CPSC 2017-18 Budget Priorities Hearing Testimony

Today was the CPSC 2017-2018 budget priorities hearing at CPSC headquarters in Bethesda, MD. euroSource was there to advocate and continue our push for burden reduction for that group of businesses too large to benefit from the Small Batch Rule and too small to realize the economy of scale that comes with mass production. The Small Batch Rule provides relief from third party test only for the smallest of businesses and does not aide businesses that are based outside the US.

To reduce the third party testing burden for small businesses we generally concentrate on the expansion of determinations and look for ways to perform a single test even when a manufacturer faces requirements from multiple jurisdictions like the US and the EU.

Determinations are rulings by the CPSC stating that certain raw materials do not need to be tested for lead or heavy metals because it has been “determined” that the raw material does not or cannot contain them. Recently, the CPSC expanded the determination on solid wood to include the additional eight heavy metals that are included in the ASTM F963 toy safety standard. These determinations in combination with the component part rule often provide a lower cost route to compliance.

Here is the text of our presentation:

Thank you for the opportunity to comment on the issue of the Consumer Product Safety Commission agenda and budget priorities for upcoming fiscal years. I’d like to take the opportunity to make clear the concerns of small businesses of which euroSource is one. This community continues to struggle against the economic burden created by the Consumer Product Safety Improvement Act. The unintended consequences linger for those who import or sell products from Europe and those who are not helped by the small batch rule.

We bring unique and diverse perspectives regarding compliance with CPSC regulations as we work with constrained budgets and low production volumes, while producing an immense assortment of items.

Burden Reduction Progress

Congress passed Public Law 112-28 in August of 2011 which provided a small batch exemption to third party testing for micro businesses and a pathway for the CPSC to provide burden reduction from third party tests. But it wasn’t until January of 2016, more than four years later, that we began to see some results and an actual burden reduction ruling.

The initial burden reduction covers solid trunk wood and is an expansion of the lead determination to include eight additional heavy metals regulated through the adoption of ASTM F963 as a mandatory standard. Even though there is some debate over the usefulness of a determination that specifies where on a tree the wood must come from, it is at least a step in the right direction – albeit a small one.

Achieving Meaningful Burden Reduction

Burden reduction plays a crucial role in the economic viability of small businesses producing children’s products. Therefore, it is imperative to turn that first step into one of many. Meaningful burden reduction for the small business community truly centers around determinations used in combination with the component part rule.

The opportunity is before the Commission to set a course responsive to small business by ensuring that burden reduction receives a much higher priority and that the forward progress continues. To this end, it is necessary that burden reduction be included in the fiscal year 2017 Operating Plan and in the fiscal year 2018 Congressional Budget Request.

Our priorities for test burden reduction are as follows:

• Continue to expand the lead determination for natural materials.
  The research that brought us the trunk wood determination was unable to find sufficient 2^nd party data on several common natural materials. I ask for the CPSC to allocate funds for 1^st party research on these materials that are unlikely to include any heavy metals. This action should mirror the efforts used to create the original lead determination in 2009. It was researched and issued within one year of the CPSIA becoming law. Thus, the Commission can be confident that staff have the ability to perform and complete the analysis in an efficient manner.
• Investigate creating a manufactured wood determination for heavy metals.
  Manufactured woods are a very common raw material for toys. Therefore, first party research to place manufactured wood on a heavy metal determination list has potential to significantly reduce the testing burden for small businesses.
• Examination of international toy safety standards to determine areas where commonality exists and which standard is most rigorous.
  Small toy makers in Europe, many who formerly sold to the US market, continue to be excluded from entry because of the cost of meeting multiple and unaligned safety standards. Unfortunately, testing laboratories, for various reasons, are reluctant to perform a single, combination test certification to multiple standards. A compilation of requirements that identifies a single test reduces costs for businesses that must meet requirements from more than one jurisdiction.

Resolution of these three issues reduces the testing burden on children’s product manufacturers while ensuring compliance with existing standards – exactly what Congress directed in 2011. Safety is not compromised.

A productive journey down this path: reopens the US market to a wide variety of safe toys and children’s products, sustains small businesses that provide jobs and economic activity, and, begins to level the playing field for businesses with low product volumes but not helped by the small batch rule.

Conclusion

In conclusion, small businesses are hindered by excessive costs in their efforts to comply with the CPSIA. There is often no economically viable route to compliance. Remedies were identified years ago, Congress provided the directive, CPSC staff demonstrated efficient 1^st party research, but CPSC policy has de-emphasized burden reduction and there has been little progress towards accommodating small businesses.

I ask the Commission to allocate sufficient funds and resources to continue burden reduction progress by: expanding determinations for heavy metals in natural materials, creating a determination for manufactured woods, and examining international standards for equivalence.

Together, these actions help keep small businesses viable, keep consumers safe, and provide alternatives to mass produced toys and children’s products.