that more adequately than I. But for that reason, I would oppose the refund.

I think the performance standard element is terrific. I think Congressman Barton has included everything that we certainly would include in that. However, I would like to see if this Consent Decree is going to work and give the benefit of this time to the industry to see if they will perform.

The Consent Decree states that they will negotiate within 4 months, a performance standard. This would be the easiest way, and less costly way I think to obtain that standard. If that happens, then we will not need that part of the legislation.

Mr. FLORIO. Mr. Chairman, what have you imposed for your own standard, how do we determine what working is? I mean, are we talking about-

Mr. SCANLON. This Consent Decree will be overseen by a Federal judge. If we don't have what we want within the timeframe that they want

Mr. FLORIO. What is it that we want in terms of a determination as to the adequacy of banning particularly perspective sales?

Mr. SCANLON. It's almost identical to Mr. Barton's bill, and we have submitted it to the industry already.

Mr. FLORIO. I reject part of what you have offered as the rationale for opposing the legislation, that somehow it will send a signal to others in the industry that they should not enter into negotiations because Congress may very well supersede the agreements by virtue of legislation.

I think, in this whole experience, we are sending a much better message to industry. It is that in fact what has occurred in this ATV experience is totally unacceptable from this point forward. The idea, and this Commission was unfortunately part of it, of just waiting and waiting and waiting for voluntary standards to come forward, having the voluntary standards come forward and ultimately the Commission declaring them-at least by a majority regarding those voluntary standards-as being woefully inadequate, is an ineffective process.

Having the Commission again in a split manner, make specific suggestions as to action to be taken; having the Commission not enact those regulations but shifting it to another governmental agency could take a prolonged period of time to evaluate whether anything was going to be done.

I think those are the course of events that we want to disabuse people of, the idea that that is an acceptable course of events. So I think the Congress taking the role that some would like it to take, is going to send a much more forceful message to industry, and that no one should accept the fact that if the Congress acts in the way that Mr. Barton chooses us to act, that that is going to send the wrong message in this case. It is going to send the right message to industry.

Let me yield to the gentleman from Texas at this point.

Mr. BARTON. Thank you, Mr. Chairman. I have got so many questions that if I literally ask every one, we would be here until 5 p.m. Mr. FLORIO. Mr. Barton, let me make this suggestion. What we are going to do—and I trust that the Commission will have no difficulty-in the event that any of the members sees fit to either

through the Chair or directly submit questions in writing, the Commission, I trust, will respond to them as expeditiously as possible. Mr. SCANLON. We would be delighted to do so.

Mr. FLORIO. I think all the members may take that into account. Mr. BARTON. I think this is a very important panel, because they are the Commissioners, they are the people that have been working on this issue with their staff. They should be the experts and I am going on the assumption that they are the experts. Some disagree with that assumption, but I, as a basis point, am going to do that. My first question is, how many of you Commissioners have ever attempted to ride a three-wheel ATV. Raise your hand.

[A show of hands.]

Mr. BARTON. All right. I am told what happened the first time you rode one, Mr. Scanlon.

Mr. SCANLON. Tell me what happened to me. I am not aware of any incident.

Mr. BARTON. I have been told that the first time you attempted to ride one that you had an accident of some sort and got off it and said you would never get on one again.

Mr. SCANLON. No, that's not true at all.

Mr. BARTON. You have never had any kind of▬▬▬

Mr. SCANLON. No accident whatsoever. I don't know who told you that. I tried an ATV in 1985, I believe, with our engineers at our lab in Gaithersburg, Maryland. I had no accident or near-accident. I must say that I did find it difficult to use and, from that first riding experience, I knew that training was imperative. So I was not surprised when the Commission collected extensive data that showed the 13 to 1 ratio of those persons who were injured within the first month of operating; those who had training were outnumbered by those who did not.

That's one of the things that I am most delighted with in this Consent Decree, that this training will be provided to every new purchaser and his or her family. In fact, purchasers going back 12 months.

Mr. BARTON. Your first experience, while it did not end in an accident, at least even as watered down as you have just reported it, it scared you a little bit; is that safe to say?

Mr. SCANLON. I wasn't scared, no. It was an unusual experience. I am not a motorcycle rider, so it was.

Mr. BARTON. You had an unusual experience, unusual but pleasant. We will let that be part of it.

Would Ms. Dawson or Ms. Graham like to comment on your first experience on a three-wheeler?

Ms. DAWSON. My first experience on a three-wheeler, was the same day that the Chairman rode his. Again, I would have to say it was unusual, unique, and I'm a very cautious person so I didn't try to do too many things with it.

However, I subsequently did take the course that was offered by the SVIA. I spent almost all day with the vehicle and with the instructor. This was a three-wheeler. Subsequent to that, I have also had an opportunity to ride on the dunes at Pismo Beach, California under the supervision of experienced trainers.

I will have to tell you that sometimes I was a little scared. Again, I am a very cautious person so I didn't take any chances.

But while I was there on the dunes, I did see people taking chances and having accidents.

Fortunately none of them were serious injuries, but it was something you could see happening all around you. Subsequent to that, I have gone back to our lab and have ridden most of the vehicles that we have out there, both three and four-wheelers.

Mr. BARTON. Ms. Graham.

