[Federal Register Volume 75, Number 97 (Thursday, May 20, 2010)]
[Proposed Rules]
[Pages 28336-28366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-11365]



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Part II





Consumer Product Safety Commission





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16 CFR Part 1107



Testing and Labeling Pertaining to Product Certification; Proposed Rule

  Federal Register / Vol. 75, No. 97 / Thursday, May 20, 2010 / 
Proposed Rules  

[[Page 28336]]


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CONSUMER PRODUCT SAFETY COMMISSION

16 CFR Part 1107

[CPSC Docket No. CPSC-2010-0038]
RIN 3041-AC71


Testing and Labeling Pertaining to Product Certification

AGENCY: Consumer Product Safety Commission.

ACTION: Proposed rule.

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SUMMARY: The Consumer Product Safety Commission (``CPSC'' or 
``Commission'') is issuing a proposed rule that would establish 
requirements for a reasonable testing program and for compliance and 
continuing testing for children's products.\1\ The proposal would also 
address labeling of consumer products to show that the product complies 
with certification requirements under a reasonable testing program for 
nonchildren's products or under compliance and continuing testing for 
children's products. The proposed rule would implement section 14(a) 
and (d) of the Consumer Product Safety Act (``CPSA''), as amended by 
section 102(b) of the Consumer Product Safety Improvement Act of 2008 
(``CPSIA'').
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    \1\ The Commission voted 5-0 to approve publication of this 
proposed rule. Chairman Inez Tenenbaum and Commissioners Nancy Nord 
and Anne Northup filed statements concerning this action. These 
statements may be viewed on the Commission's Web site at http://www.cpsc.gov/pr/statements.html or obtained from the Commission's 
Office of the Secretary.

DATES: Written comments and submissions in response to this notice must 
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be received by August 3, 2010.

ADDRESSES: You may submit comments, identified by Docket No. CPSC-2010-
0038, by any of the following methods:

Electronic Submissions

    Submit electronic comments in the following way: Federal 
eRulemaking Portal: http://www.regulations.gov. Follow the instructions 
for submitting comments.
    To ensure timely processing of comments, the Commission is no 
longer accepting comments submitted by electronic mail (e-mail) except 
through http://www.regulations.gov.

Written Submissions

    Submit written submissions in the following way:
    Mail/Hand delivery/Courier (for paper, disk, or CD-ROM 
submissions), preferably in five copies, to: Office of the Secretary, 
Consumer Product Safety Commission, Room 502, 4330 East West Highway, 
Bethesda, MD 20814; telephone (301) 504-7923.
    Instructions: All submissions received must include the agency name 
and docket number for this proposed rulemaking. All comments received 
may be posted without change, including any personal identifiers, 
contact information, or other personal information provided, to http://www.regulations.gov. Do not submit confidential business information, 
trade secret information, or other sensitive or protected information 
electronically. Such information should be submitted in writing.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Randy Butturini, Project Manager, 
Office of Hazard Identification and Reduction, U.S. Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814; 
301-504-7562; e-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

A. Statutory Authority

    Section 14(a)(1) of the CPSA, (15 U.S.C. 2063(a)(1)), as amended by 
section 102 of the CPSIA, establishes requirements for the testing and 
certification of products subject to a consumer product safety rule 
under the CPSA or similar rule, ban, standard, or regulation under any 
other act enforced by the Commission and which are imported for 
consumption or warehousing or distributed in commerce. Under section 
14(a)(1)(A) of the CPSA, manufacturers and private labelers must issue 
a certificate which ``shall certify, based on a test of each product or 
upon a reasonable testing program, that such product complies with all 
rules, bans, standards, or regulations applicable to the product under 
the CPSA or any other Act enforced by the Commission.'' CPSC 
regulations, at 16 CFR part 1110, limit the certificate requirement to 
importers and domestic manufacturers. Section 14(a)(1)(B) of the CPSA 
further requires that the certificate provided by the importer or 
domestic manufacturer ``specify each such rule, ban, standard, or 
regulation applicable to the product.'' The certificate described in 
section 14(a)(1) of the CPSA is known as a General Conformity 
Certification (GCC).
    Section 14(a)(2) of the CPSA (15 U.S.C. 2063(a)(2)) establishes 
testing requirements for children's products that are subject to a 
children's product safety rule. (Section 3(a)(2) of the CPSA (15 U.S.C. 
2052(a)(2)) defines a children's product, in part, as a consumer 
product designed or intended primarily for children 12 and younger.) 
Section 14(a)(2)(A) of the CPSA also states that, before a children's 
product subject to a children's product safety rule is imported for 
consumption or warehousing or distributed in commerce, the manufacturer 
or private labeler of such children's product must submit sufficient 
samples of the children's product ``or samples that are identical in 
all material respects to the product'' to an accredited ``third party 
conformity assessment body'' to be tested for compliance with the 
children's product safety rule. Based on such testing, the manufacturer 
or private labeler, under section 14(a)(2)(B) of the CPSA, must issue a 
certificate that certifies that such children's product complies with 
the children's product safety rule based on the assessment of a third 
party conformity assessment body accredited to perform such tests.
    Section 14(d)(2)(A) of the CPSA requires the Commission to initiate 
a program by which a manufacturer or private labeler may label a 
consumer product as complying with the certification requirements. This 
provision applies to all consumer products that are subject to a 
product safety rule administered by the Commission.
    Section 14(d)(2)(B) of the CPSA requires the Commission to 
establish protocols and standards for:
     Ensuring that a children's product tested for compliance 
with a children's product safety rule is subject to testing 
periodically and when there has been a material change in the product's 
design or manufacturing process, including the sourcing of component 
parts;
     Testing of random samples;
     Verifying that a children's product tested by a conformity 
assessment body complies with applicable children's product safety 
rules; and
     Safeguarding against the exercise of undue influence on a 
third party conformity assessment body by a manufacturer or private 
labeler.
    Section 14(d)(2)(B)(iii) of the CPSA provides for verification that 
a children's product tested by a conformity assessment body complies 
with applicable children's product safety rules. At this time, the 
Commission is not imposing any verification obligations on 
manufacturers because the Commission intends to conduct the 
verification itself under its inherent authorities while it gains more 
experience with the testing and certification requirements. When the 
Commission finds that a children's

[[Page 28337]]

product accompanied by a certificate of conformity does not pass the 
tests upon which the certification was based, it may initiate an 
investigation of the manufacturer, third party conformity assessment 
body, and any other relevant party in the supply chain, to determine 
the cause of the discrepancy.
    The proposed rule would implement sections 14(a) and (d) of the 
CPSA, as amended by section 102(b) of the CPSIA, by:
     Defining the elements of a ``reasonable testing program'' 
for purposes of section 14(a)(1)(A) of the CPSA;
     Establishing the protocols and standards for continuing 
testing of children's products under section 14(d)(2)(B)(i), (ii), and 
(iv) of the CPSA; and
     Describing the label that manufacturers may place on a 
consumer product to show that the product complies with the 
certification requirements for purposes of section 14(d)(2)(A) of the 
CPSA.
    The proposed rule also builds upon previous documents and 
activities by the Commission. For example, on November 3, 2009, 
Commission staff made available a draft guidance document titled, 
``Guidance Document: Testing and Certification Requirements Under the 
Consumer Product Safety Improvement Act of 2008.'' The draft guidance 
document, which is available at http://www.cpsc.gov/library/foia/foia10/brief/102testing.pdf, was intended to provide the Commission's 
interpretation of the requirements of section 102 of the CPSIA. 
Specifically, it sought to describe the Commission's position on a 
reasonable testing program and how to certify that a product complies 
with all rules, bans, standards, or other regulations applicable to the 
product under the laws enforced by the Commission. The guidance 
document also sought to explain when and how component testing to 
certain specific requirements would be allowed. Although the Commission 
never voted on whether to approve or to not approve the issuance of the 
draft guidance document, the draft did represent the Commission staff's 
thinking on the subject. Shortly thereafter, in the Federal Register of 
November 13, 2009 (74 FR 58611), the Commission announced that it would 
hold a two-day public workshop to discuss issues relating to the 
testing, certification, and labeling of consumer products pursuant to 
section 14 of the CPSA. The workshop was held on December 10 through 
11, 2009, in Bethesda, Maryland, and the Commission invited interested 
parties to attend and participate in the meeting. Commission staff made 
presentations on specific topics and held breakout sessions on:
     Sampling and statistical considerations;
     Verification of third party test results;
     Reasonable test programs and third party testing;
     Challenges for small manufacturer/low-volume production;
     Component testing and material changes; and
     Protection against undue influence.

    The notice also stated that the Commission wanted to use the 
workshop to discuss possible options for implementing section 14 of the 
CPSA. Several hundred individuals attended the workshop.

    The Commission understands the economic ramifications that small 
businesses (and even large businesses) face regarding the testing costs 
required by section 102 of the CPSIA. Moreover, retailers and importers 
may be imposing significant additional testing cost on manufacturers by 
requiring that products that have already been tested by a third party 
conformity assessment body be tested again by a specific third party 
conformity assessment body selected by the retailer or importer. The 
Commission wants to emphasize to retailers and sellers of children's 
products that they can rely on certificates provided by product 
suppliers if those certificates are based on testing conducted by a 
third party conformity assessment body. Section 19(b) of the CPSA 
provides that a retailer or seller of a children's product shall not be 
subject to civil or criminal penalties for selling products that do not 
comply with applicable safety standards if it holds a certificate 
issued in accordance with section 14(a) of the CPSA to the effect that 
such consumer product conforms to all applicable consumer product 
safety rules, unless such person knows that such consumer product does 
not conform. The Commission notes that section 19(b) of the CPSA does 
not relieve any person of the obligation to conduct a corrective action 
should any product violate an applicable safety standard and need to be 
recalled.
    In order to provide some relief from testing costs, elsewhere in 
this issue of the Federal Register, the Commission has issued a 
separate proposed rule which would allow for testing of component parts 
as a basis for certification of finished products in certain 
circumstances. The Commission intends to make clear in the two proposed 
rules that, in some cases, the required certificate for children's 
products can be based on component part testing as described in 
proposed 16 CFR part 1109, rather than testing of the finished product, 
if components are tested by a third party testing conformity assessment 
body. Furthermore, these proposed rules would allow importers to base 
their product certification for a children's product on a certificate 
provided by a foreign manufacturer as long as that manufacturer has 
based its certificate on third party testing conducted by a third party 
conformity assessment body.

B. Responses to Comments on the Notice of Availability and the Public 
Workshop

    In connection with the public workshop, the Commission invited 
public comment on its implementation of various aspects of section 14 
of the CPSA.
    The Federal Register notice announcing the meeting identified 
specific issues for public comment; for example, in the section titled, 
``What are the issues regarding additional third party testing of 
children's products?'' the Commission asked:
     Should the potential hazard (either the severity or the 
probability of occurrence) be considered in determining how frequently 
the periodic testing is conducted? For example, should a product 
subject to a consumer product safety rule, where the potential hazard 
is death, be tested more frequently than a product where the potential 
hazard is some lesser degree of harm? If so, how might a rule 
incorporate potential hazard into testing frequency?
     What changes should constitute a ``material change'' in a 
product's design or manufacturing process? Are there criteria by which 
one might determine whether a change is a ``material'' change? For 
example, a material change in a product's design or manufacturing 
process could be described as a change that affects the product's 
ability to comply with a consumer product safety rule. However, as a 
practical matter, it may be difficult to determine what consumer 
product safety rules apply to the product and the extent to which 
compliance with those rules is affected by a change.

See 74 FR at 58614.

    The Commission received 38 comments, and we discuss those comments, 
and our responses, in parts B.1 through B.12 of this document. To make 
it easier to identify comments and our responses, the word ``Comment'' 
or ``Comments'' will appear before the

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comment's description, and the word ``Response'' will appear before our 
response.

 1. The Reasonable Testing Program

    In the Federal Register notice announcing the public workshop, the 
Commission had described a ``reasonable testing program'' as consisting 
of:
     Product specifications that describe the consumer product 
and list the safety rules, standards, etc., with which the product must 
comply. The product specification should include a complete description 
of the product and any other information, including, but not limited 
to, a bill of materials, parts listing, raw material selection and 
sourcing, and/or model names or numbers of items necessary to describe 
the product and differentiate it from other products;
     Certification tests which are performed on samples of the 
manufacturer's consumer product to demonstrate that the product is 
capable of passing the tests prescribed by the standard;
     A production testing plan which describes the tests that 
must be performed and the testing intervals to provide reasonable 
assurance that the products as produced meet all applicable safety 
rules;
     A remedial action plan which must be employed whenever 
samples of the consumer product or results from any other tests used to 
assess compliance yield unacceptable or failing test results; and
     Documentation of the reasonable testing program and how it 
was implemented.

See 74 FR at 58613.

    Comments: Most comments addressed the five elements of the 
reasonable testing program, either by suggesting that the Commission 
allow for some flexibility as to what constitutes a reasonable testing 
program or by suggesting specific exceptions or tests as part of a 
reasonable testing program.
    Several comments expressed concern that many manufacturers may not 
be able to specify their products down to the component or raw material 
level because proprietary information from offshore manufacturers may 
prevent importers from knowing every component of the products they 
purchase. One comment noted that importers typically do not control the 
production process of the products they import, so the Commission 
should define a reasonable testing program differently to address an 
importer's special circumstances.
    Another comment suggested that ``reasonable'' for some products 
would involve less than the five elements outlined by CPSC in the 
notice for a reasonable testing program. For example, because some 
regulations require placement of a label, the comment said that 
``testing'' in that circumstance would consist of observing that the 
label was placed properly.
    One comment stated that any testing program that results in an 
acceptable confidence level that a product complies with the applicable 
standards should be considered an acceptable reasonable testing 
program. The comment also suggested that other items, such as factory 
certification (to recognized standards), audits, risk assessment plans, 
certification of a manufacturer's quality system, etc., should be 
allowed as elements of a reasonable testing plan.
    One comment suggested allowing process capability testing, where, 
for a continuous-flow process, first-run samples are tested, as a form 
of certification testing. The comment urged the Commission to allow a 
manufacturer to search ``backwards'' and ``forwards'' in continuous-
flow process for good product in the event that a test during 
manufacturing shows noncompliance.
    Several comments noted that, for seasonal or short-run products, 
only prototype samples may exist before production begins. Some 
comments stated that neither the same materials nor the same 
manufacturing processes were used to manufacture the prototype samples 
as would be used to manufacture the consumer product.
    Multiple comments stated that the relative hazard should be a 
factor in determining the test frequency. Some stated that higher risks 
should necessitate a higher test frequency, and where the perceived 
risk is low, third party testing should not be mandatory for some 
products.
    One comment suggested that a manufacturer's record of manufacturing 
products with low-lead levels should result in relaxed testing 
requirements.
    One comment remarked on the differences between conformity 
assessment and certification. The comment suggested that CPSC 
regulations should clarify that a ``reasonable testing program'' means 
a conformity assessment process such as that in Annex A of ISO/IEC 
17000 and describe the five elements in generic terms that avoid the 
implication that ``testing'' will always be the evaluation activity. 
This comment noted that the phrase ``production testing plan'' is 
misleading in that only testing is anticipated, and would expand the 
interpretation to include activities certification bodies use to assess 
continuing compliance.
    One comment said that the Commission must issue regulations 
clarifying what will constitute ``unacceptable or failing'' test 
results for product testing. Additionally, the comment stated that the 
Commission's regulations should explicitly allow for retesting prior to 
remanufacturing or redesigning. One comment specifically stated that 
the reasonable testing program should be implemented for children's 
products.
    Response: The Commission believes that the five elements of a 
reasonable testing program are adaptable to manufacturers' and 
importers' circumstances, are present in most testing programs (even if 
some of the elements might seem trivial), and can be accomplished with 
seemingly little effort. However, the five elements are essential and 
should be included to ensure a high degree of assurance of compliance 
to the applicable rules, bans, standards, or regulations.
    For the product specification component of a reasonable testing 
program, a manufacturer is not required to specify every component or 
raw material of a product. The manufacturer is free to describe its 
product by model number, general description, photograph, etc., as long 
as the product is identifiable and differentiable from other products.
    The Commission agrees that other elements such as risk assessment 
plans, quality system certification, and factory certifications could 
be added to provide a manufacturer with a high degree of assurance that 
the product produced complies with all applicable requirements. 
However, many methods suggested in the comments would require CPSC to 
assess and recognize or certify the certification services providers 
and require the manufacturer and importer to purchase these 
certification services. The approach in the proposed rule seeks to 
identify a method whereby a manufacturer or importer can independently 
establish a reasonable testing program and establish a set of minimum 
requirements for these reasonable testing programs that reflect 
commonly used elements of a quality assurance/quality control system. 
If process capability testing can ensure with a high degree of 
assurance that the product is capable of meeting the applicable rules, 
bans, standards, or regulations, that form of testing can be used for 
certification testing. Similarly, techniques used during production to 
ensure, with a high degree of assurance, that the continuing production 
is

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compliant can be considered as acceptable production testing plans.
    For children's products, section 14(a)(2) of the CPSA requires 
manufacturers to submit ``sufficient samples of the children's product, 
or samples that are identical in all material respects to the 
product,'' to a third party conformity assessment bodies for testing. A 
prototype manufactured with different materials or manufacturing 
processes than the finished product cannot be considered the same in 
all material respects as the finished product with respect to 
compliance. Therefore, section 14(a)(2) of the CPSA does not allow for 
testing of prototype samples unless they are identical in all material 
respects to the finished product. The proposed rule would extend the 
requirement to test only prototype samples that are identical in all 
material respects to the finished product that will be imported for 
consumption, warehoused, or distributed in commerce to manufacturers of 
nonchildren's products under section 14(a)(1) of the CPSA.
    While the Commission agrees that a higher risk level should 
necessitate a greater testing frequency, it should be noted that risk 
and potential severity are not indicators of the level of compliance to 
the legal standards, regulations, rules, and bans. Section 14 of the 
CPSA does not allow for the exclusion of any children's product from 
third party testing based on a perceived low level of risk. Thus, 
regardless of other existing means of determining compliance, products 
must be tested for compliance to the applicable rules, bans, standards, 
or regulations.
    As for the conformity assessment process in ISO/IEC 17000, the 
Commission does not consider it to be equivalent to a reasonable 
testing program. In sections 14(a) and 14(d)(2)(B) of the CPSA, testing 
is specifically mentioned as the evaluation activity. Thus, regardless 
of other means of determining compliance, products must be tested for 
compliance to the applicable rules. The conformity assessment process 
mentioned in Annex A of ISO/IEC 17000 includes attestations in its 
principles of conformity assessment. However, the CPSA requires the 
manufacturer to perform the attestation that its products comply with 
the applicable rules. If the manufacturer uses a third party conformity 
assessment body to conduct the testing of its products, then the 
determination and attestation functions would be performed by two 
separate parties. Thus, the conformity assessment process in ISO/IEC 
17000 is not equivalent to the reasonable testing program mentioned in 
section 14(a) of the CPSA. However, the certification testing and the 
production testing plan in the reasonable testing program do allow a 
wide latitude of actions in determining initial and continuing 
compliance to the applicable rules for a product.
    Test results that indicate noncompliance to the applicable rules 
are unacceptable or failing test results. Retesting, as a general 
matter, should not be allowed because doing so may tempt unscrupulous 
parties to attempt to ``test the product into compliance,'' (i.e., to 
repeat testing a product until a sample passes the test and then reject 
the earlier unacceptable or failing test results). The intent of 
section 14 of the CPSA is to conduct tests to provide assurance that 
all the products being imported, warehoused, or distributed in 
interstate commerce comply with all applicable rules.

2. Flexibility in Testing

    Comments: Many comments stressed the need for flexibility in test 
protocols. Some comments stated that the types of products are so 
varied that no one prescribed system could be devised to effectively 
and efficiently apply to all of them. Other comments noted that 
determining the number of samples to be tested should be left to the 
manufacturer, who has intimate knowledge of the product's manufacturing 
process, to decide.
    Response: The Commission agrees that it is difficult to develop 
rigid protocols for testing across all categories of products, 
manufacturers, and importers. A manufacturer may tailor the tests to 
the needs of the individual product, and the tests do not need to be 
the same tests that are specified in the applicable rules, provided 
that they are at least as effective in assessing compliance. The 
proposed rule would leave decisions on procedures, such as the number 
of samples to test, up to the manufacturer provided that the testing 
plan provides a high degree of assurance that noncompliant products are 
not introduced into the stream of commerce.

