This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

50003 

Vol. 71, No. 164 

Thursday, August 24, 2006 

1Acting Chairman Nancy A. Nord and 

Commissioner Thomas H. Moore each filed a 

statement. The statements are available from the 

Office of the Secretary or on the Commission’s Web 

site at http://www.cpsc.gov. 

2Earnest, G.S., Carbon Monoxide Poisonings from 

Small, Gasoline-Powered, Internal Combustion 

Engines: Just What is a ‘‘Well-Ventilated Area’’?, 

American Industrial Hygiene Association Journal, 

November 1997. 

CONSUMER PRODUCT SAFETY 

COMMISSION 

16 CFR Part 1407 

Portable Generators; Notice of 

Proposed Rulemaking; Proposed 

Labeling Requirements; Request for 

Comments and Information 

AGENCY: Consumer Product Safety 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: In this document the 

Consumer Product Safety Commission 

(Commission or CPSC) proposes to 

require manufacturers to label portable 

generators with performance and 

technical data related to performance 

and safety. The warning label would 

inform purchasers that: ‘‘Using a 

generator indoors will kill you in 

minutes;’’ ‘‘Exhaust contains carbon 

monoxide, a poison gas you cannot see 

or smell;’’ ‘‘Never use in the home or in 

partly enclosed areas such as garages;’’ 

‘‘Only use outdoors and far from open 

windows, doors, and vents.’’ The 

warning label will also include 

pictograms. The Commission believes 

that providing this labeling information 

will help reduce risks to consumers. 

The Commission invites public 

comment on this proposal.1

DATES: Written comments in response to 

this notice must be received by 

November 7, 2006. 

ADDRESSES: Comments should be emailed to cpsc-os@cpsc.gov, and should 

be captioned ‘‘PORTABLE GENERATOR 

NPR.’’ Comments may also be mailed, 

preferably in five copies, to the Office of 

the Secretary, Consumer Product Safety 

Commission, Room 502, 4330 East-West 

Highway, Bethesda, MD 20814, or 

delivered to the same address 

(telephone (301) 504–0800). Comments 

also may be filed by facsimile to (301) 

504–0127. 

FOR FURTHER INFORMATION CONTACT: 

Janet L. Buyer, Project Manager, 

Directorate for Engineering Sciences, 

Consumer Product Safety Commission, 

4330 East-West Highway, Bethesda, MD; 

telephone (301) 504–7542 or e-mail: 

jbuyer@cpsc.gov. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The total yearly estimated non-fire 

related carbon monoxide (CO) deaths for 

each of the years 1999 through 2002 are 

109, 138, 130 and 188, respectively. 

Since 1999, the percentage of estimated 

CO poisoning deaths specifically 

associated with generators has been 

increasing annually. In 1999, generators 

were associated with 7 (6%) of the total 

yearly estimated CO poisoning deaths 

for that year. In 2000, 2001 and 2002, 

they were associated with 19 (14%), 22 

(17%) and 46 (24%) deaths out of the 

total estimates for each of those years. 

On October 12, 2005, Commission 

Chairman Hal Stratton sent a 

memorandum to the Executive Director 

directing the staff to undertake a 

thorough review of the status of portable 

generator safety. As part of this review, 

Chairman Stratton requested that the 

staff address the sufficiency of warning 

labels to address the CO poisoning 

hazard posed by portable generators that 

are used within or near residences. 

B. The Product 

Portable generators offer a portable 

means of providing electrical power to 

a location that either temporarily lacks 

it or is not provided with electrical 

service at all. A portable generator has 

an internal combustion engine to 

produce rotational energy, which is 

used to generate electricity. The engine 

may be fueled by gasoline, diesel, 

natural gas, or liquid propane. It is the 

engine that is the source of carbon 

monoxide. 

Estimates of sales of portable 

generators for consumer use vary, but 

could be more than a million units 

annually. The most popular of these 

generators are gasoline-powered and are 

priced in the $500 to $800 range. The 

output of the majority of light duty 

generators sold to consumers in 2005 

was in the 3.5 kW to 6.5 kW range. This 

is the size of most of the units involved 

in the fatal CO poisoning incidents 

CPSC staff investigated in which the 

rating of the involved generator was 

identified. 

