American Coatings Association

Earlier this month, ACA responded to Congressional outreach to the industry and their trade associations to identify regulatory impediments to business innovation and competitiveness.

In its detailed letter to the U.S. House Committee on Oversight and Government Reform, ACA highlighted several existing or proposed regulatory schemes across various federal agencies including the U.S. Department of Transportation (DOT), Environmental Protection Agency (EPA), General Services Administration (GSA), and Department of Homeland Security (DHS), that the industry believes significantly jeopardize its efforts to contribute to the emerging but still fragile economic recovery.

ACA’s letter responded to an effort by House Committee on Oversight and Government Reform Chairman Darrell Issa (R-Calif.) and Chairman of the Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending Jim Jordan (R-Ohio), who sent letters to some 150 groups requesting their suggestions of federal regulations that are most harmful to their business. This effort follows a similar one from December 2010, to which ACA responded in January 2011. That letter raised issues with DOT’s Pipelines and Hazardous Materials Safety Administration (PHMSA)'s Special Permits Program; EPA’s Aerosol Coatings Regulation, Boiler MACT, NAAQS for Ozone, Cleaning Product Claims Policy under FIFRA, and TSCA Inventory Update Rule; and the Occupational Safety and Health Administration’s On-Site Consultation; Noise Proposal; and Injury and Illness Protection Program.

In its response to the House Committee, ACA focused on the following regulations believed to be particularly onerous for the industry, or stumbling blocks for economic and job growth.

Chemical Facility Security Regulations

ACA voiced concern about recent, well-publicized efforts by a large number of environmental advocacy groups calling upon the U.S. Environmental Protection Agency (EPA) to develop new chemical security regulations that would impose so-called “inherently safer technology” requirements, using what these groups contend is EPA’s authority under the general duty clause of Section 112(r) of the Clean Air Act Amendments of 1990. In a May 16, 2012 letter to the White House, these advocacy groups contend that this is necessary because of what they claim is the failure of Congress to act “responsibly.” In fact, the heavy-handed approach that EPA is being urged to consider has been thoroughly considered by several Congresses and consistently rejected. The program that Congress has developed and reauthorized on several occasions, the Chemical Facility Anti-Terrorism Standards (CFATS), while not yet fully implemented by the Department of Homeland Security (DHS), has already accomplished many of the goals that the environmental advocacy groups claim to seek, including the fact that approximately 3,000 sites have reduced risk by voluntarily changing their ingredients or processes. The entry of EPA into this homeland security area will not improve security, but will create overlapping and duplicative requirements that will impose heavy new burdens on industry without improving security.

ACA also expressed concern about an Information Collection Request (ICR) Reference Number 201105-1670-002, “Chemical Facility Anti-Terrorist Standards (CFATS) Personnel Surety Program (PSP),” which was most recently submitted by the U.S. Department of Homeland Security (DHS) last year. The ICR is a step in the creation of a regulatory standard for access into CFATS facilities, but instead of complying with the risk-based framework mandated by CFATS, DHS deviates from Congress’ intent by prescribing a rigid program based on information gathering instead of a system that focuses on making a facility more secure. Due to the major impacts the ICR has, along with the absence of any tangible security value this program will have on affected industries, ACA and other organizations have previously asked that the Office of Management and Budget (OMB) not allow this ICR to move forward because of the redundant checks against the Terrorist Screening Database (TSDB) it would require, the unnecessary burdens and liability it would create, and what we believe is DHS’s misrepresentation of the personnel and financial burdens created by this ICR, and are awaiting OMB’s response.

The PSP program under review would require companies to submit to DHS the names of personnel (e.g., employees, contractors, and visitors) who are granted unescorted access to critical assets at least 48 hours prior to gaining access, and, as a result, facilities that have hundreds or even thousands of entries daily will suffer major disruptions to operations. Affected industry has recommended that DHS instead allow companies the option to accept existing federal fingerprint-based background check credentials (such as the joint TSA-U.S. Coast Guard Transportation Worker Identification Credential (TWIC) and the Customs and Border Protection’s FAST (Free and Secure Trade) card) to satisfy all the requirements of RBPS 12 without creating a redundant program that ultimately provides no additional security value and clearly conflicts with the risk-based performance standards model established by Congress to govern chemical security.

GSA Reliance on LEED

The General Services Administration (GSA) previously adopted the Leadership in Energy and Environmental Design (LEED) green building program to help the federal government achieve its energy efficiency and sustainability objectives for public buildings. The current LEED 2012 rating system, however, represents a significant departure from the previous version and includes controversial provisions that would increase the cost of construction and prohibit the use of a wide range of architectural paint and coatings without a strong scientific basis. This is particularly troubling since the LEED green building system is not developed through a true consensus-based process (i.e., a process that is open, transparent, and representative of different stakeholder interests). ACA is deeply concerned that government agencies, such as GSA, will continue to adopt and incorporate non consensus-based green building standards — which have a negative impact on U.S. manufacturers — into mandatory laws, regulations, and purchasing requirements.

Definition of Solid Waste Regulations

After years of analyses, litigation, and policy initiatives, EPA issued the Definition of Solid Waste regulations in October 2008, which identify when certain hazardous secondary materials are considered “waste” and are therefore subject to regulation under the Resource Conservation and Recovery Act. ACA supported the 2008 final rule since it streamlined the regulation of hazardous secondary materials to encourage beneficial recycling and help conserve resources. In particular, the 2008 regulations lifted regulatory burdens off manufacturers and recyclers, making it easier and more cost-effective to safely recycle hazardous secondary material. These recycling exclusions are especially important for paint and coatings manufacturers since the industry currently recycles over 60 percent of its total waste.