3. Existing Testing Programs

    Comments: One comment asked if the Toy Safety Certification Program 
initiated by the Toy Institute of America (TIA) could be accepted as a 
reasonable testing program under section 14(a)(1) of the CPSA. Two 
other comments recommended that CPSC recognize the value of industry-
specific certification programs prescribing testing methods for a 
product category and verifying conformance. Another two comments 
suggested that CPSC should consider the testing requirements in 
existing product safety standards to be acceptable in meeting the 
requirements of section 14 the CPSA, including existing regulations 
with their own reasonable testing program requirements. One comment 
noted that, unless the Commission can show that current industry 
testing programs are insufficient, no prescribed reasonable testing 
program should be implemented. One comment stated that CPSC should 
establish a safe harbor enforcement policy regarding recognized 
programs. The comment noted that an enforcement policy that accepts 
participation in such programs as demonstrable good faith, without 
imposition of civil or criminal liability under CPSIA's expanded 
penalty limits, could act to promote participation in effective 
certification programs.
    Response: Manufacturers will need to ensure that any reasonable 
testing programs, whether they are industry-specific programs or not, 
also conform to the requirements of the CPSA and any implementing 
regulations promulgated by the Commission. If, in a manufacturer's 
determination, a prescribed testing program ensures with a high degree 
of assurance that the products distributed in commerce will comply with 
the applicable rules, then the manufacturer is free to choose that 
program for its product. CPSC cannot generally consider all preexisting 
testing regulations to be acceptable for purposes of complying with 
section 14 of the CPSA. For example, preexisting CPSC regulations may 
not mandate third party conformity assessment body testing for 
children's products because those preexisting CPSC regulations were 
promulgated before the CPSIA's enactment. Further, nothing in section 
14(a)(1) or 14(b) of the CPSA, nor section 3 of the CPSIA, which gives 
the Commission the authority to issue regulations to implement the 
CPSIA, requires the Commission to find industry testing programs to be 
insufficient before implementing a reasonable testing program.
    The proposed rule would not include any provision for a ``safe 
harbor'' enforcement policy based on a manufacturer's participation in 
a voluntary or industry-sponsored program, nor has the Commission 
recognized any such program as indicating compliance within the 
requirements of the proposed rule. Section 14 of the CPSA does not 
contain a ``safe harbor'' exception nor does it establish any criteria 
by which the Commission could ``recognize'' testing programs for 
purposes of a ``safe harbor.''

[[Page 28340]]

4. Random Samples

    In the Federal Register notice announcing the public workshop, the 
Commission explained that section 14(d)(2)(B)(ii) of the CPSA refers to 
the ``testing of random samples to ensure continued compliance'' and 
asked (among other things), ``What constitutes a `random' sample?'' See 
74 FR at 58614. At the workshop itself, CPSC staff presented a 
statistically-based rationale for selecting random samples.
    Comments: Many comments suggested that the word ``random'' should 
not be interpreted by its strict statistical definition, but should be 
adapted to the product type, how it is manufactured, and its intended 
use. One comment stated that random should be interpreted to mean free 
from overt selection bias and that it is more important that a sample 
be reasonably representative of the population from which it is 
selected. One comment suggested that, with the assistance of industry, 
the CPSC should develop guidelines regarding the circumstances and 
elements to consider when determining what constitutes a reasonable 
random sample. One comment mentioned the problems associated with 
random sampling of single-unit production and with very small 
production volumes (less than 10, for example). One comment noted that 
some manufacturing processes are of a continuous-flow type, and 
randomly selecting a sample would be disruptive to the production 
system. Another comment stated that products that are subjected to 
continuous testing with a specified frequency should be exempt from any 
additional random testing.
    Response: The Random House Dictionary of the English Language 
defines ``random sampling'' as ``a method of selecting a sample from a 
statistical population in such a way that every possible sample that 
could be selected has the same probability of being selected.'' The 
Commission believes that this is the most appropriate technical 
definition. It also seems more appropriate to use a definition where 
both terms (random and sampling) are defined together rather than two 
separate definitions, one of random and the second of sampling. More 
generally, terms such as a ``representative'' sample, a ``non-
fraudulent'' sample, or a ``non-golden'' sample, do not have the 
underlying statistical attributes necessary to generalize about 
compliance of the untested portion of the product population from the 
tested samples.
    With regard to low-volume production, the proposed rule would not 
require random sampling unless a manufacturer produces 10,000 units of 
a product at which time the product would be subject to the proposed 
periodic testing requirements. Regardless of how random sampling is 
defined, section 14(d)(2)(B) of the CPSA requires samples to be tested. 
The samples must be selected from products in production or supply and 
must be tested by a third party conformity assessment body.
    Products manufactured in a continuous-flow process ultimately 
create individual products. If those products are subject to periodic 
testing, the requirement for random samples may constrain where in the 
manufacturing process periodic testing samples are selected. In 
general, product tests at a specific frequency are susceptible to 
transient events that could affect compliance and would be undetected. 
Random sampling has the capability of detecting such transient events 
and is thus required to ensure continued compliance of the product.

5. Challenges for Small Manufacturers/Low-Volume Production

    In the Federal Register notice announcing the public workshop, the 
Commission asked, ``What provisions (if any) should be made for small 
manufacturers and manufacturers with low production volumes and why?'' 
See 74 FR at 58614. The Commission explained that specifying the 
frequency of periodic testing or the number of random samples to be 
tested may be inappropriate where the volume of children's products 
being manufactured is low or where the children's product is one-of-a-
kind.
    Comments: Several comments were received specific to small 
manufacturers who may not have the technical, legal, or financial 
resources of large-volume manufacturers. One comment stressed the need 
for step-by-step guidance from the CPSC on how to follow the rules. 
Another comment noted that, for very small production volumes (often 
one or two custom items), testing of a representative sample should be 
allowed to suffice for all items. Two comments concurred with the draft 
Guidance Policy document text that did not require periodic testing for 
production volumes less than 10,000 units or once a year, whichever is 
less. One comment suggested that, due to the economic ramifications 
associated with the development of a reasonable testing program, the 
CPSC should convene a Small Business Regulatory Enforcement Fairness 
Act (SBREFA) panel for this rulemaking.
    Response: While the Commission will provide general guidance on how 
to comply with the requirements of the CPSIA, manufacturers are 
responsible for fully understanding their manufacturing process and 
knowing how the regulations would apply to their products. Because 
there may be a disproportionate effect on small-volume manufacturers 
relative to large volume manufacturers, the proposed rule would not 
require periodic testing for production volumes of less than 10,000 
units because certification and periodic testing costs are largely 
independent of manufacturing volume. Certification testing and testing 
after a material change are still required and may be performed on 
portions of the finished product or representative samples that are the 
same with respect to compliance as the finished product.
    As for the comment regarding a SBREFA panel, the requirements for a 
SBREFA panel only apply to the Environmental Protection Agency and the 
Occupational Safety and Health Administration (OSHA).

6. Verification of Third Party Conformity Assessment Bodies

    Comments: Several comments suggested that the CPSC, rather than 
manufacturers, should perform any verification of third party 
conformity assessment bodies. Another comment proposed that, upon 
demand by the CPSC, the conformity assessment body be required to 
produce a copy of the mandatory or voluntary standard against which the 
children's product is being tested, a copy of the test protocol used 
for the test procedure, and a copy of the test results that can be 
traced back to the specific sample tested. Another comment noted that 
variations in sample preparation by conformity assessment bodies can 
and do lead to differing test results. One comment, noting lab-to-lab 
variations in test results for the same product, suggested that CPSC 
should require third party conformity assessment bodies to conduct 
blind correlation studies and lab audits. Another comment asserted that 
proficiency testing is the only true outside independent verification 
option for laboratories and should be limited to chemical tests only.
    Response: The Commission's limited resources preclude CPSC from 
directly conducting verification of the numerous conformity assessment 
bodies. As stated earlier in part A of this document, at this time, the 
Commission is not proposing any verification obligations on 
manufacturers because the Commission intends to conduct the 
verification itself under its inherent

[[Page 28341]]

authorities while it gains more experience with the testing and 
certification requirements. Additionally, the activities and 
requirements for accrediting conformity assessment bodies are outside 
the scope of this rulemaking.
    The Commission acknowledges that variations in sample preparation 
can lead to some differences in test results. However, these variations 
should not be significant enough to alter the general determination of 
whether a product complies with the applicable children's product 
safety rule.
    As for proficiency testing (by which the Commission means testing 
conducted by an independent evaluator of the competence of a ``body'' 
(organization, person, etc.) to perform specific tasks), the Commission 
considers proficiency testing to be one option for domestic 
manufacturers and importers to use for verification purposes. However, 
the requirements for verifying that a children's product complies with 
the applicable children's product safety rules are not limited to only 
chemical tests.

7. Protection of Conformity Assessment Bodies Against Undue Influence

    Comments: One comment suggested that provisions of ISO/IEC Guide 65 
be used to prevent undue influence from being exerted over third party 
testing body by a manufacturer or private labeler. Other comments 
suggested that laboratory certification beyond ISO/IEC 17025 is neither 
productive nor necessary. Another comment suggested that the Commission 
should look to OSHA's Nationally Recognized Testing Laboratory (NRTL) 
program to ensure impartiality and prevent conflict of interest. One 
comment stated that CPSC should extend existing CPSC fines and 
penalties that the CPSC can currently impose on manufacturers and 
retailers to apply to exerting or attempting to exert undue influence 
on third party conformity bodies.
    Response: ISO/IEC Guide 65 and OSHA's NRTL program both deal with 
certifying bodies that perform many functions in addition to the 
testing functions performed by third party conformity assessment 
bodies. The ISO/IEC 17025 certification system appears to be working as 
intended. There is no need to implement duplicative or additional 
requirements by requiring them in this proposed rule.
    With regard to extending fines, section 19 the CPSA already 
addresses fines and penalties. Section 19(a)(4) of the CPSA prohibits 
any attempt to exercise undue influence on a third party conformity 
assessment body. Sections 20 and 21 of the CPSA establish monetary and 
criminal penalties for violations of section 19 of the CPSA.

8. Certificates

    Comments: One comment urged the Commission to recognize the 
registered certification marks of recognized product certification 
bodies, like those accredited under the OSHA NRTL program for 
applicable product scopes, in lieu of paper certificates of conformity. 
Another comment asserted that the CPSC has no jurisdiction to issue 
certification regulations except as part of a reasonable labeling rule 
adopted under section 14 of the CPSA. The comment argued that section 
14(a) of the CPSA gives the manufacturer the option to select its own 
form and medium to convey certification of compliance with a CPSC 
standard. Finally, the comment contended that section 14 of the CPSA 
does not authorize the Commission to adopt any rule prescribing the 
content of the certificate or method of its distribution. Another 
comment stated that the CPSC has no jurisdiction to require that a 
certificate be on a separate piece of paper that accompanies the 
product. The comment also suggested that at least 180 days would be 
needed to comply with any new requirements.
    Response: The Commission does not believe that registered 
certification marks, by themselves, would provide the information 
required for certificates under section 14 of the CPSA. With respect to 
children's products, third party conformity assessment bodies only test 
children's products for compliance with the applicable children's 
product safety rules. Third party conformity assessment bodies are not 
responsible for issuing certificates under section 14(a)(2) of the 
CPSA; to the contrary, under existing CPSC regulations, only domestic 
manufacturers and importers are required to issue certificates (see 16 
CFR part 1110; see also 73 FR 68328 (November 18, 2008)).
    Regarding the Commission's jurisdiction to issue certification 
regulations, the Commission has the authority to issue implementing 
regulations under section 3 of the CPSIA, which provides that ``[t]he 
Commission may issue regulations, as necessary, to implement this Act 
and the amendments made by this Act.'' The Commission has not required 
certificates to be only in the form of a separate piece of paper. 
Certificates can be in electronic form.
    As for the effective date of any final rule, the Commission intends 
that any final rule resulting from this rulemaking become effective 180 
days after its date of publication in the Federal Register. Interested 
parties who believe that the effective date should be longer or shorter 
should submit a comment to the proposed rule. The comment should 
include the specific facts on which they base their conclusion.

9. Reliance on Test Results of Others for Certification Purposes

    Comments: Two comments noted that a foreign manufacturer may supply 
the same product to several importers, who would then be required to 
test the same product. The comments considered such testing of the same 
product by multiple importers to be wasteful and inefficient. Another 
comment stated that importers of many products will be overburdened 
with testing costs, whereas manufacturers making one product can 
efficiently test their products. The comment added that the importer 
would still be responsible for the product's certificate, but would use 
test data furnished by the manufacturer. Finally, the comment noted 
that importers have little control over the design, manufacturing 
process, or sourcing of component parts, but manufacturers control all 
those aspects of production. Two other comments asserted that importers 
should be allowed to base their certificates on test reports and 
results of other entities. Another comment proposed that CPSC should 
recognize the vendor's assumption of liability in making such 
certification and deem that retailers, importers and distributors of 
product subject to such certification may rely upon it without facing 
civil or criminal liability.
    One comment asked for clarification for importers who rely on 
foreign manufacturers' certificates of conformity regarding what level 
of diligence can reasonably and effectively be exercised by the 
importers.
    One comment recommended that ink manufacturers be allowed to group, 
test and certify product families for component testing because product 
families represent the same core formula. The comment asserted that 
product family certification provides a reasonable, economically 
viable, testing model for these ink manufacturers.
    Response: While an importer is not required to commission testing 
itself and may, in certain cases, use component part test reports from 
the manufacturer, the importer is responsible for issuing the 
certificate for a children's product (see 16 CFR 1110.7(a)). The 
importer also must ensure that the proper testing was

[[Page 28342]]

conducted (i.e., a third party conformity assessment body accredited 
for the correct test conducted the testing). The importer is ultimately 
responsible for ensuring that its product meets CPSC requirements. In 
those cases in which the importer has little or no control over the 
manufacturing process and is relying on the manufacturer's test data, 
the importer should take measures to understand the manufacturing and 
testing process. An importer needs to ensure that all necessary tests 
are conducted in an appropriate manner to ensure, with a high degree of 
assurance, that no noncompliant product is placed into commerce. In the 
Commission's proposed rule on ``Conditions and Requirements for Testing 
of Component Parts of Consumer Products'' (which appears elsewhere in 
this issue of the Federal Register), the Commission is considering 
additional issues related to the reliance of a manufacturer on the test 
results of others for certification purposes.
    As for the comment regarding ink, an ink that has a similar base 
formula and varies only in color could contain some pigments that 
contain lead while the same base with different pigments did not. Thus, 
families of inks cannot be grouped for compliance testing. However, the 
Commission has previously made a determination that CYMK inks do not 
need to be tested since they do not contain lead. See 16 CFR 1500.91.

10. Additional Third Party Testing Requirements for Children's Products

    Comments: One comment remarked that the Commission should offer 
guidance on the adequacy of specific programs to firms who request it. 
The comment also sought clarification on whether a test could be any 
reasonable, objective method for evaluating compliance with a standard. 
The comment suggested that any attempt to specify protocols and 
standards for testing children's products, such as sample size and 
frequency, should be tied to specific standards. The comment also 
expressed interest in having the Commission provide a clearer 
definition of reasonable certainty, especially in the context of 
specific standards. Finally, the comment advised against attempting to 
establish any numerical standard, such as a specified confidence level 
with a specific number of samples to test.
    Another comment requested that the Commission should provide 
reasonably specific guidelines with regard to both periodic testing 
frequency and sample size to be used in such testing. The comment 
suggested a period of at least twice per year or once every 50,000 
units in any event, whichever occurs first. With regard to the sample 
size for periodic testing, the comment suggested (at least for toys) 
using the 12-unit sample size which has been the requirement of the 
CPSC Engineering Test Manual for many years as a starting point. A 
sample size of 18 pieces could be required for higher-risk products 
such as infant and toddler toys, and a lesser sample could be allowed 
for large, bulky, or expensive products to minimize cost.
    Many comments asserted that risk should be factored into any 
testing program. A product that poses a higher level of risk should 
undergo closer scrutiny.
    One comment provided a list of activities that would more precisely 
define a material change. The list included changes in tooling, product 
materials, assembly method, or the manufacturing facility.
    Another comment contended that once the children's product has 
passed its certification testing, periodic testing is not required, and 
that only a material change would require retesting.
    One comment noted that first-party production testing is used 
extensively to control manufacturing and is effective in detecting 
problems that could lead to nonconforming products. The comment noted 
that the information can be used to reduce the number of samples 
required for periodic testing to one.
    One comment suggested that, in establishing procedures and 
standards for periodic testing of children's products, CPSC should 
consider the potential for lead exposure in order to distinguish 
between products that pose a reasonable risk of noncompliance with the 
lead content limits and products that pose only a theoretical risk of 
noncompliance.
    Response: Several existing CPSC regulations are product-specific, 
allowing the Commission to develop guidance for those particular 
manufactured goods. However, section 14(a) of the CPSA covers all 
products subject to a consumer product safety standard enforced by the 
Commission. In light of that fact, the CPSC cannot provide guidance for 
every product and every manufacturing process. For children's products, 
only a third party conformity assessment body accredited to perform the 
required tests is allowed to test for compliance to the applicable 
children's product safety rules.
    The proposed rule would consider non-conformity assessment body 
tests, such as production tests, process control measurements, or other 
means of assessing compliance, to be acceptable if they are as 
effective in discriminating compliance and noncompliance as the tests 
specified in the standards as part of a reasonable testing program. 
Neither the reasonable testing program for nonchildren's products nor 
the certification and periodic tests for children's products specify 
values for sample size or test frequency.
    The Commission recognizes that no one-size-fits-all testing program 
will be sufficient for all manufacturers. The proposed rule would state 
that a reasonable testing program is a program that, when structured 
with appropriate specifications, measurements, controls, and test 
intervals, will provide a high degree of assurance that the consumer 
products manufactured under the reasonable testing program will comply 
with all the requirements of the applicable rules. If a high degree of 
assurance is interpreted to be a statistical likelihood of not 
producing noncompliant products, the sample size for periodic testing 
will depend upon the number of samples that need to be tested to 
provide that statistical assurance. The number of samples could be 
fewer than 12 or more than 18. The Commission agrees that products with 
a higher potential for injury or death should undergo greater scrutiny.
    Because of the many types of children's products and manufacturing 
processes that will be covered by the rule, the description of the 
activities that would trigger additional third party testing due to 
material changes needs to be described in general terms. A more general 
description gives manufacturers, who are experts in their product areas 
and are better suited to understand when a change in their product 
could affect the product's ability to comply with applicable rules, the 
flexibility to develop testing programs to suit their products and 
manufacturing operations. For children's products, section 
14(d)(2)(B)(i) of the CPSA says explicitly that the rule is intended to 
establish protocols and standards to ensure that children's products 
are tested ``periodically,'' as well as when there has been a material 
change to the product. Thus, even if no changes are made to a 
children's product, it must be tested periodically.
    For children's products with a reasonable testing program, it may 
be possible to show that one periodic test sample verifies and 
validates the program. However, for children's products without a 
reasonable testing program, in order for third party testing to provide 
a high degree of assurance that the products produced comply with the 
rule, the Commission believes that testing only a single sample would 
not

[[Page 28343]]

be acceptable. Other than the exceptions for lead that are specified in 
section 101 of the CPSIA and the lead determinations regarding certain 
materials or products in 16 CFR 1500.91, all children's products are 
required to be tested for lead content.

11. Labeling Program

    As stated earlier in part A of this document, section 14(d)(2)(A) 
of the CPSA requires the Commission to initiate a program by which a 
manufacturer or private labeler may label a consumer product as 
complying with the certification requirements. This provision applies 
to all consumer products that are subject to a product safety rule 
administered by the Commission.
    Comments: One comment recommended that the Commission not initiate 
a labeling program because it will contribute to confusion within the 
small business community about the tracking label. Another comment 
suggested that the Commission should provide examples of allowable text 
for such labels, but should not have specific requirements for things 
such as size, color, font or location as these will depend on the 
product. The comment further noted that it would be a huge burden to 
impose specifications such as ``label'' text or size.
    One comment noted that some children's products currently must 
contain a label and that label should be considered sufficient. Two 
comments stated that, if a consumer compares a children's product with 
a label stating compliance to all applicable rules to a comparable 
product with no applicable rules (and thus no label), the absence of 
the label will be misperceived as noncompliance by the consumer and 
will thus disadvantage the second product. One comment suggested that 
the label requirement be harmonized as best as possible with existing 
Federal regulations such as U.S. Customs and Border Production country 
of origin labeling (19 U.S.C. 1304 and 19 CFR 134.33) and the Federal 
Trade Commission's Textile and Wool Products Identification Act's fiber 
content labeling requirements (15 U.S.C. 70 and 16 CFR part 303). 
Another comment said that the use of the label should be restricted to 
identifying the manufacturer/importer and the batch to help facilitate 
and narrow the scope of recalls. One comment suggested that there needs 
to be accommodations or exclusions for products that are impossible to 
mark that are similar to exclusions provided in the J list of the U.S. 
Customs and Border Protection regulations for country of origin 
markings or products that would be destroyed by marking. One comment 
urged CPSC to include the certification requirements of section 14(a) 
of the CPSA on a label on the product.
    Response: Section 14(d)(2)(A) of the CPSA requires the Commission 
to initiate a program by which a manufacturer or private labeler may 
label their products as complying with the certification requirements. 
The Commission staff's suggested text and format for the label will 
make it easier for consumers, small businesses, and any other 
interested party to notice it, understand its meaning, and distinguish 
it from tracking labels. Varying the text and the font size and style 
on the label could lead to greater confusion in understanding than a 
consistent label. Because the use of the label is optional for 
manufacturers, similar-looking products, or even units of the same 
product, may or may not contain the label. The label is intended to 
show compliance with CPSC certification requirements. It is not 
intended to be a tracking label or demonstrate compliance with laws or 
regulations administered by other federal agencies. The comment 
suggesting the Commission should include the certification requirements 
of section 14(a) of the CPSA on a label on the product is outside the 
scope of the labeling program in the proposed rule which is being 
promulgated pursuant to section 14(d)(2)(A) of the CPSA. Additionally, 
on November 18, 2008, the Commission issued a rule (see 16 CFR part 
1110; see also 73 FR 68328) addressing the requirements for 
certificates under section 14(a) of the CPSA.

