[Federal Register Volume 76, Number 216 (Tuesday, November 8, 2011)]
[Proposed Rules]
[Pages 69586-69594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-27686]



[[Page 69585]]

Vol. 76

Tuesday,

No. 216

November 8, 2011

Part V





Consumer Product Safety Commission





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16 CFR Part 1107





Testing and Labeling Pertaining to Product Certification Regarding 
Representative Samples for Periodic Testing of Children's Products; 
Proposed Rule

  Federal Register / Vol. 76, No. 216 / Tuesday, November 8, 2011 / 
Proposed Rules  

[[Page 69586]]


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CONSUMER PRODUCT SAFETY COMMISSION

16 CFR Part 1107

[CPSC Docket No. CPSC-2011-0082]


Testing and Labeling Pertaining to Product Certification 
Regarding Representative Samples for Periodic Testing of Children's 
Products

AGENCY: Consumer Product Safety Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Consumer Product Safety Commission (``CPSC,'' 
``Commission,'' or ``we'') is proposing to amend its regulations on 
testing and labeling pertaining to product certification. The proposed 
rule would address the testing of representative samples to ensure 
continued compliance of children's products with all applicable rules, 
bans, standards, and regulations. The proposed rule also would 
establish a recordkeeping requirement associated with the testing of 
representative samples. We are taking this action to implement part of 
H.R. 2715 (Pub. L. 112-28).\1\
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    \1\ The Commission voted 5-0 to publish this notice of proposed 
rulemaking, with changes, in the Federal Register. Chairman Inez M. 
Tenenbaum, Commissioner Robert S. Adler, and Commissioner Thomas H. 
Moore issued a joint statement. Commissioner Nancy A. Nord issued a 
statement. The statements can be found at http://www.cpsc.gov/pr/statements.html.

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DATES: Written comments must be received by January 23, 2012.

ADDRESSES: You may submit comments, identified by Docket No. CPSC-2011-
0082, 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 (email), 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 820, 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 collection of information. 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, with the sensitive portions clearly identified.
    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, Consumer Product Safety 
Commission, 4330 East West Highway, Bethesda, MD 20814; telephone (301) 
504-7562; email [email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction and Statutory Authority

    Section 14(a)(2) of the Consumer Product Safety Act (CPSA), 15 
U.S.C. 2063(a)(2), requires manufacturers and private labelers of any 
children's product that is subject to a children's product safety rule 
to submit samples of the product, or samples that are identical in all 
material respects to the product, to a third party conformity 
assessment body whose accreditation has been accepted by the CPSC to be 
tested for compliance with such children's product safety rule. Based 
on that testing, the manufacturer or private labeler must issue a 
certificate that certifies that such children's product complies with 
the children's product safety rule. 15 U.S.C. 2063(a)(2)(B). CPSC 
regulations, at 16 CFR part 1110, limit the certificate requirement to 
importers and domestic manufacturers. The manufacturer or importer of 
the children's product must issue a separate certificate for each 
applicable children's product safety rule or a combined certificate 
that certifies compliance with all applicable children's product safety 
rules and specifies each such rule. This certificate is called a 
Children's Product Certificate (``CPC'').
    Further, former section 14(d)(2)(B) of the CPSA, 15 U.S.C. 
2063(d)(2)(B), as originally provided in section 102 of the Consumer 
Product Safety Improvement Act of 2008 (``CPSIA''), requires that we 
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 to ensure continued compliance;
     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.
    In the Federal Register of May 20, 2010 (75 FR 28336), we published 
a proposed rule on ``Testing and Labeling Pertaining to Product 
Certification.'' The proposed rule was intended to implement what was 
then known as section 14(d)(2)(B) of the CPSA and to implement parts of 
section 14(a) of the CPSA. Proposed Sec.  1107.22, ``Random Samples,'' 
would implement the testing of random samples requirement in 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 (75 FR at 28349 through 28350, 28365).
    On August 12, 2011, the President signed H.R. 2715 into law. Among 
other things, H.R. 2715 replaced the CPSA's requirement for the testing 
of ``random samples'' with a requirement for the testing of 
``representative samples.'' Additionally, H.R. 2715 corrected an 
editorial error in section 14 of the CPSA, by renumbering section 14(d) 
of the CPSA, ``Additional Regulations for Third Party Testing,'' as 
section 14(i) of the CPSA.
    Elsewhere in this Federal Register, we are publishing a final rule 
for part 1107 on those aspects of the rule left unchanged by H.R. 2715. 
However, because H.R. 2715 amended the CPSA to require the testing of 
``representative samples,'' we deleted Sec.  1107.22 from the final 
rule, and we are issuing this proposed rule to implement the new 
statutory requirement for the testing of representative samples. 
Additionally, Sec.  1107.26 of the final rule establishes requirements 
pertaining to recordkeeping. We have reserved Sec.  1107.26(a)(4) in 
anticipation of a recordkeeping requirement related to representative 
samples. This proposed rule, therefore, would establish a new 
recordkeeping requirement for representative samples.
    We are issuing this proposed rule pursuant to section 14(i)(2)(B) 
of the CPSA, as well as its implementing authority pursuant to section 
3 of the CPSIA.

