The U.S. Senate and House of Representatives have approved the Conference Report on H.R. 4040, known as the Consumer Product Safety Improvement Act of 2008 ("the Act"), and will be sending the legislation to the President for his signature.

This legislation is the most comprehensive overhaul of consumer product safety laws since the U.S. Consumer Product Safety Commission ("CPSC") was created by passage of the Consumer Product Safety Act ("CPSA") in 1972. The new law was triggered by well-publicized recalls of imported toys with lead paint and other hazards, but the legislation is far broader in scope and potentially touches all manufacturers, importers, distributors and retailers of consumer products.

The full scope and impact of the new legislation will not be known for some time because it directs the CPSC to create a host of new regulations and procedures, including some based upon research and investigations that have yet to be performed. Some of the most significant impacts of the Act include widespread bans of lead and phthalates in children's products, mandatory third party testing and certification for imported children's products, new warnings in advertising and websites for toys and games, substantially increased civil penalties (up to $15 million), allowing state attorneys general to enforce federal product safety laws, giving the CPSC greater authority to dictate the terms of product recalls, whistleblower protection for employees who report safety violations, and stepped-up enforcement efforts involving other federal agencies, foreign product safety regulators and state health agencies.

Below are highlights of the changes that will result from the enactment of H.R. 4040.

Toys and Children's Products

  • Many of the Act's provisions, including bans on phthalates and lead, are tied to new definitions and general rules applicable to all children's products and more specific rules for toys and child care articles.
  • "Children's products" are defined as "a consumer product designed or intended primarily for children 12 years of age or younger." The CPSC issued age determination guidelines for children's products in 2002 that are referenced in the new Act.
  • "Children's toys" include products "designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays."
  • "Child care articles" are defined as "a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething."

Ban on Phthalates in Toys and Children's Products

  • Prohibits the sale of children's toys and child care articles with concentrations of more than 0.1 percent of di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), or benzyl butyl phthalate (BBP). Effective 180 days after enactment.
  • Establishes an interim (effective in 180 days) ban on the sale of children's toys that can be placed in a child's mouth and all child care articles that contain more than 0.1 percent of diisononyl phthalate (DINP), diisodecyl phthalate (DIDP), or di-n-octyl phthalate (DnOP). Toys that can be put in the mouth are defined to include toys or parts smaller than five centimeters in dimension, and exclude toys that can only be licked.
  • Provides only limited preemption of state laws regulating phthalates and phthalates alternatives - many states have adopted laws banning various phthalates in the past year.

Ban on Lead in Toys and Children's Products

  • Mandates a phased-in ban on lead in all children's products, requiring that lead levels be reduced to 600 parts per million within 180 days, 300 parts per million within one year; and 100 parts per million within three years of the bill's enactment.
  • Special provisions apply to lead paint (0.009 percent and possibly lower after further studies are conducted). Inaccessible component parts are generally exempt.

Additional Safety Rules Affecting Toys and Children's Products

  • Adopts ASTM F963-07 standard as a mandatory consumer product safety rule and directs studies that may result in additional rules. ASTM F963-07 is a comprehensive standard applying to most toys; it does not cover sporting goods, athletic equipment, musical instruments or furniture, but does apply to "toy counterparts" of such items.
  • Mandates testing and certification of imported children's products for compliance with safety standards, with detailed requirements for laboratory accreditation, firewalling rules for labs owned or controlled by the manufacturer, and priorities for testing certain products. The testing and certification provisions take effect 90 days after the CPSC has published its requirements for accreditation of third party testing bodies; the CPSC must publish these requirements within 30 days for lead paint, 60 days for cribs, 90 days for small parts, 120 days for metal jewelry, 210 days for baby bouncers, walkers and jumpers, and 10 months for all other children's products.
  • Creates new rules for durable infant and toddler products, including cribs, high chairs, strollers, infant carriers, bath seats, gates, swings and other items, that will facilitate owner registration by requiring manufacturers to provide postpaid registration cards and to take other steps that will enable more efficient distribution of recall and safety notices.
  • Mandates permanent tracking labels on children's products and their packaging with source, production date and batch information that will better enable recalled products to be tracked and identified. These labels must be in place within one year of enactment.
  • Expands warning requirements for choking hazards for children's toys and games. The Federal Hazardous Substances Act requires warnings on packaging and accompanying descriptive materials for toys and games containing small balls, balloons, small parts and marbles that they present choking hazards and are not for children under age 3. The new Act requires that these choking warnings be included in all Internet advertisements within 120 days of enactment and in all catalogs and other printed materials within 180 days if they provide a "direct means for the purchase or order of the product."

Recalls and Enforcement

  • Greatly increases civil penalties for violations of the CPSA, as well as the Flammable Fabrics Act and the Federal Hazardous Substances Act, to $100,000 for each violation, with a maximum cap of $15 million for a related series of violations (the existing limits are $8,000/$1,825,000).
  • Authorizes state attorneys general to enforce the CPSA and related laws by seeking injunctive relief, but requires states to give the CPSC advance notice of any intent to initiate a state action. (State enforcement previously was prohibited, and the CPSC objected to this provision of the new Act.)
  • Increases criminal penalties by permitting larger fines, up to five years' imprisonment, and forfeiture of assets associated with a violation, and removes a requirement that directors, officers and agents be aware of violations before being criminally charged.
  • Eliminates the right of a party recalling a product to elect whether they will offer a refund, repair or replacement for recalled products and permits the CPSC to require a refund, repair and/or replacement as the CPSC determines to be in the public interest.
  • Creates new requirements for the content and dissemination of recall notices and permits the CPSC to require recall notices in languages other than English.
  • Prohibits any CPSC regulatory activities from preempting damage claims arising under common law and state statutes, or from preempting California Proposition 65.
  • Establishes whistleblower protection for private employees who report violations, testify or otherwise provide assistance in consumer product safety enforcement proceedings.
  • Provides stronger prohibitions against selling banned or recalled products, or any products that violate product safety regulations.
  • Calls for a study to determine the feasibility of requiring that manufacturers, importers and retailers establish escrow funds, purchase insurance or otherwise provide financial security to pay for recalls and/or destruction of recalled products.

Other Products and Substances

  • Bans 3-wheeled all-terrain vehicles (ATVs) and strengthens regulation of other ATVs, especially those intended for use by youth.
  • Mandates a study of risks resulting from formaldehydes in textiles and apparel.

Import-Export Issues

  • Imposes mandatory testing and certification for imported children's products, as discussed above.
  • Prohibits the export of recalled or non-conforming products to other countries, subject to certain exceptions.
  • Establishes policies to utilize the International Trade Data System established under the Tariff Act of 1930 and to increase cooperation with U.S. Customs and Border Protection to prevent unsafe products from entering the United States.
  • Establishes procedures to destroy products that have been refused admission into the United States for failure to conform to safety regulations.
  • Authorizes further studies to assess the effectiveness of measures and activities intended to prevent the importation of unsafe products into the United States.

Administrative and Procedural Changes

  • Mandates that the CPSC establish a searchable database, accessible to the public on the Internet, on the safety of consumer products that will include reports from certain sources on deaths and injuries reportedly caused by consumer products, and which includes manufacturers' names, product names and other information.
  • Requires that the CPSC shares information with state public health agencies.
  • Bans industry-sponsored travel by CPSC commissioners and staff, and authorizes a travel budget to address the increasingly global market for consumer products.
  • Restores the five-member Commission (it has operated with only three commissioners) and authorizes significant budget increases for the agency.
  • Provides for expedited rulemaking by the CPSC.