SAN FRANCISCO – The toy industry, jarred by millions of toys being yanked off retail shelves last year, is closer to improving safety standards.

The Toy Industry Association, in conjunction with American National Standards Institute, plans to release on Friday new proposed standards to regulate toy makers.

The industry is tackling three main areas to improve toy safety. The measures aim to strengthen the design analysis process, rate factory quality and bolster testing.

Factories, for instance, would be graded on a Tier 1, Tier 2 and Tier 3 basis. All factories would be rated Tier 3 until the initial audit is finished. It would apply to factories in China, the U.S., and Europe that sell toys in the U.S., the Toy Industry Association said.

About 80 percent of the toys sold in the U.S. are made in China. An optional “certification seal” is also being considered. It would be placed on toys or toy packaging.

The proposed standards are “meant to work hand in hand with Congressional legislation,” said Joan Lawrence, vice president of standards and regulatory affairs at the Toy Industry Association.

The proposed toy association standards will be voluntary, meaning no toy maker will be forced to abide by them. Last December, the House passed toy safety legislation and is waiting on the Senate to hammer out companion legislation.

Once the standards are published, public comments will be accepted for 30 days.

After starting on the process last July, the toy association aims to institute the final standards by May. It has worked with congressional lawmakers, retailers, toy makers and others to develop new safety standards.

Senate lawmakers may debate toy legislation as soon as the first week of March, said Nancy Nord, acting chairwoman of the Consumer Products Safety Commission, who spoke Monday at the American International Toy Fair.

The House legislation would increase the frequency of third-party testing at factories, date-code toys, reduce lead and other toxic content in toys.

On Friday, Toys R Us instituted similar rules for its manufacturers, starting with products shipped March 1.

If Congress fails to pass legislation, the consumer agency will attempt to make new rules mandatory through its existing statues, Nord said.

The consumer agency is taking steps to ensure safer toys. The agency, which regulates more than 15,000 consumer products, including toys, is hiring more inspectors to examine toys at the largest U.S. shipping ports under a new import surveillance division, Nord said.

Since the unit is still being set up, she declined to say how many full-time port inspectors there will be. CPSC also is hiring more scientists.

In all, there were 61 different toys recalled by the agency in 2007, up from 40 in 2006. Toys were recalled excessive lead paint or loose magnets, among other potential safety and health threats.

Mattel Inc. was the hardest hit, with more than 21 million toys recalled. RC2 Corp. also faced recalls of its Thomas & Friends toy line.

Hasbro Inc., the world’s largest toy maker behind Mattel, eluded the string of recalls that began last June.

New toy association standards, if enacted, shouldn’t result in large cost increases for big toymakers, many of whom already have factory testing and quality control measures. Small toymakers would bear more of the costs, the association’s Lawrence said.

Since the bulk of the toys sold during the winter holiday season are made from April through August, it’s still unclear if the proposed standards will make an impact this year. New manufacturing regulations from Toys R Us and actions taken by Mattel and others should help.