[Federal Register Volume 61, Number 123 (Tuesday, June 25, 1996)]
[Proposed Rules]
[Pages 32729-32746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16009]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 59

[AD-FRL-5526-3]


National Volatile Organic Compounds Emission Standards for 
Architectural Coatings

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule and notice of public hearing.

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SUMMARY: The proposed standards would reduce emissions of volatile 
organic compounds (VOC) from architectural coatings. The proposed 
standards implement Section 183(e) of the Clean Air Act (CAA), as 
amended in 1990, which requires the Administrator to control VOC 
emissions from certain categories of consumer and commercial products.
    Exposure to ozone is associated with a wide variety of human health 
effects, agricultural crop loss, and damage to forests and ecosystems. 
As required by Section 183(e), the Administrator conducted a study to 
determine the potential of VOC emissions from consumer and commercial 
products to contribute to ozone levels that violate the National 
Ambient Air Quality Standards (NAAQS) for ozone and established a list 
of product categories to be regulated. Based on the criteria described 
in the study and accompanying report, the EPA determined that VOC 
emissions from architectural coatings should be reduced. Therefore, the 
EPA is proposing standards to reduce ozone-causing VOC emissions from 
these coatings. The proposed standards would reduce annual emissions of 
VOC by 106,000 tons representing a 20 percent reduction from 1990 
levels.
    The proposed rule is centered around requiring VOC content levels 
for 55 individual architectural coating categories. When promulgated 
these requirements on manufacturers and importers of architectural 
coatings are anticipated to take effect on April 1, 1997. This 
rulemaking is on an expedited schedule, with a relatively short public 
comment period.
    Following proposal of this rule, the EPA plans to participate in a 
joint study with the architectural coatings industry. This study will 
focus on the feasibility of adopting more stringent VOC requirements in 
the future.

DATES: Comments. Comments pertaining to the proposed rule must be 
received on or before August 30, 1996.
    Public Hearing. A public hearing will be held, if requested, to 
provide interested persons an opportunity for oral presentation of 
data, views, or arguments concerning the proposed standards for 
architectural coatings. If anyone contacts the EPA requesting to speak 
at a public hearing concerning this proposed rule by July 18, 1996, a 
public hearing will be held on July 30, 1996, beginning at 10:00 a.m. 
Persons interested in attending the hearing should notify Ms. Kim Teal, 
(919) 541-5580 by July 18, 1996, to verify that a hearing will occur 
and for notification of the location of the hearing. The record for the 
public hearing will remain open for 30 days after completion of the 
hearing to provide an opportunity for the submission of rebuttal and 
supplementary information.
    Persons wishing to present oral testimony concerning this proposed 
rule must contact Ms. Kim Teal at the EPA by July 18, 1996. Ms. Teal 
may be contacted at the following address: Coatings and Consumer 
Products Group (MD-13), U.S. Environmental Protection Agency, Research 
Triangle Park, North Carolina 27711, telephone number (919) 541-5580, 
FAX number (919) 541-5689.

ADDRESSES: Comments. Comments should be submitted (in duplicate) to: 
Air and Radiation Docket and Information Center (6102), Attention: 
Docket No. A-92-18, U.S. Environmental Protection Agency, 401 M Street 
SW, Washington, DC 20460. Comments and data may also be submitted 
electronically by sending electronic mail (e-mail) to: a-and-r-
[email protected]. Electronic comments must be submitted as an 
ASCII file avoiding the use of special characters and any form of 
encryption. Comments and data will also be accepted on disks in 
WordPerfect in 5.1 file format or ASCII file format. All comments and 
data in electronic form must be identified by the docket number A-92-
18. No Confidential Business

[[Page 32730]]

Information (CBI) should be submitted through e-mail. Electronic 
comments on this proposed rule may be filed online at many Federal 
Depository Libraries.
    Docket. The proposed regulatory text and other materials related to 
this rulemaking, excepting any information claimed as CBI, are 
available for review in a public record. This record has been 
established for this rulemaking under docket number A-92-18. The 
docket, including paper versions of electronic comments, is available 
for inspection from 8:00a.m. to 5:30p.m. Monday-Friday, excluding legal 
holidays. The docket is located at the EPA's Air and Radiation Docket 
and Information Center, Room M1500, 1st Floor, 401 M St. S.W., 
Washington, D.C. 20460, telephone (202) 260-7548, FAX (202) 260-4400. A 
reasonable fee may be charged for copying.
    Background Information Document. The background information 
document (BID) and other documents supporting the proposed standards 
may be obtained from the docket or from the U.S. EPA Library (MD-35), 
Research Triangle Park, North Carolina 27711, telephone number (919) 
541-2777. Please refer to ``Architectural Coatings--Background for 
Proposed Standards,'' EPA-453/R-95-009a.

FOR FURTHER INFORMATION CONTACT: For information concerning the 
proposed standards, contact Ms. Ellen Ducey at (919) 541-5408, Coatings 
and Consumer Products Group, Emission Standards Division (MD-13), U.S. 
Environmental Protection Agency, Research Triangle Park, North Carolina 
27711.

SUPPLEMENTARY INFORMATION:

Regulated entities

    Entities potentially regulated by this action are those who have 
the potential to supply products which emit VOC and are listed in 
Sec. 183(e) of the CAA in the following regulated categories and 
entities:

------------------------------------------------------------------------
              Category                  Examples of regulated entities  
------------------------------------------------------------------------
Manufacturer........................  Source that produces, packages, or
                                       repackages architectural coatings
                                       for sale or distribution in the  
                                       U.S.                             
Importers...........................  Source that brings architectural  
                                       coatings from a location outside 
                                       the U.S. into the U.S. for sale  
                                       or distribution within the U.S.  
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that the EPA is now 
aware could potentially be regulated by this action. Other types of 
entities not listed in the table could also be regulated. To determine 
whether your facility is regulated by this action, you should carefully 
examine the applicability criteria in Sec. 59.400 of the rule. If you 
have questions regarding the applicability of this action to a 
particular entity, consult the person listed in the preceding
FOR FURTHER INFORMATION CONTACT section of this preamble.
    The regulatory text of the proposed rule is not included in this 
Federal Register notice, but is available in Docket No. A-92-18 (see 
ADDRESSES for information about the docket). The proposed regulatory 
language is also available on one of the EPA's Technology Transfer 
Network (TTN) electronic bulletin boards.
    The TTN provides information and technology exchange in various 
areas of air pollution control. The TTN contains 18 electronic bulletin 
boards, and the following five items can be obtained through the Clean 
Air Act Amendments bulletin board in the section called Recently Signed 
Rules:
    (1) ``FACT SHEET: Proposed Air Regulations for Architectural 
Coatings (1995).''
    (2) Federal Register notice for this preamble: ``National Volatile 
Organic Compound Emission Standards for Architectural Coatings'' (this 
document).
    (3) Regulatory text for the proposed rule.
    (4) ``Architectural Coatings--Background for Proposed Standards,'' 
(EPA-453/R-95-009a).
    (5) Information Collection Request document for the proposed 
standards: ``Reporting and Recordkeeping Requirements for National VOC 
Emission Standards for Architectural Coatings,'' November 29, 1995.
    The TTN is accessible 24 hours per day, 7 days per week except 
Monday morning from 8:00 a.m. to 12:00 p.m. when the system is down for 
maintenance and back up. The service is free, except for the cost of a 
phone call. Dial (919) 541-5742 for up to a 14,400 bits per second 
(bps) modem. If more information on the TTN is needed, call the help 
desk at (919) 541-5384.
    The information presented in this preamble is organized as follows:

I. Background
    A. Clean Air Act Requirements
    B. Regulatory Background
    C. Supporting Documentation for the Proposed Standards
II. Summary of Proposed Standards
    A. Applicability of the Standards
    B. Regulated Entities
    C. VOC Levels
    D. Compliance Requirements
    E. Labeling Requirements
    F. Recordkeeping
    G. Reporting
    H. Test Methods
    I. Variance
III. Summary of Impacts
    A. Environmental Impacts
    B. Energy Impacts
    C. Cost and Economic Impacts
    D. Cost-Effectiveness
IV. Rulemaking Decision Process
    A. Legislative Authority
    B. Regulatory Negotiation Procedure
V. Rationale
    A. Applicability
    B. Regulated Entities
    C. Selection of Best Available Controls (BAC)
    D. Exceedance Fee Approach
    E. Low Volume Categories/Exemption
    F. Special Provisions
    G. Labeling and Public Information Requirements
    H. Selection of the Recordkeeping and Reporting Requirements
    I. Test Methods
    J. Alternative Regulatory Approaches
    K. Solicitation of Comments
VI. Future Phase Under Consideration
VII. Administrative Requirements
    A. Public Hearing
    B. Executive Order 12866
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates
    F. Enhancing the Intergovernmental Partnership under Executive 
Order 12875.