II. Description of the Proposed Rule

    The proposal would amend Title 16 of the Code of Federal 
Regulations: Part

[[Page 69587]]

1107, titled ``Testing and Labeling Pertaining to Product 
Certification.'' The amendment would implement section 14(i)(2)(B)(ii) 
of the CPSA, by amending Sec.  1107.21, ``Periodic Testing.'' The 
proposal would require that periodic testing be conducted using 
representative samples. Additionally, the proposal would amend Sec.  
1107.26 to include a recordkeeping provision related to testing 
representative samples.

A. Proposed Sec.  1107.21(f)--Testing Representative Samples

    The proposal would create a new Sec.  1107.21(f), which would state 
that a manufacturer must select representative product samples to be 
submitted to the third party conformity assessment body for periodic 
testing. We recognize that the proposed rule on ``Testing and Labeling 
Pertaining to Product Certification'' (75 FR 28336 (May 20, 2010)) 
would have treated ``Random Samples'' as a distinct section, rather 
than as a subparagraph within Sec.  1107.21, ``Periodic Testing.'' 
However, because we have treated the requirement in section 
14(i)(2)(B)(ii) of the CPSA as part of the periodic testing process, 
the proposed rule would place a requirement for the testing of 
representative samples in Sec.  1107.21, rather than create a separate 
section.
    The procedure used to select representative product samples for 
periodic testing must provide a basis for inferring compliance about 
the population of untested products produced during the applicable 
periodic testing interval. The number of samples selected for the 
sampling procedure must be sufficient to ensure continuing compliance 
with all of the applicable children's product safety rules. 
Manufacturers must document the procedure used to select the product 
samples for periodic testing and document the basis for inferring the 
compliance of the product manufactured during the periodic testing 
interval from the results of the tested samples.
    Proposed Sec.  1107.21(f) would implement the requirement to test 
representative samples, by requiring each manufacturer of a children's 
product to select samples for periodic testing known to be 
representative of the population of products manufactured since the 
last periodic test occurred (or since certification for the first 
periodic tests). In order for the test results of the samples submitted 
to a third party conformity assessment body to infer compliance of the 
untested units of the children's product, the manufacturer must have 
knowledge that the tested samples are, indeed, representative of the 
product produced. Haphazard methods of sample selection cannot provide 
a basis for inferring the compliance of the untested units without 
additional information indicating that the samples are representative.
1. Representative Samples
    Representative samples of a children's product selected for testing 
are comparable to the unselected portion of the children's product 
population with respect to compliance to the applicable children's 
product safety rule(s). To be representative, the manufacturer must 
have a basis for inferring that, had other samples been chosen for 
testing, test results from those samples would have indicated the same 
compliance or noncompliance to the applicable children's product safety 
rule as the representative samples.
    Determining that the selected samples are representative may be 
achieved in many ways, depending upon on the rule, ban, standard, or 
regulation being evaluated. For example, for the chemical tests, a 
sample selected from a homogeneous material, such as a well-mixed 
container of paint, could be considered representative of the entire 
container.
    For discretely produced products, information indicating uniform 
materials and dimensional control could be used to indicate that a 
sample is representative of the product for mechanical tests. For 
example, if a bicycle handlebar sample is manufactured from the same 
grade of steel and with the same dimensions (e.g., wall thickness, 
length, shape, placement of holes for attaching brake levers) as other 
handlebars produced, that handlebar sample can be considered 
representative of the population of handlebars for the purpose of the 
complying with the handlebar stem test in 16 CFR 1512.18(g).
    Other methods that may be used to establish that samples selected 
for periodic testing are representative--with respect to compliance--of 
the population of products manufactured since the last periodic test. 
Examples of such methods include: Incoming inspection of raw materials 
or component parts; process control data generated during product 
manufacture; and use of manufacturing techniques with intrinsic 
manufacturing uniformity, such as die casting.
    Random sampling is another means of selecting representative 
samples that provide a basis for inferring the compliance of untested 
product units from the tested product units. The conditions that allow 
for the inference of compliance concerning untested units versus tested 
units may be met by a range of probability-based sampling designs, 
including, but not limited to, simple random sampling, cluster 
sampling, systematic sampling, stratified sampling, and multistage 
sampling. These methods allow the manufacturer the flexibility to 
select a random sampling procedure that is most appropriate for the 
manufacturer's product production setting but still allow for the 
inference about the compliance of the population of product units. For 
example, alternative sampling procedures--like systematic sampling 
(where a starting unit is randomly selected and then every kth unit 
after that is selected) or multistage sampling (where units are grouped 
in clusters such as pallets, the clusters are randomly selected and 
then units within the selected clusters are randomly drawn)--can be 
employed for products for which such sampling procedures would be 
beneficial. Even though every unit produced does not have the same 
probability of selection for testing in these examples, these 
techniques can be used to infer the compliance of the untested units. 
It should be noted, however, that just because random sampling can be 
used as one method of conducting representative testing, it is by no 
means the only method to meet the new broader ``representative'' 
sampling in H.R. 2715.
    With evidence that the samples submitted to a third party 
conformity assessment body are representative of the children's product 
produced since the last periodic test (or since product certification 
for the first periodic test interval), the manufacturer can infer the 
compliance of the untested units.
2. Testing To Ensure Compliance
    For the purposes of periodic testing, passing test results means 
the samples tested are in compliance with the applicable children's 
product safety rule. Most children's product safety rules require each 
product sample submitted to pass the prescribed tests. For example, 
each pacifier subjected to the guard and shield testing specified in 16 
CFR 1511.3 must pass the test. In a similar manner, each infant walker 
submitted for testing must pass the tests prescribed in 16 CFR part 
1216.
    However, for some children's product standards, compliance with the 
standard can include individual test results that exceed a specified 
maximum. For example, for children's products tested for compliance to 
16