C. Relevant Statutory Provisions 

Section 27(e) of the Consumer 

Product Safety Act (CPSA) authorizes 

the Commission, by rule, to ‘‘require 

any manufacturer of consumer products 

to provide the Commission with such 

performance and technical data related 

to performance and safety as may be 

required to carry out the purposes of 

this Act, and to give such notification of 

such performance and technical data at 

the time of original purchase to 

prospective purchasers and to the first 

purchaser of such product for purposes 

other than resale, as it determines 

necessary to carry out the purposes of 

this Act.’’ As provided in section 2(b)(1) 

of the Consumer Product Safety Act (15 

U.S.C. 2051(b)(1)), one purpose of the 

CPSA is ‘‘to protect the public against 

unreasonable risks of injury associated 

with consumer products.’’ 

D. Development of Proposed Rule 

In 2002, CPSC staff assessed the 

effectiveness of current CO poisoning 

warnings found on the product and 

within the owner’s manuals of several 

models of portable generators found on 

store shelves. Staff found that the 

guidance provided for avoiding the 

hazard was typically twofold: (1) Do not 

use in a confined or enclosed space, and 

(2) provide proper ventilation. None of 

the evaluated warnings defined 

‘‘confined or enclosed space’’ or ‘‘proper 

ventilation.’’ 

The Commission believes these 

ambiguous instructions and warnings 

do not adequately advise the user how 

to avoid the CO poisoning hazard. 

Furthermore, the incident data includes 

fatalities where it appears that the 

victims attempted to provide adequate 

ventilation, to open confined areas, or to 

do both by, for example, opening doors, 

opening windows, and running exhaust 

fans. Prior research has shown that tools 

with gasoline-powered engines produce 

CO that ‘‘can rapidly accumulate, even 

in areas that appear to be wellventilated, resulting in dangerous and 

fatal concentrations within minutes.’’ 2

Thus, evidence suggests that the 

methods consumers typically use to 


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50004 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 

3CDC, Carbon Monoxide Poisoning After Two 

Major Hurricanes—Alabama and Texas, August–

October 2005, MMWR March 10, 2006; 55(09); 236–

239. 

4Natalie E. Marcy and Debra S. Ascone, 

‘‘Incidents, Deaths and In-Depth Investigations 

Associated with Carbon Monoxide from EngineDriven Generators and other Engine-Driven Tools, 

1990–2004,’’ CPSC Memorandum to Janet Buyer, 

Directorate for Engineering Sciences, U.S. 

Consumer Product Safety Commission, Washington, 

DC (1 December 2005) and Robin L. Ingle, ‘‘Nonfire Carbon Monoxide Fatalities Associated with 

Engine-Driven Generators and Other Engine Driven 

Tools in 2004 and 2005,’’ CPSC Memorandum to 

Janet Buyer, Directorate for Engineering Sciences, 

U.S. Consumer Product Safety Commission, 

Washington, DC (3 January 2006). 

5Timothy P. Smith, ‘‘Human Factors Assessment 

for the Small Engine-Driven Tools Project,’’ CPSC 

Memorandum to Janet L. Buyer, U.S. Consumer 

Product Safety Commission, Washington, DC (18 

June 2002). 

provide ventilation or to open confined 

areas are insufficient to prevent 

hazardous levels of CO buildup. Even 

locating a generator outdoors can be 

insufficient if the generator is near 

enough to openings to the home or other 

occupied structure to allow CO to 

permeate and subsequently accumulate 

indoors. CPSC is aware of at least five 

deaths that occurred when the generator 

was situated outdoors but near openings 

to the home. In addition, the Centers for 

Disease Control and Prevention recently 

reported the results of a study of posthurricane related generator use in 2005 

that found up to 50 percent of non-fatal 

CO poisoning incidents involved 

generators operated outdoors but within 

one to seven feet from the home.3

The staff believes that there are too 

many unknown variables to be able to 

recommend one single safe distance for 

the location of a portable generator 

relative to a home or dwelling. Variables 

such as the wind speed and direction 

relative to openings to indoor spaces, 

relative proximity of other structures in 

the area that could create wind vortices, 

direction in which the engine exhaust is 

pointing, and a multitude of other 

factors complicate attempts to define a 

safe distance. Notwithstanding the issue 

of defining a safe operating distance, the 

staff believes that warning labels must 

instruct consumers to keep generators 

outdoors and away from air intakes 

during use. 

