The exemptions are solely in regards to LEAD testing they do not exempt you from any other part of the law under CPSIA. So all children's item will require a tracking label see
http://www.cpsc.gov/about/cpsia/sect103.html for the most current information direct from the CPSC. Plus you must follow any other labeling requirements inaddition to the CPSIA ones for your products.
The exemptions do not absolve you from any other testing that might be required for your particular product's type or use classification, so there are no exemptions from the phthalate, small parts / breakability / choking hazard, flamability, or any other testing that the federal, state, or local governmnet requires.
"Are there exemptions/exclusions to meeting the lead content limits?
CPSC is currently working to determine exemptions to the lead content limits and the requirement to test. In the interim, until the Commission issues final rules in these areas, certain materials can be used in making products or be sold as children’s products without risk of sanction or penalties by the Commission provided the manufacturer, distributor or seller does not have actual knowledge that the products have more than the acceptable lead limit. The Commission generally will not prosecute someone for making, selling or distributing items in these categories (see Table B) even if it turns out that such an item actually contains more than 600 ppm lead." exerpt from
http://cpsc.gov/about/cpsia/smbus/cpsiasbguide.html