[[Page 69588]]

CFR part 1611, Standard for the flammability of vinyl plastic film, 10 
samples are averaged to determine if the maximum burn rate exceeds 1.2 
inches per second, as specified in 16 CFR 1611.3. Because the maximum 
burn rate applies to the average, it is possible for one or more of the 
tested samples to exceed that burn rate when tested. In this 
circumstance, the samples are considered to be in conformance with the 
standard and have passed the test.
    As another example, small carpets and rugs that are children's 
products are subject to the requirements for periodic testing. For 
small carpets and rugs, at least seven of the eight samples tested for 
compliance to 16 CFR part 1631, Standard for the surface flammability 
of small carpets and rugs (FF 2-70), must meet the test criterion 
specified in Sec.  1631.3(b). Alternatively, a small carpet or rug that 
does not meet the test criterion must be permanently labeled prior to 
its introduction into commerce. Small carpets and rugs that meet either 
condition would be considered to be in compliance with 16 CFR part 1631 
and deemed to have passed the periodic tests.

B. Proposed Sec.  1107.26(a)(4)--Recordkeeping

    Proposed Sec.  1107.26(a)(4) would require a manufacturer of a 
children's product subject to an applicable children's product safety 
rule to maintain records documenting the testing of representative 
samples, as set forth in proposed Sec.  1107.21(f) on periodic testing, 
including the number of representative samples selected and the 
procedure used to select representative samples. Records also must 
include the basis for inferring compliance of the product manufactured 
during the periodic testing interval from the results of the tested 
samples.
    The recordkeeping requirement for the testing of representative 
samples is intended to allow manufacturers to demonstrate continued 
compliance by establishing how the samples selected are representative 
of the population of products manufactured during the periodic testing 
interval and how the manufacturer can infer compliance of all products 
produced during this interval based on such testing.

III. Environmental Considerations

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

IV. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-612, 
generally requires that agencies review proposed rules for their 
potential economic impact on small entities, including small 
businesses. The RFA calls for agencies to prepare and make available 
for public comment an initial regulatory flexibility analysis 
describing the impact of the proposed rule on small entities and 
identifying impact-reducing alternatives. 5 U.S.C. 603.
    The Commission is proposing this rule in order to implement Section 
14(i)(2)(B)(ii) of the CPSA. As originally enacted in 2008, this 
provision required the Commission to promulgate a regulation to 
establish protocols and standards for the testing of ``random samples'' 
to ensure that children's products continue to comply with all 
applicable children's product safety rules. H.R. 2715, which was 
enacted on August 12, 2011, amended the provision by substituting the 
term ``representative'' for the term ``random,'' in describing the 
samples that must be tested.

A. Objectives of the Rule

    The objective of the rule is to reduce the risk of death and injury 
from consumer products, especially from products intended for children 
aged 12 years and younger. The proposed rule would accomplish this 
objective by requiring that manufacturers select the samples of 
children's products for periodic testing (which will be required by 16 
CFR 1107.21), using a procedure that results in the selection of 
samples from a population that is representative of the unselected 
products and provides a basis for inferring that if the selected 
samples comply with the applicable children's product safety rules, 
then the units not selected will also comply. (The term 
``manufacturer,'' for purposes of this proposed rule, includes private 
labelers and importers of products manufacturer by foreign 
manufacturers.) Being able to infer the compliance of the untested 
units is how the continued compliance of the product is ensured.

B. Small Entities to Which the Rule Will Apply

    By regulation (16 CFR part 1110), the domestic manufacturer or 
importer is responsible for ensuring that a consumer product is 
properly tested, and, based upon the testing results, certifying that 
the product conforms to all applicable consumer product safety rules. 
Therefore, the domestic manufacturer or importer will be responsible 
for ensuring that representative samples of children's products that 
are subject to one or more children's product safety rules are tested 
to ensure continued compliance. The definition of a ``children's 
product'' is broad and includes bicycles, furniture, apparel, jewelry, 
televisions, electronic games, toys, and so on, if designed or intended 
primarily for a child 12 years of age or younger. Virtually all 
children's products are subject to one or more children's product 
safety rules. A full list of the children's product safety rules for 
which third party testing and certification will be required is given 
in Table 1.

