Editor’s Note – Below is an excellent small business article on the problems with SB 478 toy mandate bill by economist Dr. Eric Fruits as As featured in The Oregonian, April 11, 2015.   If you would like to contact your legislator on this issue, click here.

“…just about any store selling these common toys would have to report the chemical contents to the state agency….But, it’s not just common toys. It’s also car seats, clothing, and even kitchen utensils designed with a cartoon caricature. For superstores like Fred Meyer, Target, and Walmart, tens of thousands of products would need a report filed with the OHA.”

Among the several thousand bills that the Oregon legislature will consider this legislative session is Senate Bill 478. On its face, SB 478 is designed to help protect children from harmful chemicals. It does so by setting up a new system to monitor a list of “high priority” chemicals in toys and other “children’s products.” The new system and the priority list would then be managed and administered by the Oregon Health Authority.

Under this complex new system, manufacturers and distributors of toys and other children’s products in Oregon would be required to report on the chemical components of the products they sell. They would also be required by the OHA to “remove” or “substitute” those chemicals on a timely basis. Failure to comply in reporting, or meet required reporting objectives, may result in civil penalties of up to $10,000 per violation.

Like many bills, the biggest demons dwell in the details.

We don’t have a bunch of toy or children’s product manufacturers here in Oregon. Most manufacturers are national if not international in scope. For example, one of the world’s most popular and well-know toy manufacturers is based in Denmark. To deal with this complication, SB 478 defines a “manufacturer” to include any outlet or store that sells these products. In other words, because a toy or child’s product is foreign made, Fred Meyer, Target, and even an independent Oregon toy store becomes responsible for reporting to the OHA the chemical components of toy plastic bricks, dolls, and other common toys. Indeed, the way the bill is written, just about any store selling these common toys would have to report the chemical contents to the state agency. (However, the law isn’t clear whether Amazon or eBay sellers would be subject to the law.)

But, it’s not just common toys. It’s also car seats, clothing, and even kitchen utensils designed with a cartoon caricature. For superstores like Fred Meyer, Target, and Walmart, tens of thousands of products would need a report filed with the OHA. Say that each of those stores sell the same toy that’s made out-of-state. Each store would have to submit to OHA their own report on the toy. That is a huge waste of time and energy.

That’s not all—and here’s where things get really strange. Under SB 478, stores would be responsible to manage any chemical changes mandated by the OHA. In other words, if OHA says to reduce the chemical content of a toy or children’s product, then the Oregon sellers would be legally liable for telling out-of-state and out-of-country manufacturers how to make their products. Can you imagine Fred Meyer or Finnegan’s telling a respected international toy manufacturer how to make their toys? Can you imagine the toy manufacturer listening to a state that represents less than one-half of one percent of their total sales?

Oregon businesses have many challenges. SB 478 would worsen those challenges by creating separate standards, onerous new regulations, and stiff penalties on Oregon businesses. As these new regulations and penalties don’t exist for similar businesses in other parts of our country, SB 478 would also put Oregon businesses at a competitive disadvantage. If we agree that regulatory changes are needed, they should and must be done (and in fact are being done) at the federal level. This is the only way to ensure uniform standards are in place.

SB 478 may be well intended. As a father, I know we all want our kids to live in a safe environment. But there is no evidence that SB 478 would do a single thing to make our kid’s world even a little safer. In its current form, the bill would only serve to further harm Oregon business through onerous reporting requirements and punitive financial penalties.

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Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an Oregon based economics consulting firm, and an adjunct professor in business and economics at Portland State University.