12. Comments Outside the Scope of the Rule

    Comments: Several comments addressed issues pertaining to specific 
tests or other provisions in the CPSIA, such as tracking labels and the 
interpretation of statutory definitions.
    Several comments suggested that x-ray fluorescence (XRF) technology 
should be an acceptable method to test for the presence of lead.
    Two comments suggested that CPSC require a hazard analysis of 
children's products if manufacturers are permitted to perform the 
analysis themselves without a third party check of the results.
    One comment would interpret the CPSIA's definition of ``children's 
product'' as a product with which a child plays.
    One comment suggested that the CPSC tracking label require the name 
of the manufacturer or importer, the production date, the compliance 
identifier, and the model number.
    One comment said that the electronic availability of certificates 
should satisfy the ``accompany'' and ``furnish'' requirements as 
opposed to requiring a paper certificate. One comment stated that the 
CPSC cannot require the certificate to contain the specific week of 
manufacture or the particular unit of equipment used to manufacture the 
product.
    One comment argued that the Commission has no jurisdiction over 
architectural glass (e.g., glass used in windows and doors).
    Response: Because these comments address issues that are unrelated 
to reasonable testing programs, continued testing of children's 
products, and labels to show that a product complies with the 
certification requirements in section 14(a) of the CPSA, they are 
outside the scope of this rule. Consequently, we decline to address 
them here.

C. Description of the Proposed Rule

    The proposal would create a new part in Title 16 of the Code of 
Federal Regulations: Part 1107, titled ``Testing and Labeling 
Pertaining to Product Certification.'' The new part 1107 would consist 
of four subparts: Subpart A would be ``General Provisions''; Subpart B 
would be the requirements for a ``Reasonable Testing Program for 
Nonchildren's Products''; Subpart C would be the requirements for 
``Certification of Children's Products''; and Subpart D would be the 
requirements for a ``Consumer Product Labeling Program.''

1. Proposed Subpart A General Provisions

a. Proposed Sec.  1107.1--Purpose
    Proposed Sec.  1107.1 would state that part 1107 establishes the 
requirements for: a reasonable testing program for nonchildren's 
products; third party conformity assessment body testing to support 
certification and continuing testing of children's products; and 
labeling of consumer products to indicate that the certification 
requirements have been met pursuant to sections 14(a)(1), and (a)(2), 
(d)(2)(B) of the CPSA (15 U.S.C. 2063(a)(1), (a)(2), (d)(2)(B)).
b. Proposed Sec.  1107.2--Definitions
    Proposed Sec.  1107.2 would state that, unless otherwise stated, 
the definitions of the Consumer Product Safety Act and the Consumer 
Product Safety Improvement Act of 2008 apply to this part. Proposed 
Sec.  1107.2 also would define certain terms or abbreviations for

[[Page 28344]]

purposes of part 1107. For example, with respect to abbreviations, 
proposed Sec.  1107.2 would define ``CPSA'' to mean the Consumer 
Product Safety Act. Proposed Sec.  1107.2 would define ``CPSC'' to mean 
the Consumer Product Safety Commission.
    Proposed Sec.  1107.2 would define ``detailed bill of materials'' 
to mean a list of the raw materials, sub-assemblies, intermediate 
assemblies, sub-component parts, component parts, and the quantities of 
each needed to manufacture a finished product.
    Proposed Sec.  1107.2 would define ``due care'' to mean the degree 
of care that a prudent and competent person engaged in the same line of 
business or endeavor would exercise under similar circumstances.
    Proposed Sec.  1107.2 would define ``high degree of assurance'' to 
mean an evidence-based demonstration of consistent performance of a 
product regarding compliance based on knowledge of a product and its 
manufacture. The term ``high degree of assurance'' appears in several 
proposed provisions, and so the concept of what constitutes a ``high 
degree of assurance'' would be important for purposes of interpreting 
and complying with certain proposed sections. We considered several 
alternative definitions for a high degree of assurance. One alternative 
definition would be, for quantitative tests, where a high degree of 
assurance would be at least a 95 percent probability that all the 
product produced meets the requirements of the applicable rules; for 
non-quantitative (pass/fail) tests, a high degree of assurance could 
mean a 95 percent confidence that at least 95 percent of the product 
produced meets the requirements of the applicable rules. The 95 percent 
level is widely used in the natural and social sciences as the minimum 
acceptable probability for determining statistical significance and has 
been found to be effective. However, we recognize that defining a 
``high degree of assurance'' as a 95 percent or greater probability 
could result in greater testing demands on small manufacturers. For 
example, for a non-quantitative test, a method such as the ``rule of 
three'' could be used to determine the number of samples needed for 
testing. For a 95 percent confidence that no more than five percent of 
the production fails to comply, 3/0.05 = 60 units will be needed for 
testing. For small production volumes where 60 samples would be 
considered excessive, alternative methods would be needed. Thus, we 
decided against defining ``high degree of assurance'' with respect to a 
95 percent probability or confidence level because there may be 
difficulty in applying the statistical methods to all manufacturing 
processes. We invite comment on possible amendments or revisions to the 
proposed definition of ``high degree of assurance.''
    Proposed Sec.  1107.2 would define ``identical in all material 
respects'' to mean there is no difference with respect to compliance to 
the applicable rules between the samples and the finished product.
    Proposed Sec.  1107.2 would define ``manufacturer'' to mean the 
parties responsible for certification of a consumer product pursuant to 
16 CFR part 1110. Currently, 16 CFR part 1110 limits the certification 
requirement to domestic manufacturers and importers.
    Proposed Sec.  1107.2 would define ``manufacturing process'' to 
mean the techniques, fixtures, tools, materials, and personnel used to 
create the component parts and assemble a finished product.
    Proposed Sec.  1107.2 would define ``production testing plan'' to 
mean a document that shows what tests must be performed and the 
frequency at which those tests must be performed to provide a high 
degree of assurance that the products manufactured after certification 
continue to meet all the applicable safety rules.
    Proposed Sec.  1107.2 would define ``third party conformity 
assessment body'' to mean a third party conformity assessment body 
recognized by the CPSC to conduct certification testing on children's 
products.

2. Proposed Subpart B--Reasonable Testing Program for Nonchildren's 
Products

    Proposed subpart B would consist of one provision and would 
describe the ``reasonable testing program'' for nonchildren's products.
a. Proposed Sec.  1107.10--Reasonable Testing Program for Nonchildren's 
Products
    Proposed Sec.  1107.10(a) would state that, except as otherwise 
provided in a specific regulation under this title or a specific 
standard prescribed by law, a manufacturer certifying a product 
pursuant to a reasonable testing program must ensure that the 
reasonable testing program provides a high degree of assurance that the 
consumer products covered by the program will comply with all 
applicable rules, bans, standards or regulations. The proposed 
exception for specific regulations or standards prescribed by law is 
meant to recognize that certain preexisting CPSC regulations or 
standards that were previously voluntary standards which, by statute, 
are now considered to be mandatory consumer product safety standards or 
are to be adopted as mandatory standards may have specific testing 
requirements or protocols. The reasonable testing programs requirements 
under proposed Sec.  1107.10 are not intended to supersede those 
preexisting testing requirements listed in Table 1. Table 1 only lists 
testing requirements as they pertain to nonchildren's products because 
proposed Sec.  1107.10 would not apply to children's products.

   Table 1--Existing Testing Programs That Would Not Be Superseded by
     Proposed Sec.   1107.10 Regarding a Reasonable Testing Program
------------------------------------------------------------------------
         16 CFR part                            Subject
------------------------------------------------------------------------
1201.........................  Safety Standard for Architectural Glazing
                                Materials.
1202.........................  Safety Standard for Matchbooks.
1203.........................  Safety Standard for Bicycle Helmets.
1204.........................  Safety Standard for Omnidirectional
                                Citizen Band Base Station Antennas.
1205.........................  Safety Standard for Walk-Behind Power
                                Lawn Mowers.
1207.........................  Safety Standard for Swimming Pool Slides.
1209.........................  Interim Safety Standard for Cellulose
                                Insulation.
1210.........................  Safety Standard for Cigarette Lighters.
1211.........................  Safety Standard for Automatic Residential
                                Garage Door Operators.
1212.........................  Safety Standard for Multi-Purpose
                                Lighters.
1610.........................  Standard for the Flammability of Clothing
                                Textiles.
1611.........................  Standard for the Flammability of Vinyl
                                Plastic Film.

[[Page 28345]]

 
1630, 1631...................  Standards for the Surface Flammability of
                                Carpets and Rugs.
------------------------------------------------------------------------

    A reasonable testing program serves as the basis for issuance of 
the general conformity certification for nonchildren's products unless 
the manufacturer conducts a test of each product. A reasonable testing 
program is a program that, when structured with appropriate 
specifications, measurements, controls, and test intervals, will 
provide a high degree of assurance that the consumer products 
manufactured under the reasonable testing program will comply with all 
the requirements of the applicable rules.
    The manufacturer is responsible for establishing a reasonable 
testing program because it is necessary to support the issuance of a 
general conformity certificate where a test of each product is not 
undertaken. All the elements of the reasonable testing program should 
be in place, and certification tests completed with passing results 
before a general conformity certificate can be issued for a product.
    Several existing nonchildren's product standards issued by the 
Commission already contain product-specific testing programs that were 
developed by the Commission at the time the standard was issued and for 
which certification was required before the CPSIA's enactment. For 
existing rules that contain testing requirements, and do not contain 
specific testing programs, the reasonable testing program establishes 
the minimum set of requirements to be met for certification. For the 
remaining applicable rules, the implementation of reasonable testing 
programs will vary depending on the product under consideration and the 
compliance characteristics being tested. Persons issuing general 
conformity certificates should exercise due care in developing and 
implementing a reasonable testing program that demonstrates that their 
products comply with the applicable rules.
    Commission staff examined existing CPSC regulations, such as the 
regulations pertaining to omnidirectional citizens band base station 
antennas, walk-behind lawn mowers, and automatic residential garage 
door openers, and selected common features of existing reasonable 
testing programs that CPSC has found to be effective. The proposed 
elements of a reasonable testing program would be necessary to 
demonstrate a product's compliance at the time of certification and as 
production of the product continues after certification. Because the 
requirement for a reasonable testing program would apply to a wide 
variety of product types and manufacturing processes, it is designed to 
be scalable to production volumes and adaptable to the specifics of the 
product. A manufacturer may develop the scope and details of each 
element of a reasonable testing program based on the manufacturer's 
knowledge and expertise regarding the product and its manufacturing 
processes.
    The Commission's primary concern is ensuring that manufacturers 
produce safe and compliant products. Testing is not an end in itself, 
but rather one part of a process to ensure the safety of consumer 
products. For this reason, the Commission believes the primary 
objective in a reasonable testing program is determining whether or not 
a manufacturer produces safe and compliant products. When CPSC staff 
discovers unsafe or noncompliant products, CPSC may have reason to 
examine a manufacturer's programs and processes. Because the Commission 
recognizes that even the best processes can occasionally yield 
noncompliant products, the Commission is especially concerned about 
unsafe or noncompliant products emerging from defective processes.
    Proposed Sec.  1107.10(b) would describe the five elements that a 
reasonable testing program must contain. The Commission invites 
comments on these five elements of a reasonable testing program. How 
well do these elements fall within the elements of existing quality 
assurance/quality control programs? In cases where no quality 
assurance/quality control programs exist, what activities will have to 
occur to implement the proposed reasonable testing program? Please 
explain.
    Proposed Sec.  1107.10(b)(1) would state that a reasonable testing 
program must have a product specification. The product specification 
would contain a description of the consumer product and lists the 
applicable rules, bans, standards or regulations to which the product 
is subject. A product specification should describe the product listed 
on a general conformity certification in sufficient detail to identify 
the product and distinguish it from other products made by the 
manufacturer. Proposed Sec.  1107.10(b)(1) would state that the product 
specification may include items such as a color photograph or 
illustration, model names or numbers, a detailed bill of materials, a 
parts listing, raw material selection and sourcing requirements. 
Proposed Sec.  1107.10(b)(1)(i) would state that a product 
specification must include any component parts that are certified 
pursuant to 16 CFR part 1109. (Elsewhere in this issue of the Federal 
Register, the Commission is issuing a proposed rule regarding component 
part testing.)
    Proposed Sec.  1107.10(b)(1)(ii) would state that product 
specifications that identify individual features of a product that 
would not be considered a material change may use the same product 
specification for all products manufactured with those specific 
features. Features that would not be considered a material change 
include different product sizes or other features that cover variations 
of the product where those variations do not affect the product's 
ability to comply with applicable rules. For example, several sizes of 
the same article of clothing made with the same materials would not be 
considered a material change. Another example would be if a product 
specification lists a number of complying component parts that are 
grouped in a number of different combinations for separate products, 
the differences in the number of component parts between the products 
would not be considered a material change. Additionally, a product with 
different versions of software downloaded into various units that would 
not affect compliance, such as various language packages downloaded 
into various educational toys, would not be considered a material 
change.
    Proposed Sec.  1107.10(b)(1)(iii) would state that each 
manufacturing site must have a separate product specification. This 
would be required because a manufacturer cannot assume that units of 
the same product manufactured in more than one location are identical 
in all material respects.

[[Page 28346]]

    Proposed Sec.  1107.10(b)(2) would state that a manufacturer must 
conduct certification tests on a product before issuing a general 
conformity certificate for that product. Certification tests provide 
evidence that a product identified in a product specification complies 
with the applicable rules, bans, standards, or regulations. 
Certification tests are required as part of a reasonable testing 
program in lieu of a test of each product. Proposed Sec.  1107.10(b)(2) 
would state that a certification test would be a test performed on 
samples of the product that are identical to the finished product in 
all material respects to demonstrate that the product complies with the 
applicable safety rules. Proposed Sec.  1107.10(b)(2) would require 
certification tests to contain certain elements.
    Proposed Sec.  1107.10(b)(2)(i) would state that, for purposes of 
proposed Sec.  1107.10, a sample means a component part of the product 
or the finished product which is subjected to testing. Samples 
submitted for certification testing would be required to be identical 
in all material respects to the product to be distributed in commerce. 
The manufacturer would be required to submit a sufficient number of 
samples for certification testing so as to provide a high degree of 
assurance that the certification tests accurately represent the 
product's compliance with all applicable rules.
    Proposed Sec.  1107.10(b)(2)(i)(A) would only allow finished 
products or component parts listed on the product specification to be 
submitted for certification testing. Proposed Sec.  1107.10(b)(2)(i)(B) 
would allow a manufacturer to substitute component part testing for 
finished product testing pursuant to 16 CFR part 1109 unless the rule, 
ban, standard or regulation applicable to the product requires testing 
of the finished product. If a manufacturer relies upon certification 
testing of component part(s) (rather than tests of the finished 
product), the manufacturer would be required to demonstrate how the 
combination of testing of component part(s), portions of the finished 
product, and finished product samples demonstrate, with a high degree 
of assurance, compliance with all applicable rules, bans, standards, or 
regulations.
    Proposed Sec.  1107.10(b)(2)(ii) would state that a material change 
is any change in the product's design, manufacturing process, or 
sourcing of component parts that a manufacturer exercising due care 
knows, or should know, could affect the product's ability to comply 
with the applicable rules, bans, standards, or regulations. Proposed 
Sec.  1107.10(b)(2)(ii)(A) would state that when a previously-certified 
product undergoes a material change that only affects the product's 
ability to comply with certain applicable rules, bans, standards, or 
regulations, certification for the new product specification may be 
based on certification testing of the materially changed component 
part, material, or process, and the passing certification tests of the 
portion of the previously-certified product that were not materially 
changed. For example, if a material change is limited to using a 
different paint on the product, new certification testing of that 
product may be limited to evaluating the paint to the applicable safety 
rules.
    Proposed Sec.  1107.10(b)(2)(ii)(B) would require a manufacturer to 
conduct a certification test of the finished product if a material 
change affects the finished product's ability to comply with an 
applicable rule, ban, standard, or regulation. Proposed Sec.  
1107.10(b)(2)(ii)(C) would require a manufacturer to exercise due care 
to ensure that reliance on anything other than retesting of the 
finished product after a material change occurs does not allow a 
noncompliant product to be distributed in commerce. A manufacturer 
should resolve any doubts in favor of retesting the finished product 
for certification.
    Proposed Sec.  1107.10(b)(3) would explain that a production 
testing plan describes what tests must be performed and the frequency 
at which those tests must be performed to provide a high degree of 
assurance that the products manufactured after certification continue 
to meet all the applicable safety rules, bans, standards, or 
regulations. A production testing plan may include recurring testing or 
the use of process management techniques, such as control charts, 
statistical process control programs, or failure modes and effects 
analyses (FMEAs), designed to control potential variations in product 
manufacturing that could affect the product's ability to comply with 
the applicable rules, bans, standards, or regulations.
    Proposed Sec.  1107.10(b)(3)(i) through (iii) would require a 
production test plan to contain the following elements:
     A description of the production testing plan, including, 
but not limited to, a description of the tests to be conducted or the 
measurements to be taken, the intervals at which the tests or 
measurements will be made, the number of samples tested, and the basis 
for determining that such tests provide a high degree of assurance of 
compliance if they are not the tests prescribed in the applicable rule, 
ban, standard, or regulation.
     A separate production testing plan for each manufacturing 
site; and
     Production testing intervals selected to be short enough 
to ensure that, if the samples selected for production testing comply 
with an applicable rule, ban, standard, or regulation, there is a high 
degree of assurance that the untested products manufactured during that 
interval also will comply with the applicable rule, ban standard, or 
regulation. Production test intervals should be appropriate for the 
specific testing or alternative measurements being conducted.
    Proposed Sec.  1107.10(b)(3)(iii)(A) would allow a manufacturer to 
use measurement techniques that are nondestructive and tailored to the 
needs of an individual product instead of conducting product 
performance tests to assure a product complies with all applicable 
rules, bans, standards, or regulations. For example, a manufacturer may 
have determined that, by controlling the particle size and water 
content of cellulose insulation, it is possible to determine compliance 
to the cellulose insulation critical radiant flux test (16 CFR part 
1209.6) by examination of a sample of a fixed volume under a graduated 
microscope and measuring its weight. Sizes and weights within certain 
limits mean that the insulation will pass the critical radiant flux 
test. As another example, a manufacturer may choose to determine 
compliance to the requirements for garage door opener photoelectric 
sensors (16 CFR 1211.11) by placing the sensor in a fixture with a 
calibrated light flux, then measuring the response voltage of the 
light-sensitive element directly. An element output voltage above a 
threshold would indicate passing performance for the tests described in 
the safety standard.
    Proposed Sec.  1107.10(b)(3)(iii)(B) would require any production 
test method used to conduct production testing to be as effective in 
detecting noncompliant products as the tests used for certification. 
Proposed Sec.  1107.10(b)(3)(iii)(C) would state that if a manufacturer 
is uncertain whether a production test is as effective as the 
certification test, the manufacturer must use the certification test. 
For example, if the probability that all production products are 
compliant using the tests methods used for certification is 95 percent, 
the probability that all production products are compliant using 
alternative testing methods should be at least 95 percent. If there is 
uncertainty whether the test method