     Table 1--Product Safety Rules Applicable to Children's Products
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   16 CFR part No. (or test method or
               standard)                           Description
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1420...................................  All-Terrain Vehicles.
1203...................................  Bicycle Helmets.
1512...................................  Bicycles.
1513...................................  Bunk Beds.
1500.86(a)(5)..........................  Clacker Balls.
1500.86(a)(7) and (8)..................  Dive Sticks and Other Similar
                                          Articles.
1505...................................  Electrically Operated Toys or
                                          Articles.
1615...................................  Flammability of Children's
                                          Sleepwear, Sizes 0 through 6X.
1616...................................  Flammability of Children's
                                          Sleepwear, Sizes 7 through 14.
1610...................................  Flammability of Clothing
                                          Textiles.
1632...................................  Flammability of Mattresses and
                                          Mattress Pads.
1633...................................  Flammability (Open-Flame) of
                                          Mattress Sets.
1611...................................  Flammability of Vinyl Plastic
                                          Film.

[[Page 69589]]

 
1219...................................  Full-Size Cribs.
1215...................................  Infant Bath Seats.
1216...................................  Infant Walkers.
Sec. 101 of CPSIA (Test Method CPSC-CH-  Lead Content in Children's
 E1001-08, CPSC-CH-E1001-08.1 or 2005     Metal Jewelry.
 CPSC Laboratory SOP).
Sec. 101 of CPSIA (Test Method CPSC-CH-  Lead Content in Children's
 E1001-08 or CPSC-CH-E1001-08.1).         Metal Products.
Sec. 101 of CPSIA (Test Method CPSC-CH-  Lead Content in Children's Non-
 E1002-08 and/or CPSC-CH-E1002-08.1).     Metal Products.
1303...................................  Lead Paint.
1220...................................  Non-Full-Size Cribs.
1511...................................  Pacifiers.
Sec. 108 of CPSIA (Test Method CPSC-CH-  Phthalate Content of Children's
 C1001-09.3 ).                            Toys and Child Care Articles.
1510...................................  Rattles.
1501...................................  Small Parts Rule.
1630...................................  Surface Flammability of Carpets
                                          and Rugs.
1631...................................  Surface Flammability of Small
                                          Carpets and Rugs.
1217...................................  Toddler Beds.
(ASTM F963)............................  Toys.
------------------------------------------------------------------------

    The number of firms that could be impacted was estimated by 
reviewing every industry in the North American Industrial 
Classification System (NAICS) and selecting industries whose firms 
could manufacture or sell any children's product that could be covered 
by a consumer product safety rule. Firms are classified in the NAICS 
category that describes their primary activity. Therefore, firms that 
might manufacture or import consumer products covered by a safety rule 
as a secondary or tertiary activity may not have been counted. There is 
no separate NAICS category for importers. Firms that import products 
might be classified as manufacturers, wholesalers, or retailers.

C. Manufacturers

    According to the criteria established by the U.S. 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 manufacturing firms by the NAICS categories that cover most 
children's products that are subject to a product safety rule. Although 
there are more than 26,000 manufacturers that would be considered small 
in these categories, not all of these firms are engaged in 
manufacturing children's products that are subject to a children's 
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, the 
Surgical Appliance and Supplies Manufacturing category includes crash 
helmets, but most of the other products in this category are not under 
the CPSC's jurisdiction.

                                             Table 2--Manufacturers
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                 NAICS Code                              Description                Small firms     Total firms
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31411......................................  Carpet and Rug Mills...............             244             262
315........................................  Apparel Manufacturing..............           7,126           7,195
316211.....................................  Rubber and Plastic Footwear                      43              45
                                              Manufacturing.
316212.....................................  House Slipper Manufacturing........               1               1
316219.....................................  Other Footwear Manufacturing.......              53              54
326299.....................................  All Other Rubber Product                        622             666
                                              Manufacturing.
336991.....................................  Motorcycle, Bicycle, and Parts                  447             452
                                              Manufacturing.
33712......................................  Household and Institutional                   6,058           6,154
                                              Furniture Manufacturing.
33791......................................  Mattress Manufacturing.............             427             441
339113.....................................  Surgical Appliance and Supplies               1,817           1,916
                                              Manufacturing.
33991......................................  Jewelry and Silverware                        2,470           2,484
                                              Manufacturing.
33992......................................  Sporting and Athletic Goods                   1,707           1,748
                                              Manufacturing.
33993......................................  Doll, Toy and Game Manufacturing...             694             705
339942.....................................  Lead Pencil and Art Good                        124             129
                                              Manufacturing.
339999.....................................  All Other Miscellaneous                       4,646           4,695
                                              Manufacturing.
                                                                                 -------------------------------
                                                Total Manufacturers.............          26,479          26,947
----------------------------------------------------------------------------------------------------------------
Source: U.S. Department of Commerce, Bureau of the Census, 2008 County Business Patterns, Number of Firms,
  Number of Establishments, Employment, and Annual Payroll by Small Enterprise Employment Sizes for the United
  States, NAICS Sectors: 2008. Available at: http://www2.census.gov/econ/susb/data/2008/us_naicssector_small_emplsize_2008.xls, last accessed on 16 August 2011.