Ms. GRAHAM. Congressman Barton, I have ridden both threewheelers and four-wheelers. I took the course and the more I got to know about ATV's, the less I wanted to ride them. I was watched like a hawk by the Commission staff as I was taking the training course, and at one point they prevented me from breaking my leg when I went up a hill and immediately put my foot on the ground in order to stop the machine and the machine started coming after my leg.

Mr. BARTON. The next question is, who is the expert on this chart?

Mr. MARCHICA. I will explain whatever you need to have explained.

Mr. BARTON. Again, it is an assumption, but I am assuming that this is a chart to show that ATV's are becoming more safe to operate and in some sense by looking at that chart we should feel satisfied that a lot is being done in the safety area; is that the purpose of that chart?

Mr. MARCHICA. No, sir, not at all. The purpose of that chart was the result of a question posed to us by Congressman Barnard for a hearing he held in January, where he wanted to know what was going on.

We asked the staff to look at the data and tell us what was happening. By no means does this show that the Agency is satisfied with the level of injuries.

Mr. BARTON. Well, I am happy to know that. It is the first time that I have seen it to my knowledge. I may have seen a draft of it. I look at that and I see an injury rate of 2 percent which is extraordinarily high. I wouldn't get on an airplane to Texas if the accident rate was 2 percent.

I see just by simple multiplication, the number of accidents per year will be in the neighborhood of 60,000 in the year 1992. If that chart which you just said is not, but if it were purported to show an increase in safety it would be a joke.

If it is simply to show the facts as you think that they are going to be, then I will accept it as a valid document.

Mr. MARCHICA. That is correct. That is what it was intended to show. What it also shows is that you are seeing a population of three-wheelers that are being taken out of use; there are more four-wheelers in use; and there are fewer sales of all terrain vehi

cles.

In addition, you are seeing a population of ATV users that are much more experienced. That is the key variable, we believe, the experience variable.

Mr. BARTON. I would like to address this question to Commissioners Dawson and Graham. I am told that there are some internal documents in your Agency that show that a refund provision could

be cost effective. Would either of you Commissioners care to comment on that?

Ms. DAWSON. There were some documents provided internally, which I really haven't had an opportunity to study that carefully. They are quite complex in their execution. Maybe Commissioner Graham could speak to that more intelligently than I, because I haven't had an opportunity to study them that closely.

Ms. GRAHAM. Congressman, the staff provided last week, some scenarios for refunds. Two of them did come out as a major benefit. One was if all ATV's used by children under 16 years of age were returned and are resold for use by people over the age of 16, that benefit would be $181 million.

The second is if all three-wheelers driven by children under 16 are returned and 30 percent of the remaining three and four-wheelers were returned, that the net benefit would be $89 million.

Deaths were not factored into that, and I would suspect that if they were, all of the five scenarios might come out cost beneficial. Mr. BARTON. Mr. Chairman, I would like to officially request for the record, any of the internal documents that the CPSC has prepared dealing with the cost effectiveness of the various refund proposals.

I think that would be very helpful to the committee if not at the subcommittee level, the full committee level.

Mr. FLORIO. We will work with the members to frame an appropriate request and submit the request.

[Testimony resumes on p. 70.]

[The information follows:]

UNITED STATES GOVERNMENT

Memorandum

U.S. CONSUMER PRODUCT
SAFETY COMMISSION
WASHINGTON, D. C. 20207

To:
Thru:

From:

Subject:

Nicholas V. Marchica, OEX

-8 MAR 1989

Warren J. Prunella, AED, Economic Analysis

Gregory B. Rodgers, ECPA, GR

The Economic Impact of Several ATV Recall Options

We have been asked to provide an assessment of several possible ATV recall options. Since there are an unlimited variety of conceivable options, we are examining five scenarios which may illustrate the range of possible impacts. Injury reduction estimates used to calculate benefits were provided by the Directorate for Epidemiology.

Crucial to the assessments are the estimates of the numbers of ATVS likely to be returned. In two of the scenarios we assume that 30 percent of ATVS will be returned. This is probably an upper bound of the number of ATVs that would be returned, and one that is probably not attainable absent some inducement such as a premium. In addition, we also examine several scenarios in which either all three-wheelers used by children, or all ATVs used by children, are returned during a recall. These latter scenarios are probably unrealistic because it is unlikely that all ATVs driven by any class of drivers would be returned. However, the results of these scenarios represent what might be considered by some an ideal outcome of a recall effort. Also important in the assessments is the assumption that the number of deaths will not be affected by any redistribution of ATVs caused by the recall.

Finally, we should mention that the magnitudes of the costs and benefits of the scenarios discussed below depend on the proportions of ATVs returned under a recall. Consequently, if we have overestimated the number of ATVs that would be returned, the estimated costs and benefits will probably also be overestimated, but not disproportionately.

Scenario A. Recall with resale; 30 percent of eligible ATVs
Returned.

For the first scenario we assume that the recall applies to all three-wheeled ATVs, four-wheeled ATVS driven by children less than 16, and that the ATVs can be resold. We further assume that 30 percent of the eligible ATVS will be returned for a refund. Under these assumptions, about 520,000 ATVs would be returned; 390,000 three-wheelers and 130,000 four-wheelers.