Unfortunately, EPA decided to reconsider the 2008 Definition of Solid Waste framework, and the Agency issued proposed changes to the regulations on July 22, 2011. ACA is concerned that the proposed amendments remove specific recycling exclusions from the current regulations, thereby increasing the level of burden on manufacturers seeking to recycle or reclaim secondary materials. As currently proposed, however, the regulations will discourage sustainable materials management and lead to an increase in incineration, waste treatment, and landfill disposal of secondary materials. ACA believes the Definition of Solid Waste rules should be amended to reduce the barriers to recycling and encourage sustainable materials management, the intended primary purpose of the regulations.

EPA’s Pleasure Craft Control Techniques Guidelines

In 2008 the EPA promulgated the Pleasure Craft Control Techniques Guidelines (CTG) for Miscellaneous Metal and Plastic Parts. The CTG created new limits for Volatile Organic Compounds (VOCs) used in marine coatings for pleasure craft that are difficult to achieve with current technology. The first time the Guidelines were published was in the final CTG for Miscellaneous Metal and Plastic Parts. Given that ACA and the industry had no advance notice of the rulemaking before the final Guidelines were published, ACA identified the difficulties with the VOC limits of the Pleasure Craft standard in as timely a manner as possible once the Association was alerted to the new rule. ACA would greatly appreciate EPA’s reconsideration of the limits it set in the Pleasure Craft aspect of the Miscellaneous Metal and Plastic Parts CTG. At a minimum, EPA should make clear to the state and regional EPA clean air planning officials that they are not bound by the standards in the CTG, but can and should make their own determinations based on current coatings technology information.

ACA explained this in detail in a letter to the Office of Air Quality Planning and Standards dated August 8, 2011. ACA has repeatedly followed up with OAQPS but to no avail. Lastly, it is very difficult to monitor and comment on the rule as it is adopted in different forms across dozens of air districts and potentially all 50 states. This is creating a compliance headache for many of our members. We therefore request that the EPA create a national rule in order to streamline compliance across the entire country. There is precedent for this in other VOC rules for coatings, for example, the National Volatile Organic Compound Emission Standards for Automobile Refinish Coatings and the National Volatile Organic Compound Emission Standards for Architectural Coatings.

FMSCA Tank Vehicle Endorsement

In a May 9, 2012 final rule, Federal Motor Carrier Safety Administration (FMCSA) amended 49 CFR 383.5 and promulgated a new definition for a tank vehicle which includes any commercial motor vehicle designed to transport liquid or gaseous material within a tank or tanks having an individual rated capacity of more than 119 gallons and an aggregate rated capacity of 1,000 gallons or more. This new definition significantly expanded the definition of tank vehicles and has captured vehicles that are manifestly not tank vehicles, such as intermediate bulk containers (IBCs) of liquid and gases.

This change in the tank vehicle definition was not a significant portion of the rulemaking and was not widely-known in the carrier community until the state enforcement agencies began to initiate training and enforcement procedures. Because states have three years to incorporate a change to the FMCSRs into their respective codes, some states have begun enforcing this requirement before others. This factor is compounded because a driver may test and follow the regulations in his/her state of domicile (that is not yet enforcing this change) only to be cited, through no fault of his or her own, by another state for failing to hold the proper endorsement. This new requirement is causing significant confusion in the carrier industry and significant driver shortages for the coatings industry.

While FMSCA has agreed to initiate a rulemaking on this issue, they have also issued regulatory guidance which indicates that commercial drivers seeking to transport IBCs of liquids and gases should move forward to obtain tank vehicle endorsements. ACA is looking forward to participating in this rulemaking due to the significant impact on our industry. ACA is seeking a solution which recognizes that IBCs less than 1,000 gallons are not “tank vehicles” and do not require a tank vehicle endorsement.

PHMSA Petition for Rulemaking on Incident Reporting

ACA filed a Petition for Rulemaking to amend the incident reporting requirements under the Pipeline and Hazardous Materials Safety Administration’s (PHSMA) Hazardous Materials Regulations (HMR) in order to exempt spills of paint and paint related materials in small containers (less than 5.2 gallons) for Packing Group II and III materials in July 2010. Currently, the HMR require reporting for incidents involving paint and paint related materials in Packing Group II in small containers, but not Packing Group III. ACA’s petition requests that PHMSA extend this exemption to Packing Group II materials — an exemption that existed in the HMR until 2004. We believe that this amendment will assist PHMSA in collecting data that is meaningful, useful, consistent, and reliable.

Spills of paint and paint-related materials in small containers are very low risk, low hazard incidents. While the coatings industry believes that any spill of hazardous materials presents some risk, spills of nominal amounts of a low risk, low hazard commodity such as paint should not warrant data collection by the government. Data collection under the current regulatory framework is not reliable and it is very difficult to collect and organize it in such a way that it is useful or meaningful. Unfortunately, data collected from incident reporting forms are used in a variety of situations, including determining the fitness of applicants for special permits, party to status, and other special permit requests. Consequently, it is vital that PHMSA examine this framework and develop a strategy that collects data that is reliable, meaningful, and useful.

While PHMSA has accepted ACA’s petition as suitable for a rulemaking initiative, to date, no rulemaking docket has been opened on the incident reporting regulations.

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