    In addition to the manufacturers in Table 3, there were 25,184 
nonemployer businesses classified in NAICS 315 (Apparel Manufacturing) 
and 61,180 classified in NAICS 3399 (Other Miscellaneous Manufacturers) 
in 2008. Nonemployer businesses are generally very small businesses 
with no employees. They are typically sole proprietorships, and they 
may or may not constitute the owner's principal source of income. The 
average receipts

[[Page 69590]]

for the nonemployer businesses classified in Apparel Manufacturing was 
about $31,000, and the average receipts for the nonemployer businesses 
classified as Other Miscellaneous Manufacturers was about $41,000.\2\
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    \2\ U.S. Department of Commerce, Bureau of the Census, ``Revised 
2008 Nonemployer Statistics Table.'' Available at: http://www.census.gov/econ/nonemployer/Revised%202008%20Data%20With%202009%20Methodology%20Applied.xls 
(last accessed 16 August 2011).
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D. Wholesalers

    Wholesalers would be impacted by the rule if they import any 
children's product that is subject to a product safety rule. 
Wholesalers who obtain their products strictly from domestic 
manufacturers or from other wholesalers would not be impacted by the 
rule because the manufacturer or importer would be responsible for 
certifying the products. Table 3 shows the number of wholesalers by 
NAICS code that would cover most children's products that are subject 
to a product safety rule. According to SBA criteria, wholesalers are 
generally considered to be small entities if they have fewer than 100 
employees. Although there are more than 78,000 wholesalers that would 
be considered small in these categories, not all of these firms are 
engaged in importing children's products that are subject to a 
children's 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 
that would be impacted by the final rule are those that import all-
terrain vehicles that are intended for children 12 year old or younger.

                                              Table 3--Wholesalers
----------------------------------------------------------------------------------------------------------------
                 NAICS Code                              Description                Small firms     Total firms
----------------------------------------------------------------------------------------------------------------
4231.......................................  Motor Vehicle and Motor Vehicle              17,734          18,769
                                              Parts and Suppliers.
4232.......................................  Furniture and Home Furnishing                11,353          11,844
                                              Merchant Wholesalers.
42362......................................  Electrical and Electronic                     2,444           2,591
                                              Appliance, Television, and Radio
                                              Set Merchant Wholesalers.
42391......................................  Sporting and Recreational Goods and           5,019           5,196
                                              Supplies Merchant Wholesalers.
42392......................................  Toy and Hobby Goods and Supplies              2,227           2,302
                                              Merchant Wholesalers.
42394......................................  Jewelry, Watch, Precious Stone, and           7,363           7,447
                                              Precious Metal Merchant
                                              Wholesalers.
42399......................................  Other Miscellaneous Durable Goods             9,040           9,302
                                              Merchant Wholesalers.
42432......................................  Men's and Boy's Clothing and                  3,557           3,722
                                              Furnishings Merchant Wholesalers.
42433......................................  Women's, Children's, and Infant's             6,797           7,029
                                              Clothing, and Accessories Merchant
                                              Wholesalers.
42434......................................  Footwear Merchant Wholesalers......           1,521           1,593
42499......................................  Other Miscellaneous Nondurable               11,203          11,490
                                              Goods Merchant Wholesalers.
                                            --------------------------------------------------------------------
                                                Total Wholesalers...............          78,258          81,285
----------------------------------------------------------------------------------------------------------------
Source: U.S. Department of Commerce, Bureau of the Census, 2008 County Business Patterns, Number of Firms,
  Number of Establishments, Employment, and Annual Payroll by Small Enterprise Employment Sizes for the United
  States, NAICS Sectors: 2008. (Available at: http://www2.census.gov/econ/susb/data/2008/us_naicssector_small_emplsize_2008.xls, last accessed on 16 August 2011.

    In addition to the wholesalers tabulated in Table 3, the U.S. 
Census Bureau estimated that there were 206,072 nonemployer businesses 
classified in NAICS categories that could include wholesalers of 
children's products. Nonemployer businesses are generally very small 
sole proprietorships. The average receipts for the nonemployer business 
wholesalers were about $86,000.\3\ An unknown number of nonemployer 
wholesalers could import children's products.
---------------------------------------------------------------------------

    \3\ U.S. Department of Commerce, Bureau of the Census, ``Revised 
2008 Nonemployer Statistics Table.'' available at http://www.census.gov/econ/nonemployer/Revised%202008%20Data%20With%202009%20Methodology%20Applied.xls 
(last accessed 16 August 2011).
---------------------------------------------------------------------------

E. Retailers

    Retailers that obtain all of their products from domestic 
manufacturers or wholesalers will not be directly impacted by the rule 
because the manufacturers or wholesalers would be responsible for the 
testing and certification of the children's products. However, there 
are some retailers that manufacture or directly import some products 
and, therefore, will be responsible for ensuring that these products 
are properly tested and certified. 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 SBA size standards, 
retailers are generally considered to be small entities if their annual 
sales are less than $7 million to $30 million, depending on the 
specific NAICS category. Because of the way in which the data were 
reported by the Bureau of the Census, the estimates of the number of 
small firms in each category in Table 4 are based on similar, but 
different criteria. Although there are more than 100,000 firms 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 products. Many of these firms probably obtain 
all of their products from domestic wholesalers or manufacturers and 
would not be directly impacted by the rule.

