Sunday, August 21, 2011

HTA Letter to CPSC on Registration of Small Batch Manufacturers in the CPSIA Reform Law

August 19, 2011

Office of the Secretary
Consumer Product Safety Commission
Room 502
4330 East-West Highway,
Bethesda, Maryland, 20814

Dear Mr. Stevenson:

On behalf of the Handmade Toy Alliance, an alliance now numbering 670 toy stores, toymakers and children's product manufacturers from across the country who want to preserve unique handmade toys, clothes, and children's goods in the USA, we respectfully request your clarification and action in regards to the registration requirements for small batch manufacturers in the newly signed CPSIA reform law, H.R. 2715.

Congress has now expressed its clear intent to provide regulatory relief to the small businesses we represent. As you know, H.R. 2715 allows small batch manufacturers to assure compliance with applicable product safety laws through less expensive alternative testing methods and exempts them from testing altogether when no affordable alternative testing methods are identified by the Commission.

The Handmade Toy Alliance would like to be fully engaged with the CPSC as it interprets H.R. 2715. Our goal, as always, is to create a regulatory environment which protects both public health and the welfare of the small businesses we represent.

It has come to our attention that members of the Commission are interpreting H.R. 2715's requirement for small batch manufacturers to register with the CPSC as a technicality which requires the completion of an official registration process by the Commission before relief willbe provided. This interpretation is contrary to our understanding of the law and contrary to congressional intent as we understand it through dozens of conversations with bothRepublicans and Democrats in the House and Senate.

The text of the law reads:
Any small batch manufacturer that utilizes alternative requirements or an exemption...shall register with the Commission prior to using such alternative requirements or exemptions pursuant to any guidelines issued by the Commission to carry out this requirement.
The word any in this sentence makes it clear that a manufacturer's ability to register with the Commission is not predicated upon whether or not the Commission has issued guidelines for registration. If the word any were not present in the sentence, the meaning would be different. However, the inclusion of the word any makes it clear that small batch manufacturers may still register with the Commission even in the absence any official guidelines. It is our interpretation that, in the absence of any guidelines from the CPSC, a small batch manufacturer may register with the CPSC in any manner which the manufacturer deems appropriate.

Our interpretation is supported by the previous section of the law, which reads:
The Commission may not require third party testing of a covered product by a third party conformity assessment body until the Commission has provided either an alternative testing requirement or an exemption...
This sentence clearly states Congress's intent that, in the absence of any action by the CPSC, third party testing will not be required for covered products made by small batch manufacturers. Relief is not contingent upon the CPSC's ability to identify alternative testing methods. Nor should relief be made contingent upon the establishment of registration guidelines.

We therefore formally request the Commission to make an immediate finding of fact that relief for small batch manufacturers under H.R. 2715 is not contingent upon the promulgation of registration guidelines by the Commission.

Notwithstanding our position on this interpretation, we would like express our interest to help create a sensible registration process as soon as possible. Registration should be simple and straightforward for both the Commission and small batch manufactures. We agree with Senator Rockefeller, who spoke on the Senate floor:
The creation of a new public [sic] registry for small batch manufacturers...can be implemented without notice and comment or even a hearing. As such, the Commission should act to effectuate the new mandates of this bill in a most expeditious manner.
Senator Pryor then seconded this view:
I also share the Senator’s view that nothing in H.R. 2715 is intended to delay the Commission’s rulemaking with respect to third party testing and believe that the Commission should conclude its testing rulemakings in the next 2 months.
We agree with Senators Rockefeller and Pryor that 2 months is an appropriate timeline to complete registration guidelines. This will allow enough time for small batch manufacturers to register prior to the expiration of the ASTM F963 and lead in substrate testing stays of enforcement on December 31. If the registration process is not completed by October 31, 2011, there will not be enough time to notify small businesses before the expiration of these stays. As we have stated previously, the last two months of the year are the busiest season for our members. So, the earlier they can begin to register, the better.

Small batch manufacturer registration can and should be as simple as filling out a registration form or sending an email to a specified address at the CPSC. The Commission may also want to allow outsourcing of this task to trade associations or businesses who could collect and compile a database for the Commission. We would like to discuss alternatives with the Commission as soon as possible, as well as ways in which our organization can help publicize the registration process to our members.

Thank you again for taking the time to read and consider our comments.

Respectfully Submitted,

The Handmade Toy Alliance

Monday, August 1, 2011

Congress Passes CPSIA Relief for Small Businesses!

In the past three years, Handmade Toy Alliance members were quoted in hundreds of news articles, testified 5 times on Capitol Hill in both the House and Senate, met with 4 out of 5 of the CPSC commissioners, phoned in to dozens of conference calls, wrote dozens of letters to the CPSC and hundreds of letters to Congress, and brought together over 600 likeminded small businesses--all to reform the CPSIA, a one-size-fits-all law that was killing our businesses.

And, just when it seemed that the debt ceiling crisis was going to swallow Washington whole and prevent any chance of CPSIA reform for another legislative session, the balance suddenly tipped yesterday. Within 8 hours, both the House and the Senate passed a bipartisan bill that provides a meaningful way forward for our members. Only two members voted against it in the House and it passed unanimously in the Senate.

While we did not write this bill, we were able to significantly influence it's design through dozens of meetings with Republican and Democratic staffers. It's not a perfect solution to the many problems of the CPSIA, but it does offer the promise of meaningful relief for small batch manufacturers. Basically, the new law will require the CPSC to identify "alternative testing methods" which are economically practical for each product safety standard which would otherwise require third party testing. And, if the CPSC is unable to identify an economically feasible alternative for a given standard, it must exempt small batch manufacturers from the testing requirement. And, it gives the CPSC the flexibility to recognize other standards, like EN-71 in the Europen Union, which paves the way for the return of small batch products from Europe.

These new rules will apply to standards such as the 100ppm lead in substrate rule, the ASTM toy safety standard, and a variety of other standards which apply to many different types of children's products. Notably, it does not apply to the lead in paint standard, the small parts standard for products designed for children under age 3, the lead in metal jewelry standard, and standards that apply to pacifiers, cribs, and durable nursery equipment; those standards will still require third party testing as they do now.

What is a small batch manufacturer? Basically, it's a business or group of similarly-owned businesses that make less than $1 million in revenue per year (indexed for inflation) from the sale of consumer goods. And, in order to qualify for these alternative testing methods or exemptions, products cannot be made in quantities greater than 7,500 per year. Qualifying small businesses will also need to register with the CPSC.

What this means is that the CPSC must act to ensure that product safety certification is affordable for small businesses. How that plays out over the next few years is very much in question, however, and it will require the HTA and other groups to remain steadfast advocates for our members. The importance of the HTA and other trade organizations will only grow as a result of this new law.

If this law is to work for us, we need your continued support! The fight is far from over--it's just moved from Congress back to the CPSC. The HTA could use your support now, more than ever. If you aren't already a member, please join us now. The HTA has low cost and even free options for membership. Not only will we be working to make sure that this new version of CPSIA does what it needs to for small batch producers, we will continue to promote members and offer great cooperative marketing opportunities.

Yesterday morning, our members were facing a drop dead date on December 31, 2011, when two important CPSC stays of enforcement on third party testing requirements were set to expire. Today, we now have a way forward that will stop the CPSIA's one-size-fits-all approach and will hopefully keep our family businesses alive. That is the victory in today's votes.

We did this together! Thank you!