SEATTLE -- It's a tough time to be a toy maker in Washington state.

The new toy safety law the governor signed on Tuesday sets the most restrictive standards in the nation.

Many praised the new restrictions as necessary in the wake of a string of toy recalls, but the cost of testing toys for safety threatens to put smaller toy stores out of business.

Jude LaRene, the owner of Izilla Toys, says many of the toy makers he regularly buys from may stop conducting business in the state. He fears he won't have much left on his shelves.

"What has happened is we've asked them to do a unique set of tests for Washington. And for a lot of the smaller companies, it's just not economically viable; they just can't make it work here," he said.

LaRene says that could add hurdles to a road that already has its share of bumps.

"We wanted to bring the safest toys, the most enriching, the smartest toys into our lives for our son, and we had trouble finding them locally in our neighborhood. So we opened a store," he said.

The governor's action came after weeks of intense lobbying by the toy industry, which wanted Gregoire to veto the bill, and from child health advocates, who wanted her to sign it in the same form in which it overwhelmingly passed both houses of the Legislature.

"As recent as this morning I talked to the CEO of Hasbro," the governor said on Tuesday.

But ultimately she decided it was time for the state to take a stand on the issue.

"The toys that pose a danger to our children are not welcome here in Washington state," she said.

The measure states that any product made for children that contains more than .009 percent of lead, .004 percent of cadmium and .10 percent of phthalates cannot be made, sold or distributed in Washington state beginning in July 2009.

The measure also requires companies to disclose if their products contain other toxins identified by the Department of Ecology as high risk for children.

Parents who support small toy stores say the new law is a double-edged sword.

"I think that the thought behind the law is sensible, but how it's being done is not workable for small companies," said Lisa Blume.

The governor opened the door for significant changes to be made to the bill over the next year, announcing she would create an advisory group to assess its standards, timelines and testing requirements. She said the advisory board would develop additional legislation she'll sponsor next session.

But LaRene doesn't know if his shop will be around then. He fears the law, which was created with good intentions, will leave him with nothing to sell.

"I don't know what that means with me. I don't know if it means I close my doors," LaRene said.

Covered by the new requirements are children's cosmetics, children's jewelry, toys and car seats. Exempted toys include roller skates, toy steam engines, bicycles and tricycles, chemistry sets and video toys.