                                               Table 4--Retailers
----------------------------------------------------------------------------------------------------------------
                                                                   Criteria used
                                                     SBA size      for estimate
                                                     standard     of small firms
          NAICS Code               Description     (millions of    (millions of     Small firms     Total firms
                                                    dollars of      dollars of
                                                   annual sales)   annual sales)
----------------------------------------------------------------------------------------------------------------
441221........................  Motorcycle, ATV,            < 30            < 25           4,794           4,879
                                 and Personal
                                 Watercraft
                                 Dealers.

[[Page 69591]]

 
4421..........................  Furniture Stores            < 19            < 10          16,033          16,611
44813.........................  Children's and              < 30            < 25           2,057           2,074
                                 Infant's
                                 Clothing Stores.
44814.........................  Family Clothing           < 25.5            < 25           6,588           6,684
                                 Stores.
44815.........................  Clothing                    < 14            < 10           2,757           2,774
                                 Accessories
                                 Stores.
44819.........................  Other Clothing              < 19            < 10           6,331           6,393
                                 Stores.
4482103.......................  Children's &              < 25.5            < 25             227             230
                                 Juveniles' Shoe
                                 Stores.
4482104.......................  Family Shoe               < 25.5            < 25           2,905           2,941
                                 Stores.
45111.........................  Sporting Goods              < 14            < 10          14,388          14,545
                                 Stores.
45112.........................  Hobby, Toy, &             < 25.5            < 25           4,612           4,629
                                 Game Stores.
452...........................  General                     < 30            < 25           6,873           6,971
                                 Merchandise
                                 Stores.
45322.........................  Gift, Novelty,              < 30            < 25          19,297          19,339
                                 and Souvenir
                                 Store.
454111........................  Electronic                  < 30            < 25          11,374          11,646
                                 Shopping.
454113........................  Mail Order                < 35.5            < 25           5,281           5,645
                                 Houses.
4542..........................  Vending Machine             < 10            < 10           3,796           3,887
                                 Operators.
                               ---------------------------------------------------------------------------------
                                   Total          ..............  ..............         107.313         124,700
                                    Retailers.
----------------------------------------------------------------------------------------------------------------
Source: U.S. Census Bureau, 2007 Economic Census, Release date 11/02/2010.

    In addition to the retailers tabulated in Table 4, the U.S. Census 
Bureau estimated that there were 324,918 nonemployer businesses 
classified in NAICS categories that could include retailers of 
children's products. Nonemployer businesses are generally very small 
sole proprietorships. The average receipts for the nonemployer business 
wholesalers were about $40,000.\4\ An unknown number of nonemployer 
wholesalers could import children's products.
---------------------------------------------------------------------------

    \4\ U.S. Department of Commerce, Bureau of the Census, ``Revised 
2008 Nonemployer Statistics Table.'' Available at: http://www.census.gov/econ/nonemployer/Revised%202008%20Data%20With%202009%20Methodology%20Applied.xls 
(last accessed 16 August 2011).
---------------------------------------------------------------------------

F. Compliance, Reporting, and Recordkeeping Requirements of Proposed 
Rule

    The proposed rule would require that children's product 
manufacturers select representative samples required for the third 
party periodic testing (required by 16 CFR 1107.21) to be selected 
using a procedure that provides a basis for inferring compliance about 
the population of untested products produced during the applicable 
periodic testing interval. The proposed rule would further require that 
the number of samples selected must be sufficient to ensure continuing 
compliance with all the applicable children's product safety rules.
    In order to be able to infer the compliance of the untested 
products, the samples selected must be representative of the untested 
or unselected units in the population of products produced during the 
periodic testing interval. In other words, children's product 
manufacturers must have a basis for believing that if the samples 
selected for periodic testing show compliance with the applicable 
children's product safety rules, then one can infer the compliance of 
the untested units in the population.
    Haphazard or nonpurposive methods of sample selection cannot 
provide a basis for believing that the samples are representative 
without additional information. In many cases, a manufacturer's 
knowledge of the manufacturing processes or materials used in the 
process may provide such information. For example, if the manufacturer 
knows that a product or component is manufactured using the same grade 
of material as all of the other units, and if the production processes 
are controlled such that the all dimensions are the same as all other 
units, then that product or component could be considered 
representative of all other units produced during the interval. 
Information that can be used to establish that a sample is 
representative can come from a variety of sources, including inspection 
of, or tests on, incoming materials or components, as well as 
inspection, tests, and process-control data generated during 
production.
    Other methods of selecting representative samples include various 
probability-based sampling methods. These methods include simple random 
sampling, cluster sampling, systematic sampling, stratified sampling, 
and multistage sampling. Probability-based sampling methods allow one 
to make statistical inferences about the population of the products, 
based upon results of tests on the selected samples.
    The proposed rule would require that manufacturers document the 
procedures used to select the product samples for periodic testing and 
document the basis for that belief that the samples are representative 
of the untested product produced during the periodic testing interval. 
The records must be maintained for five years. The records can be 
maintained electronically or in hardcopy. The manufacturer must make 
the records available for inspection by the CPSC upon request. The 
records may be maintained in languages other than English--if they can 
be provided immediately to the CPSC upon request, and provided that the 
manufacturer can translate them accurately into English within 48 
hours--or any longer period negotiated with CPSC staff, upon a request 
by the CPSC to translate the records.
    There will be some costs associated with developing and 
implementing sampling procedures that will result in the selection of 
representative samples. Some knowledge of subjects such as statistics 
and quality control techniques may be necessary to develop the 
procedure even though the Commission has not mandated the use of 
statistical sampling techniques. Some manufacturers may have these 
skills in-house; others may need to hire outside consultants with these 
skills. There also may be some ongoing costs associated with selecting 
the representative samples once the procedures have been developed. 
There also would be some costs associated with documenting the

[[Page 69592]]

procedure and maintaining the records that would be required by the 
proposed rule. We invite comment on these costs and other impacts that 
the proposed rule could have on manufacturers.

