The exemption list is solely about the lead testing, as of yet there has been no list issued of exempt raw materials for the phthalate testing. A textile and fiber industry related assocoation has requested that when they do issue a exemptions from phthalates that plain & dyed fabrics and fibers should be included on the list. Any item needs phthalate testing if the government classifies the item as a toy for children under 13, or if it is to be used for or aids in the care of, feeding of, or the sleeping of a child 3 and under.
The 2 agencies, the CPSIA and the FTC, incharge of different types of labeling of fabric &/or fiber made children's items have yet to officially state if their 2 labels can be combined into one big label. The CPSIA wants tracking information permanantly attached on all products for children under 13, unless the label would interfer with the function of the finished item, significantly detract from the aesthetics of the item, or if the when written in the smallest readable print that the label would still be too big for the product. The FTC on the other hand wants the fiber content, country of fiber origin, and the care instructions on their labels. For some products this means a traditional label, others are allowed to have iron ons (if the print lasts a long time), and a few products can have this information on hang tags or detachable labels that can be removed prior to use by the customer.
If you have an ink jet printer at home the CMYK inks used in that are exempt, but for the label to remain exempt the print must go on an exempt medium. If you can print directly on an exempt fabric or ribbon you could make your own labels, but if printing to a transfer sheet there is a question of if iron-on media is compliant. From what I've read companies like Avery are not going to test the iron-on facing because they feel that their products are not meant primarily for the use by children or on a product that is for children. That leaves the CPSIA testing, for lead and if needed phthalates, to the manufacturer of the final product that is being made for the child to have the iron-on sheets tested. Then you have the professional and crafters that make labels, all but a few are willing to state officially that their labels are CPSIA compliant even when they state in the product desciption what main materials are used in making their labels.
If you haven't already, put your questions in the comment section of the The Storque article. That way your questions won't get lost in the live chat feed, I sat in the Lab last night about resellers and many good questions were skipped just because there were so many people in attendance. By the time the moderator finished answering 1 question like 5 more had already moved off the screen because there was a lot of comments being made, some closed captioning that was being done because a deaf ETSIAN requested it, & the system announcing who came in or left the lab.