Polaris 2010 Annual Report Download - page 24

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The Act also includes a provision that requires the CPSC to complete the ATV rulemaking process it started in
August, 2006 and issue a final rule regarding ATV safety. The Act requires the CPSC to evaluate certain matters in
the final rule, including the safety of the categories of youth ATVs as well as the need for safety standards or
increased safety standards for suspension, brakes, speed governors, warning labels, marketing and dynamic
stability.
The Act also includes provisions that limit the amount of lead paint and lead content that can exist in the
accessible components of ATVs and snowmobiles that we sell in the United States for youth 12 years of age and
younger. Under the Act, products that have lead content in excess of these limits may not be sold in the United States
starting February 10, 2009. We, along with others in the recreational products industry, filed a petition for exclusion
with the CPSC which, if approved, would have exempted certain metal alloys and battery terminals from the
requirements of the law.
The CPSC did not approve this request, but instead issued a Stay of Enforcement (“Stay”) until May 2011. The
Stay provides that the CPSC will not seek to enforce the Act against manufacturers who sell recreational vehicle
products for youth provided the metal alloys in these products meet certain lead limits and information regarding the
lead content of the relevant products is submitted to the CPSC. To meet the requirements of the law and the Stay, we
have installed lead-compliant parts on our vehicles where possible and in some cases have designed features and
kits to be installed on our vehicles to make lead-containing parts inaccessible. We believe that our products meet the
terms of the Stay and we are currently selling youth products. The CPSC recently extended the Stay until
December 31, 2011. However, if the Stay expires at the end of 2011 and is not extended, we will again be restricted
from selling youth products that do not comply with the lead limits in the Act. Furthermore, the legal protection
provided under the Stay is limited because it only limits the enforcement actions of the CPSC. The Stay does not
prevent third parties from bringing legal action under the law or state Attorneys General from bringing an action to
enforce the law.
We do not believe that any of our youth products present a harmful risk of lead exposure because children are
not exposed to vehicle parts containing lead during normal operation and use. It is for this reason that we, along with
others in the recreational product industry, are seeking an amendment to the Act that would exclude such products
from the scope of the law. However, until the Act is changed or a permanent petition for exclusion is approved by the
CPSC exempting the youth products from the law, there is uncertainty about whether Polaris and our dealers will be
restricted from selling some of our youth products in the United States at some time in the future. We do not believe
that these restrictions have had or will have a material adverse effect on Polaris or negatively impact our business to
any greater degree than those of our competitors who sell youth products in the United States.
We are a member of the Recreational Off-Highway Vehicle Association (“ROHVA”), which was established to
promote the safe and responsible use of side-by-side vehicles also known as Recreational Off-Highway Vehicles
(“ROVs”). Since early 2008, ROHVA has been engaged in a comprehensive process for developing a voluntary
standard for equipment, configuration and performance requirements of ROVs through ANSI. Comments on the
draft standard were actively solicited from the CPSC and other stakeholders as part of the ANSI process. The
standard, which addresses stability, occupant retention, and other safety performance criteria, was approved and
published by ANSI in March, 2010. The standard was then immediately opened for maintenance and revision in
accordance with the ANSI process to evaluate additional safety provisions.
In October, 2009, the Consumer Product Safety Commission published an advance notice of proposed
rulemaking regarding ROVs. Our RANGER and RZR side-by-side vehicles are included in the ROV category. In its
notice, the CPSC stated that it was reviewing the risk of injury associated with ROVs and beginning a rule-making
procedure under the Consumer Product Safety Act. The CPSC also noted the draft ANSI standard developed by
ROHVA and expressed concerns with the draft standard in the areas of vehicle stability, vehicle handling, and
occupant retention and protection. We are a member of ROHVA, which submitted written comments and a technical
response to the CPSC notice. We, through ROHVA, also met with CPSC Commissioners and staff on several
occasions during 2010 to provide updates on ROHVA’s efforts to address CPSC concerns through changes to the
voluntary ANSI standard relating to stability, occupant retention and warnings. Comments on these changes were
solicited from the CPSC and other stakeholders as part of the ANSI process and these comments are currently
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