G. Alternatives for Reducing the Adverse Impact on Small Businesses

    The Regulatory Flexibility Act requires agencies to consider 
alternatives to proposed rules that would accomplish the stated 
objectives of the applicable statutes and that would reduce the 
economic impact on small entities. At a minimum, agencies must 
consider:
    1. The establishment of differing compliance or reporting 
requirements that take into account the resources available to small 
businesses;
    2. The clarification, consolidation, or 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.
    One alternative we considered was to propose less stringent 
alternatives for selecting representative samples. One alternative 
would be to allow manufacturers to select the samples using any method, 
provided that the method used would not purposively lead to the 
selection of samples that the manufacturers knows are more likely to 
comply with a standard or requirement than other samples, or select 
samples that are manufactured and chosen specifically to comply with a 
standard or requirement (often referred to as ``golden samples''). For 
example, manufacturers could pull randomly or nonpurposively the 
samples for periodic testing from their finished goods inventory or 
from the next lot or batch when the periodic testing needs to be 
completed.
    This alternative was not incorporated in the proposed rule because 
we think that it is necessary for the manufacturer to have a positive 
basis for their belief that the samples selected for periodic testing 
are, in fact, representative of the entire population of units produced 
during the periodic testing interval. If the manufacturer does not have 
a basis for believing that the samples selected are representative, 
then the ability to make inferences regarding the compliance of the 
untested units produced during the interval is limited, and the 
continued compliance, as stated in Sec.  14(i)(2)(B)(ii) of the CPSA, 
cannot be ensured.
    We invite comments on these or any other alternatives to the 
proposed rule that could reduce the impact on small businesses. In 
providing such comments, we request that the comments provide specific 
suggestions and well-developed justifications for the suggestions.

V. 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. 3501-3520). 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, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing each collection of information.
    We 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 method 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: Amendment to Regulation on Testing and Labeling Pertaining 
to Product Certification Regarding Representative Samples for Periodic 
Testing of Children's Products
    Description: The proposed rule would require records that describe 
how the samples for periodic testing are selected, the number of 
samples that will be selected, and an explanation of why the procedure 
described will result in the selection of representative samples, such 
that one can infer that the untested units produced during the periodic 
testing interval comply with the applicable children's product safety 
rules if the samples selected comply.
    Description of Respondents: Manufacturers of children's products.
    We estimate the burden of this collection of information as 
follows: Although it might take a manufacturer several hours, perhaps 
several days to analyze its products and manufacturing processes to 
determine its options for selecting representative samples (and some 
might need to hire consultants for this purpose), the actual 
documentation of the procedure and basis for inferring compliance will 
probably take less time.
    On the assumption that, because this document would be required by 
regulation, manufacturers will make sure that the document is reviewed 
and edited properly, it could take an average of 4 hours to prepare 
this document, once the procedure that will be used is decided and the 
number of samples has been determined. Developing the sampling 
procedure and documenting it are managerial or professional functions. 
According to the Bureau of Labor Statistics, as of March 2011, total 
compensation for management, professional, and related occupations for 
all workers in private industry was $50.08 an hour. Therefore, the cost 
of creating the record documenting a procedure for selecting 
representative samples could be estimated to be about $200 ($50.08 x 4 
hours).\5\
---------------------------------------------------------------------------

    \5\ Bureau of Labor Statistics, Employer Costs for Employee 
Compensation, Table 9 (March 2011). Available at: http://www.bls.gov/ncs.
---------------------------------------------------------------------------

    In developing the estimates of the recordkeeping burden associated 
with the testing and labeling pertaining to the certification of a 
children's products rule, we estimated that there were about 1.6 
million children's products. However, manufacturers probably will not 
need to develop and document a separate sampling procedure for each 
product. It might be more reasonable to believe that manufacturers will 
be able to use the same sampling plan for similar or closely related 
products or product lines. Therefore, manufacturers may need to develop 
and document separate sampling procedures for each set of closely 
related children's products or children's product lines rather than 
each individual product. For example, a manufacturer of die-cast toy 
cars might offer 50 different models, but if each one is manufactured 
using the same manufacturing processes and the same materials, one 
sampling plan for all die-cast cars might be sufficient. We do not have 
information on the number of closely related products or product lines 
that manufacturers offer or the average number of individual models 
within each set of closely related products or product lines. In some 
cases, a manufacturer might have only one product in a particular 
product line. Some large manufacturers may offer several hundred models 
or styles within some product lines.
    A starting point to estimate the recordkeeping burden of the 
proposed rule is to assume that each product line averages 10 to 50 
individual product models or styles. If each product line averages 50 
individual models or styles,