I. Background

A. Clean Air Act Requirements

    Exposure to ground-level ozone is associated with a wide variety of 
human health effects, agricultural crop loss, and damage to forests and 
ecosystems. The most thoroughly studied health effects of exposure to 
ozone at elevated levels during periods of moderate to strenuous 
exercise are the impairment of normal functioning of the lungs, 
symptomatic effects, and reduction in the ability to engage in 
activities that require various levels of physical exertion. Typical 
symptoms associated with acute (one to three hour) exposure to ozone at 
levels of 0.12 parts per million (ppm) or higher under heavy exercise 
or 0.16 ppm or higher under moderate exercise include cough, chest 
pain, nausea, shortness of breath, and throat irritation.
    Ground-level ozone, which is a major component of ``smog,'' is 
formed in the atmosphere by reactions of VOC and oxides of nitrogen 
(NOX) in the presence of sunlight. In order to reduce ground-level 
ozone concentrations, emissions of VOC and NOX must be reduced.
    Section 183(e) of the CAA addresses VOC emissions from the use of 
consumer and commercial products. It requires the EPA to study VOC

[[Page 32731]]

emissions from the use of consumer and commercial products, to report 
to Congress the results of the study, and to list for regulation 
products accounting for at least 80 percent of VOC emissions resulting 
from the use of such products in ozone nonattainment areas. 
Accordingly, in the March 23, 1995 Federal Register (60 FR 15264), the 
EPA announced the availability of the ``Consumer and Commercial 
Products Report to Congress'' (EPA-453/R-94-066-A), and published the 
consumer and commercial products list and schedule for regulation. 
Architectural coatings are in the first group of products to be 
regulated by March 1997. This listing and prioritization are not final 
Agency actions, and the EPA requests comment on the placement of 
architectural coatings on the list and the priority assigned to these 
coatings.

B. Regulatory Background

    Architectural coatings are included under the definition of 
consumer and commercial products because the definition under Section 
183(e) of the CAA specifically includes paints, coatings, and solvents. 
Section 183(e) of the CAA requires that the first group of consumer and 
commercial products (i.e., those with highest priority for regulation) 
be regulated within two years after publication of the regulatory 
schedule. As mentioned previously, architectural coatings are in the 
first group of consumer and commercial products to be regulated and, 
therefore, must be regulated by March 1997.
    Because preliminary information indicated that the architectural 
coatings category is a sizable contributor to ozone levels in 
nonattainment areas, it seemed probable that this category would be a 
high priority for regulation. In 1992, the EPA initiated a regulatory 
negotiation to address architectural coatings (see section IV.B for a 
discussion of the negotiation). Throughout this process, the EPA 
maintained that if the final results of the study of consumer and 
commercial products varied from preliminary estimates, the EPA's 
decision to include architectural coatings in the first group of 
categories to be regulated could change. The study indicated that the 
VOC emissions from consumer and commercial products represent 
approximately 28 percent of all manmade VOC emissions. The 
architectural coatings category is one of the largest consumer and 
commercial product categories, accounting for about nine percent of the 
emissions of VOC from all consumer and commercial products. Based on 
evaluation of criteria developed under Section 183(e) of the CAA, 
architectural coatings were placed in the first group of products to be 
regulated. The criteria that contribute to the prioritization of 
architectural coatings in the first group of consumer and commercial 
products to be regulated include the availability of alternatives, the 
cost-effectiveness of controls, and the quantity of VOC emissions in 
ozone nonattainment areas. Further details about the criteria used to 
prioritize consumer and commercial product categories for regulation 
are available in the report to Congress.
    Architectural coating regulations are already in place in a number 
of States, and many other States are in the process of developing 
regulations. For the companies that market architectural coatings in 
different States, trying to fulfill the differing requirements of State 
rules has created administrative, technical, and marketing problems. A 
Federal rule is expected to provide some degree of consistency, 
predictability, and administrative ease for the industry. In addition, 
State representatives have recommended that the EPA develop and 
implement Federal control measures. This is because a national rule 
helps reduce compliance problems associated with noncompliant coatings 
being transported into nonattainment areas from neighboring areas and 
neighboring States. Also, a national rule will enable States to obtain 
needed emission reductions from this sector in the near term, without 
having to expend their limited resources to develop similar rules in 
each State.

C. Supporting Documentation for the Proposed Standards

    The architectural coating BID (EPA 453/R-95-009a) contains some 
supporting documentation for this proposal. It contains a product 
category description, an industry profile, a discussion of control 
measures, and a description of the expected emission reductions. Other 
supporting information for this proposed regulation includes existing 
State regulations, regulatory negotiation presentation material, 
meeting summaries, survey data, technical memoranda including the 
economic impact analysis, and the report to Congress on consumer and 
commercial products. This information is contained in the docket and is 
available to the public as described above.

II. Summary of Proposed Standards

    The proposed standards are summarized below. The rationale for the 
regulatory decisions made in developing these standards is provided in 
section V.

A. Applicability of the Standards

    The provisions of the proposed rule apply to all architectural 
coatings that are manufactured or imported for sale or distribution in 
the United States on or after April 1, 1997. An architectural coating 
is defined in the proposed rule as ``a coating recommended for field 
application to stationary structures and their appurtenances, to 
portable buildings, to pavements, or to curbs.''
    Category definitions in the proposed rule, such as ``exterior 
flats'' or ``industrial maintenance coatings,'' are a subset of 
architectural coatings. A coating must first meet the general 
definition of an architectural coating to be subject to the provisions 
of the proposed rule.
    The proposed standards do not apply to the following architectural 
coatings:
    (1) Coatings manufactured exclusively for sale outside the United 
States;
    (2) Coatings manufactured or imported prior to April 1, 1997;
    (3) Coatings supplied in nonrefillable aerosol containers;
    (4) Coatings that are collected and redistributed at community-
based paint exchanges; and
    (5) Coatings sold in containers with capacities of 1 liter or less.

B. Regulated Entities

    Regulated entities in this proposal are limited to architectural 
coating manufacturers and importers as defined below.
    Architectural coating importer (or importer) means a company, 
group, or individual that brings architectural coatings from a location 
outside the United States into the United States for sale or 
distribution within the United States.
    Architectural coating manufacturer (or manufacturer) means a 
company, group, or individual that produces, packages, or repackages 
architectural coatings for sale or distribution in the United States. A 
company, group, or individual that repackages architectural coatings as 
part of a community-based paint exchange and does not produce, package, 
or repackage any other architectural coatings for sale or distribution 
in the United States is excluded from this definition.

C. VOC Levels

    The proposed rule is centered around VOC content levels for 55 
individual architectural coating categories. Manufacturers and 
importers must limit the VOC content of subject coatings to the VOC 
levels in Table 1, which are effective April 1, 1997 and thereafter.
    As shown in Table 1, the categories of low solids stains and low 
solids wood

[[Page 32732]]

preservatives have different units for the VOC content level. The VOC 
content for these categories is expressed in grams of VOC per liter of 
coating thinned to the manufacturer's maximum recommendation, including 
water and exempt compounds. This is because, unlike conventional 
coatings, which achieve a film-build, these stains and wood 
preservatives are not applied to achieve a certain thickness of solid 
film, but rather to affect penetration of the stain or wood 
preservative. For these low solids coatings, the assumption that 
coverage of the coating is dependent on the volume of solids in the 
coating is not valid. The volume of the coating (which must include at 
least 50 percent water in the volatile fraction) determines coverage. 
For this reason, the VOC content level is determined ``including water 
and exempt compounds.''
    A coating is subject to the VOC content level for the category in 
Table 1 that describes the coating's recommended use, appearance 
characteristics, and/or resin type. If a coating meets the definition 
of an architectural coating and is subject to the proposed rule, it 
must be identified by the manufacturer or importer to be defined under 
at least one of the categories listed in Table 1. If a coating does not 
meet any of the other category definitions besides ``flat'' or 
``nonflat,'' it would be categorized in either the flat or nonflat 
category depending on its gloss level. These default categories 
generally require lower VOC content levels than other categories in 
Table 1. If a coating is marketed in more than one of the listed 
coating categories, compliance is required with the lowest applicable 
VOC content level except for the following:
    (1) High temperature coatings that may also be suitable for use as 
metallic pigmented coatings are subject only to the VOC level for high 
temperature coatings;
    (2) Lacquer sanding sealers that may also be suitable for use as 
sanding sealers in conjunction with clear lacquer topcoats are subject 
only to the VOC level for lacquer sanding sealers;
    (3) Metallic pigmented coatings that may also be suitable for use 
as roof coatings, industrial maintenance coatings, or primers are 
subject only to the VOC level for metallic pigmented coatings;
    (4) Shellacs that may be marketed as primers, sealers, or 
undercoaters are subject only to the VOC level for shellacs;
    (5) Fire-retardant/resistive coatings that may be suitable for use 
as any other architectural coatings are subject only to the VOC level 
for fire-retardant/resistive coatings;
    (6) Pretreatment wash primers that may be suitable for use as 
primers are subject only to the VOC level for pretreatment wash 
primers; and
    (7) Industrial maintenance coatings that may also be primers are 
subject only to the VOC level for industrial maintenance coatings.
    These exceptions were developed to clarify the applicable VOC level 
in situations where inherent overlap exists between category 
definitions, and the least stringent VOC level is meant to apply.
    Manufacturers or importers of ``recycled'' architectural coatings 
collect, reprocess, and market coatings that contain a percentage of 
post-consumer coating product. Such use is environmentally beneficial 
because it reduces the magnitude of waste from architectural coatings. 
Manufacturers and importers of recycled coatings are given the option 
of calculating an ``adjusted VOC content.'' The ``adjusted VOC 
content'' provides some credit for the amount of post-consumer material 
contained in the coating. The EPA is providing this credit to encourage 
recycling of unused paint. The ``adjusted VOC content'' is determined 
by multiplying the percentage of post-consumer content of the coating 
by the VOC content of the recycled coating, which can then be 
subtracted from the VOC content of the recycled coating. An explicit 
equation for the calculation is in the proposed rule.

