such extension, and 
every 6 months thereafter during such extension, the Secretary 
shall submit a report to the Congress explaining the reasons 
for such extension and the steps being taken to ensure the 
accreditation of a sufficient number of laboratories.
  (b) Aircraft Exemption._
          (1) In general._The requirements of this Act shall 
        not apply to fasteners specifically manufactured or 
        altered for use on an aircraft if the quality and 
        suitability of those fasteners for that use has been 
        approved by the Federal Aviation Administration, except 
        as provided in paragraph (2).
          (2) Exception._Paragraph (1) shall not apply to 
        fasteners represented by the fastener manufacturer as 
        having been manufactured in conformance with standards 
        or specifications established by a consensus standards 
        organization or a Federal agency other than the Federal 
        Aviation Administration.