[[Page 69593]]

then a total of 32,000 individual sampling plans (1.6 million 
children's products / 50 models or styles) would need to be developed 
and documented. This would require 128,000 hours (32,000 plans x 4 
hours per plan) at a total cost of approximately $6.4 million (128,000 
hours x $50.08 per hour). If each product line averages 10 individual 
models or styles, then a total of 160,000 different sampling plans (1.6 
million children's products / 10 models or styles) would need to be 
documented. This would require 640,000 hours (160,000 plans x 4 hours 
per plan), at a total cost of approximately $32 million (640,000 hours 
x $50.08 per hour).
    Once a sampling plan is developed and documented, manufacturers 
will probably not incur the full cost of documenting their sampling 
plans in subsequent years because the same plan and documentation 
should be valid. However, each year, it is expected that manufacturers 
will retire some product lines and introduce new ones. Moreover, some 
manufacturers will leave the market, and other manufacturers will enter 
the market. Therefore, there will be some ongoing costs associated with 
documenting sampling plans.
    We do not have data on the number of new product lines introduced 
annually, whether from existing manufacturers or from new manufacturers 
entering a market. For purposes of this analysis, we will assume that 
about 20 percent of the children's product lines are new each year, 
either because an existing manufacturer has changed an existing product 
line to the extent that a new sampling plan is required, introduced a 
new product line, or because a new manufacturer has entered the market. 
If this is the case, then the ongoing recordkeeping costs associated 
with the draft proposed rule would be 25,600 hours (128,000 hours x 
0.2) to 128,000 hours (640,000 hours x 0.2) annually or approximately 
$1.3 million (25,600 hours x $50.08 per hour) to approximately $6.4 
million (128,000 hours x $50.08 per hour) annually.
    Another potential ongoing recordkeeping cost might result if 
manufacturers make adjustments or revisions to their sampling plans or 
procedures for their existing product lines. This might occur if 
manufacturers find that their initial procedures are difficult to 
implement or if they come up with more efficient methods of selecting 
representative samples. We do not have any information that could be 
used to estimate how often manufacturers will revise these plans. For 
purposes of this analysis, we will assume that this, too, would amount 
to about 20 percent of the burden estimated for the initial year, or 
approximately $1.3 million to $6.4 million annually.
    As noted above, we do not have empirical data for most of the 
numbers used in the examples above. We invite comments from 
manufacturers and others to gather better insight on the potential 
recordkeeping burden of the draft proposed rule.
    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 December 8, 2011, to the 
Office of Information and Regulatory Affairs, OMB (see ADDRESSES).

VI. Executive Order 12988 (Preemption)

    Executive Order 12988 (February 5, 1996), requires agencies to 
state in clear language the preemptive effect, if any, of new 
regulations. The proposed rule would be issued under the 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 by a court of competent 
jurisdiction.

VII. Effective Date

    The Administrative Procedure Act (APA) generally requires that the 
effective date of a rule be at least 30 days after publication of a 
final rule. 5 U.S.C. 553(d). The Commission intends that any final rule 
based on this proposal would become effective on the same date as the 
rule on ``Testing and Labeling Pertaining to Certification,'' published 
elsewhere in this Federal Register, which is February 8, 2013.

VIII. Request for Comments

    The issuance of this proposed rule begins a rulemaking proceeding 
under sections 3 and 102 of the CPSIA that will establish performance 
and recordkeeping requirements for the testing of representative 
samples for periodic testing of children's products. We invite 
interested persons to submit comments on any aspect of the proposed 
rule. Comments should be submitted in accordance with the instructions 
in the ADDRESSES section at the beginning of this notice.

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 amend 16 CFR part 1107, as 
proposed to be added elsewhere in this issue of the Federal Register, 
to read as follows:

PART 1107--TESTING AND LABELING PERTAINING TO PRODUCT CERTIFICATION

    1. The authority citation for part 1107 continues to read as 
follows:

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

Subpart C--Certification of Children's Products

    2. Add paragraph (f) to Sec.  1107.21 to read as follows:


Sec.  1107.21  Periodic testing.

* * * * *
    (f) A manufacturer must select representative product samples to be 
submitted to the third party conformity assessment body for periodic 
testing. The procedure used to select representative product samples 
for periodic testing must provide a basis for inferring compliance 
about the population of untested products produced during the 
applicable periodic testing interval. The number of samples selected 
for the sampling procedure must be sufficient to ensure continuing 
compliance with all applicable children's product safety rules. The 
manufacturer must document the procedure used to select the product 
samples for periodic testing and the basis for inferring the compliance 
of the product manufactured during the periodic testing interval from 
the results of the tested samples.
* * * * *
    3. Add paragraph (a)(4) to Sec.  1107.26 to read as follows:


Sec.  1107.26  Recordkeeping.

    (a) * * *
    (4) Records documenting the testing of representative samples, as 
set forth in Sec.  1107.21(f), including the number of representative 
samples selected and the procedure used to select representative 
samples. Records also must include the basis for inferring compliance 
of the product manufactured during the periodic testing interval from 
the results of the tested samples;
* * * * *


[[Page 69594]]


    Dated: October 21, 2011.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 2011-27686 Filed 11-7-11; 8:45 am]
BILLING CODE 6355-01-P