D. Compliance Requirements

1. Compliance Dates
    The compliance date for all manufacturers and importers is April 1, 
1997. In draft versions of the proposed rule, the compliance date for 
small manufacturers and small importers was January 1, 1998. Small 
manufacturers and small importers were defined as manufacturers and 
importers with annual gross revenues in 1995 of less than $10 million, 
and total gross revenues in 1995 from sales of all products of less 
than $50 million. This extra compliance time has been eliminated from 
the proposed rule due to the inclusion of less stringent VOC levels for 
some of the largest categories of architectural coatings, and the 
inclusion of a variance provision described in sections II.I and V.F. 
These provisions are expected to provide sufficient compliance 
flexibility needed by small manufacturers. However, the EPA requests 
comment on whether the final rule should include the small manufacturer 
compliance extension. If such a provision were included, the VOC 
reduction achieved by the proposed rule in 1997 would be reduced from 
20 percent to approximately 15 percent. The EPA also requests comment 
on the adequacy of the compliance lead time for all affected sources. 
Comments supporting extra compliance time for all manufacturers and 
other affected sources should include supporting data providing 
economic and/or technological justification.
2. Compliance Methods
    Compliance with the VOC content levels in the proposed rule is to 
be determined on a coating-by-coating basis. To determine compliance 
with the VOC levels in Table 1, manufacturers or importers would first 
be required to determine the coating category, the applicable VOC 
level, and the VOC content for each coating product manufactured or 
imported. An initial report is required for all manufacturers and 
importers subject to the rule. Other labeling, recordkeeping, and 
reporting requirements are summarized in sections II.E, II.F, and II.G, 
respectively. Test methods to be used to determine VOC content of the 
coatings are described in section II.H.

E. Labeling Requirements

    With the exception of low solids stains and low solids wood 
preservatives, containers of all subject coatings must bear labels or 
lids that include the following information:
    (1) The date of manufacture or a code indicating the date of 
manufacture;
    (2) The maximum VOC content of the coating in the container, 
displayed in units of grams of VOC per liter of coating thinned to the 
manufacturer's maximum recommendation, excluding the volume of any 
water, exempt compounds, or colorant added to tint bases; and
    (3) A statement of the manufacturer's recommendation regarding 
thinning with organic solvents. Containers of low solids stains and low 
solids wood preservatives must bear labels or lids that include the 
following information:
    (1) The date of manufacture or a code indicating the date of 
manufacture;
    (2) The maximum VOC content of the coating in the container, 
displayed in units of grams of VOC per liter of coating thinned to the 
manufacturer's maximum recommendation, including the volume of any 
water and exempt compounds; and
    (3) A statement of the manufacturer's recommendation regarding 
thinning with organic solvents.

[[Page 32733]]

    Containers of industrial maintenance coatings, in addition to the 
labeling requirements for all subject coatings, must include on the 
container label or lid the phrase ``NOT INTENDED FOR RESIDENTIAL USE.''
    Containers of recycled architectural coatings, in addition to the 
labeling requirements for all subject coatings, must include on the 
label or lid a statement of the percentage, by volume, of post-consumer 
coating content. This prerequisite must be met to be able to determine 
compliance using an ``adjusted VOC content.''
    The EPA considered requiring the following statement on every label 
or lid of architectural coatings: ``This architectural coating contains 
volatile organic compounds that will be emitted to the ambient air 
during use and, under certain environmental conditions, these compounds 
may contribute to the formation of ground-level ozone, an air pollutant 
and major component of urban smog.'' As an alternative to this 
requirement, the EPA is considering undertaking an educational effort 
directed at informing the public about the role of VOC emissions from 
architectural coatings in the formation of ground-level ozone. The EPA 
requests comment on whether an outreach effort would be as effective an 
approach as an educational statement on each container of architectural 
coating.
    The EPA is aware that many architectural coating labels currently 
display information on the amount of coverage that the coating is 
expected to provide. The EPA is considering requiring this information 
to be displayed on the labels or lids of all architectural coating 
containers. Both coating coverage and VOC content information are 
necessary to allow a consumer to estimate and compare the expected 
resulting VOC emissions from application of different coatings to 
complete a particular job. This information on coating coverage would 
allow consumers to make an informed choice between coatings. The EPA 
requests comment on the feasibility of requiring coverage information 
to be displayed on the label or lid of all architectural coating 
containers subject to this rule.

F. Recordkeeping

    Except for recycled coatings, there are no proposed recordkeeping 
requirements. For recycled coatings, manufacturers and importers must 
keep the following records for three years:
    (1) The minimum percentage of post-consumer coating content for 
each recycled coating product;
    (2) Calculation of an adjusted VOC content that accounts for the 
post-consumer coating content credit;
    (3) The volume of coating received for recycling;
    (4) The volume of coating received that was unusable;
    (5) The volume of virgin materials; and
    (6) The volume of the final recycled coating manufactured.

G. Reporting

    Manufacturers and importers of coatings subject to the proposed 
standard must file an initial report. The initial report must be 
submitted by April 1, 1997 or within 180 days after becoming subject to 
the requirements of the proposed standard, whichever is later. The 
initial report must include the following information:
    (1) Name and mailing address of the manufacturer or importer; and
    (2) A list of categories from Table 1 in which coatings are 
manufactured or imported.
    For recycled coatings, manufacturers and importers must submit an 
annual report by February 1 of the calendar year following the year in 
which the coatings are introduced into commerce that includes the 
following:
    (1) The volume of coating received for recycling;
    (2) The volume received that was unusable;
    (3) The volume of virgin material used;
    (4) The volume of the final recycled product; and
    (5) The minimum post-consumer content of the coating.
    Reporting requirements for the variance application are discussed 
in II.I.
    In cases where a code is used to indicate the date of manufacture, 
all manufacturers and importers of architectural coatings must file an 
explanation of each date code displayed on coating containers by April 
1, 1997. Explanations of new codes must be filed within 30 days after 
their first use.

H. Test Methods

    For purposes of determining compliance with this rule, the VOC 
content of each coating product manufactured or imported must be 
determined using the EPA's Reference Method 24, ``Determination of 
Volatile Matter Content, Water Content, Density, Volume Solids, and 
Weight Solids of Surface Coatings,'' found in 40 CFR part 60, appendix 
A. Analysis of waterborne coating VOC content determined by Reference 
Method 24 must be adjusted as described in section 4.4 of Method 24.
    Manufacturers and importers may use alternate methods for 
determining coating VOC content if it can be demonstrated to the 
Administrator's satisfaction that the method provides results 
equivalent to or more accurate than those obtained using Reference 
Method 24.

I. Variance

    The proposed rule also allows manufacturers and importers of 
architectural coatings to submit a written application to the 
Administrator requesting a variance if, for reasons beyond their 
reasonable control, they cannot comply with the requirements of the 
proposed rule. The application must include the following information:
    (1) The specific grounds for which the variance is sought;
    (2) The proposed date(s) by which compliance with the provisions of 
the rule will be achieved; and
    (3) A compliance report reasonably detailing the method(s) by which 
compliance will be achieved.
    Upon receipt of the variance application, the Administrator will 
hold a public hearing to determine whether, under what conditions, and 
to what extent, a variance from the requirements of the proposed rule 
is necessary and will be permitted.
    The Administrator may grant a variance if the following criteria 
are met:
    (1) By complying with the proposed rule, the applicant would bear 
unreasonable economic hardship;
    (2) The public benefit of avoiding hardship to the applicant 
outweighs the public interest in any increased emissions or air 
contaminants that would result from issuing the variance; and
    (3) The proposed compliance schedule can be reasonably implemented, 
and compliance will be achieved as expeditiously as possible.
    The approved variance order will designate a final compliance date 
and a condition that specifies increments of progress necessary to 
assure timely compliance. A variance shall end immediately upon the 
failure (of the party to whom the variance was granted) to comply with 
any term or condition of the variance.

III. Summary of Impacts

A. Environmental Impacts

    This section contains a discussion of the incremental increase or 
decrease in air pollution, water pollution, and solid waste generation 
that would result from implementing the proposed standards.

[[Page 32734]]

1. Air Pollution Impacts
    The proposed standards would reduce annual nationwide emissions of 
VOC from the use of architectural coatings by an estimated 96,000 
megagrams (Mg) (106,000 tons) beginning in 1997. These reductions are 
compared to the 1990 baseline emission estimate of 480,000 Mg (530,000 
tons) and represent emissions that would occur in the absence of the 
proposed standards.
    Because the VOC emissions from architectural coatings include a 
large class of compounds that are expected to be associated with a wide 
spectrum of health effects, reductions in VOC from architectural 
coatings would result in a decrease in the associated health effects.
    Because many regulated VOC species are also hazardous air 
pollutants (HAP), the proposed standards are expected to reduce some 
HAP emissions from the use of architectural coatings. An increase in 
the use of HAP in product formulation is not expected to occur as a 
result of the proposed standards. Data on speciated VOC content from 
the VOC Emissions Inventory Survey show no pattern of higher HAP 
concentrations in lower VOC formulations.
2. Water and Solid Waste
    The major compliance method for this rule will be the use of 
compliant coatings. No adverse solid waste impacts are anticipated from 
compliance with this rule. It is not expected that the disposal of 
coatings as solid waste will increase as a result of this rule. In 
fact, because the compliant (higher solids) coatings are more 
concentrated, fewer containers will require disposal when the same 
volume of solids is applied.
    Some provisions in this proposed rule have the potential to reduce 
the amount of coating discarded as solid waste. Recycling of coatings 
may be encouraged through two provisions. The rule includes a provision 
that allows an ``adjusted VOC content'' to be calculated for recycled 
coatings for compliance purposes. This adjustment essentially allows a 
higher VOC content standard for coatings that contain post-consumer 
coating. The rule also exempts any coatings distributed through 
community-based paint exchanges.
    In cases where conversion from solventborne to waterborne coatings 
is the method used to achieve compliance, an increase in wastewater 
discharge may occur if waste waterborne coatings are discharged to 
publicly owned treatment works.