[[Page 28347]]

will achieve the same level of detection of compliance, then the 
specific tests required by the applicable rules should be used.
    Proposed Sec.  1107.10(b)(4) would describe the remedial action 
plan. Proposed Sec.  1107.10(b)(4)(i) would state that a remedial 
action plan describes the steps to be taken whenever samples of a 
product or a component part of a product fails a test or fails to 
comply with an applicable rule, ban, standard, or regulation. A 
remedial action plan would be required to contain procedures the 
manufacturer must follow to investigate and address failing test 
results in addition to any reporting obligation it may have. 
Manufacturers would be required to take remedial action after any 
failing test result to ensure with a high degree of assurance that the 
products manufactured after the remedial action has been taken comply 
with the applicable rules, bans, standards, or regulations. The type of 
remedial action may differ depending upon the applicable rule, ban, 
standard, or regulation. Proposed Sec.  1107.10(b)(4)(i) also would 
state that a remedial action can include, but is not limited to, the 
following:
     Changes to the manufacturing process, the equipment used 
to manufacture the product, the product's materials, or design;
     Reworking the product produced; or
     Other actions deemed appropriate by the manufacturer, in 
the exercise of due care, to assure compliant products.
    Proposed Sec.  1107.10(b)(4)(ii) would state that any remedial 
action that results in a material change to a product's design, parts, 
suppliers of parts, or manufacturing process that could affect the 
product's ability to comply with any applicable rules would require a 
new product specification for that product. Before a product covered by 
the new product specification can be certified as compliant with the 
applicable rules, bans, standards, or regulations, a manufacturer would 
be required to have passing certification test results for the 
applicable rules, bans, standards, or regulations.
    Proposed Sec.  1107.10(b)(5) would impose recordkeeping 
requirements to document the reasonable testing program. Documentation 
is necessary to establish the identity of the product, and to 
demonstrate that the product complies with the applicable rules, when 
it is certified and on a continuing basis as production progresses. 
Documentation supports the validity of a general conformity certificate 
and provides validation that a test of each product produced is not 
necessary.
    Proposed Sec.  1107.10(b)(5)(i)(A) through (b)(5)(i)(E) would 
identify the records that a manufacturer of a nonchildren's product 
would be required to maintain. In brief, these records would be:
     Records of the general conformity certificate for each 
product;
     Records of each product specification;
     Records of each certification test and, if the 
manufacturer elected to have a third party conformity assessment body 
test the product, identification of any third party conformity 
assessment body on whose testing the certificate depends. Records of 
certification tests would be required to describe how the product was 
certified as meeting the requirements, including how each applicable 
rule was evaluated, the test results, and the actual values of the 
tests;
     Records to demonstrate compliance with the production 
testing plan requirement, including a list of the applicable rules, 
bans, standards, or regulations, a description of the types of 
production tests conducted, the number of samples tested, the 
production interval selected for performance of each test, and the test 
results. Records of a production test program would be required to 
describe how the production tests demonstrate that the continuing 
production complies with the applicable rules. References to techniques 
in relevant quality management and control standards, such as ANSI/ISO/
ASQ Q9001-2008: Quality management systems--Requirements, ANSI/ASQ 
Z1.4-2008: Sampling Procedures and Tables for Inspection by Attributes, 
and/or ANSI/ASQ Z1.9-2008: Sampling Procedures and Tables for 
Inspection by Variables for Percent Nonconforming, would be allowed to 
demonstrate that the production tests have the necessary accuracy, 
precision sensitivity, repeatability, and confidence to distinguish 
between compliant and noncompliant products. These standards are widely 
recognized in industry and were developed by organizations with 
international exposure and millions of members. Retaining test results 
can help identify the events that led to the creation of noncompliant 
products, the number of products affected, and their disposition; and
     Records of all remedial actions taken, including the 
specific action taken, the date the action was taken, the person who 
authorized the actions, and any test failure which necessitated the 
action. Records of remedial action would be required to relate the 
action taken to the product specification of the product that was the 
subject of that remedial action and the product specification of any 
new product resulting from any remedial action.
    Proposed Sec.  1107.10(b)(5)(ii) would require a manufacturer to 
create a new set of records for a product if a remedial action results 
in a new product specification.
    Proposed Sec.  1107.10(b)(5)(iii) would require a manufacturer to 
maintain the records specified in subpart B at the location within the 
United States specified in 16 CFR 1110.11(d) or, if the records are not 
maintained at the custodian's address, at a location within the United 
States specified by the custodian. The manufacturer would be required 
to make these records available, either in hard copy or electronically, 
for inspection by the CPSC upon request.
    Proposed Sec.  1107.10(b)(5)(iv) would require a manufacturer to 
maintain records (except for test records) for as long as the product 
is being produced or imported by the manufacturer plus five years. The 
proposal also would require test records to be maintained for five 
years and all records to be available in the English language. Records 
would be required to be maintained for five years because the statute 
of limitations under 28 U.S.C. 2462 allows the Commission to bring an 
action within that time. It would be unnecessarily burdensome to 
require a manufacturer to maintain records beyond the time the 
Commission could pursue an action.
    Proposed Sec.  1107.10(c) would state that, if any certification 
test results in a failure, a manufacturer cannot certify a product 
until the manufacturer has taken remedial action, and the product 
manufactured after the remedial action passes certification testing.
    Proposed Sec.  1107.10(d) would state that a manufacturer of a 
nonchildren's product may, but is not required to, use a third party 
conformity assessment body to conduct certification testing. The third 
party conformity assessment body would not have to be a third party 
conformity assessment body recognized by the CPSC to conduct 
certification testing on children's products.
    Proposed Sec.  1107.10(e) would state that manufacturers of 
children's products may voluntarily establish a reasonable testing 
program consistent with this subpart.

3. Proposed Subpart C--Certification of Children's Products

    Proposed subpart C would contain the requirements pertaining to the 
certification of children's products. The subpart would consist of 
seven sections, and most sections would implement the

[[Page 28348]]

requirements in section 14(d)(2)(B) of the CPSA.
    Some industries have developed and implemented testing and 
certification programs that are intended to determine compliance with 
specific standards. The Commission invites comments about such 
programs.
a. Proposed Sec.  1107.20--General Requirements
    Proposed Sec.  1107.20(a) would require manufacturers to submit a 
sufficient number of samples of a children's product, or samples that 
are identical in all material respects to the children's product, to a 
third party conformity assessment body for testing to support 
certification. The proposal would not specify the exact number of 
samples to be tested; instead, the proposal would require that the 
number of samples selected provide a high degree of assurance that the 
tests conducted for certification purposes accurately demonstrate the 
ability of the children's product to meet all applicable children's 
product safety rules.
    Proposed Sec.  1107.20(b) would state that, if the manufacturing 
process for a children's product consistently creates parts that are 
uniform in composition and quality, a manufacturer may submit fewer 
samples to provide a high degree of assurance that the finished product 
complies with the applicable children's product safety rules. If the 
manufacturing process for a children's product results in variability 
in the composition or quality of children's products, a manufacturer 
may need to submit more samples to provide a high degree of assurance 
that the finished product complies with the applicable children's 
product safety rules. An example of a manufacturing process that 
consistently creates highly similar parts would be die casting. 
Manufacturing processes with greater inherent variability may 
necessitate testing of more samples to provide a high degree of 
assurance that the finished product complies with the applicable 
children's product safety rules. An example of a manufacturing process 
with greater inherent variability would be hand assembly of the 
product.
    Proposed Sec.  1107.20(c) would state that, except where otherwise 
specified by a children's product safety rule, a manufacturer may 
substitute component part testing for finished product testing pursuant 
to 16 CFR part 1109 if the component part, without the remainder of the 
finished product, is sufficient to determine compliance for the 
finished product. For example, assume that a children's product is a 
cotton sweater with a metal zipper and that the manufacturer wishes to 
test the sweater for compliance to the lead limits in section 101 of 
the CPSIA. Because the Commission has determined that textiles, such as 
cotton, do not exceed the statutory lead limits, the manufacturer would 
test the metal zipper only for lead rather than the cotton in the 
sweater. In this example, therefore, testing the component part (the 
metal zipper) is sufficient to determine the finished product's 
compliance with the lead limit.
    Proposed Sec.  1107.20(d) would state that, if a product sample 
fails certification testing, even if other samples have passed the same 
certification test, the manufacturer must investigate the reasons for 
the failure and take remedial action. A manufacturer would not be 
allowed to certify the children's product until the manufacturer 
establishes, with a high degree of assurance, that the finished product 
does comply with all applicable children's product safety rules.
b. Proposed Sec.  1107.21 Periodic Testing
    Section 14(d)(2)(B)(i) of the CPSA requires children's products to 
be tested periodically for compliance with all applicable children's 
product safety rules. Although the statute does not require all 
periodic testing to be conducted by a third party conformity assessment 
body, the Commission proposes to require that manufacturers submit 
samples of their products to a third party conformity assessment body 
for testing to the applicable children's product safety rules at least 
once every two years if they have a reasonable testing program. As 
proposed by the Commission, not every periodic test has to be done by a 
third party conformity assessment body if the manufacturer has 
implemented four elements of a reasonable testing program as described 
in subpart B of this part (certification for children's products is 
covered by proposed Sec.  1107.20 of this part). Depending upon the 
type and rigor of the production testing done by a manufacturer, and 
the manufacturer's ability to do in-house compliance testing of the 
product or component part to the applicable children's product safety 
rule(s), production testing may serve as the non-third party periodic 
compliance testing. The Commission recognizes that some compliance 
testing may be too complex for a manufacturer to undertake in-house. In 
that case, the manufacturer may elect to have the product or a 
component part tested by a third party which may or may not be a third 
party conformity assessment body, depending upon whether the test 
satisfies the schedule for periodic testing described above. Other 
circumstances may arise during production of the product that may 
require consideration of additional testing by a third party conformity 
assessment body. The factors described in proposed Sec.  1107.21(c)(2) 
may provide some guidance in those circumstances.
    Proposed Sec.  1107.21(a) would implement the periodic testing 
requirement in section 14(d)(2)(B)(i) of the CPSA by requiring each 
manufacturer to conduct periodic testing at least annually, except as 
otherwise provided in paragraphs (b) and (d) of this section (which we 
discuss later in this part of the preamble) or as provided in 
regulations under this title. Manufacturers may need to conduct 
periodic tests more frequently than on an annual basis to ensure a high 
degree of assurance that the product being tested complies with all 
applicable children's product safety rules. More frequent periodic 
testing may help a manufacturer identify noncompliant products more 
quickly and, as a result, may limit the scope of any potential product 
recall. In addition, more frequent testing may reduce the 
manufacturer's liability for civil penalties resulting from a 
noncompliant product, reduce potential damage to a manufacturer's 
reputation, and increase the manufacturer's confidence in the 
effectiveness of the periodic testing.
    Proposed Sec.  1107.21(b) would state that, if a manufacturer has 
implemented a reasonable testing program as described in subpart B of 
this part (with the exception of the certification element which, for 
children's products, would be required to comply with the requirements 
in proposed Sec.  1107.20), it would be required to submit samples of 
its product to a third party conformity assessment body for periodic 
testing to all applicable children's product safety rules at least once 
every two years. If a manufacturer's reasonable testing program fails 
to provide a high degree of assurance of compliance with all applicable 
children's product safety rules, the Commission may require the 
manufacturer to meet the requirements of proposed Sec.  1107.21(c) or 
modify its reasonable testing program to ensure a high degree of 
assurance. Currently, the rule on children's bicycle helmets is the 
only children's product safety rule that contains requirements for a 
reasonable testing program. The reasonable testing program requirements 
in this rule are not intended to replace that preexisting testing 
requirement. For existing rules that contain testing requirements and 
do not contain specific testing programs, the reasonable testing 
program and the

[[Page 28349]]

two year minimum third party conformity assessment testing requirement 
establishes the minimum set of requirements for periodic testing. As 
the Commission promulgates new or revised children's product safety 
rules, it may establish different testing requirements for those 
children's products than the requirements described in this proposed 
rule.
    Proposed Sec.  1107.21(c) would state that, if a manufacturer has 
not implemented a reasonable testing program as described in subpart B 
of this part, then all periodic testing would be required to be 
conducted by a third party conformity assessment body, and the 
manufacturer would be required to conduct periodic testing described in 
proposed Sec.  1107.21(c)(1) and (c)(2). In brief, proposed Sec.  
1107.21(c)(1) would require the manufacturer to develop a periodic test 
plan to assure that children's products manufactured after the issuance 
of a children's product certification, or when the previous periodic 
testing was conducted, continue to comply with all applicable 
children's product safety rules. The periodic test plan would have to 
include the tests to be conducted, the intervals at which the tests 
will be conducted, the number of samples tested, and the basis for 
determining that the periodic testing plan provides a high degree of 
assurance that the product being tested continues to comply with all 
applicable children's product safety rules. The proposal would require 
the manufacturer to have a separate periodic testing plan for each 
manufacturing site producing a children's product.
    Proposed Sec.  1107.21(c)(2) would require the periodic testing 
interval selected to be short enough to ensure that, if the samples 
selected for periodic testing pass the test, there is a high degree of 
assurance that the other untested children's products manufactured 
during the interval comply with the applicable children's product 
safety rules. The interval for periodic testing may vary depending upon 
the specific children's product safety rules that apply to the 
children's product. For example, the intervals selected to test for 
small parts where there is variability in the factors assuring that no 
small parts are created, and for lead in paint, where one tested 
container is used for a large production volume, may not be the same. 
Assuring that products do not generate small parts may require more 
frequent testing than that required to assure that the paint used does 
not contain lead in excess of the acceptable limits. The appropriate 
periodic testing interval may vary for a manufacturer depending on the 
manufacturer's knowledge of the product and its manufacturing 
processes. Under proposed Sec.  1107.21(c)(2)(i) through (c)(2)(ix), 
factors to be considered when determining the periodic testing interval 
would include, but not be limited to:
     High variability in test results, as indicated by a 
relatively large sample standard deviation in quantitative tests;
     Measurements that are close to the allowable numerical 
limit for quantitative tests;
     Known manufacturing process factors which could affect 
compliance with a rule. For example, if the manufacturer knows that a 
casting die wears down as the die nears the end of its useful life, the 
manufacturer may wish to test more often as the casting die wears down;
     Consumer complaints or warranty claims;
     Nonmaterial changes such as introduction of a new set of 
component parts into the assembly process, or the manufacture of a 
fixed number of products;
     Potential for serious injury or death resulting from a 
noncompliant children's product;
     The number of children's products produced annually, such 
that a manufacturer should consider testing a children's product more 
frequently if the product is produced in very large numbers or 
distributed widely throughout the United States;
     The children's product's similarity to other children's 
products with which the manufacturer is familiar and/or whether the 
children's product has many different component parts compared to other 
children's products of a similar type; and
     The inability to determine the children's product's 
noncompliance easily through means such as visual inspection.
    Proposed Sec.  1107.21(d) would pertain to the periodic testing 
frequency for low-volume manufacturers. In brief, the proposal would 
not require a manufacturer to conduct periodic testing unless it has 
produced or imported more than 10,000 units of a particular product. 
(See Appendix A of the Memorandum Requirements for Certification and 
Continued Testing of Children's Products, Established by the Consumer 
Product Safety Improvement Act of 2008 from Randy Butturini, Office of 
Hazard Identification and Reduction, for Commission staff's rationale 
for selecting the 10,000 number). The proposed rule would not require 
periodic testing at every 10,000 units manufactured; instead, once that 
threshold has been reached, the manufacturer would be subject to the 
periodic testing requirements of proposed Sec.  1107.21(a), and (b) or 
(c). The manufacturer is responsible for deciding how often such 
periodic testing will occur. In other words, assume that a manufacturer 
produces 9,000 units of product X. Under the proposal, the manufacturer 
would not have to engage in periodic testing unless it produces 10,000 
units of product X; at that time, the manufacturer would be required to 
conduct periodic testing on an annual basis (under proposed Sec.  
1107.21(a)) and it would be required to comply with the requirements of 
proposed Sec.  1107.21(b) or Sec.  1107.21 (c) (depending on whether 
the manufacturer has implemented a reasonable testing program under 
subpart B). The proposal would not require the manufacturer to engage 
in periodic testing every time it produces 10,000 units of product X.
    The low-volume exception would apply both to manufacturers and 
importers who produce or import a specific product at a low volume 
(10,000 units under the proposed rule). In other words, proposed Sec.  
1107.21(d) would focus on the volume of a specific product rather than 
attempt to distinguish between ``large'' and ``small'' manufacturers. 
Thus, an individual who hand carves 30 products would fall within 
proposed Sec.  1107.21(d), as would a multinational corporation who 
makes 9,000 units of a particular product.
c. Proposed Sec.  1107.22--Random Samples
    Proposed Sec.  1107.22 would implement the testing of random 
samples requirement in section 14(d)(2)(B)(ii) of the CPSA by requiring 
each manufacturer of a children's product to select samples for 
periodic testing by using a process that assigns each sample in the 
production population an equal probability of being selected. We 
recognize that there are alternative approaches for deciding whether 
something represents a ``random'' sample. One alternative approach 
would be to say that a random sample is a sample not intentionally 
identified beforehand for testing. Another possible approach would be 
to require only that a random sample adequately represent the 
production sample pool from which it was chosen. The Commission chose 
neither alternative because the purpose of random sampling is to 
establish a basis for inferring compliance about a population of 
untested products from a set of tested products. If the products 
selected for testing are not randomly selected, there is no statistical 
basis for inferring the compliance of the untested

[[Page 28350]]

products. Manufacturers may select additional samples based on the 
manufacturer's knowledge of the product and its production to provide 
greater assurance of compliance. For example, if a manufacturer knows 
its control over compliance degrades with continuing production, the 
manufacturer may always test the last unit produced. Proposed Sec.  
1107.22 would state that the production population is the number of 
products manufactured or imported after the initial certification or 
last periodic testing of a children's product. Proposed Sec.  1107.22 
would allow a manufacturer to use a procedure that randomly selects 
items from a list to determine which samples are the random samples for 
testing before production begins. For example, if the planned 
production quantity in a period is 50,000, and 12 random samples are to 
be selected for periodic testing, before the products are manufactured, 
a random process would have to identify which 12 of the 50,000 will be 
selected for periodic testing. Manufacturers that produce products that 
continue to be distributed in commerce as they are manufactured may 
wish to test the random samples as they are selected to minimize the 
potential quantity of noncompliant products if a test has failing test 
results.
    Proposed Sec.  1107.22 would allow manufacturers to select samples 
for testing as they are manufactured. Proposed Sec.  1107.22 would 
allow manufacturers who produce children's products that continue to be 
distributed in commerce as they are manufactured to test the samples as 
they become available instead of waiting until all the random samples 
have been selected before conducting testing.
d. Proposed Sec.  1107.23--Material Change
    Proposed Sec.  1107.23 would implement the requirement in section 
14(d)(2)(B)(i) of the CPSA to test a children's product when a material 
change has occurred. Proposed Sec.  1107.23(a) would state that if a 
children's product undergoes a material change in product design or 
manufacturing process, including the sourcing of component parts, that 
a manufacturer exercising due care knows or should know that such 
material change could affect the product's ability to comply with the 
applicable children's product safety rules, the manufacturer must 
submit a sufficient number of samples of the materially changed product 
for testing by a third party conformity assessment body. Such testing 
would be required before a manufacturer could certify the children's 
product. The extent of such testing would depend on the nature of the 
material change. Proposed Sec.  1107.23(a) would state that, when a 
material change is limited to a component part of the finished 
children's product and does not affect the ability of the children's 
product to meet other applicable children's product safety rules, a 
manufacturer may issue a children's product certificate based on the 
earlier third party certification tests and on test results of the 
changed component part conducted by a third party conformity assessment 
body. For example, if the paint is changed on a children's product, 
issuance of a children's product certificate may be based on previous 
product testing and on tests of the new paint for compliance to lead, 
heavy metal, and phthalate concentrations.
    Proposed Sec.  1107.23(a) also would state that changes that cause 
a children's product safety rule to no longer apply to a children's 
product are not considered to be material changes. For example, assume 
that a children's product consists of a cotton sweater with metal 
buttons and that the children's product would be subject to the lead 
limits in section 101 of the CPSIA. If the manufacturer decided to use 
wooden buttons instead of metal buttons, the use of wooden buttons 
would eliminate the need to test the product for lead, and the change 
to wooden buttons, while arguably a change in the product's component 
parts, would not be a ``material change'' under proposed Sec.  
1107.23(a) for the purposes of complying with the lead content limits. 
However, for other children's product safety rules, such as small 
parts, the change may be a material change.
    Proposed Sec.  1107.23(a) also would require a manufacturer to 
exercise due care to ensure that reliance on anything other than 
retesting of the finished product after a material change would not 
allow a noncompliant children's product to be distributed in commerce. 
A manufacturer should resolve any doubts in favor of retesting the 
finished product for certification. Additionally, a manufacturer would 
be required to exercise due care to ensure that any component part 
undergoing component-part-level testing is the same as the component 
part on the finished children's product in all material respects.
    Proposed Sec.  1107.23(b) would state that, for purposes of 
proposed subpart B, the term ``product design'' includes all component 
parts, their composition, and their interaction and functionality when 
assembled. To determine which children's product safety rules apply to 
a children's product, a manufacturer should examine the product design 
for the children's product as received by the consumer. For example, if 
a children's product has a component part that contains lead or has a 
sharp edge, but is inaccessible when the product is assembled, then the 
lead and sharp edge requirements would not be applicable to the 
finished product. Changes to a product's design may result in a product 
being subject to additional children's product safety rules. For 
example, if a wooden button on a children's product is replaced with a 
plastic button, the wooden button previously excluded from testing for 
lead content has been replaced with a component part that would be 
subject to testing for compliance with the lead content requirements.
    Proposed Sec.  1107.23(c) would state that a material change in the 
manufacturing process is a change in how the children's product is made 
that could affect the finished children's product's ability to comply 
with the applicable children's product safety rules. For each change in 
the manufacturing process, a manufacturer should exercise due care to 
determine if compliance to an existing applicable children's product 
safety rule could be affected or if the change results in a newly-
applicable children's product safety rule. The following are some 
examples of a material change to the manufacturing process of a 
children's product:
     A new technique is used to fasten buttons to a doll's 
dress which could affect the children's products ability to comply with 
the small parts rule;
     New solvents are used to clean equipment employed in the 
manufacture of children's products; the new solvents could affect the 
children's products ability to comply with the lead content and 
phthalates requirements; and
     A new mold for an accessible metal component part of a 
children's product is introduced into the assembly line which could 
affect the children's products ability to comply with requirements for 
sharp edges.
    Proposed Sec.  1107.23(d) would state that a material change in the 
sourcing of component parts results when the replacement of one 
component part of a children's product with another component part 
could affect compliance with the applicable children's product safety 
rules. This would include, but is not limited to, changes in component 
part composition, component part supplier, or the use of a different 
component part from the same supplier who provided the initial 
component part.