In 2003, the staff developed 

recommended warning language for 

engine-driven tools, with particular 

focus on portable generators, as a 

follow-up to the staff’s assessment of the 

inadequacy of current warnings. This 

was later provided to the Underwriters 

Laboratories (UL) voluntary standard 

development committee. In February 

2006, staff developed a further refined 

warning label for portable generators 

and presented it to UL in response to 

their request for CPSC staff comments 

on a proposed UL Outline of 

Investigation. UL incorporated staff’s 

proposed warning label into their 

Outline of Investigation, which became 

effective April 2006 and serves as the 

requirements with which a product 

must conform in order to be eligible to 

bear the UL mark. This document is not 

a consensus standard. The Commission 

believes the proposed rule is needed to 

ensure that all products will bear the 

proposed warning label as opposed to 

only those that seek UL’s mark. 

E. Description of the Proposal 

The proposed warning label appears 

at fig. 1 (and fig. 3 for the on-package 

label). The warning label provides 

technical data, i.e., it indicates the 

presence of carbon monoxide in the 

portable generator exhaust and informs 

that carbon monoxide is a gas you 

cannot see or smell. The label uses the 

phrase ‘‘you cannot see or smell’’ rather 

than terms such as ‘‘odorless’’ and 

‘‘colorless,’’ because the latter 

terminology may be less familiar and 

understandable to some consumers. 

The label also includes statements 

which connect the technical data with 

safety concerns. Specifically, the label 

warns: ‘‘Using a generator indoors WILL 

KILL YOU IN MINUTES.’’ The phrase 

‘‘in minutes’’ is intended to emphasize 

the imminence of the carbon monoxide 

poisoning hazard to provide consumers 

with a better understanding of the speed 

with which incapacitation can occur. In 

addition, research indicates that 

information about hazard scenarios 

affects consumers’ risk judgments. Thus, 

the label includes a description not just 

of the hazard, carbon monoxide, but of 

the primary hazard scenario associated 

with CO-poisoning deaths, i.e., using a 

generator indoors. The label also warns, 

‘‘NEVER use in the home or in partly 

enclosed areas such as garages.’’ The 

label warns specifically against use in 

the home and in garages, since these are 

known places in which consumers use 

generators. Furthermore, the use of a 

more wide-reaching phrase, ‘‘partly 

enclosed,’’ is intended to broaden the 

perceived range of potentially 

dangerous areas in which to operate a 

generator, since this range does include 

partly enclosed areas. The label 

includes prescriptive advice to ‘‘ONLY 

use outdoors and far from open 

windows, doors, and vents,’’ so 

consumers can know what positive 

action they can take to avoid the hazard, 

rather than focusing exclusively on 

prohibited behaviors, or what 

consumers should not do. This is 

consistent with the requirements of 

ANSI Z535.4–2002, which is the 

primary U.S. voluntary consensus 

standard on product safety signs and 

labels, and with warning design 

guidelines in general. The 

accompanying pictograms are based on 

the pictograms developed by the 

Underwriters Laboratories Standards 

Technical Panel. Research shows that 

labels with pictograms tend to capture 

a consumer’s attention more readily 

than a label without pictograms. 

F. Unreasonable Risk of Injury 

Portable generators are powered by 

gasoline, diesel, or propane engines and 

exhaust CO. If the generator is used in 

enclosed or even partially enclosed 

spaces, the CO can very quickly build to 

hazardous levels. Serious injury can 

also result when the generator is placed 

outdoors but near an open window or 

vent and the exhaust is pulled into a 

house. In the 6-year period from 2000 

through 2005, CPSC staff is aware of at 

least 222 deaths related to CO poisoning 

associated with generators.4 Non-fatal 

CO injuries can have serious 

consequences since permanent brain or 

neurological damage can result. 