B. Energy Impacts

    No adverse energy impacts are anticipated from compliance with this 
rule. No add-on controls are required.

C. Cost and Economic Impacts

    By establishing a set of product-specific levels for VOC content, 
the proposed regulations have cost implications for manufacturers and 
consumers of the affected products. In 1997, manufacturers of 
architectural coatings that do not meet the VOC levels in Table 1 will 
be required to reformulate products or remove products from the market 
(or participate in an alternative compliance mechanism such as an 
exceedance fee). It is presumed that manufacturers will choose the 
option that is most advantageous to them, but each option imposes 
costs, some of which will be passed on to other members of society 
(consumers) in the form of higher prices and some of which will be 
borne directly by the manufacturers.
    The cost for reformulating noncompliant products depends on the 
level of effort required to develop a new product (e.g., research and 
development and market testing expenditures) and how these expenditures 
are incurred over time. Data on level of effort were provided to the 
regulatory negotiation committee (see section IV.B for discussion of 
the negotiation) for prototype reformulations, from which an annualized 
cost estimate of approximately $17,772 (in 1991 dollars) per 
reformulation was computed. This cost is assumed to be independent of 
the annual sales volume of the product. Other costs and cost savings 
associated with reformulation are likely, but could not be quantified. 
Unquantified costs include material cost changes and changes in 
disposal costs.
    An economic impact analysis of the proposed regulatory requirements 
was performed. Potential cost, price, and output effects for the 
architectural coatings industry were examined for the proposed table of 
VOC levels. The economic analysis also evaluated the option of 
utilizing an exceedance fee, which is an alternative compliance 
mechanism that is discussed in detail in section V.D. However, the 
analysis did not consider the impact of any variances or low volume 
exemptions that may be granted to reduce impacts.
    The cost analyses performed were based on data from the 1990 VOC 
Emissions Inventory Survey. These survey data represented approximately 
75 percent of the total volume of architectural coating products 
produced in 1990. For the products in the survey population, the 
estimated average annualized cost, if all products exceeding the VOC 
levels were reformulated to meet the standard, is $260 per ton of VOC 
emissions reduction (in 1991 dollars). This value is extrapolated to 
the national population for the cost and economic analysis.
    With exceedance fees as an option, it was estimated that 
manufacturers would choose to pay fees for approximately 12 percent of 
products instead of incurring reformulating costs or exiting the market 
in 1997. These products only account for about 2 percent of industry 
output, so the foregone emissions reduction by allowing the fee is less 
than 0.8 percent (2,308 tons) of estimated baseline emissions. However, 
the fee reduces national reformulation costs by roughly 50 percent. 
Thus, it is anticipated that the exceedance fee provision could allow 
significant cost savings while sacrificing little in the way of 
emissions reduction.
    The estimated market effects from the proposed standards are 
relatively slight. In 1997, approximately one million liters of 
architectural coating products, accounting for less than one-tenth of 
one percent of industry product volume, are projected to withdraw from 
the market. Price effects in each market ranged from no effect to an 
increase of less than two cents per liter, which is still less than a 
one percent increase of the baseline price. Average price and quantity 
effects across all market segments were each less than one-tenth of one 
percent of baseline values.
    Although relatively little product volume is projected to be 
withdrawn or subject to an exceedance fee, the remaining volume is 
subject to reformulation and bears the associated cost. The estimated 
cost to society of the regulation is approximately $25.0 million per 
year (evaluated in 1991 dollars, excluding reporting and recordkeeping 
costs, and costs to the EPA). These cost estimates amount to roughly 
0.4 percent of baseline revenues for the industry. With the exceedance 
fee alternative compliance mechanism, the estimated annual cost 
decreases to $13 million, which equates to a savings of $12 million.
    Resource constraints preclude an evaluation of foreign trade 
impacts. However, according to a 1992 study by SRI International, 
importers accounted for less than one percent of total coating sales 
volume in 1990. Due to importers' small market presence and the lack of 
detailed product data on imported coatings, importers have not been 
included in the cost and economic impacts analysis. However, all of the

[[Page 32735]]

flexible compliance options that are available for manufacturers are 
also available for importers. The EPA solicits comment on the potential 
cost and economic impacts of this rule on importers.
    As discussed earlier in this section, the estimated national cost 
for the regulation is based on information developed by industry 
representatives during the regulatory negotiation. The assumption in 
estimating these costs was that coating technologies would need to be 
researched and developed in the laboratories of resin manufacturers/
suppliers and paint manufacturers in order to meet VOC requirements. 
Although the proposal is significantly less stringent than the 
potential requirements discussed during negotiations (which would have 
been implemented in three phases), the EPA has relied on these same 
reformulation cost estimates for calculating the national cost of the 
proposed rule. Given that the rule has similar VOC content requirements 
to State rules which have been enforced since 1990, the EPA believes 
the reformulation estimates used may be overstated. Since the proposed 
rule is implementing available resin technologies, the cost to comply 
for those manufacturers needing to reformulate their higher VOC 
coatings is expected to be partially reduced through the assistance of 
resin manufacturers/suppliers. Upon request, most resin suppliers are 
willing to share information and sample low VOC coating formulations 
with interested paint manufacturers, both large and small. In addition, 
another limitation in the cost data is that no distinction for 
reformulation cost is made between categories (i.e., the reformulation 
cost in one category is the same as the reformulation cost in any other 
category), or in relation to the required VOC content reduction (i.e., 
it does not distinguish between coatings at different VOC levels above 
the limit). The EPA requests comment and technical information on 
previous (since 1990) or potential reformulation costs. Commenters on 
this topic should provide detailed information specific to a given 
category and VOC content level change (e.g., total number of 
noncompliant products within each category, VOC content and sales 
information for each noncompliant product, the applicable category, and 
the estimated cost of reformulation). The EPA also requests historic 
information about product reformulations and reformulation costs in 
response to State and local architectural coating regulation. In 
addition, information is requested on any changes in variable (e.g., 
raw material) costs or disposal costs associated with manufacturing 
coatings to meet the proposed VOC levels.

D. Cost-Effectiveness

    The EPA often compares the relative cost of different measures for 
controlling a pollutant by calculating the ``cost-effectiveness'' of 
the measures. Using the EPA's traditional calculation methodology, the 
cost-effectiveness of a regulation that applies nationwide is based on 
a comparison of national costs and nationwide emission reductions. This 
comparison is expressed as the cost per Mg (or ton) of emissions 
reduced. Using social cost and emission reduction figures presented 
earlier in this section of the preamble, the nationwide cost-
effectiveness of the proposed regulation is $260 per Mg ($237 per ton).
    Alternative ways to calculate a measure of the ``cost-
effectiveness'' of the regulation have been suggested by others. One 
alternative would be to calculate cost-effectiveness on the basis of 
the nationwide cost of the regulation ($25 million for the proposed 
regulation) and the VOC reduction achieved in ozone nonattainment 
areas. The stated rationale for this approach is that cost-
effectiveness measures should be designed in a way that best represents 
the objective of the regulatory action. In this case, for example, a 
major objective, though not the only objective, of these regulations is 
the control of ozone formation in nonattainment areas. By establishing 
nationwide standards, the cost of achieving emission reductions in 
ozone nonattainment areas during the ozone seasons requires nationwide 
expenditures during all seasons of the year, including expenditures 
year-round in areas currently in attainment with the current standard. 
These nationwide emission reductions--including emission reductions 
outside of nonattainment areas and out of the ozone season--may or may 
not contribute to efforts to limit ozone in nonattainment areas, 
depending on whether they participate in ozone transport from one area 
to another.
    The proposed standard will achieve 42,341 Mg of VOC emission 
reductions in ozone nonattainment areas. Thus, the cost-effectiveness 
of the rule in limiting VOC emissions in nonattainment areas would be 
$590/Mg ($538/ton). It has been suggested that cost-effectiveness could 
also be calculated considering the seasonality of ozone formation, and 
the EPA requests comment on this approach.
    While such an approach offers a measure of the cost of emission 
reductions in nonattainment areas, the EPA sees significant drawbacks 
to this approach. First, cost-effectiveness figures would no longer 
provide a consistent basis for comparison of the relative cost of 
different control measures or regulations considered at different 
points in time. Because the number and location of nonattainment areas 
changes frequently, the initial calculation of the cost-effectiveness 
of a rule would depend upon when it was issued. The EPA believes it is 
important that cost-effectiveness be calculated in a consistent manner 
that allows for valid comparisons. Also, introducing new methodology 
would tend to make new control measures appear superficially to be less 
cost-effective than measures utilized in the past, simply because of a 
change in well-established terminology.
    Second, this alternative approach attributes all costs of the rule 
to emission reductions achieved in nonattainment areas and no cost to 
emission reductions achieved in attainment areas. By not including 
emission reductions in attainment areas, the methodology assumes that 
emission reductions in areas which attain the NAAQS for ozone have no 
value. In fact, attainment areas often contribute to pollution problems 
in nonattainment areas through the transport of emissions downwind. 
Also, emission reductions in attainment areas help to maintain clean 
air as the economy grows and new pollution sources come into existence. 
Furthermore, measures to reduce emissions of VOC often reduce emissions 
of toxic air pollutants.
    Another alternative that has been suggested would be to calculate 
not only the emission reductions but also the cost if the requirements 
applied only in ozone nonattainment areas, perhaps through issuance of 
control techniques guidelines (CTG). A request for comment and further 
information on the use of a CTG is discussed in section V(J)(2) of this 
notice.
    The EPA requests comments on the traditional and alternative 
methods discussed above to characterize the cost-effectiveness of this 
regulation.