[[Page 28351]]

 e. Proposed Sec.  1107.24--Undue Influence
    Proposed Sec.  1107.24(a) would implement the requirement to 
safeguard against undue influence, pursuant to section 14(d)(2)(B)(iv) 
of the CPSA, by requiring each manufacturer to establish procedures to 
safeguard against the exercise of undue influence by a manufacturer on 
a third party conformity assessment body.
    Proposed Sec.  1107.24(b)(1) would require the procedures 
established under proposed Sec.  1107.24(a) to include, at a minimum:
     Safeguards to prevent attempts by the manufacturer to 
exercise undue influence on a third party conformity assessment body, 
including a written policy statement from company officials that the 
exercise of undue influence is not acceptable, and directing that 
appropriate staff receive annual training on avoiding undue influence, 
and sign a statement attesting to participation in such training;
     A requirement to notify the Commission immediately of any 
attempt by the manufacturer to hide or exert undue influence over test 
results; and
     A requirement to inform employees that allegations of 
undue influence may be reported confidentially to the Commission and to 
describe the manner in which such a report can be made.
 f. Proposed Sec.  1107.25--Remedial Action
    Proposed Sec.  1107.25(a) would require each manufacturer of a 
children's product to have a remedial action plan that contains 
procedures the manufacturer must follow to investigate and address 
failing test results. A manufacturer would be required to take remedial 
action after any failing test result to ensure, with a high degree of 
assurance, that the children's products manufactured after the remedial 
action has been taken comply with all applicable children's product 
safety rules.
    Proposed Sec.  1107.25(b) would not permit a manufacturer to 
certify a product if any certification test by a third party conformity 
assessment body results in a failure, until the manufacturer has taken 
remedial action and the product manufactured after the remedial action 
passes certification testing.
    Proposed Sec.  1107.25(c) would require a manufacturer whose 
children's product has received a failing test result to take remedial 
action to ensure, with a high degree of assurance, that the children's 
product complies with all applicable children's product safety rules. 
The proposal would state that remedial action can include, but is not 
limited to, redesign, changes in the manufacturing process, or changes 
in component part sourcing. For existing production, remedial action 
may include rework, repair, or scrap of the children's product. If a 
remedial action results in a material change, the proposed rule would 
require a manufacturer to have a third party conformity assessment body 
retest the redesigned or remanufactured product before the manufacturer 
can certify the product.
 g. Proposed Sec.  1107.26--Recordkeeping
    Proposed Sec.  1107.26(a) would require a children's product 
manufacturer subject to an applicable children's product safety rule to 
maintain the following records:
     Records of the children's product certificate for each 
product. The children's product covered by the certificate must be 
clearly identifiable and distinguishable from other products;
     Records of each third party certification test. The 
manufacturer must have separate certification tests records for each 
manufacturing site;
     Records of the periodic test plan and periodic test 
results for a children's product;
     Records of descriptions of all material changes in product 
design, manufacturing process, and sourcing of component parts, and the 
certification tests run and the test values;
     Records of the undue influence procedures, including 
training materials and training records of all employees trained on 
these procedures; and
     Records of all remedial actions taken following a failing 
test result, including the rule that was tested, the specific remedial 
action taken, the date the action was taken, the person who authorized 
the action, any test failure which necessitated the action, and the 
results from certification tests showing compliance after the remedial 
action was taken.
    Proposed Sec.  1107.26(b) would require a manufacturer to maintain 
the records specified in subpart C at the location within the United 
States specified in 16 CFR 1110.11(d) or, if the records are not 
maintained at the custodian's address, at a location within the United 
States specified by the custodian. The manufacturer would be required 
to make these records available, either in hard copy or electronically, 
for inspection by the CPSC upon request.
    Proposed Sec.  1107.26(c) would require a manufacturer to maintain 
records (except for test records) for as long as the product is in 
production or imported by the manufacturer plus 5 years. Test records 
would be required to be maintained for 5 years. All records would be 
required to be available in the English language.

 4. Proposed Subpart D--Consumer Product Labeling Program

 a. Introduction
    Proposed subpart D, consisting of one section, would implement the 
label provision at section 14(d)(2)(A) of the CPSA. Section 14(d)(2)(A) 
of the CPSA requires the Commission to initiate a program by which a 
manufacturer or private labeler may label a consumer product as 
complying with the certification requirements in section 14(a) of the 
CPSA.
b. Proposed Sec.  1107.40 Labeling Consumer Products To Indicate That 
the Certification Requirements of Section 14 of the CPSA Have Been Met
    Proposed Sec.  1107.40(a) would allow manufacturers and private 
labelers of a consumer product to indicate, by a uniform label on or 
provided with the product, that the product complies with any consumer 
product safety rule under the CPSA, or with any similar rule, ban, 
standard or regulation under any other act enforced by the CPSC.
    Proposed Sec.  1107.40(b) would require the label to be printed in 
bold typeface, using an Arial font of not less than 12 points, be 
visible and legible, and state ``Meets CPSC Safety Requirements''.
    The Commission considered whether a shorter label statement would 
adequately convey the intended message and concluded that it would not. 
Acronyms such as ``CPSIA'' or ``CPSA'' were considered. However, the 
Commission concluded that the meaning of the acronym might not be known 
to a sufficient number of people. Further, even those persons who might 
know what the acronyms stood for would not necessarily know why it was 
marked on the label or product. The acronym ``CPSC'' might be more 
widely recognized, but viewers still may not know why it is present. 
Further, the Commission does not want the presence of a ``CPSC'' 
marking on a label, package, or product to give the impression that the 
CPSC has tested, approved, or endorsed the product.
    The Commission also considered the statement ``Meets CPSC 
Requirements,'' but this statement did not seem very informative for 
persons who did not recognize the term ``CPSC.'' Inserting the word 
``safety'' to form the statement ``Meets CPSC Safety Requirements'' 
would convey the message that the product met some safety requirements, 
even to those persons who are not familiar with CPSC. Giving the full

[[Page 28352]]

name of the CPSC would make the statement too long to be practical in 
some cases, and the length could discourage viewers from reading the 
message. Therefore, the proposal would have the statement say ``Meets 
CPSC Safety Requirements'' to indicate that the product has been 
certified by the manufacturer or private labeler as complying with all 
applicable safety requirements enforced by CPSC.
    Proposed Sec.  1107.40(c) would allow a consumer product to bear 
the label if the manufacturer or private labeler has certified, 
pursuant to section 14 of the CPSA, that the consumer product complies 
with all applicable consumer product safety rules under the CPSA and 
with all rules, bans, standards, or regulations applicable to the 
product under any other act enforced by the Consumer Product Safety 
Commission.
    Proposed Sec.  1107.40(d) would allow a manufacturer or private 
labeler to use another label on the consumer product as long as such 
label does not alter or mislead consumers as to the meaning of the 
label described in proposed Sec.  1107.40(b). A manufacturer or private 
labeler would not be allowed to imply that the CPSC has tested, 
approved, or endorsed the product.

D. Regulatory Flexibility Act

1. Introduction

    The Commission has examined the impact of the proposed rule under 
the Regulatory Flexibility Act (5 U.S.C. 601 through 612). The 
Regulatory Flexibility Act requires agencies to analyze regulatory 
options that would minimize any significant impact of a rule on small 
entities. The Commission has conducted an initial regulatory 
flexibility analysis of the proposed rule regarding the potential 
impact on small entities.

2. Objectives and Legal Basis for Proposed Rule

    The Commission is proposing this rule to implement sections 14(a) 
and 14(d)(2)(A) and (B) of the CPSA, as amended by the CPSIA. The 
objective of the rule is to reduce the risk of injury from consumer 
products, especially from products intended for children aged 12 years 
and younger. The rule will accomplish this objective by requiring that 
manufacturers of nonchildren's products that are subject to consumer 
product safety rules develop and maintain a reasonable testing program 
that provides a high degree of assurance that their products conform to 
all the applicable safety standards. For children's products, an 
additional layer of protection is provided by requiring that certain 
testing be performed by a third party conformity assessment body. The 
proposed testing programs should allow manufacturers to discover 
noncompliant products and take the necessary corrective actions to keep 
noncompliant products from entering commerce or to remove them 
expeditiously if they have been introduced into commerce.

3. Number of Small Firms Impacted

    The number of firms that could be impacted was estimated by 
reviewing every category in the North American Industrial 
Classification System (NAICS) and selecting those firms that 
manufacture or sell any consumer product that could be covered by a 
consumer product safety rule. These firms include any establishment 
that could manufacture or sell a nonchildren's product or children's 
products. Firms are classified by an NAICS code that describes their 
primary activity. Therefore, firms that might manufacture or import 
consumer products covered by a consumer product safety rule as a 
secondary or tertiary activity might not have been counted. There is no 
separate NAICS category for importers. Firms that import product might 
be classified as manufacturers, wholesalers, or retailers.
a. Manufacturers
    According to the criteria established by the Small Business 
Administration (SBA), manufacturers are generally considered to be 
small entities if they have fewer than 500 employees. Table 2 shows the 
number of manufacturers that are classified by the NAICS categories 
that cover most children's and general use products that are subject to 
a consumer product safety rule. Although there are more than 36,000 
manufacturers that would be considered small in these categories, not 
all of these firms are engaged in manufacturing children's products or 
general use products that are subject to a consumer product safety 
rule. It would be expected that most of the firms engaged in Doll, Toy, 
and Game manufacturing produce some products that are intended for 
children age 12 and younger. On the other hand, All Other Miscellaneous 
Chemical Product and Preparation Manufacturing includes some products 
such as matchbooks and fireworks, subject to consumer product safety 
rules but also includes products, such as distilled water and hydraulic 
fluids, that are not subject to consumer product safety rules. All 
Other Miscellaneous Electrical Equipment and Component Manufacturing 
includes consumer products such as garage door openers as well as non 
consumer products such as particle accelerators. The Surgical Appliance 
and Supplies Manufacturing category includes bicycle helmets, but most 
of the other products in this category are not under CPSC jurisdiction.

                         Table 2--Manufacturers
------------------------------------------------------------------------
     NAICS code           Description       Small firms     Total firms
------------------------------------------------------------------------
31411...............  Carpet and Rug                 261             284
                       Mills.
31519...............  Other Apparel                  235             246
                       Knitting Mills
                       (Outerwear,
                       Underwear, and
                       Sleepwear).
3152................  Cut and Sew                  9,313           9,388
                       Apparel
                       Manufacturing.
3159................  Apparel                        907             920
                       Accessories and
                       Other Apparel
                       Manufacturing.
316211..............  Rubber and Plastic              52              56
                       Footwear
                       Manufacturing.
316212..............  House Slipper                    2               2
                       Manufacturing.
316219..............  Other Footwear                  68              69
                       Manufacturing.
321911..............  Wood Window and              1,241           1,297
                       Door
                       Manufacturing.
32551...............  Paint and Coating            1,042           1,093
                       Manufacturing.
325998..............  All Other Misc.                957           1,045
                       Chemical Product
                       and Preparation
                       Manufacturing.
326191..............  Plastics Plumbing              465             488
                       Fixture
                       Manufacturing.
326299..............  All Other Rubber               633             681
                       Product
                       Manufacturing.
332321..............  Metal Window and             1,071           1,138
                       Door
                       Manufacturing.
332998..............  Enameled Iron and               60              72
                       Metal Sanitary
                       Ware
                       Manufacturing.
333112..............  Lawn and Garden                117             134
                       Tractor and Home
                       Lawn and Garden
                       Equip. Mfg..
33422...............  Radio, Television              811             894
                       Broadcasting and
                       Wireless Comm.
                       Equip. Mfg..
335222..............  Household                       12              18
                       Refrigerator and
                       Home Freezer
                       Manufacturing.

[[Page 28353]]

 
335999..............  All Other Misc.                737             791
                       Electrical
                       Equipment and
                       Component Mfg..
336991..............  Motorcycle,                    456             466
                       Bicycle, and
                       Parts
                       Manufacturing.
33712...............  Household and                6,052           6,179
                       Institutional
                       Furniture
                       Manufacturing.
33791...............  Mattress                       448             462
                       Manufacturing.
339113..............  Surgical Appliance           1,601           1,691
                       and Supplies
                       Manufacturing.
33991...............  Jewelry and                  2,737           2,752
                       Silverware
                       Manufacturing.
33992...............  Sporting and                 1,886           1,930
                       Athletic Goods
                       Manufacturing.
33993...............  Doll, Toy and Game             763             776
                       Manufacturing.
339999..............  All Other                    4,440           4,499
                       Miscellaneous
                       Manufacturing.
                                         -------------------------------
    Total Manufacturers.................          36,367          37,371
------------------------------------------------------------------------
Source: U.S. Census Bureau, 2006 County Business Patterns.

b. Wholesalers
    Wholesalers would be impacted by the proposed rule if they import 
any children's products or general use products that are subject to a 
consumer product safety rule. Wholesalers that obtain their products 
strictly from domestic manufacturers or from other wholesalers would 
not be impacted by the proposed rule since the manufacturer would be 
responsible for testing and certifying the product. Table 3 shows the 
number of wholesalers by NAICS code that would cover most children's 
products and general use products that are subject to a consumer 
product safety rule. According to the SBA criteria, wholesalers are 
generally considered to be small entities if they have fewer than 100 
employees. Although there are more than 77,000 wholesalers that would 
be considered small in these categories, not all of these firms are 
engaged in importing children's or general use products that are 
subject to a consumer product safety rule. A significant proportion of 
the firms classified as Toy and Hobby Goods and Supplies Merchant 
Wholesalers probably import at least some children's products. However, 
the only firms classified as Motor Vehicle and Motor Vehicle Parts and 
Suppliers would be those that import all terrain vehicles or other off-
road vehicles, especially those intended for children age 12 years and 
younger.

                          Table 3--Wholesalers
------------------------------------------------------------------------
     NAICS Code           Description       Small firms     Total firms
------------------------------------------------------------------------
4231................  Motor Vehicle and           16,947          17,858
                       Motor Vehicle
                       Parts and
                       Suppliers.
4232................  Furniture and Home          10,534          10,981
                       Furnishing
                       Merchant
                       Wholesalers.
42362...............  Electrical and               2,147           2,269
                       Electronic
                       Appliance,
                       Television, and
                       Radio Set
                       Merchant
                       Wholesalers.
42391...............  Sporting and                 4,397           4,552
                       Recreational
                       Goods and
                       Supplies Merchant
                       Wholesalers.
42392...............  Toy and Hobby                2,170           2,248
                       Goods and
                       Supplies Merchant
                       Wholesalers.
42394...............  Jewelry, Watch,              7,735           7,815
                       Precious Stone,
                       and Precious
                       Metal Merchant
                       Wholesalers.
42399...............  Other                       10,146          10,367
                       Miscellaneous
                       Durable Goods
                       Merchant
                       Wholesalers.
42432...............  Men's and Boy's              3,235           3,393
                       Clothing and
                       Furnishings
                       Merchant
                       Wholesalers.
42433...............  Women's,                     5,965           6,186
                       Children's, and
                       Infant's
                       Clothing, and
                       Accessories
                       Merchant
                       Wholesalers.
42434...............  Footwear Merchant            1,434           1,493
                       Wholesalers.
42499...............  Other                       12,497          12,753
                       Miscellaneous
                       Nondurable Goods
                       Merchant
                       Wholesalers.
                     ---------------------------------------------------
    Total...........  ..................          77,207          79,915
------------------------------------------------------------------------
Source: U.S. Census Bureau, 2006 County Business Patterns.

c. Retailers
    Retailers that obtain all of their products from domestic 
manufacturers or wholesalers will not be directly impacted by the 
proposed rule, since the direct impact of the proposed rule would be 
experienced by the manufacturer. However, there are some retailers that 
manufacture or directly import some products and, therefore, would be 
responsible for ensuring that these products are subjected to testing 
by third party conformity assessment bodies. The number of such 
retailers is not known. Table 4 shows the number of retailers by NAICS 
code that would cover most children's products. According to the SBA 
criteria, retailers are generally considered to be small entities if 
their annual sales are less than $7 million ($27 million in the case of 
general merchandise stores). Because of the way in which the data were 
reported, Table 4 shows the total number of firms in each of the 
categories that operated all year and the number with sales of less 
than $5 million ($25 million in the case of general merchandise 
stores). Although there are more than 125,000 that would be considered 
to be small businesses in these categories, it is not known how many of 
these firms are engaged in importing or manufacturing children's or 
general use products that are subject to a consumer product safety 
rule. Many of these firms probably obtain all of their products from 
domestic wholesalers or manufacturers and would not be directly 
impacted by the rule.

[[Page 28354]]



                           Table 4--Retailers
------------------------------------------------------------------------
     NAICS Code           Description       Small firms     Total firms
------------------------------------------------------------------------
441221..............  Motorcycle, ATV,             3,969           4,001
                       and Personal
                       Watercraft
                       Dealers.
4421................  Furniture Stores..          16,282          17,542
44813...............  Children's and               2,146           2,200
                       Infant's Clothing
                       Stores.
44814...............  Family Clothing              5,998           6,240
                       Stores.
4482103.............  Children's &                   300             305
                       juveniles' shoe
                       stores.
4483................  Jewelry, luggage,           16,341          16,778
                       & leather goods
                       stores.
45111...............  Sporting goods              14,451          14,831
                       stores.
45112...............  Hobby, toy, & game           4,832           4,903
                       stores.
452.................  General                      7,387           7,494
                       Merchandise
                       Stores.
45322...............  Gift, Novelty, and          21,412          21,637
                       Souvenir Store.
453998..............  All Other Misc.             11,934          12,228
                       Store Retailers
                       (except Tobacco
                       Stores).
4542................  Vending machine              4,081           4,278
                       operators.
45439...............  Other direct                15,938          16,431
                       selling
                       establishments.
                     ---------------------------------------------------
    Total...........  ..................         125,071         128,868
------------------------------------------------------------------------
Source: U.S. Census Bureau, 2002 Economic Census, Release date 11/25/
  2005.

4. The Potential Effects of the Proposed Rule

a. Reasonable Testing Program
    The proposed rule would require any manufacturer of a nonchildren's 
product to establish a reasonable testing program for the product 
unless they test every product. Most manufacturers probably have some 
quality control programs in place that are intended to demonstrate that 
the products as manufactured meet the manufacturer's specifications, 
including their specifications for complying with any safety 
regulations. In some cases, these programs would meet the requirements 
of the reasonable testing program as described in the proposed rule. 
Other manufacturers may have to modify their current programs to ensure 
that they meet the requirements of the proposed rule. For example, some 
manufacturers might have to modify their programs to ensure that the 
testing program adequately covers all consumer product safety rules 
that are applicable to their products. Some manufacturers might have to 
increase their testing frequency. Some manufacturers might have some 
informal testing programs that would have to be formalized and better 
documented. There may also be some manufacturers that do not have a 
program in place. These firms will have to develop reasonable testing 
programs.
    Compliance with the proposed rule would require a variety of 
professional skills on the part of manufacturers. Lawyers may be 
required to review CPSC regulations in order to determine which 
regulations are applicable to a product. Depending upon the specific 
product and the safety rules that are applicable to it, people with 
knowledge of subjects such as engineering and chemistry may be required 
to develop the product specifications, conduct the certification tests, 
and to design a program for production testing. Statistical skills or 
statistical consultants may be required to determine the frequency, 
sample size, and collection method for production testing. For some 
production tests, professionals such as engineers or chemists might be 
required, depending upon the consumer product safety rules applicable 
to the product. In some cases, the production tests could be carried 
out by the firm's production workers or technicians, perhaps working 
under the supervision of an engineer, chemist, or similar professional. 
When the manufacturer does not have the internal capability to perform 
some of the required production testing, the testing may need to be 
performed by a third party testing assessment body.
    The cost to firms of complying with this provision of the proposed 
rule would depend upon the extent of the changes that firms will have 
to make to their existing testing programs. For firms that already have 
testing programs that would meet the requirements of the proposed rule, 
there could be no additional costs. For other firms, the cost of 
complying with the requirements of the proposed rule will depend upon 
several factors, including the characteristics of their products and 
the steps that the firm will have to take to comply with the 
requirements. Because of the wide variety of products and manufacturers 
that would be covered by the proposed rule and because the 
characteristics of each product and the circumstances of each firm are 
different, the Commission cannot reliably estimate the cost to 
manufacturers of the reasonable testing program requirement of the 
proposed rule. The Commission invites comments that provide more 
information on the cost and other impacts of this requirement on 
manufacturers.
b. Third Party Testing of Children's Products
    The proposed rule would establish requirements for the continued 
testing of children's products by third party conformity assessment 
bodies for certification, periodically, and when there has been a 
material change in the products design or manufacturing process, 
including the sourcing of component parts.
    Manufacturers will have to develop and maintain records that 
demonstrate compliance with the third party testing requirements. The 
Commission welcomes comment on these requirements, including comments 
on the possible burden that these recordkeeping requirements might 
impose.
    It is expected that the cost of the third party testing 
requirements could have a significant impact on a substantial number of 
small entities. The cost of third party testing is influenced by many 
factors, including the amount and skill of the labor required to 
conduct the tests, the cost of the equipment involved, the cost of 
transporting the product samples to the test facility, and the 
geographic area where the tests are conducted. Some tests require a 
substantial amount of time to conduct including the preparation of the 
sample. It might take a couple of days, for example, to test a bicycle 
for compliance with the bicycle standard (16 CFR part 1512). Similarly, 
a chemist testing the lead content of a product might be able to test 
only a few component parts a day due to the amount of time required to 
prepare the samples and to clean and calibrate the equipment between 
tests.
    It should be noted that the price that a given manufacturer pays 
for testing is often the result of negotiations between the testing 
laboratory and the