A well-designed warning label could 

inform the consumer of the CO hazard 

associated with generators and how to 

avoid the hazard while using the 

generator. A label placed in a prominent 

position on the generator could 

reinforce this information each time the 

consumer used the generator. For 

example, the proposed label reminds 

the consumer that generator exhaust 

contains CO, which cannot be seen or 

smelled, and can quickly kill. The label 

also clarifies that a generator should 

only be used outside and away from 

windows and vents and should not be 

used in partly enclosed spaces such as 

garages. This information is important 

since some consumers have apparently 

been aware that a CO hazard was 

associated with generators, but believed 

that they would avoid the hazard by 

running the generator in a garage with 

the door open or outside the house, but 

did not understand that it was necessary 

to place it away from open windows 

and vents.5 The costs of a warning label 

include the one-time cost of designing 

the label and the continuing costs of 

printing and applying the labels to the 

generators and packages. These costs are 

expected to be low—less than one dollar 

per generator. The Commission 

therefore preliminarily concludes that 

there is an unreasonable risk of injury 

associated with portable generators and 


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that providing the information required 

by the proposed rule will help reduce 

the rising CO death toll associated with 

consumer use of portable generators. 

G. Environmental Considerations 

Labeling requirements are not 

expected to have an adverse impact on 

the environment and are considered to 

be ‘‘categorical exclusions’’ for the 

purposes of the National Environmental 

Policy Act according to the CPSC 

regulations that cover its 

‘‘environmental review’’ procedures (16 

CFR part 1021.5(c)(2)). 

H. Impact on Small Business 

CPSC staff has identified more than 

40 suppliers of generators to the U.S. 

consumer market. Although a few large 

firms dominate the market, a number of 

these suppliers are likely to be small 

businesses. The small businesses 

include firms that import generators 

from foreign manufacturers as well as 

equipment assemblers, which assemble 

generator sets from purchased 

components. The small manufacturers 

will be responsible for ensuring that 

their generators are properly labeled. 

However, the labeling requirement is 

not expected to pose a significant 

burden to small business because the 

cost of adding the labels per generator 

is expected to be less than a dollar per 

generator set. 

I. Effective Date 

The proposed effective date of Part 

1407, which requires labeling for 

portable generators, is 90 days from 

issuance of any final regulation in the 

Federal Register. The labeling 

requirement would apply to all portable 

generators imported or introduced into 

commerce after the 89th day following 

publication of any final regulation in the 

Federal Register. 

J. Request for Information and 

Comments 

Interested persons are invited to 

submit comments regarding this 

proposal. The Commission specifically 

seeks comments on whether the 

proposed new warning label should be 

required or permitted to appear in a 

second language. If such dual language 

labeling is required or permitted, the 

Commission seeks further comments on 

the most effective manner to implement 

the second language warning. 

Comments should be e-mailed to 

cpsc-os@cpsc.gov and should be 

captioned ‘‘PORTABLE GENERATOR 

NPR.’’ Comments may also be mailed, 

preferably in five copies, to the Office of 

the Secretary, Consumer Product Safety 

Commission, Room 502, 4330 East-West 

Highway, Bethesda, MD 20814, or 

delivered to the same address 

(telephone (301) 504–0800). Comments 

also may be filed by telefacsimile to 

(301) 504–0127. All comments and 

submissions should be received no later 

than November 7, 2006. 

K. Conclusion and Proposal 

On the basis of the information 

discussed above, the Commission 

preliminarily finds that there is an 

unreasonable risk of injury associated 

with portable generators, and concludes 

that a requirement for a carbon 

monoxide identification and warning 

statement on portable generators is 

necessary to help protect the public 

against the risk of CO poisoning 

associated with such products. 