IV. Rulemaking Decision Process

A. Legislative Authority

    Section 183(e) of the CAA gives the EPA the authority to establish 
national standards to reduce VOC emissions from architectural coatings. 
According to the CAA, regulations developed under this section shall 
require best available controls (BAC). Best available

[[Page 32736]]

controls are defined in Section 183(e)(1)(A) as follows:

    The term ``best available controls'' means the degree of 
emissions reduction that the Administrator determines, on the basis 
of technological and economic feasibility, health, environmental, 
and energy impacts, is achievable through the application of the 
most effective equipment, measures, processes, methods, systems, or 
techniques, including chemical reformulation, product or feedstock 
substitution, repackaging, and directions for use, consumption, 
storage, or disposal.

Section V.C describes the EPA's determination of BAC for the proposed 
regulation.

B. Regulatory Negotiation Procedure

1. Overview of the Regulatory Negotiation Process
    The regulatory negotiation process is an alternative to the 
traditional approach to rulemaking. Negotiations are conducted through 
an advisory committee (hereafter ``the committee'') that consists of 
representatives of the interests significantly affected by the outcome 
of the regulation (e.g., industry, States, environmental groups, and 
consumers). In this process, the EPA works closely with the members of 
the committee to develop the regulation.
    The goal of the committee is to attempt to reach consensus on 
language or issues that can be used as the basis of a proposed rule. If 
the committee fails to reach consensus, the EPA proceeds with its own 
regulatory development approach.
2. History of the Architectural Coatings Regulatory Negotiations
    The EPA recognizes that there are many issues and challenges in 
developing, proposing, and promulgating a rule for this source 
category. In early 1992, the EPA held three meetings with 
representatives of the industry (including small and large 
manufacturers), trade associations, resin suppliers, States, and 
environmental groups to discuss the potential scope of the regulation 
and issues, share information, determine data collection needs, and 
assess whether a regulatory negotiation would be appropriate for this 
industry.
    On July 16, 1992, the EPA solicited comments on its intent to form 
an advisory committee under the authority of provisions of the Federal 
Advisory Committee Act (FACA), 5 U.S.C. app. II 9(c), and the 
Negotiated Rulemaking Act (NRA), 5 U.S.C. Sections 581-590, to 
negotiate a proposed regulation for architectural coatings, referred to 
in the notice as AIM (architectural and industrial maintenance) 
coatings. The EPA held a meeting in July 1992 to discuss the 
feasibility of conducting regulatory negotiations to develop a 
regulation for architectural coatings. Based on the interest of the 
potentially affected parties and the EPA, the EPA decided to proceed 
with the regulatory negotiation process. After publishing a notice of 
establishment of the regulatory negotiation committee in the Federal 
Register on October 2, 1992 (57 FR 45597), the first official 
regulatory negotiation meeting was held in October 1992 (57 FR 45597).
    The members of the regulatory negotiation committee represented the 
affected industries, consumers, Federal agencies, State and local air 
pollution control agencies, environmental groups, and labor 
organizations. Regulatory negotiation meetings were held from October 
1992 to February 1994. During the negotiation process, it became 
evident that certain groups of committee members shared similar views 
and interests. These groups were called ``caucuses.''
    During the negotiations, most of the caucuses submitted proposed 
regulations for review by the rest of the committee. Based on elements 
from the caucus proposals and discussions, a number of ``frameworks'' 
for a potential regulation were prepared by the EPA and the facilitator 
during the more than two years of negotiation. Despite these efforts, 
the committee could not reach consensus on a regulatory framework. 
Therefore, on September 23, 1994, the negotiations facilitator notified 
each of the committee members that the regulatory negotiations were 
concluded without consensus. Following this decision, the EPA continued 
development of the rule. The EPA used the information obtained in the 
negotiations to develop the proposed rule. The proposed rule 
development was, therefore, assisted in part through the regulatory 
negotiation. Specifically, information on the volume, VOC content, and 
HAP content of coatings produced in 1990 was collected in the VOC 
Emissions Inventory Survey conducted by industry. Categories and 
definitions for architectural coatings were presented and discussed 
both in caucus meetings and meetings of the entire committee.

V. Rationale

    The following sections explain the rationale for selecting the 
proposed standards.

A. Applicability

    These proposed standards apply to all architectural coatings that 
are manufactured or imported for sale or distribution in the United 
States on or after April 1, 1997. Architectural coatings were 
determined to be a significant source of VOC emissions in nonattainment 
areas and were designated for regulation under the authority of Section 
183(e) of the CAA.
    In general, architectural coatings protect the substrates to which 
they are applied from corrosion, abrasion, decay, ultraviolet light 
damage, or the penetration of water. These coatings are recommended for 
field application to stationary structures and their interior or 
exterior appurtenances, portable buildings, pavement, and curbs. The 
definition in the proposed regulation includes the term ``field 
application'' and specifies ``stationary structures'' in order to 
distinguish architectural coatings from those coatings applied at a 
coating or recoating facility or other shop or maintenance facility.
    Some architectural coatings have specialized functions. Concrete 
form release compounds and concrete curing compounds are examples of 
architectural coatings that are used during construction, rather than 
being used for protecting or enhancing the finished structure. Fire-
retardant/resistive coatings and traffic marking coatings have 
important public safety functions. Coatings may also increase the 
aesthetic value of a structure by changing the color or texture of its 
surface. Application of architectural coatings also decreases 
maintenance costs associated with stationary structure replacement or 
repair. Input received during negotiations from committee members was 
used to take these economic, protective, safety, and aesthetic benefits 
of architectural coatings into consideration in the development of 
these proposed standards.
    The proposed standards do not apply to some types of coatings. 
There are exemptions for exported coatings, coatings manufactured or 
imported prior to April 1, 1997, coatings that are sold in 
nonrefillable aerosol containers, coatings that are collected and 
redistributed at community-based paint exchanges, and coatings that are 
sold in containers with a volume of one liter or less.
    The purpose of Section 183(e) of the CAA is to control VOC 
emissions that contribute to ozone nonattainment in the United States. 
Because exported coatings do not contribute to VOC emissions in the 
United States, and because the EPA has no legal or factual basis to 
impose VOC control measures outside the United States, coatings 
manufactured for the explicit purpose of export and which are in fact 
exported

[[Page 32737]]

are exempt from the requirements of the proposed rule. Coatings 
manufactured and imported prior to April 1, 1997 are exempted because 
the compliance date for the proposed rule is April 1, 1997. An 
exemption for coatings sold in nonrefillable aerosol containers is 
included in the proposed rule because the EPA is addressing these 
coatings separately under Section 183(e) authority. The reason is 
because aerosol paint is considered a specialty paint product and 
typically involves a specialized division within a paint company. In 
addition, it is a complex category due to the many subcategories of 
aerosol paint, and the range of options to reformulate include the 
potential to change propellant formulations.
    Community-based paint exchanges are programs in which the general 
public may drop off and pick up post-consumer architectural coatings 
(leftover paint), typically free of charge, and thereby reduce 
household hazardous waste. The exchanges occur between users and not 
manufacturers. Even though these coatings may be repackaged and the 
proposed regulatory definition of ``manufacturer'' includes 
repackagers, repackaging that occurs at community-based paint exchanges 
is specifically excluded from the definition. These programs are 
consistent with the EPA's pollution prevention policies and are 
generally considered effective in minimizing waste. Because the EPA 
wants to encourage this form of recycling, the EPA has excluded paints 
exchanged in these programs from the proposed rule.
    An exemption for products sold in containers with capacities of one 
liter or less is included in the proposed rule as means for 
manufacturers and importers to keep selected products on the market. 
Similar exemptions are included in State regulations. Due to the 
increased cost of packaging products in smaller size containers, and 
the increased bulk of multiple containers, the EPA would not expect a 
marked increase in the number of products sold in small volume 
containers as a result of the exemption. No reporting or recordkeeping 
would be required for this provision.

B. Regulated Entities

    In contrast to traditionally regulated stationary sources that emit 
VOC at a specific fixed location (e.g., a manufacturing plant), VOC 
from architectural coatings are emitted wherever the products are used. 
For this reason, regulating at the manufacturer and importer level is 
the most efficient and least burdensome method of regulating the VOC 
content of coatings, and would ultimately impact the VOC content of 
architectural coatings at the distributor and end user level.
    Regulated entities are defined under Section 183(e) to include 
processors, wholesale distributors, and those entities that supply 
manufacturers, processors, wholesale distributors, and importers. 
However, regulated entities in this proposal are limited to 
architectural coating manufacturers and importers.
    The EPA is also considering including ``processors'' as a regulated 
entity. Processors would be defined to include individuals who add 
organic thinner to the coating in a commercial setting at the point of 
application. Commercial settings would include industrial applications 
of architectural coatings. This would allow the regulation to prohibit 
an applicator from using organic solvents to thin a coating beyond the 
manufacturer's recommendation. This is a concern because if an 
applicator exceeds the maximum recommended thinning, expected VOC 
reductions may not be achieved. The EPA requests comments on this 
approach.