[[Page 28355]]

manufacturer. Manufacturers that do a large volume of business with a 
testing laboratory can frequently obtain substantial discounts on the 
laboratory's normal charges, whereas manufacturers that do only a small 
volume of business may not.
    Some information on the cost of third party testing for some of the 
applicable tests is provided below. The information was collected from 
a number of sources, including published price lists from some testing 
laboratories, conversations with representatives of testing 
laboratories, and actual invoices provided by consumer product 
manufacturers. The data are not based upon a statistically valid survey 
of testing laboratories. Additionally, the costs are only the costs 
that would be charged by the testing laboratory and do not include the 
costs of the products consumed in destructive tests or the cost of 
shipping the samples to the laboratories.
i. Costs Associated With Various Third Party Tests
    Lead Content and Lead-in-Paint: The cost per component part for 
testing for lead content and lead-in-paint using inductively coupled 
plasma (ICP) analysis will range from a low of about $20 per test to 
more than $100 per test. The lowest per unit cost represents a 
substantially discounted price charged to a particular customer by a 
laboratory in China and might not be typical. Within the United States, 
typical prices range from around $50 to more than $100 per test.
    The cost of testing for lead content using XRF technology is 
significantly less expensive. Some firms have offered to screen 
products for lead content for as little as $2 per test. These offers 
were generally directed to stores or businesses that wanted to check 
their inventory for conformity with the retroactive lead content 
requirements that were contained in the CPSIA. Some testing 
laboratories will charge for XRF testing at an hourly rate, which can 
be around $100. Ten to 30 components parts can be tested in an hour. 
However, with the exception of some plastics, XRF is not acceptable for 
all certification purposes.
    Phthalates: The cost of testing for phthalate content will range 
from around $100 (a discounted price by a laboratory in China) to about 
$350. These are the costs per component part and include testing for 
all six of the prohibited phthalates specified in the CPSIA.
    Bicycle Standard: According to one testing laboratory, it takes 1 
to 2 days to test a bicycle. The estimated price for testing one 
bicycle may range from around $700, if the testing is performed in 
China, to around $1,100 if the testing is performed in the United 
States. A manufacturer that needs several models of bicycle tested at 
the same time might be able to obtain discounts from these prices. 
However, this does not include the testing of component parts for lead 
and phthalates, which would add to the costs of bicycle testing.
    Bicycle Helmets: One laboratory quoted a price of $600 for testing 
one model of a bicycle helmet to the CPSC bicycle helmet standard. A 
price list from another laboratory stated that conducting the 
certification testing to the Snell Foundation's bicycle helmet standard 
(which is similar to the CPSC standard, but considered by some to be 
more stringent) was $830.
    Full-Size Cribs: As with bicycles, testing cribs requires a 
substantial amount of labor time to assemble the crib, take the 
appropriate measurements and perform the required tests. The cost of 
testing a full-size crib will be around $1,200 in the United States. 
The cost can vary depending on the features of the individual cribs 
that require testing and between laboratories. Some manufacturers might 
receive discounted prices. This does not include testing the crib for 
lead and phthalates, which, to the extent necessary, would add to the 
cost of testing a crib to all applicable safety rules.
    Toys: The ASTM F963 toy standard was made a mandatory standard by 
the CPSIA. The standard includes a wide variety of tests, including 
tests for soluble heavy metals in surface coatings and for various 
physical and mechanical criteria. Based on the itemized prices on 
several invoices from testing laboratories that have been provided to 
CPSC staff or otherwise made public, the cost of the physical and 
mechanical tests range from about $50 to $245. The cost of the chemical 
test for the presence of heavy metals ranges from about $60 to $190 per 
surface coating. Again, these costs do not include testing for lead and 
phthalates, which add to the total cost.
    The flammability requirements of ASTM F963 were not made mandatory 
by the CPSIA, but the Commission was directed to examine the 
flammability requirements and consider promulgating rules addressing 
the issue. If some flammability tests are eventually required, the cost 
per test could be in the range of $20 to $50 based on some observed 
costs for the ASTM F963 flammability tests.
ii. Cost of Third Party Testing by Product
    The cost to obtain the required third party testing for a product 
depends on the types and number of tests that must be performed on each 
product, the size of the sample that is required to provide a high 
degree of assurance that the products comply with the applicable safety 
rules, and the extent to which component part testing can be used. 
Because of the wide variety of manufacturers, and importers, and 
products that would be affected by the proposed rule, we cannot provide 
comprehensive estimates of the impact of the proposed rule on all 
products or firms. The discussion immediately below is intended to 
provide some perspective on the potential impact. The Commission 
invites additional public comments on the discussion and more specific 
information on the impact and cost of the third party testing 
requirements of the proposed rule.
    The third party testing costs discussed in this section apply to 
the costs associated with either the periodic testing requirement or 
the requirement that additional third party testing be conducted if 
there is a material change in the product's design or manufacturing 
process. However, in the latter case, the testing might be limited to 
those rules where compliance might have been impacted by the change.
    Number of units for testing: The proposed rule would require the 
manufacturer to submit enough units to the conformity assessment body 
to provide a high degree of assurance that the products comply with the 
applicable consumer product safety rules. The exact number will depend 
upon the characteristics of the product, the lot size, whether the 
tests produce quantitative or qualitative data, whether the product has 
an established reasonable testing program, and the interpretation of a 
high degree of assurance. A discussion of the statistical aspects of 
designing a sampling plan was presented by Dr. Michael Greene of the 
CPSC staff at the Product Testing Workshop on December 10, 2009.
    Quantitative testing data is data where the relevant variable can 
be measured with some degree of precision. For example, the lead 
content of a substance can be measured in terms of parts per million 
(ppm). Qualitative data is where the outcome of a test is simply a 
``pass'' or ``fail.'' For example, in a drop test the result might 
simply be whether a sharp edge was exposed (a ``fail'') or a sharp edge 
was not exposed (a ``pass''). When the data is qualitative, the sample 
size

[[Page 28356]]

will usually have to be larger than when the data is quantitative.
    For example, as of August 14, 2011 the lead content of children's 
products must be no greater than 100 ppm unless the Commission 
determines that a limit of 100 ppm is not technologically feasible for 
a product or product category. If, for illustrative purposes, a high 
degree of assurance means at least a 95 percent probability that all 
products are in compliance and a manufacturer is testing a component 
part for lead content, then the manufacturer could determine the 
appropriate sample size if it knew the mean lead content of the 
component part, the standard deviation about the mean, and the size of 
the lot that was to be tested. Table 5 shows the sample sizes that 
would be required to provide a high degree of assurance for different 
lot sizes by mean and standard deviation (assuming a normal 
distribution). Larger sample sizes would be required for products with 
higher means, larger standard deviations, and larger lot sizes. Smaller 
sample sizes would be required for products with lower means, standard 
deviations and lot sizes.

 Table 5--Sample Sizes Required To Provide at Least 95 Percent Probability That the Lot is Compliant (Given the
                                     Availability of Quantitative Test Data)
----------------------------------------------------------------------------------------------------------------
                                                                                                Probability that
             Mean (ppm)                    Standard       Lot size (units)     Sample size         the lot is
                                       deviation (ppm)                           (units)           compliant
----------------------------------------------------------------------------------------------------------------
10..................................                  1              1,000                  4               .998
10..................................                  1              2,500                  4               .995
10..................................                  1             10,000                  4               .992
10..................................                  1             25,000                  5               .978
10..................................                  1             50,000                  5               .957
15..................................                  3              1,000                  5               .993
15..................................                  3              2,500                  5               .983
15..................................                  3             10,000                  6               .992
15..................................                  3             25,000                  6               .981
15..................................                  3             50,000                  6               .962
35..................................                  5              1,000                  6               .965
35..................................                  5              2,500                  7               .976
35..................................                  5             10,000                  8               .972
35..................................                  5             25,000                  9               .978
35..................................                  5             50,000                  9               .957
----------------------------------------------------------------------------------------------------------------

    Where only qualitative (e.g., pass/fail) testing data is available, 
the sample sizes needed to provide a high degree of assurance will be 
higher than those in Table 5. Such tests include some of the use and 
abuse tests for testing children's products (e.g., the drop test). As 
discussed by Dr. Michael Greene at the CPSIA Product Testing Workshop, 
more samples may be necessary because there is more uncertainty in the 
test data. In other words, with only pass/fail data, it is not known if 
the result was close to the threshold or far from the threshold. In 
these cases, it might be necessary to define a high degree of assurance 
as a probability that no more than a given proportion of noncompliant 
products. For example, as discussed by Dr. Greene at the Product 
Testing Workshop, a 95 percent probability that no more than a certain 
proportion ``p'' of the units in a lot do not comply is approximately 
given by the formula p [ap] 3/k, where ``k'' is the sample size. Thus, 
if 50 items were tested and no noncompliant items were found, there is 
a 95 percent probability that no more than 6 percent of the items in 
the lot do not comply. In other words, if the lot size were 1,000 and 
50 units were tested and no noncompliant product were found, there is a 
95 percent probability that no more than 60 units in the entire lot are 
not in compliance. If the lot size were 10,000 units, there would be a 
95 percent probability that no more than 600 of the products would be 
noncompliant. If a higher level of assurance were required, the sample 
size would have to be larger. If a lower level of assurance were 
acceptable the sample size could be smaller.
    The examples in Table 5 illustrate the disproportionate impact that 
the proposed rule could have on small businesses or businesses with 
low-volume products. In the first example in Table 5, the same number 
of units would have to be submitted to a third party testing conformity 
assessment body whether 1,000 units or 10,000 units were in the lot. In 
other words, the total third party testing costs would be the same, but 
the cost per unit for a manufacturer producing only 1,000 units would 
be 10 times the cost per unit for a manufacturer producing 10,000 
units.
    The examples in table 5 also illustrate the potential that 
component part testing could offer for reducing the cost of testing. 
For example, assume a manufacturer produces five products in lots of 
10,000 units, but uses a common component part on each of the products 
that it purchases in lots of 50,000. The manufacturer could conduct the 
applicable chemical tests on the component part rather than on the 
finished product. If, following the sample sizes in Table 5, the mean 
of the component was 10 and the standard deviation was 1, this would 
reduce the cost of testing that component part by a factor of four over 
the cost that would apply if only tests on the finished product were 
acceptable. This is because without component part testing, the 
manufacturer would have to conduct tests on the component part as it 
was used in each of the five products. If each product were produced in 
lots of 10,000 units, this would amount to four tests on the component 
for each product or 20 total tests on the same component part. With 
component part testing, the manufacturer could simply conduct the tests 
on the component part, which was assumed to be purchased in a lot of 
50,000 units, which would only require five tests of the component to 
provide a 95 percent probability that all of the units in the lot were 
in compliance.
    Random Samples: The proposed rule would require that samples for 
periodic testing for children's products be selected randomly. A random 
sample is one in which each unit has an equal chance of being included 
in the sample. The proposed rule would specify that each unit produced 
or imported by the firm since the last random sample was drawn must 
have an equal chance of being selected. There will be some

[[Page 28357]]

additional cost associated with selecting a random sample rather than a 
convenience sample. The Commission invites comments on this proposed 
provision and is especially interested in comments describing the cost 
or other burdens that this proposed provision would impose.
iii. Hypothetical Product Testing Examples
    To provide some information on what the magnitude of the third 
party testing costs may be for some manufacturers of children's 
products, this section discusses the potential cost of conducting third 
party testing for two product categories: Bicycles and toys. These 
examples are hypothetical and are intended to illustrate some potential 
cost implications of the proposed rule but might not be representative 
of every manufacturer in each category. The costs per test that are 
assumed in the examples can vary significantly. The Commission invites 
any comments that provide better information on the potential impacts 
on individual manufacturers.
    Bicycles: Children's bicycles must be tested for compliance with 
the CPSC bicycle standard, which was estimated above to cost between 
$700 and $1,100. Additionally, the paint used on the bicycle must be 
tested for compliance with the lead-in-paint standard and the 
accessible component parts on the bicycle must be tested for lead 
content. The number of paints and component parts that require testing 
can vary among different models, but information provided by CPSC 
Compliance staff suggests that 75 components parts might be a 
reasonable estimate for the average. This example will use estimates in 
the middle of these ranges for the testing costs discussed above and 
assume that the cost of testing to the bicycle standard is $900 and the 
cost for testing a component part for lead content is $50. It is 
further assumed that quantitative data is available for all applicable 
tests and that the variation is low enough that testing four units will 
provide the high degree of assurance desired that products comply with 
the applicable safety rules. To the extent that some of the tests in 
the bicycle standard might be qualitative in nature, the sample size 
for testing would need to be larger.
    If component part testing is not available to this manufacturer, 
the cost of testing the bicycle to each applicable safety rule one time 
would be about $4,650 (testing to the bicycle standard itself at $900 
and testing 75 components parts for lead content). If a sample of four 
units were required to be tested to provide the required high degree of 
assurance, then the cost of the third party testing to the manufacturer 
would be $18,600.
    The manufacturer in this example might be able to reduce the 
testing costs with component part testing if some of the components 
parts were used on more than one model. If component part testing 
reduced the cost of the lead content testing by this manufacturer by a 
factor of four, then the cost of testing to the bicycle standard itself 
would still be $900, but the average cost of testing the lead content 
of the component parts would be reduced to $12.50 per component part. 
Therefore the cost of testing the bicycle once would be $1,837.50. The 
cost to test four units to provide the required high degree of 
assurance would be $7,350.
    The total cost of the third party testing to the manufacturer would 
depend upon the number of youth model bicycles that the manufacturer 
offered. If the manufacturer had five different models, and if 
component part testing could reduce the costs of the lead-content 
testing by a factor of four, the total cost of the third party testing 
to the firm would be about $36,750.
    Toys: Toys are subject to the requirements for lead and phthalate 
content, and to several physical and mechanical requirements, including 
the requirements of ASTM F963, which was made a mandatory standard by 
the CPSIA. In this example, it is assumed that the testing costs are at 
the low to middle part of the ranges and that the hypothesized toy 
contains one metal component part that must be tested for lead content 
using ICP analysis (at $50) and two plastic component parts for which 
XRF analysis can be used for determining the lead content (two tests at 
$6 each). The plastic component parts also must be tested for phthalate 
content (two tests at $225 each). Additionally, it is assumed that the 
toy contains four different paints that must be tested for both lead 
content ($50/test) and soluble heavy metals ($125/test). Finally, it is 
assumed that the toy is subject to some mechanical requirements that 
include use and abuse testing for which only qualitative data is 
available at $50 per test. Thus, the cost of testing this toy for 
compliance to each applicable rule one time would be $1,262: $1,212 is 
associated with the chemical (lead, heavy metal, and phthalate) testing 
and $50 is associated with the mechanical testing (including use and 
abuse testing).
    If the means and standard deviations of the lead, heavy metal, and 
phthalate contents of all of the product components parts are 
sufficiently low that testing four units could statistically provide 
the required high degree of assurance, then the cost the chemical 
testing for this toy would be $4,848 ($1,212 x 4). If the means or 
standard deviations of the lead, heavy metal, or phthalate content were 
higher, which is likely the case for some materials, more units might 
have to be tested to provide the required high degree of assurance and 
the resulting cost would also be higher.
    Because the testing data for mechanical requirements are 
qualitative in nature, the number of units that might have to be tested 
to provide the required high degree of assurance would be more than 
required for the chemical tests. If a high degree of assurance were 
considered to be a 95 percent probability that no more than 6 percent 
of the units in the lot did not comply, then 50 units would have to be 
tested. In this case, the cost of mechanical testing would be $2,500 
($50 x 50).
    Combining the cost of the chemical tests and the cost of the tests 
for mechanical or physical requirements, the total cost to this 
hypothetical manufacturer to obtain the required high degree of 
assurance that the products complied with all applicable safety rules 
would be $7,348. If, as in the bicycle example, component part testing 
could be used to reduce the cost of the chemical testing by a factor of 
four, then the total cost of testing the toy could be reduced to $3,712 
($4,848/4 + $2,500).
    Again, the total cost to the manufacturer would depend upon factors 
such as the complexity of the products, the variation in the materials 
used, the opportunities to use component part testing, and the number 
of different toys that were offered. For example, if the manufacturer 
offered five similar toys and the third party testing costs were 
similar for each toy and component part testing allowed the 
manufacturer to reduce the costs of chemical testing by a factor of 
four, the total cost to the manufacturer for testing the toys would be 
$18,560. The annual cost would be higher if the testing had to be 
repeated more than once annually or there were material changes in the 
design of the products or production processes during the year.
iv. Impact of Third Party Testing on Firms
    Whether such costs would have a substantial adverse impact on a 
firm depends upon the individual circumstances of the firm. One factor 
that can give an indication of whether something will have a 
significant impact is the magnitude of the impact in

[[Page 28358]]

relation to the revenue of the firm. A typical profit rate is about 5 
percent of revenue. In other words, for every $1 of revenue, only 5 
cents might remain after paying all expenses. Therefore, a new cost 
that amounted to 1 percent of revenue could, all other things equal, 
reduce the profit by 20 percent and might be considered to be a 
significant impact by some firms. This would be consistent with what 
some other agencies consider to be significant. OSHA, for example, 
considers an impact to be significant if the costs exceed 1 percent of 
revenue or 5 percent of profit.
    Using the toy example above, with component part testing, if the 
third party testing costs were spread over 10,000 units, the cost of 
the testing would be about $0.37 per unit ($3,712/10,000). According to 
a toy industry representative, the average retail price of a toy is 
about $8. However, depending upon the channels of distribution and the 
practices in the particular market or industry, the price that a 
manufacturer receives for a product can be less than half of what the 
product eventually sells for at retail. Therefore, if the manufacturer 
received $4 for the toy that cost $0.37 per unit to test, the third 
party testing costs would be 9.2 percent of revenue ($0.37/$4) and 
could exceed the expected profit. Even if the manufacturer received $30 
per unit for the toy (which might indicate a retail price of around $60 
or more), the third party testing cost would still exceed 1 percent of 
the revenue per unit and might be considered to be a significant 
impact.
    It is possible that the impact could be reduced if the manufacturer 
had an established reasonable testing program that met the requirements 
of the proposed rule. In such cases, manufacturers would be required to 
conduct periodic third party tests per rule at least once every two 
years rather than at least once a year. For example, if the 
hypothetical manufacturer of the toy used in the above example had a 
reasonable testing program and determined that obtaining one periodic 
third party test per applicable rule were sufficient, and the annual 
production volume were 10,000 units, then the per unit testing cost 
(without any component testing) would be about $0.06 ($1,262/20,000). 
(However, it should be noted that testing a product for compliance with 
each applicable rule one time is likely to require that the 
manufacturer submit more than one sample of the product to the testing 
laboratory. This is because some required tests cannot be performed on 
the same sample that has been used for another test. For some chemical 
tests, it may be necessary to use more than one sample of the product 
to obtain enough of a component to test.) If the manufacturer received 
$4 for each unit, then the periodic third party testing costs would 
amount to about 1.5 percent of revenue ($0.06/$4), which still could be 
considered to be a significant impact. If component part testing 
reduced the cost of the chemical tests by a factor of four, then the 
cost of the periodic third party testing could be reduced to $353 ($50 
+ $1,212/4) or about $0.02 per unit, if 10,000 units were produced 
annually and third party testing were conducted only once every two 
years. This would be about 0.5 percent of revenue if the manufacturer 
received $4 for each unit, which might not be considered significant. 
If the production volume were lower or the revenue per unit received by 
the manufacturer were lower, the impact would be greater. If the 
production volume were higher or the revenue per unit received by the 
manufacturer were higher, then the impact of the third party testing 
requirement would be lower.
    It should be noted that the only cost considered in this 
hypothetical example is the cost of the third party testing. Any 
additional costs associated with in-house periodic testing or a 
reasonable testing program would be in addition to these costs and 
increase the impact, as would any additional third party testing costs 
associated with material changes in the product's design, the 
manufacturing processes, or the sourcing of component parts. Other 
costs that were not considered were the cost of the samples consumed in 
the testing and the cost of shipping the samples to the third party 
conformity assessment body.
v. Caveats and Possible Market Reactions to Third Party Testing 
Requirements
    Manufacturers can be expected to react to a significant increase in 
their costs due to testing requirements in several ways. Some 
manufacturers might attempt to redesign their products to reduce the 
number of tests required, by reducing the features or the number of 
components parts used in their products. Manufacturers could also be 
expected to reduce the number of children's products that they offer 
or, in some cases, exit the market for children's products entirely. 
Some may go out of business altogether.
    The requirement for third party certification testing could be a 
barrier to new firms entering the children's product market, unless 
they expect to have relatively high volume products. This could be 
especially important for firms that expected to serve a niche market, 
including products intended for children with special needs. The 
requirement for third party testing when there is a material change in 
a product's design or manufacturing process could cause some small or 
low-volume manufacturers to forgo or delay implementing some 
improvements to a product's design or manufacturing process in order to 
avoid the cost of the third party testing.
    The cost of testing some toys and other children's products could 
be higher than those in the above examples. The cost would be higher, 
for example, for products that had more components parts or where the 
variability in the test results was greater, which would require more 
samples to be tested. The cost of testing would also be higher if there 
was less opportunity for component part testing. The cost of testing 
could be lower for products that were subject to fewer safety rules or 
that contained fewer component parts. For some apparel articles, for 
example, the only tests required might be for lead content on some 
components parts for which component part testing might be permissible.
    Although the above examples illustrate the potential for component 
part testing to reduce the costs of testing, it might not be an option 
for all products or manufacturers. Component part testing is most 
likely to be an option for component parts that are common to multiple 
products (e.g., paints, bolts of a standard size). The potential for 
component part testing to reduce the cost of testing would be less for 
products that have component parts that are unique to that product.