Therefore, under provision of the 

Consumer Product Safety Act (section 

27(e), 86 Stat. 1227–9, as amended; 15 

U.S.C. 2076(e)), the Commission 

proposes that Title 16, Chapter II, be 

amended by adding to Subchapter B the 

following new Part 1407: 

List of Subjects in 16 CFR Part 1407 

Consumer protection, labeling. 

PART 1407—PORTABLE 

GENERATORS: REQUIREMENTS TO 

PROVIDE PERFORMANCE AND 

TECHNICAL DATA BY LABELING 

Sec. 

1407.1 Purpose, Scope, and Effective Date. 

1407.2 Definitions. 

1407.3 Providing performance and 

technical data to purchasers by labeling. 

Authority: 15 U.S.C. 2076(e). 

§ 1407.1 Purpose, Scope, and Effective 

Date. 

This part 1407 establishes 

requirements under section 27(e) of the 

Consumer Product Safety Act (15 U.S.C. 

2076(e)) for manufacturers to provide 

consumers with a specified notification 

concerning the carbon monoxide 

poisoning hazard associated with the 

use of portable generators. The 

notification is intended to provide 

consumers with technical and 

performance information related to the 

safety of portable generators. This part 

becomes effective [90 DAYS FROM 

ISSUANCE OF FINAL RULE]. 

§ 1407.2 Definitions. 

(a) The definitions in section 3 of the 

Consumer Product Safety Act (15 U.S.C. 

2052) apply to this part 1407. 

(b) A portable generator is an internal 

combustion engine-driven electric 

generator, which is intended to be 

moved for temporary use at a location 

where utility-supplied electric power is 

not available. It has receptacle outlets 

for the alternating-current output 

circuits and may also have a direct 

current (DC) battery charging outlet. 

§ 1407.3 Providing performance and 

technical data to purchasers by labeling. 

(a) Notice to purchasers. 

Manufacturers of portable generators 

shall give notification of performance 

and technical data related to 

performance and safety to prospective 

purchasers of such products at the time 

of original purchase and to the first 

purchaser of such product for purposes 

other than resale, in the manner set 

forth below. 

(1) On-product label. The CO 

poisoning hazard label shown in fig. 1 

shall be used on the product. A different 

representation of the generator may be 

substituted for accuracy if consumers 

are more likely to recognize the 

substituted representation as the 

generator to which this label is affixed. 

(i) The signal word ‘‘DANGER’’ shall 

be in letters not less than 0.15 inch (3.8 

mm) high. The remaining text shall be 

in type whose uppercase letters are not 

less than 0.1 inch (2.5 mm) high. 

(ii) The signal word ‘‘DANGER’’ shall 

appear in white letters on a safety red 

background. The safety alert symbol 

shown in fig. 2 shall appear 

immediately before and next to the 

signal word and be no smaller than the 

height of the signal word with the base 

of the triangle on the same horizontal 

line as the base of the signal word. The 

solid portion of the triangle (within the 

lines of the triangle, around the 

exclamation mark) shall be white and 

the exclamation mark shall be safety 

red. The prohibition ‘‘X’’s shall be safety 

red. 

(iii) The on-product hazard label 

shown in fig. 1 shall be located: 

(A) On a part of the portable generator 

that, if removed, would impair the 

operation of the generator assembly, and 

(B) On a location that is prominent 

and conspicuous to an operator while 

performing at least two of the following 

actions: filling the fuel tank, accessing 

the receptacle panel, and starting the 

engine. 

(iv) The on-product hazard label 

shown in fig. 1 shall be designed to 

remain permanently affixed, intact, 

legible, and largely unfaded in the 

environment in which the product is 

expected to be operated and stored over 

the life of the product. 

(2) Carbon monoxide poisoning 

hazard label for package. The CO 

poisoning hazard label shown in fig. 3 

shall be affixed to the principal display 

panel(s) of the package, as well as the 

surface containing the top flaps of the 

package. The principal display panel(s) 


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50006 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 

of the package is the portion(s) of the 

outer packaging that is designed to be 

most prominently displayed, shown, 

presented, or examined under 

conditions of retail sale. Any panel of 

the package that includes text in a 

language other than English shall also 

include a CO poisoning hazard label in 

that language. Alternate-language 

versions of this label may also appear on 

the top flaps of the package as long as 

they are physically separate from one 

another. A different representation of 

the generator may be substituted for 

accuracy if consumers are more likely to 

recognize the substituted representation 

as the generator contained within the 

packaging. 