C. Selection of Best Available Controls (BAC)

    The primary factors considered in determining BAC were 
technological and economic feasibility, and environmental impacts. 
Other factors, such as non-air-environmental impacts (solid waste and 
water) and energy impacts, are expected to be minimal and therefore do 
not vary significantly among various VOC control levels. Health impacts 
are expected to parallel environmental impacts in terms of directional 
benefit (i.e., as the environment improves, health improves).
    The process of determining BAC for architectural coatings presented 
a new challenge for the EPA. In the past, control levels for VOC 
emissions from coatings were often established based on the ability to 
use add-on controls. For architectural coatings, the method for 
achieving VOC reduction is through reformulation, which is a pollution 
prevention technique. Reformulation could involve minor adjustments in 
coating formulation or larger adjustments involving a change in resin 
technology.
    The EPA considered many factors in evaluating economic and 
technological feasibility of VOC levels (i.e., degree of 
reformulation). These include State and local VOC requirements, VOC 
content and sales information, technical information, performance 
considerations, cost considerations, market impacts, and stakeholder 
positions.
    The discussion in section V.C.1 focuses on the general process used 
to determine categories and VOC levels that constitute BAC. The 
discussion in V.C.2 describes the selection of BAC. The determination 
of what constitutes BAC by April 1, 1997 involved consideration of what 
is economically and technologically feasible in light of the lead time 
available for compliance.
1. Process for Selection of BAC
    The process of determining BAC began with the collection of 
information from existing State and local architectural coating 
requirements. The EPA focused generally on existing categories and 
associated VOC limits in State architectural coating rules to determine 
what categories and VOC levels might constitute the degree of emissions 
reduction that represents BAC. Since California has been regulating 
architectural coatings for almost two decades and generally has the 
most stringent VOC limits in the country, some California air quality 
management district regulations were gathered and the record underlying 
these regulations was analyzed. The EPA recognizes that what is 
achievable now in California cannot necessarily be used to extrapolate 
what is achievable nationwide in 1997. Adequate consideration must be 
given to lead time, and any other factors that may influence the 
ability to apply requirements nationwide (e.g., climate 
considerations).
    After analyzing existing standards, the EPA reviewed the data from 
the Emissions Inventory Survey that was developed during the regulatory 
negotiation process. The regulatory negotiation committee developed the 
survey that was administered through an industry trade association. 
This survey accounted for roughly 75 percent of the volume of 
architectural coatings sold in 1990. The survey data included 
information on the volume and VOC content of coatings. Manufacturers 
were surveyed primarily using a system of coating categories that form 
the basis for existing rules in several California districts. The 
survey data were used to identify the minimum VOC contents needed for 
certain applications and/or resin types as well as to determine the 
feasibility of establishing lower VOC levels for various categories 
based on the distribution of coating sales with respect to different 
VOC content levels.
    The EPA also relied on technical input and information received 
during the regulatory negotiation process to

[[Page 32738]]

determine BAC. The EPA considered information that was submitted to the 
docket by coating manufacturers and other members of the general public 
during the course of the regulatory negotiations, and definitions for 
categories found in other EPA regulations. The expertise of the EPA's 
engineering staff also was used to develop the appropriate definitions 
that would minimize overlap and specify characteristics so that 
manufacturers and enforcement personnel can identify the applicable 
category for each coating on the market.
    The Emissions Inventory Survey did not provide data to answer the 
question as to whether coatings at a given VOC level can meet all the 
performance needs within a particular category. Ideally, coating 
performance data in addition to VOC content and sales data would have 
been gathered to better aid this type of determination. Collection of 
performance data, however, is complicated due to the subjective nature 
of performance requirements. ``Acceptable'' performance is difficult to 
evaluate. In evaluating potential emissions of VOC into the 
environment, acceptable performance means durable coatings with 
qualities acceptable to the consumer that would maximize the interval 
between required repaintings. These acceptable qualities can vary 
significantly depending on the consumer and the coating category. For 
example, durability might be of limited value in evaluating house paint 
since a house paint may be painted over due to extraneous factors such 
as resale of the house or redecorating long before the coating begins 
to fail. For coatings used in an industrial setting, such as high 
temperature and industrial maintenance coatings, repainting is more 
dependent on durability considerations. A variety of performance levels 
within most coating categories presently exist in the marketplace and 
will continue to exist after regulation.
    Because there is no consensus within the architectural coating 
industry on standards by which to evaluate acceptable coating 
performance, it was not obvious what performance data could be gathered 
to permit comparison. The EPA relied to some extent on input from the 
negotiation committee to determine the BAC VOC level within each 
coating category that would allow customer performance needs to be met. 
Beyond that, the EPA also relied on the survey results as support for 
its conclusions about the achievability of various VOC levels in light 
of performance needs. Although the EPA recognizes that the authority 
under Section 183(e) does not limit BAC determination to coatings 
available in the marketplace today, availability and the fact that 
customers are purchasing coatings at a particular VOC content level to 
meet their performance needs were significant factors in the EPA's BAC 
determination process.
    While low VOC coatings are available today which meet the proposed 
coating VOC limits, there continues to be debate over the performance 
characteristics and perceived limitations of low VOC architectural 
coatings. This issue was raised by some industry representatives during 
development of the proposed rule. Specifically, it has been argued that 
low VOC content levels may be counterproductive if the use of coatings 
with reduced VOC results in more coating applied, more thinners needed, 
and more frequent recoating, and consequently, more emissions. This 
argument has been made broadly, without detail as to the VOC content 
levels to which it pertains or the categories involved. The EPA is 
aware of numerous examples of low VOC systems which perform better than 
the traditional higher VOC systems and which result in less emissions. 
The EPA requests documentation, test results, or factual evidence which 
either supports or refutes claims about performance changes in coatings 
with VOC contents that comply with the proposed standards.
    In addition, the EPA relied on the background and expertise present 
within the Agency to make decisions regarding category selection and 
corresponding VOC content levels. The EPA has developed VOC standards 
and guidance documents for different sectors of the paint industry 
since 1977. The EPA has expertise in analysis of control techniques for 
coatings and in developing test methods for coatings, including the 
test method used to determine the VOC content of coatings (Method 24).
    The BAC selection process involved both selection of categories and 
determination of VOC content levels. These components are linked in a 
determination of what degree of emissions reduction represents BAC. 
Decisions to subdivide a given category into more specific 
subcategories can be a direct consequence of the VOC content levels 
under consideration. For example, the industrial maintenance coating 
category is fairly broad and encompasses many industrial coating 
applications. As the technological and economic feasibility of lower 
VOC content levels are considered for the industrial maintenance 
category, coatings within a particular application may not be able to 
meet the VOC level under consideration. Rather than establish the VOC 
level high enough to allow this particular application, the category 
can be subdivided to create another category that would then allow the 
achievable VOC content for industrial maintenance to be lower. For 
example, the ``high temperature coating'' category was created to allow 
a more stringent VOC level for the broader category of ``industrial 
maintenance coatings,'' which otherwise would have included high 
temperature coatings. Rather than raise the VOC content level for all 
the industrial maintenance coatings to ensure that high temperature 
coatings could achieve this level, the EPA created a separate, less 
stringent VOC level for high temperature coatings while maintaining the 
more stringent level achievable for other types of industrial 
maintenance coatings. Thus, it is possible to achieve lower VOC levels 
and greater emission reductions while still meeting the performance 
needs of some coating categories by further subdividing particular 
categories. Stains and wood preservatives have both been subdivided 
into clear and semitransparent, and opaque coatings. This subdivision 
of categories helps preserve markets while still achieving emission 
reductions.
    During development of the proposed rule, some industry 
representatives provided requests for particular categories to be 
created and given a higher VOC level than the VOC level for the more 
general category in which it would otherwise be grouped. Categories for 
which adequate justification was presented appear in the proposed rule. 
However, in cases where significant overlap between the requested 
category and other existing categories was apparent and the overlap 
could be expected to undermine the degree of emission reductions 
achieved, the category was not included in the proposal. The categories 
and definitions in the proposed rule are roughly consistent with the 
categories and definitions presented during negotiations.
    For the BAC determination, the EPA generally focused on the coating 
categories that contribute the largest amount of VOC to the 
environment.
2. Determination of BAC
    A primary consideration affecting the selection of VOC content 
levels that EPA believes represent BAC was the need expressed by many 
industry and regulatory stakeholder representatives to proceed with 
development of these standards as quickly and expeditiously

[[Page 32739]]

