Grants Limited Exemptions to Lead Limit Standards and Third Party Testing Requirements

On Monday, August 1, 2011, both Houses of Congress passed virtually unanimously a bill to amend the Consumer Product Safety Improvement Act of 2008 ("CPSIA") in response to industry complaints that complying with CPSIA would prove excessively onerous to manufacturers. The bill now awaits President Obama’s signature, who is expected to sign the bill into law. The legislation, H.R. 2715 , passed both the House of Representatives and the Senate in quick succession as Congress was primarily engaged in the debt limit debate. A similar bill to amend CPSIA earlier this year had been criticized by House Democrats and was stalled in Committee, appearing unlikely to pass, until the debt limit debate provided an opportunity for the legislation’s proponents to expedite consideration of the bill. Among other changes, the enrolled bill exempts specific products from CPSIA’s 100 parts per million lead limit requirements and grants the Consumer Product Safety Commission (the "CPSC") authority to modify third party testing requirements.

Prospective Application of CPSIA Lead Limits, Exemption of Certain Children’s Products

The bill affirms CPSIA’s maximum lead content threshold of 100 parts per million in any part of a children’s product, but clarifies that the threshold shall apply to products on a prospective basis only. Under the CPSIA, the previous standard of 300 parts per million total lead content already was scheduled to drop to 100 parts per million as of August 14, 2011, with the CPSC having affirmed the lower threshhold in July, 2011. Industry groups had lobbied Congress to either to retain the 300 parts per million standard or stay enforcement of this provision for an additional year but, in the end, neither the lower lead limit standard nor the effective date of the law was modified. Thus, while the prospective application of the statute provides some relief to manufacturers, most product manufacturers will have to comply with the lower lead content standard that goes into effect on August 14, 2011, and the CPSC will begin enforcing the new standards on January 1, 2012.

The bill specifically exempts a number of products from the modified lead limits that are deemed unlikely to be ingested by children, including youth motorcycles and all-terrain vehicles ("ATVs"), children’s bicycles, and used children’s products. The legislation also provides the CPSC with the authority to exempt additional products from the lead limits upon a showing that the product requires the inclusion of lead, that the product is not likely to be placed in a child’s mouth or ingested, and that the exception for the product will not lead to measurable increases in a child’s blood lead levels. As noted above, despite these limited carve-outs, most children’s products will now be subject to the 100 part per million lead standard and associated third-party testing requirements.

Limited Exemptions from Third Party Testing, Consideration of Small Batch Manufacturers, and Mandated CPSC Comment Cycle

Mandatory third party testing of children’s products to ensure conformity to CPSC rules and standards has been among the most controversial of CPSIA’s requirements. The new legislation modifies this requirement by granting an exemption from the testing requirement for bicycle components parts as well as for ordinary books and paper-based printing materials. The CPSC is also now required to take into consideration small batch manufacturers when implementing third party testing requirements and allow for alternative testing requirements or an exemption for these parties where appropriate. A very significant provision of the bill is the requirement that the CPSC seek public comment on opportunities to reduce the cost of third party testing requirements within 60 days after the date of the bill’s enactment. The CPSC will be required to consider a number of factors set forth for comment and allows the CPSC to act within one year after the date of enactment to propose new or revised third party testing requirements. This provides manufacturers that continue to be adversely impacted by the third party testing requirement with an additional opportunity to modify the third party testing regime through the CPSC.

Modifications to Phthalate, Durable Nursery Goods, and Tracking Label Standards

The bill also modifies the plasticized phthalate prohibition to clarify the prospective application of the standard and to provide an exemption for component parts that would be inaccessible to a child through normal and foreseeable abuse of the product, which specifically includes ingestion, breaking, or aging of the product. The durable nursery goods standards have also been slightly modified to ensure that the CPSC revises its regulations consistent with evolving industry standards. Finally, the CPSC was granted authority to modify requirements for tracking labels for products that the CPSC determines cannot be practically labeled.

Enhanced Reliability Requirements for the CPSC Public Consumer Product Database

The CPSC’s public consumer product safety database, which was launched by the CPSC in March of this year, will be modified in order to improve its reliability. Specifically, the bill modifies the process for handling reports in the public database that may be "materially" inaccurate by providing that the CPSC must delay publication of potentially inaccurate data upon receipt of notice of material inaccuracy. The bill also requires the CPSC to seek from the reporting entity the model, serial number, or a photograph of the product if this information was not initially provided. As a practical matter this is likely to lead the CPSC to modify the reporting questionnaire to include these items.

Analysis

Taken together, the new legislation is a victory for small manufacturers and those limited industries that won a special exemption from Congress, but it does not provide the more sweeping relief sought by many manufacturers of affected products. Parties seeking relief from the CPSIA’s reduced lead content requirements or third party testing mandate will likely be disappointed that the legislation did not substantially modify CPSIA’s existing requirements, especially in light of the modified lead standard provisions and third party testing requirements that were proposed in similar legislation that had been introduced in Congress earlier this year. However, the bill’s mandate that the CPSC seek comment on opportunities to reduce the cost of third party testing requirements provides manufacturers with an opportunity to modify the testing regime through the CPSC on a case-by-case basis.