5. Protection Against Undue Influence

    The proposed rule would require all manufacturers of children's 
products to establish procedures to prevent attempts to exercise undue 
influence on a third party conformity assessment body and to report to 
the Commission immediately of any attempt by any interested party to 
exert undue influence over test results, and that employees are aware 
that they may report any allegations of undue influence to the 
Commission confidentially. There would be some cost to firms to develop 
the materials or training programs to comply with these requirements. 
The Commission invites comments from the public providing information 
on the cost and other impacts of this provision.

[[Page 28359]]

6. Consumer Product Labeling Program

    The consumer product labeling program that would be established by 
the proposed rule would allow firms to label any product that complies 
with the certification requirements for the product with a label that 
states that the product ``Meets CPSC Safety Requirements.'' This 
provision is not expected to have a significant impact on firms because 
the program is voluntary and the costs of adding or modifying a label 
on a product are expected to be low.

7. Summary of Impact on Small Businesses

    The proposed rule, if finalized, could have a significant adverse 
impact on a substantial number of small businesses. The provisions of 
the proposed rule that are expected to have the most significant impact 
are provisions related to requirements for the third party testing of 
children's products with and without a reasonable testing program. The 
impact of the proposed rule would be expected to be disproportionate on 
small and low-volume manufacturers. This is because testing costs are 
relatively fixed. Therefore, the per unit impact of testing costs will 
be greater on low-volume producers than on high- volume producers.
    The provisions of the proposed rule that would require 
manufacturers of nonchildren's products to establish and maintain a 
reasonable testing program also could have an adverse impact on some 
manufacturers. The impact of these provisions are expected to be less 
significant than the impact of the provisions related to children's 
products because many manufacturers are believed to already have at 
least some quality assurance or testing programs in place. The 
provisions related to the proposed requirement for a reasonable testing 
program are intended to provide manufacturers with a high degree of 
flexibility in designing and implementing the programs, which would 
also serve to reduce the potential impact on a firm.
    The other requirements in the proposed rule for protection against 
undue influence over a conformity assessment body and the consumer 
product labeling program are less likely to have a significant adverse 
impact on a substantial number of small businesses. The Commission 
invites comments on these provisions.

8. Federal Rules Which May Duplicate, Overlap, or Conflict With the 
Proposed Rule

    The proposed rule would establish the minimum requirements for 
testing and certification of consumer products. Some individual 
consumer product safety rules contain specific testing requirements. 
Manufacturers would be expected to meet the more stringent requirements 
whether they are the provisions of this proposed rule or the 
requirements in the specific safety rule. However, the rules would not 
require manufacturers to duplicate their efforts to comply with both 
sets of requirements. Testing and recordkeeping required to comply with 
the more stringent rule would also meet the requirements of the less 
stringent rule. Manufacturers will not be required to duplicate tests 
or recordkeeping to comply with both sets of rules. There are no known 
Federal rules that conflict with the proposed rule.

9. Alternatives for Reducing the Adverse Impact on Small Businesses

    The Commission recognizes that the proposed rule could have a 
significant and disproportionate impact on small and low-volume 
manufacturers. The Commission has incorporated some provisions into the 
proposed rule that are intended to lessen the impact on small 
businesses. These include some relief from the periodic testing 
requirement for children's products, the ability to use component part 
testing (which would be addressed by a separate Commission rule 
elsewhere in this issue of the Federal Register). The Commission 
invites comments on these provisions and other provisions or 
alternatives that could lessen the adverse impact on small or low-
volume businesses.
    The Commission is proposing that manufactures that have implemented 
reasonable testing programs that meet the requirements contained in the 
proposed rule would be obligated to conduct third party periodic tests 
at least once every two years instead of at least once every year if 
they have not implemented reasonable testing programs. This provision 
could significantly reduce the third party periodic testing costs of 
manufacturers that have such programs. However, the reduction could be 
limited for firms that do not have the ability to conduct the tests in-
house, for importers that do have significant control over the actual 
production of their products, and for manufacturers who might have more 
frequent material changes in their products' designs, manufacturing 
processes, or sourcing of component parts. The Commission invites 
comment on this provision, including whether this provision would 
provide sufficient relief to enough firms to maintain this provision in 
the final rule.
a. Partial Exemption From Periodic Testing
    The proposed rule would require that all children's products be 
tested periodically by a third party conformity assessment body and 
establishes one year as the maximum interval between third party 
periodic tests if the manufacturer does not have a reasonable testing 
program and two years if the manufacturer does have a reasonable 
testing program. However, if fewer than 10,000 units of a product have 
been manufactured or imported since the last time the product was 
submitted to a third party conformity assessment body, the manufacturer 
would not be subject to the periodic testing requirements unless 10,000 
units have been manufactured or imported. This provision would allow 
low-volume manufacturers to spread their periodic testing costs over 
more units. The exemption would not relieve the manufacturer from the 
obligation to have the product tested by a third party conformity 
assessment body before the product is introduced into commerce, or when 
there has been a material change in the product's design or production 
processes, nor would the exemption extend beyond the initial exemption 
for the first 10,000 units.
b. Component Testing
    The proposed rule would allow firms to submit component parts for 
third party testing when the required testing does not need to be 
performed on the finished product. This can reduce the cost to 
manufacturers particularly where one component part might be common to 
more than one product. Such component parts might include paints, 
polymers used in molding different parts, and standard-sized bolts. In 
these cases the component parts might be received in larger lots than 
the production lots of the products in which they are used. Therefore, 
the testing costs for those component parts will be spread over more 
units than if they were required to be tested on the finished products.

10. Alternatives That May Further Reduce the Impact on Small Businesses

    The Commission also invites comments on other alternatives that 
could provide some relief to small businesses that would be adversely 
impacted by the proposed rule. Alternatives could include things such 
as: (1) The establishment of different compliance or reporting 
requirements that take into account the resources available to small 
businesses; (2) the clarification, consolidation, or

[[Page 28360]]

simplification of compliance and reporting requirements for small 
entities; (3) the use of performance rather than design standards; and 
(4) an exemption from coverage of the rule, or any part of the rule 
thereof, for small entities to the extent statutorily permissible under 
section 14 of the CPSA. In providing such comments, the Commission 
requests that the comments provide specific suggestions and well 
developed justifications for the suggestions. Some possible 
alternatives that could be considered are discussed below.
a. Less Stringent Requirements for Third Party Testing
    The proposed rule would require that enough third party tests be 
conducted to provide a high degree of assurance that the products 
comply with the applicable rules. This could require most manufacturers 
to submit multiple samples for third party testing each year, 
especially if they have not implemented a reasonable testing program. 
However, the Commission could adopt an alternative that would limit the 
number of samples required for third party testing. For example, the 
Commission could simply require that manufacturers submit sufficient 
samples to a third party conformity assessment body so that compliance 
with each rule could be assessed at least once annually.
    The proposed rule would require that periodic third party testing 
be conducted at least once a year or at least once every two years if 
the manufacturer has established a reasonable testing program. A year 
was chosen as the maximum interval between periodic testing because 
many children's products are produced on an annual or seasonal cycle, 
but, in the case of manufacturers with reasonable testing programs, the 
Commission believed that the information about the products provided 
the manufacturer by the internal testing programs could substitute for 
some third party tests. The Commission could, however, consider a 
different maximum interval between the periodic tests. For example, the 
Commission could consider requiring that third party tests be conducted 
at less frequent or more frequent intervals.
    The advantage of less stringent requirements is that they could 
significantly reduce the cost of the third party testing requirement. 
The disadvantage is that the testing would provide less information 
about whether all of the products produced were in compliance with the 
applicable safety rules. Requiring third party tests more frequently 
would provide additional assurance that the products comply with the 
applicable safety rules. However, this would also increase the costs 
associated with third party testing.
    The Commission invites comments on these and similar alternatives. 
For example, should the Commission consider a less stringent 
requirement? If so, what should the alternative requirement be? Should 
the less stringent requirement apply to all manufacturers or only those 
that meet certain criteria, such as to small or low-volume 
manufacturers?
b. Limits on Third Party Testing for Small or Low-Volume Manufacturers
    The Commission could consider additional alternatives that would 
provide relief to small or low-volume manufacturers. Substantial relief 
could be provided to small or low-volume manufacturers. The Commission 
invites comments on third party testing limits for small or low-volume 
manufacturers that still meet statutory requirements of section 14(d) 
of the CPSA. In providing such comments, it is important to note that 
the Commission cannot exempt small or low-volume manufacturers of 
children's products from initial third party certification testing to 
applicable standards, regulations, or bans or from third party testing 
when there is a material change to the product and has already 
specified limits on periodic testing where a manufacturer produces less 
than 10,000 units of a particular product. The Commission seeks 
comments on additional alternatives that may provide testing cost 
relief to small or low-volume manufacturers while still satisfying the 
testing and compliance requirements of section 14(d) of the CPSA.
c. Alternative Test Methods for Small or Low-Volume Manufacturers
    Some small manufacturers have encouraged the Commission to allow 
alternative test methods such as those relying on XRF technology. XRF 
testing methods are significantly less expensive than the ICP analysis 
that the Commission currently requires for most lead content testing 
(with the exception of homogenous polymer products). The Commission 
staff uses XRF for screening samples.
    The Commission invites comments on the possibility of using 
alternative testing technologies for reducing the burden on small and 
low-volume manufacturers. For example, could the Commission allow small 
or low-volume manufacturers to use less expensive, but potentially less 
accurate third party testing methods? If so, under what conditions?

E. Paperwork Reduction Act

    This proposed rule contains information collection requirements 
that are subject to public comment and review by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 through 3520). We describe the provisions in this 
section of the document with an estimate of the annual reporting 
burden. Our estimate includes the time for reviewing instructions, 
gathering and maintaining the data needed, and completing and reviewing 
each collection of information.
    We particularly invite comments on: (1) Whether the collection of 
information is necessary for the proper performance of the CPSC's 
functions, including whether the information will have practical 
utility; (2) the accuracy of the CPSC's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques, when 
appropriate, and other forms of information technology.
    Title: Testing and Labeling Pertaining to Product Certification.
    Description: The proposed rule would implement section 102(b) of 
the CPSIA, which requires certifications of compliance with safety 
standards for each product subject to a consumer product safety rule, 
ban, standard, or regulation promulgated and/or enforced by the CPSC. A 
certification that a nonchildren's product complies with applicable 
consumer products safety rules, bans, standards, and regulations must 
be supported by a reasonable testing program or a test of each product. 
A certification that a children's product complies with the applicable 
children's product safety rules must be supported by testing performed 
by an approved third party conformity assessment body. The proposed 
rule would impose recordkeeping requirements related to those testing 
and certification requirements. The recordkeeping requirements are 
intended to allow one to uniquely identify each product and establish 
that it was properly certified before it enters commerce and has been 
properly retested for conformity with all applicable rules on a 
continuing basis, including after a material change in the product's 
design or manufacturing

[[Page 28361]]

processes, including the sourcing of component parts.
    Each manufacturer or importer of a consumer product subject to an 
applicable safety rule would be required to establish and maintain the 
following records:
     A copy of the certificate of compliance for each product. 
In the case of nonchildren's products, the required certificate is a 
general conformity certificate. In the case of children's products, the 
certificate must be based upon testing by a third party conformity 
assessment body. (Proposed Sec. Sec.  1107.10(a)(5)(i)(A), 
1107.26(a)(1))
     For nonchildren's products, a record of each product 
specification, including any new product specification resulting from 
remedial action. (Proposed Sec.  1107.10(a)(5)(i)(B) and (E))
     Records of each certification test, including 
identification of the third party conformity assessment body, if any, 
that conducted the test. (Proposed Sec. Sec.  1107.10(a)(5)(i)(C), 
1107.26(a)(2))
     Records of the production testing and periodic test plans 
and results. (Proposed Sec. Sec.  1107.10(a)(5)(i)(D), 1107.26(a)(3))
     For children's products, records relating to all material 
changes. (Proposed Sec.  1107.26(a)(4))
     Records of all remedial actions taken. (Proposed 
Sec. Sec.  1107.10(a)(5)(i)(E), 1107.26(a)(6))
     For children's products, records of undue influence 
procedures. (Proposed Sec.  1107.26(a)(5))
    Description of Respondents: The recordkeeping requirements 
contained in this proposed rule would apply to all manufacturers or 
importers of consumer products that are covered by one or more consumer 
product safety rules promulgated and/or enforced by the CPSC. The CPSC 
reviewed every category in the NAICS and selected those that included 
firms that could manufacture or sell any consumer product that could be 
covered by a consumer product safety rule. Using data from the U.S. 
Census Bureau, we determined that there were over 37,000 manufacturers, 
almost 80,000 wholesalers, and about 128,000 retailers in these 
categories. However, not all of the firms in these categories 
manufacture or import products that are covered by consumer product 
safety rules. Therefore, these numbers would constitute a high estimate 
of the number of firms that are subject to the recordkeeping 
requirements.
    Estimate of the Burden: The hour burden of the recordkeeping 
requirements will likely vary greatly from product to product depending 
upon such factors as the complexity of the product and the amount of 
testing that must be documented. CPSC staff does not have comprehensive 
data on the universe of products that will be impacted. Therefore, 
estimates of the hour burden of the recordkeeping requirements are 
somewhat speculative. The CPSC invites comments that can provide more 
information about the number of hours required for the recordkeeping 
requirements of the proposed rule.
    Previously, the CPSC staff estimated that the recordkeeping burden 
of the mattress open flame flammability standard would be about one 
hour per model (prototype) per year. Many of the recordkeeping 
requirements in that standard are comparable to the requirements in 
this proposed rule. However, that rule concerned only the recordkeeping 
requirements for one rule (mattress flammability) while manufacturers 
of children's products will frequently have to document their 
compliance with more than one product safety rule (e.g., lead-in-paint, 
lead content, phthalates, and some product specific rules, such as the 
ASTM F963 toy standard). Therefore, one can assume the burden of the 
proposed rule could be twice the hour burden of the recordkeeping 
required for the mattress flammability rule. (Information on the 
product safety rules that apply to different consumer products can be 
found at http://www.cpsc.gov/businfo/regsbyproduct.html.)
    According to a representative of a trade association, there are an 
estimated 50,000 to 60,000 individual toys on the market. It is likely 
that there are at least that many other children's products in product 
categories such as wearing apparel, accessories, jewelry, juvenile 
products, children's furniture, etc. Additionally nonchildren's 
products that are subject to product safety rules include paints, 
nonmetal furniture (for lead-in-paint), all-terrain vehicles, bicycles, 
and bunk beds. Therefore, we estimate that there are approximately 
100,000 to 150,000 individual products to which the recordkeeping 
requirements would apply.
    Assuming the annual recordkeeping burden per product will be two 
hours and that there are between 100,000 and 150,000 products to which 
the recordkeeping requirements would apply, the total hour burden for 
the recordkeeping requirements is estimated to be between 200,000 and 
300,000 hours.
    The total cost burden of the recordkeeping requirements is expected 
to be between $9.8 and $14.7 million. This estimate is obtained by 
multiplying the total burden hours by $48.91, which is the total hourly 
compensation for private sector workers in management, professional, 
and related occupations. The recordkeeping requirements are not 
expected to result in any additional cost to the Federal government. 
The CPSC will likely request access to these records only when it is 
investigating potentially defective or noncomplying products. 
Investigating potentially defective or noncomplying product is a 
regular ongoing activity of the Commission. It is anticipated that 
access to the records required by this rule will make it easier for the 
investigators to narrow the scope of their investigations to particular 
production or import lots.
    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), we have submitted the information collection requirements of 
this rule to OMB for review. Interested persons are requested to fax 
comments regarding information collection by June 21, 2010, to the 
Office of Information and Regulatory Affairs, OMB (see ADDRESSES).

F. Environmental Considerations

    This proposed rule falls within the scope of the Commission's 
environmental review regulations at 16 CFR 1021.5(c)(2) which provides 
a categorical exclusion from any requirement for the agency to prepare 
an environmental assessment or environmental impact statement for 
product certification rules.

G. Executive Order 12988

    Executive Order 12988 (February 5, 1996), requires agencies to 
state in clear language the preemptive effect, if any, of new 
regulations. The proposed regulation would be issued under authority of 
the CPSA and the CPSIA. The CPSA provision on preemption appears at 
section 26 of the CPSA. The CPSIA provision on preemption appears at 
section 231 of the CPSIA. The preemptive effect of this rule would be 
determined in an appropriate proceeding in by a court of competent 
jurisdiction.

H. Effective Date

    The Commission is proposing that any final rule based on this 
proposal become effective 180 days after its date of publication in the 
Federal Register.

List of Subjects in 16 CFR Part 1107

    Business and industry, Children, Consumer protection, Imports, 
Product testing and certification, Records, Record retention, Toys.
    Accordingly, the Commission proposes to add 16 CFR part 1107 to 
read as follows:

[[Page 28362]]

PART 1107--TESTING AND LABELING PERTAINING TO PRODUCT CERTIFICATION

Subpart A--General Provisions
Sec.
1107.1 Purpose.
1107.2 Definitions.
Subpart B--Reasonable Testing Program for Nonchildren's Products
1107.10 Reasonable testing program for nonchildren's products.
Subpart C--Certification of Children's Products
1107.20 General requirements.
1107.21 Periodic testing.
1107.22 Random samples.
1107.23 Material change.
1107.24 Undue influence.
1107.25 Remedial action.
1107.26 Recordkeeping.
Subpart D--Consumer Product Labeling Program
1107.40 Labeling consumer products to indicate that the 
certification requirements of section 14 of the CPSA have been met.

    Authority: 15 U.S.C. 2063, Sec. 3, 102 Pub. L. 110-314, 122 
Stat. 3016, 3017, 3022.

Subpart A--General Provisions


Sec.  1107.1  Purpose.

    This part establishes the requirements for: A reasonable testing 
program for nonchildren's products; third party conformity assessment 
body testing to support certification and continuing testing of 
children's products; and labeling of consumer products to indicate that 
the certification requirements have been met pursuant to sections 
14(a)(1), and (a)(2), (d)(2)(B) of the Consumer Product Safety Act 
(CPSA) (15 U.S.C. 2063(a)(1), (a)(2), (d)(2)(B)).


Sec.  1107.2  Definitions.

    Unless otherwise stated, the definitions of the Consumer Product 
Safety Act and the Consumer Product Safety Improvement Act of 2008 
apply to this part. The following definitions apply for purposes of 
this part:
    CPSA means the Consumer Product Safety Act.
    CPSC means the Consumer Product Safety Commission.
    Detailed bill of materials means a list of the raw materials, sub-
assemblies, intermediate assemblies, sub-component parts, component 
parts, and the quantities of each needed to manufacture a finished 
product.
    Due care means the degree of care that a prudent and competent 
person engaged in the same line of business or endeavor would exercise 
under similar circumstances.
    High degree of assurance means an evidence-based demonstration of 
consistent performance of a product regarding compliance based on 
knowledge of a product and its manufacture.
    Identical in all material respects means there is no difference 
with respect to compliance to the applicable rules between the samples 
and the finished product.
    Manufacturer means the parties responsible for certification of a 
consumer product pursuant to 16 CFR part 1110.
    Manufacturing process means the techniques, fixtures, tools, 
materials, and personnel used to create the component parts and 
assemble a finished product.
    Production testing plan means a document that shows what tests must 
be performed and the frequency at which those tests must be performed 
to provide a high degree of assurance that the products manufactured 
after certification continue to meet all the applicable safety rules.
    Third party conformity assessment body means a third party 
conformity assessment body recognized by the CPSC to conduct 
certification testing on children's products.

Subpart B--Reasonable Testing Program for Nonchildren's Products


Sec.  1107.10  Reasonable testing program for nonchildren's products.