as possible. State and local agencies and representatives of industry 
who market products in different States have expressed concern about 
the lack of Federal VOC standards for architectural coatings. For this 
reason, the EPA has focused on establishing VOC levels that would take 
effect in 1997. An expedited rulemaking process for this proposed rule 
is necessary to fulfill the expectations and reliance of the States and 
to give coating manufacturers timely notice of requirements. Therefore, 
EPA based the BAC determination on VOC content levels that could be 
achieved in a short time frame (by April 1, 1997). As discussed in 
section II.D.1 of this preamble, EPA requests comment on the adequacy 
of this compliance lead time.
    The EPA attempted to gather specific information with which to 
determine the technological and economic feasibility of different VOC 
limits that would take effect in 1997. The following paragraphs discuss 
this information and how EPA used it to determine BAC.
    Fourteen categories which appear in the proposed rule and which are 
found in existing State standards were included in a list of categories 
developed during the regulatory negotiation referred to as ``low 
volume.'' These are anti-graffiti coatings, bituminous coatings and 
mastics, bond breakers, concrete curing compounds, fire-retardant/
resistive coatings (clear/pigmented), form release compounds, graphic 
arts coatings (sign paints), high temperature coatings, magnesite 
cement coatings, mastic texture coatings, multi-color coatings, pre-
treatment wash primers, sanding sealers, and swimming pool coatings. 
The VOC content levels in Table 1 for these categories are in the upper 
range of the VOC content limits found in existing State rules. The 
industry argued that these coatings represent unique compositions and 
specialized uses, and the imposition of lower VOC levels on these 
categories would probably result in an adverse economic impact on the 
manufacturers and may even have a disproportionate effect on small 
manufacturers. Because these coatings are used in relatively low 
volumes and in a limited range of circumstances, the EPA has determined 
that it should set VOC levels for these coatings based on the 
justification presented by the industry and that additional effort to 
collect more data is not warranted in the development of this proposal. 
After proposal, the EPA plans to reevaluate the feasibility of more 
stringent VOC levels for these categories as part of the joint study 
with industry that is described in section VI.
    In addition to the 14 ``low volume'' categories discussed, the VOC 
Emissions Inventory Survey contains 12 categories that represent about 
75 percent of the VOC emissions (industrial maintenance, interior 
nonflat, exterior nonflat, clear and semitransparent stains, clear 
waterproofing sealers and treatments, interior flat, roof coatings, 
primers and undercoaters, traffic markings, exterior flat, varnishes, 
and lacquers). For these 26 categories and an additional 15 categories 
contained in the survey, sales and VOC content data indicate that 
coatings are available that can achieve the VOC content levels listed 
in Table 1. The fact that the survey reveals that coatings are 
available that meet today's proposed standard is one factor that 
supports the conclusion that these coatings are economically and 
technologically feasible.
    During regulatory negotiation discussions of potential VOC content 
limits, 17 additional specialty coating categories were added to the 
list of categories under consideration. These categories were generally 
offered as a result of discussion of specific VOC content levels for 
more general and broad categories such as industrial maintenance 
coatings. These specialty coating categories did not appear in any 
existing State architectural coating regulation and, excepting high 
performance architectural coatings, were not categories for which data 
were collected in the VOC Emissions Inventory Survey. These 17 
categories include alkali-resistant primers, antenna coatings, 
antifouling coatings, chalkboard resurfacers, concrete protective 
coatings, extreme high durability coatings, floor coatings, flow 
coatings, heat reactive coatings, high performance architectural 
coatings, impacted immersion coatings, lacquer stains, nonferrous 
ornamental metal lacquers and surface protectants, nuclear coatings, 
repair and maintenance thermoplastic coatings, rust preventative 
coatings, and thermoplastic rubber coatings and mastics.
    Fourteen of these 17 additional specialty coating categories appear 
in today's proposal because discussion during negotiations and/or 
petitions from individual companies provided support for inclusion of 
these categories and an associated VOC content level separate from the 
broader category and level to which they otherwise would have been 
assigned. No data were available to the EPA to conclude that lower VOC 
content levels for these categories would represent BAC.
    Three of these 14 categories which appear in the rule, antenna 
coatings, antifouling coatings, and nuclear coatings, were assigned VOC 
content levels consistent with those found in the EPA's National 
Emission Standards for Hazardous Air Pollutants for Shipbuilding and 
Ship Repair (59 FR 62681). These VOC levels were based primarily on 
information contained in the EPA's Alternative Control Techniques (ACT) 
Document: ``Surface Coating Operations at Shipbuilding and Ship Repair 
Facilities,'' EPA-453/R-94-032.
    Two of the three specialty categories that do not appear in the 
proposed rule are alkali-resistant primers and lacquer stains. Although 
the EPA considered inclusion of alkali-resistant primers based on 
requests from some manufacturers, it was excluded for two reasons. 
Significant overlap between alkali-resistant primers and the more 
general primer category is apparent, and comments were received about 
the ability of latex coatings (lower VOC coatings) to perform the 
function of alkali-resistant primers. For lacquer stains, although 
arguments were presented about the need for the category, the overlap 
between lacquer stains and the more general stain categories would 
allow the higher VOC lacquer stain for uses in which lower VOC stains 
would be acceptable substitutes. In order to attain the degree of 
emission reductions achievable, these categories are excluded in the 
proposed rule. The coatings that would have been classified into these 
categories would be subject to the VOC level of the more general 
category of either primers or stains, as applicable.
    The third coating category that was surveyed in the VOC Emissions 
Inventory Survey, but does not appear in the proposed rule, is ``high 
performance architectural (HPA) coatings.'' Several industry proposals 
presented to the regulatory negotiation committee contained a 
definition and VOC standard for HPA coatings with subcategories for 
concrete protective coatings, floor coatings, and rust preventative 
coatings. However, the information available to the EPA does not 
support a need for a broad HPA category. Rather than including a 
separate, broad category of HPA coatings, the proposal contains 
separate definitions and VOC levels for concrete protective, floor, and 
rust preventative coatings. These subcategories were specifically 
identified during negotiations, and arguments were presented for VOC 
levels and definitions. These categories have specific performance 
requirements such

[[Page 32740]]

as prevention of water and chloride ion intrusion (concrete protective 
coatings), abrasion resistance (floor coatings), and prevention of the 
corrosion of metals (rust preventative coatings).
    In April 1995, architectural coating industry representatives 
submitted recommended VOC content limits for BAC to the EPA. These 
industry representatives reported that these limits were developed 
based on extensive negotiations within the industry to determine what 
is economically and technologically feasible. Today's proposed VOC 
requirements are consistent with those in the proposal submitted by 
these industry representatives.
    The EPA requests comment and any supporting data on the 
appropriateness of inclusion or exclusion of the 17 additional 
specialty categories and the VOC content levels assigned to all of the 
categories included in the proposed rule. For comments supporting 
exclusion of a category, the supporting argument should include data to 
show why the category under consideration could be expected to meet 
(consistent with performance needs) the VOC levels applicable to the 
more general category to which it would revert back in the absence of 
the specific category. For comments supporting inclusion of a category, 
the request should be accompanied by a detailed explanation of the need 
for the category, and data on why lower VOC coatings would not be 
acceptable substitutes.
    In addition, the EPA requests information on any coating category 
where recent progress in low VOC resin systems has resulted in new low 
VOC coatings being introduced into the market since 1990. The EPA 
requests comments on the ability of coatings with VOC content levels 
lower than those in Table 1 to meet the performance needs within the 
category.

D. Exceedance Fee Approach

    An exceedance fee economic incentive approach is being considered 
for inclusion in the architectural coating rule. Under this approach, 
manufacturers and importers would have the option of paying a fee, 
based on the amount that VOC content levels are exceeded, instead of 
achieving the VOC content levels listed in Table 1.
    The fee would be calculated at an initial rate of $0.0028 per gram 
($2,500 per ton) of VOC in excess of the applicable VOC level, 
multiplied by the volume of coating produced. For example, if a coating 
is 50 grams of VOC per liter over the applicable VOC standard, the fee 
rate would be approximately 14 cents per liter ($.0028 per gram 
multiplied by 50 grams per liter). The fee rate is in the upper end of 
the range of the incremental VOC reduction cost imposed by VOC 
regulations for other source categories. The EPA believes this rate is 
appropriate because the exceedance fee rate is intended to provide 
compliance flexibility, but also be high enough to encourage 
reformulation to meet the applicable VOC level. This rate would be 
adjusted for inflation periodically.
    For all but two categories, the volume of coating produced is 
determined excluding the volume of any water, exempt compounds, or 
colorant added to tint bases to be consistent with the units of the VOC 
content level. For the two ``low solids'' categories (low solids stains 
and low solids wood preservatives), the volume is determined 
``including water and exempt compounds'' to be consistent with the 
units of the VOC content level for these coatings. The exceedance fee 
would be paid quarterly to the Administrator and would be due no later 
than two months after the end of the quarter in which the coating is 
manufactured or imported.
    The fee option could be expected to provide transition time for 
those manufacturers that desire additional time to obtain lower VOC 
technologies. It could also provide a less costly compliance approach 
for manufacturers selling very low volume products.
    Under the exceedance fee approach, manufacturers and importers 
would be required to keep records and submit reports detailing the 
following information for all coatings for which fees are paid: VOC 
content, excess VOC content above the standard, volume of product 
manufactured or imported, product quarterly fee, and the total 
quarterly fee for all products.
    Section 183(e) specifies that fees collected must be deposited in a 
special fund. Specifically, under Section 183(e)(5) of the CAA, funds 
collected pursuant to the regulation of consumer and commercial 
products:

* * * shall be deposited in a special fund in the United States 
Treasury for licensing and other services, which thereafter shall be 
available until expended, subject to annual appropriation Acts, 
solely to carry out the activities of the Administrator for which 
such fees, charges or collections are established and made.

    The Congress, through the annual appropriations process, will 
determine whether and how to spend any fee revenues collected. The 
Administrator, however, may make recommendations to Congress concerning 
use of any funds collected. Therefore, the EPA today seeks comment on 
how the revenues should be spent should the proposed exceedance fee 
option be promulgated as part of the final rule. The EPA believes that 
it may be possible to construe the statutory language on potential uses 
of the money either broadly, to authorize spending for a wide variety 
of activities related to reducing ozone, or more narrowly. In 
particular, the EPA requests comment on whether these revenues should 
be used for:
    (1) Grants or awards to promote the development of lower VOC 
architectural coating technologies by private firms, or by other 
governmental or nongovernmental entities;
    (2) Purchase by the government of VOC emission reduction credits 
from private firms or emission credit brokers;
    (3) State and EPA administrative and enforcement costs in carrying 
out architectural coating rules, or other rules to reduce VOC emissions 
from consumer and commercial products; or
    (4) Other possible uses.
    In addition to comments on the use of exceedance fees, the EPA 
seeks comment on the exceedance fee rate, and recordkeeping and 
reporting associated with this option.