(i) The signal word ‘‘DANGER’’ shall 

be in letters not less than 0.15 inch (3.8 

mm) high. The remaining text shall be 

in type whose uppercase letters are not 

less than 0.1 inch (2.5 mm) high. 

(ii) The signal word ‘‘DANGER’’ shall 

appear in white letters on a safety red 

background. The safety alert symbol 

shown in fig. 2 shall appear 

immediately before and next to the 

signal word and be no smaller than the 

height of the signal word with the base 

of the triangle on the same horizontal 

line as the base of the signal word. The 

solid portion of the triangle (within the 

lines of the triangle, around the 

exclamation mark) shall be white and 

the exclamation mark shall be safety 

red. The prohibition ‘‘X’’s shall be safety 

red. 


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Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Proposed Rules 50007 

Dated: August 17, 2006. 

Todd A. Stevenson, 

Secretary, Consumer Product Safety 

Commission. 

[FR Doc. 06–7069 Filed 8–23–06; 8:45 am] 

BILLING CODE 6355–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–109367–06] 

RIN 1545–BF52 

Section 1221(a)(4) Capital Asset 

Exclusion for Accounts and Notes 

Receivable 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correction notice. 

SUMMARY: This document corrects a 

notice of proposed rulemaking (REG–

109367–06) that was published in the 

Federal Register on Monday, August 7, 

2006 (71 FR 44600) clarifying the 

circumstances in which accounts or 

notes receivable are ‘‘acquired * * * for 

services rendered’’ within the meaning 

of section 1221(a)(4) of the Internal 

Revenue Code. 

FOR FURTHER INFORMATION CONTACT: K. 

Scott Brown (202) 622–7454 (not a tollfree number). 

SUPPLEMENTARY INFORMATION: 

Background 

The notice of proposed rulemaking 

(REG–109367–06) that is the subject of 

this correction is under section 1221 of 

the Internal Revenue Code. 

Need for Correction 

As published, REG–109367–06 

contains an error that may prove to be 

misleading and is in need of 

clarification. 

Correction of Publication 

Accordingly, the publication of the 

proposed regulations (REG–109367–06) 

which was the subject of FR Doc. E6–

12789, is corrected as follows: 

1. On page 44600, column 1, in the 

preamble, under the caption FOR

FURTHER INFORMATION CONTACT, line 2, 

the language ‘‘Scott Brown (202) 622–

3920 (not a toll-’’ is corrected to read 

‘‘Scott Brown (202) 622–7454 (not a 

toll-’’. 

Guy Traynor, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. E6–14003 Filed 8–23–06; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–158677–05] 

RIN 1545–BF24 

Effect of Election on Corporation 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Proposed regulations and notice 

of public hearing. 

SUMMARY: These proposed regulations 

clarify that if a bank is an S corporation 

within the meaning of section 

1361(a)(1), its status as an S corporation 

does not affect the applicability of the 

special rules for banks under the 

Internal Revenue Code. 

DATES: Written or electronic comments 

and requests for a public hearing must 

be received by November 22, 2006. 

ADDRESSES: Send submissions to: 

CC:PA:LPD:PR (REG–158677–05), Room 

5203, Internal Revenue Service, POB 

7604, Ben Franklin Station, Washington 

DC 20044. Alternatively, taxpayers may 

submit comments electronically via the 

IRS Internet site at http://www.irs.gov/ 

regs or via the Federal eRulemaking 

Portal at http://www.regulations.gov 

(IRS—REG–158677–05). If a public 

hearing is requested, the public hearing 

will be held in the Auditorium, New 

Carrollton Federal Building, 5000 Ellin 

Road, Lanham, MD. 


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