    (a) Except as otherwise provided in a specific regulation under 
this title or a specific standard prescribed by law, a manufacturer 
certifying a product pursuant to a reasonable testing program must 
ensure that the reasonable testing program provides a high degree of 
assurance that the consumer products covered by the program will comply 
with all applicable rules, bans, standards, or regulations.
    (b) A reasonable testing program must consist of the following 
elements:
    (1) Product Specification. The product specification is a 
description of the consumer product and lists the applicable rules, 
bans, standards or regulations to which the product is subject. A 
product specification should describe the product listed on a general 
conformity certification in sufficient detail to identify the product 
and distinguish it from other products made by the manufacturer. The 
product specification may include, but is not limited to, a color 
photograph or illustration, model names or numbers, a detailed bill of 
materials, a parts listing, raw material selection and sourcing 
requirements.
    (i) A product specification must include any component parts that 
are certified pursuant to 16 CFR Part 1109.
    (ii) Product specifications that identify individual features of a 
product that would not be considered a material change may use the same 
product specification for all products manufactured with those specific 
features. Features that would not be considered a material change 
include different product sizes or other features that cover variations 
of the product where those variations do not affect the product's 
ability to comply with applicable rules, bans, standards, or 
regulations.
    (iii) Each manufacturing site must have a separate product 
specification.
    (2) Certification Tests. A manufacturer must conduct certification 
tests on a product before issuing a general conformity certificate for 
that product. A certification test is a test performed on samples of 
the product that are identical to the finished product in all material 
respects to demonstrate that the product complies with the applicable 
safety rules, bans, standards, or regulations. Certification tests must 
contain the following elements:
    (i) Samples. For purposes of this section, a sample means a 
component part of the product or the finished product which is subject 
to testing. Samples submitted for certification testing must be 
identical in all material respects to the product to be distributed in 
commerce. The manufacturer must submit a sufficient number of samples 
for certification testing so as to provide a high degree of assurance 
that the certification tests accurately represent the product's 
compliance with all applicable rules.
    (A) Only finished products or component parts listed on the product 
specification can be submitted for certification testing.
    (B) A manufacturer may substitute component part testing for 
finished product testing pursuant to 16 CFR part 1109 unless the rule, 
ban, standard or regulation applicable to the product requires testing 
of the finished product. If a manufacturer relies upon certification 
testing of component part(s) (rather than tests of the finished 
product), the manufacturer must demonstrate how the combination of 
testing of component part(s), portions of the finished product, and 
finished product samples demonstrate, with a high degree of assurance, 
compliance with all applicable rules, bans, standards, or regulations.
    (ii) Material Change. A material change is any change in the 
product's design, manufacturing process, or

[[Page 28363]]

sourcing of component parts that a manufacturer exercising due care 
knows, or should know, could affect the product's ability to comply 
with the applicable rules, bans, standards, or regulations.
    (A) When a previously-certified product undergoes a material change 
that only affects the product's ability to comply with certain 
applicable rules, bans, standards, or regulations, certification for 
the new product specification may be based on certification testing of 
the materially changed component part, material, or process, and the 
passing certification tests of the portions of the previously-certified 
product that were not materially changed.
    (B) A manufacturer must conduct certification tests of the finished 
product if a material change affects the finished product's ability to 
comply with an applicable rule, ban, standard, or regulation.
    (C) A manufacturer must exercise due care to ensure that reliance 
on anything other than retesting of the finished product after a 
material change occurs does not allow a noncompliant product to be 
distributed in commerce. A manufacturer should resolve any doubts in 
favor of retesting the finished product for certification.
    (3) Production Testing Plan. A production testing plan describes 
what tests must be performed and the frequency at which those tests 
must be performed to provide a high degree of assurance that the 
products manufactured after certification continue to meet all the 
applicable safety rules, bans, standards, or regulations. A production 
testing plan may include recurring testing or the use of process 
management techniques such as control charts, statistical process 
control programs, or failure modes and effects analyses (FMEAs) 
designed to control potential variations in product manufacturing that 
could affect the product's ability to comply with the applicable rules, 
bans, standards, or regulations. A production testing plan must contain 
the following elements:
    (i) A description of the production testing plan, including, but 
not limited to, a description of the tests to be conducted or the 
measurements to be taken, the intervals at which the tests or 
measurements will be made, the number of samples tested, and the basis 
for determining that such tests provide a high degree of assurance of 
compliance if they are not the tests prescribed in the applicable rule, 
ban, standard, or regulation;
    (ii) Each manufacturing site must have a separate production 
testing plan;
    (iii) The production testing interval selected must be short enough 
to ensure that, if the samples selected for production testing comply 
with an applicable rule, ban, standard, or regulation, there is a high 
degree of assurance that the untested products manufactured during that 
interval also will comply with the applicable rule, ban, standard, or 
regulation. Production test intervals should be appropriate for the 
specific testing or alternative measurements being conducted.
    (A) A manufacturer may use measurement techniques that are 
nondestructive and tailored to the needs of an individual product 
instead of conducting product performance tests to assure a product 
complies with all applicable rules, bans, standards, or regulations.
    (B) Any production test method used to conduct production testing 
must be as effective in detecting noncompliant products as the tests 
used for certification.
    (C) If a manufacturer is uncertain whether a production test is as 
effective as the certification test, the manufacturer must use the 
certification test.
    (4) Remedial Action Plan.
    (i) A remedial action plan describes the steps to be taken whenever 
samples of a product or a component part of a product fails a test or 
fails to comply with an applicable rule, ban, standard, or regulation. 
A remedial action plan must contain procedures the manufacturer must 
follow to investigate and address failing test results. Manufacturers 
must take remedial action after any failing test result to ensure with 
a high degree of assurance that the products manufactured after the 
remedial action has been taken comply with the applicable rules, bans, 
standards, or regulations. The type of remedial action may be different 
depending upon the applicable rule, ban, standard, or regulation. 
Remedial action can include, but is not limited to:
    (A) Changes to the manufacturing process, the equipment used to 
manufacture the product, the product's materials, or design;
    (B) reworking the product produced; or
    (C) other actions deemed appropriate by the manufacturer, in the 
exercise of due care, to assure compliant products.
    (ii) Any remedial action that results in a material change to a 
product's design, parts, suppliers of parts, or manufacturing process 
that could affect the product's ability to comply with any applicable 
rules requires a new product specification for that product. Before a 
product covered by the new product specification can be certified as 
compliant with the applicable rules, bans, standards, or regulations, a 
manufacturer must have passing certification test results for the 
applicable rules, bans, standards, or regulation.
    (5) Recordkeeping.
    (i) A manufacturer of a nonchildren's product must maintain the 
following records:
    (A) Records of the general conformity certificate for each product;
    (B) Records of each product specification;
    (C) Records of each certification test and, if the manufacturer 
elected to have a third party conformity assessment body test the 
product, identification of any third party conformity assessment body 
on whose testing the certificate depends. Records of certification 
tests must describe how the product was certified as meeting the 
requirements, including how each applicable rule was evaluated, the 
test results, and the actual values of the tests;
    (D) Records to demonstrate compliance with the production testing 
plan requirement, including a list of the applicable rules, bans, 
standards, or regulations, a description of the types of production 
tests conducted, the number of samples tested, the production interval 
selected for performance of each test, and the test results. Records of 
a production test program must describe how the production tests 
demonstrate that the continuing production complies with the applicable 
rules. References to techniques in relevant quality management and 
control standards, such as ANSI/ISO/ASQ Q9001-2008: Quality management 
systems--Requirements, ANSI/ASQ Z1.4-2008: Sampling Procedures and 
Tables for Inspection by Attributes, and/or ANSI/ASQ Z1.9-2008: 
Sampling Procedures and Tables for Inspection by Variables for Percent 
Nonconforming, may be used to demonstrate that the production tests 
have the necessary accuracy, precision sensitivity, repeatability, and 
confidence to distinguish between compliant and noncompliant products;
    (E) Records of all remedial actions taken, including the specific 
action taken, the date the action was taken, the person who authorized 
the actions, and any test failure which necessitated the action. 
Records of remedial action must relate the action taken to the product 
specification of the product that was the subject of that remedial 
action and the product specification of any new product resulting from 
any remedial action;

[[Page 28364]]

    (ii) If a remedial action results in a new product specification, 
the manufacturer must create a new set of records for the product.
    (iii) A manufacturer must maintain the records specified in this 
subpart at the location within the United States specified in 16 CFR 
1110.11(d) or, if the records are not maintained at the custodian's 
address, at a location within the United States specified by the 
custodian. The manufacturer must make these records available, either 
in hard copy or electronically, for inspection by the CPSC upon 
request.
    (iv) A manufacturer must maintain records (except for test records) 
for as long as the product is in production or imported by the 
manufacturer plus five years. Test records must be maintained for five 
years. All records must be available in the English language.
    (c) If any certification test results in a failure, a manufacturer 
cannot certify a product until the manufacturer has taken remedial 
action, and the product manufactured after the remedial action passes 
certification testing.
    (d) Manufacturers of a nonchildren's product may use a third party 
conformity assessment body to conduct certification testing but are not 
required to use a third party conformity assessment body recognized by 
the CPSC to conduct certification testing on children's products.
    (e) Manufacturers of children's products may voluntarily establish 
a reasonable testing program consistent with this subpart.

Subpart C--Certification of Children's Products


Sec.  1107.20  General requirements.

    (a) Manufacturers must submit a sufficient number of samples of a 
children's product, or samples that are identical in all material 
respects to the children's product, to a third party conformity 
assessment body for testing to support certification. The number of 
samples selected must provide a high degree of assurance that the tests 
conducted for certification purposes accurately demonstrate the ability 
of the children's product to meet all applicable children's product 
safety rules.
    (b) If the manufacturing process for a children's product 
consistently creates finished products that are uniform in composition 
and quality, a manufacturer may submit fewer samples to provide a high 
degree of assurance that the finished product complies with the 
applicable children's product safety rules. If the manufacturing 
process for a children's product results in variability in the 
composition or quality of children's products, a manufacturer may need 
to submit more samples to provide a high degree of assurance that the 
finished product complies with the applicable children's product safety 
rules.
    (c) Except where otherwise specified by a children's product safety 
rule, a manufacturer may substitute component part testing for complete 
product testing pursuant to 16 CFR part 1109 if the component part, 
without the remainder of the finished product, is sufficient to 
determine compliance for the entire product.
    (d) If a product sample fails certification testing, even if other 
samples have passed the same certification test, the manufacturer must 
investigate the reasons for the failure and take remedial action. A 
manufacturer cannot certify the children's product until the 
manufacturer establishes, with a high degree of assurance, that the 
finished product does comply with all applicable children's product 
safety rules.


Sec.  1107.21  Periodic testing.

    (a) Each manufacturer must conduct periodic testing at least 
annually, except as otherwise provided in paragraphs (b) and (d) of 
this section or as provided in regulations under this title. 
Manufacturers may need to conduct periodic tests more frequently than 
on an annual basis to ensure a high degree of assurance that the 
product being tested complies with all applicable children's product 
safety rules.
    (b) If a manufacturer has implemented a reasonable testing program 
as described in subpart B of this part, it must submit samples of its 
product to a third party conformity assessment body for periodic 
testing to the applicable children's product safety rules at least once 
every two years. If a manufacturer's reasonable testing program fails 
to provide a high degree of assurance of compliance with all applicable 
children's product safety rules, the Commission may require the 
manufacturer to meet the requirements of paragraph (c) of this section 
or modify its reasonable testing program to ensure a high degree of 
assurance.
    (c) If a manufacturer has not implemented a reasonable testing 
program as described in subpart B of this part, then all periodic 
testing must be conducted by a third party conformity assessment body, 
and the manufacturer must conduct periodic testing as follows:
    (1) Periodic Test Plan. Manufacturers must develop a periodic test 
plan to assure that children's products manufactured after the issuance 
of a children's product certification, or when the previous periodic 
testing was conducted, continue to comply with all applicable 
children's product safety rules. The periodic test plan must include 
the tests to be conducted, the intervals at which the tests will be 
conducted, the number of samples tested, and the basis for determining 
that the periodic testing plan provides a high degree of assurance that 
the product being tested continues to comply with all applicable 
children's product safety rules. The manufacturer must have a separate 
periodic testing plan for each manufacturing site producing a 
children's product.
    (2) Testing Interval. The periodic testing interval selected must 
be short enough to ensure that, if the samples selected for periodic 
testing pass the test, there is a high degree of assurance that the 
other untested children's products manufactured during the interval 
comply with the applicable children's product safety rules. The 
interval for periodic testing may vary depending upon the specific 
children's product safety rules that apply to the children's product. 
Factors to be considered when determining the periodic testing interval 
include, but are not limited to, the following:
    (i) High variability in test results, as indicated by a relatively 
large sample standard deviation in quantitative tests;
    (ii) Measurements that are close to the allowable numerical limit 
for quantitative tests;
    (iii) Known manufacturing process factors which could affect 
compliance with a rule. For example, if the manufacturer knows that a 
casting die wears down as the die nears the end of its useful life, the 
manufacturer may wish to test more often as the casting die wears down;
    (iv) Consumer complaints or warranty claims;
    (v) Nonmaterial changes, such as introduction of a new set of 
component parts into the assembly process, or the manufacture of a 
fixed number of products;
    (vi) Potential for serious injury or death resulting from a 
noncompliant children's product;
    (vii) The number of children's products produced annually, such 
that a manufacturer should consider testing a children's product more 
frequently if the product is produced in very large numbers or 
distributed widely throughout the United States;
    (viii) The children's product's similarity to other children's 
products with which the manufacturer is familiar and/or whether the 
children's product has many different component parts

[[Page 28365]]

compared to other children's products of a similar type; or
    (ix) Inability to determine the children's product's noncompliance 
easily through means such as visual inspection.
    (d) For a product produced or imported at low volumes, a 
manufacturer is not subject to the periodic testing requirements of 
paragraphs (a) and (b) or (c) of this section unless it produces 10,000 
units of the product. Once a manufacturer has produced or imported 
10,000 units of the product, the frequency at which the manufacturer 
must engage in periodic testing must comply with paragraph (a), and (b) 
or (c) of this section and does not depend on how often the 
manufacturer produces or imports every 10,000 units of the product.


Sec.  1107.22  Random samples.

    Each manufacturer must select samples for periodic testing by using 
a process that assigns each sample in the production population an 
equal probability of being selected. For purposes of this section, the 
production population is the number of products manufactured or 
imported after the initial certification or last periodic testing of a 
children's product. A manufacturer may use a procedure that randomly 
selects items from a list to determine which samples are the random 
samples used for periodic testing before production begins. A 
manufacturer may select samples for testing as they are manufactured. 
Manufacturers who produce children's products that continue to be 
distributed in commerce as they are manufactured may wish to test the 
samples as they become available instead of waiting until all the 
random samples have been selected before conducting testing.


Sec.  1107.23  Material change.

    (a) General Requirements. If a children's product undergoes a 
material change in product design or manufacturing process, including 
the sourcing of component parts, that a manufacturer exercising due 
care knows, or should know, could affect the product's ability to 
comply with the applicable children's product safety rules, the 
manufacturer must submit a sufficient number of samples of the 
materially changed product for testing by a third party conformity 
assessment body. Such testing must occur before a manufacturer can 
certify the children's product. The extent of such testing may depend 
on the nature of the material change. When a material change is limited 
to a component part of the finished children's product and does not 
affect the ability of the children's product to comply with other 
applicable children's product safety rules, a manufacturer may issue a 
children's product certificate based on the earlier third party 
certification tests and on test results of the changed component part 
conducted by a third party conformity assessment body. Changes that 
cause a children's product safety rule to no longer apply to a 
children's product are not considered to be material changes. A 
manufacturer must exercise due care to ensure that reliance on anything 
other than retesting of the finished product after a material change 
would not allow a noncompliant children's product to be distributed in 
commerce. A manufacturer should resolve any doubts in favor of 
retesting the finished product for certification. Additionally, a 
manufacturer must exercise due care to ensure that any component part 
undergoing component-part-level testing is the same as the component 
part on the finished children's product in all material respects.
    (b) Product Design. For purposes of this subpart, the term product 
design includes all component parts, their composition, and their 
interaction and functionality when assembled. To determine which 
children's product safety rules apply to a children's product, a 
manufacturer should examine the product design for the children's 
product as received by the consumer.
    (c) Manufacturing Process. A material change in the manufacturing 
process is a change in how the children's product is made that could 
affect the finished children's product's ability to comply with the 
applicable children's product safety rules. For each change in the 
manufacturing process, a manufacturer should exercise due care to 
determine if compliance to an existing applicable children's product 
safety rule could be affected, or if the change results in a newly-
applicable children's product safety rule.
    (d) Sourcing of Component Parts. A material change in the sourcing 
of component parts results when the replacement of one component part 
of a children's product with another component part could affect 
compliance with the applicable children's product safety rules. This 
includes, but is not limited to, changes in component part composition, 
component part supplier, or the use of a different component part from 
the same supplier who provided the initial component part.


Sec.  1107.24  Undue influence.

    (a) Each manufacturer must establish procedures to safeguard 
against the exercise of undue influence by a manufacturer on a third 
party conformity assessment body.
    (b) The procedures required in paragraph (a) of this section, at a 
minimum, must include:
    (1) Safeguards to prevent attempts by the manufacturer to exercise 
undue influence on a third party conformity assessment body, including 
a written policy statement from company officials that the exercise of 
undue influence is not acceptable, and directing that appropriate staff 
receive annual training on avoiding undue influence, and sign a 
statement attesting to participation in such training;
    (2) A requirement to notify the Commission immediately of any 
attempt by the manufacturer to hide or exert undue influence over test 
results; and
    (3) A requirement to inform employees that allegations of undue 
influence may be reported confidentially to the Commission and to 
describe the manner in which such a report can be made.


Sec.  1107.25  Remedial action.

    (a) Each manufacturer of a children's product must have a remedial 
action plan that contains procedures the manufacturer must follow to 
investigate and address failing test results. A manufacturer must take 
remedial action after any failing test result to ensure, with a high 
degree of assurance, that the children's products manufactured after 
the remedial action has been taken comply with all applicable 
children's product safety rules.
    (b) A manufacturer must not certify a product if any certification 
test by a third party conformity assessment body results in a failure 
until the manufacturer has taken remedial action and the product 
manufactured after the remedial action passes certification testing.
    (c) Following a failing test result, a manufacturer must take 
remedial action to ensure, with a high degree of assurance, that the 
children's product complies with all applicable children's product 
safety rules. Remedial action can include, but is not limited to, 
redesign, changes in the manufacturing process, or changes in component 
part sourcing. For existing production, remedial action may include 
rework, repair, or scrap of the children's product. If a remedial 
action results in a material change a manufacturer must have a third 
party conformity assessment body retest the redesigned or 
remanufactured product before the manufacturer can certify the product.

[[Page 28366]]

Sec.  1107.26  Recordkeeping.

    (a) A manufacturer of a children's product subject to an applicable 
children's product safety rule must maintain the following records:
    (1) Records of the children's product certificate for each product. 
The children's product covered by the certificate must be clearly 
identifiable and distinguishable from other products;
    (2) Records of each third party certification test. The 
manufacturer must have separate certification tests records for each 
manufacturing site;
    (3) Records of the periodic test plan and periodic test results for 
a children's product;
    (4) Records of descriptions of all material changes in product 
design, manufacturing process, and sourcing of component parts, and the 
certification tests run and the test values;
    (5) Records of the undue influence procedures, including training 
materials and training records of all employees trained on these 
procedures; and
    (6) Records of all remedial actions taken following a failing test 
result, including the rule that was tested, the specific remedial 
action taken, the date the action was taken, the person who authorized 
the action, any test failure which necessitated the action, and the 
results from certification tests showing compliance after the remedial 
action was taken.
    (b) A manufacturer must maintain the records specified in this 
subpart at the location within the United States specified in 16 CFR 
1110.11(d) or, if the records are not maintained at the custodian's 
address, at a location within the United States specified by the 
custodian. The manufacturer must make these records available, either 
in hard copy or electronically, for inspection by the CPSC upon 
request.
    (c) A manufacturer must maintain records (except for test records) 
for as long as the product is in production or imported by the 
manufacturer plus five years. Test records must be maintained for five 
years. All records must be available in the English language.

Subpart D--Consumer Product Labeling Program


Sec.  1107.40  Labeling consumer products to indicate that the 
certification requirements of section 14 of the CPSA have been met.

    (a) Manufacturers and private labelers of a consumer product may 
indicate, by a uniform label on or provided with the product, that the 
product complies with any consumer product safety rule under the CPSA, 
or with any similar rule, ban, standard or regulation under any other 
act enforced by the CPSC.
    (b) The label must be printed in bold typeface, using an Arial font 
of not less than 12 points, be visible and legible, and consist of the 
following statement: Meets CPSC Safety Requirements
    (c) A consumer product may bear the label if the manufacturer or 
private labeler has certified, pursuant to section 14 of the CPSA, that 
the consumer product complies with all applicable consumer product 
safety rules under the CPSA and with all rules, bans, standards, or 
regulations applicable to the product under any other act enforced by 
the Consumer Product Safety Commission.
    (d) A manufacturer or private labeler may use another label on the 
consumer product as long as such label does not alter or mislead 
consumers as to the meaning of the label described in paragraph (b) of 
this section. A manufacturer or private labeler must not imply that the 
CPSC has tested, approved, or endorsed the product.

    Dated: May 7, 2010.
Todd A. Stevenson,
Secretary.
[FR Doc. 2010-11365 Filed 5-19-10; 8:45 am]
BILLING CODE 6355-01-P