E. Low Volume Categories/Exemption

    The EPA recognizes that there may be some low volume, specialty 
niche products for which it may not be cost effective for either the 
manufacturer or resin supplier to develop a lower VOC formulation. The 
Agency addressed this concern during the regulatory negotiation by 
developing many new specialty categories and definitions which have 
been subsequently included in the proposed rule. To evaluate what 
further steps may still be needed to accommodate niche coatings within 
the proposed rule, the EPA requests detailed information on the 
following: (1) Identification of any specialty coatings which do not 
comply with Table 1. (specify coating category from Table 1 in which 
the product would be classified) and that cannot be cost-effectively 
reformulated, (2) the sales volume and VOC content of each identified 
product, (3) detailed cost estimate for reformulation (e.g., man-years, 
and product testing expected to be involved) and (4) whether a lower 
VOC alternative product currently exists in the market which can 
adequately substitute for the identified specialty product.
    EPA will consider developing additional categories for newly 
identified niche markets in the final rule. In addition, based on 
reformulation cost, sales volume, and VOC emissions information 
gathered in

[[Page 32741]]

response to the above request on low volume products, the EPA will 
evaluate the option of a categorical exemption for any new or existing 
low volume specialty categories. Alternatively, although no coating 
manufacturers have requested that EPA consider a low volume exemption, 
the EPA will consider establishing a low volume cut-off, under which a 
coating may be exempt from regulation. These approaches would allow 
these low volume, specialized products to remain on the market. Under 
the low volume exemption concept, any manufacturer or importer may 
request an exemption from the VOC levels in Table 1 for specialized 
coating products that are manufactured or imported in quantities less 
than a specified number of gallons per year. This exemption would 
require an annual report, recordkeeping, and labeling.
    A major issue with this type of an exemption is where to set the 
cut-off. The EPA would design any low volume exemption to avoid 
significant loss in emission reductions. The EPA has limited data with 
which to evaluate an appropriate cut-off level. The EPA requests 
comment on a cut-off in the range between 1,000 and 5,000 gallons per 
year.
    A manufacturer or importer applying for this type of exemption 
would need to submit an annual report. This report would contain a 
written request for the exemption, a list of the coating products for 
which the exemption is being requested, a statement signed by a 
responsible official that the sales of each product for which the 
exemption is being requested will not exceed the cut-off established, 
and documentation and a statement signed by a responsible official that 
each product serves a specialized use which cannot be cost-effectively 
replaced with another, lower VOC product. In addition, the report would 
contain the following information for each product for which the 
exemption is being requested: the name of the product, the specialized 
use, the sales of the product in the previous year, and the VOC content 
of the product. The EPA can waive this reporting requirement on a case-
by-case basis if the information from each year is essentially the 
same. Whether or not reporting is waived, the company would be required 
to keep records for a three year period sufficient to demonstrate upon 
request that the product qualified for the exemption. A company that 
sold more than the cut-off amount of a product for which the exemption 
was claimed would be in violation of the rule and subject to the same 
penalties as any company producing coatings in violation of the VOC 
content limits.
    In addition, the following statement would need to be placed on the 
label or lid of each container of coating for which the exemption is 
being applied: ``This is a specialized architectural coating produced 
in volumes less than X gallons per year.'' The labeling requirement 
would serve to identify these coatings to enforcement personnel.
    The EPA's goal would be to set the volume cut-off for this 
exemption low enough such that it would not significantly impact the 
VOC emission reductions achieved by the rule, yet high enough such 
that, if needed, it could be expected to be used by a number of smaller 
manufacturers and importers for their low volume products.
    The EPA requests comment on whether a low volume exemption would 
have any disadvantages. Such an exemption might create an incentive for 
some companies to circumvent the rule by taking a higher volume product 
and marketing (with or without any variations in formulation) as 
several separate products, each meeting the sales volume cut-off. Also, 
some may perceive that a low volume exemption would give competitive 
advantage to higher polluting, low volume products.
    The EPA requests comments on whether this exemption should be 
included in the final rule and on the following specific aspects of 
this exemption: (1) What would be an appropriate cut-off level? (2) To 
what degree would a low volume exemption aid small manufacturers and 
importers in complying with the rule? (3) To what extent would the 
exemption be used if included in the regulation? (4) Would such an 
exemption be equitable? (5) Would such an exemption create incentives 
for circumvention of the rule?

F. Special Provisions

    This section contains a description of the rationale for the 
recycled coating and variance provisions that are included in the 
proposed standard.
1. Recycled Coatings
    The proposed regulation allows manufacturers and importers VOC 
credit for recycling post-consumer coatings. Post-consumer coating is 
unused coating that has been previously purchased by a consumer, and is 
subsequently combined with virgin materials and offered for sale as a 
recycled coating. The proposed credit for recycled coating content is 
demonstrated in the following example: If a coating has a VOC content 
(calculated as prescribed in Sec. 59.404 of the regulation) of 400 
grams per liter of coating and contains 10 percent recycled coating, 
then 10 percent of the calculated VOC content (40 grams per liter) is 
subtracted or credited to give an adjusted VOC content of 360 grams per 
liter. Compliance is determined based on the adjusted VOC content.
    The calculation of an adjusted VOC content is included in the 
proposed regulation to encourage recycling by providing flexibility to 
manufacturers of recycled coatings. Recycling these coatings eliminates 
the need for their disposal (some unused coatings may be considered 
hazardous waste) and reduces the amount of new coating that must be 
manufactured.
    The EPA recognizes the inherent difficulties associated with 
enforcing the credit associated with the recycled coating provision. It 
is not normally possible to determine the fraction of post-consumer 
content by analytical means. Therefore, enforcement would be through an 
evaluation of reports submitted by manufacturers or importers of 
recycled coatings (see section II.G) and a comparison of these reports 
to claims of recycled content on the labels of coatings. The EPA 
requests comment on this VOC credit for recycled coatings and the 
enforcement of such a provision.
2. Compliance Variance.
    The proposed rule includes a variance provision whereby 
manufacturers and importers of subject architectural coatings may apply 
to the Administrator for a temporary variance from compliance with the 
standards. A variance will be granted if the applicant demonstrates 
that compliance would result in economic hardship, and that granting 
the variance would better serve the public interest than would 
requiring continuous compliance under the conditions of economic 
hardship. The EPA intends for this provision to allow manufacturers and 
importers some flexibility in responding to unforeseen circumstances 
that may cause additional, unanticipated compliance burden. The EPA 
recognizes that certain interruptions in the availability of raw 
materials and or manufacturing processes may affect the manufacturer's 
or importer's ability to continuously comply with the standards. In 
particular, the EPA anticipates that this variance provision will help 
to mitigate impacts to small manufacturers. Within the architectural 
coatings industry, small manufacturers are likely to have fewer 
research and development

[[Page 32742]]

resources, and therefore, will benefit from the allowed variance.

G. Labeling and Public Information Requirements

1. Containers of All Subject Coatings
    The proposed regulation requires that containers for all subject 
coatings display on the label or lid the date of manufacture (or a code 
indicating the date) and the maximum VOC content in the coating. The 
date of manufacture on the label or lid allows enforcement personnel to 
determine whether the coating was manufactured prior to April 1, 1997.
    Section 183(e) of the CAA specifically authorizes the EPA to 
require certain labeling and informing of the public as mechanisms for 
control of VOC emissions from consumer and commercial products. The 
proposed standards include labeling requirements that not only allow 
the EPA to verify compliance with the VOC content levels but also to 
inform consumers about VOC content. Such labeling, with appropriate 
consumer education, might provide an incentive to consumers to purchase 
coatings that will emit less VOC, and to manufacturers and importers to 
manufacture or import lower VOC content coatings.
    As described in section II.E, the EPA is considering two other 
labeling requirements. The EPA is considering a requirement to include 
on the label of each coating an educational statement about VOC 
emissions, and their potential contribution to ground-level ozone. The 
EPA requests comment on whether an outreach effort would be as 
effective an approach as an educational statement. Also, the EPA is 
considering a requirement to include coating coverage information on 
all architectural coating labels. Comment is requested on the 
feasibility of this requirement.
2. Containers of Industrial Maintenance Coatings
    In addition to the general labeling requirements for all 
architectural coatings, containers of industrial maintenance coatings 
(as defined in Sec. 59.401 of the proposed regulation) must also 
include on the label or lid the phrase ``NOT INTENDED FOR RESIDENTIAL 
USE.'' Section 183(e) of the CAA provides authority to include in the 
regulation directions for use of the product. The proposed VOC levels 
for industrial maintenance coatings were set based on more rigorous 
performance specifications than those needed for residential 
applications. While this labeling requirement is intended to discourage 
consumers from applying industrial maintenance coatings in a 
residential setting where a lower VOC coating with less rigorous 
performance specifications may be adequate, it does not prohibit the 
use of industrial maintenance coatings in a residential setting where 
extreme environmental conditions are present and for which an 
industrial maintenance coating would provide the most viable protection 
from these conditions.
3. Containers of Recycled Architectural Coatings
    Containers of recycled architectural coatings, in addition to the 
requirements listed previously for all subject coatings, must also 
display a label that includes the statement ``CONTAINS NOT LESS THAN X 
PERCENT, BY VOLUME, POST-CONSUMER COATING,'' where X is replaced by the 
percentage, by volume, of post-consumer coating. Inclusion of the 
recycled coating content is necessary for compliance purposes to 
identify coatings for which an adjusted VOC content has been 
calculated.

H. Selection of Recordkeeping and Reporting Requirements

    The EPA evaluated what recorded and reported information would be 
sufficient to ensure compliance with the VOC levels. The recordkeeping 
and reporting requirements proposed are necessary to allow 
determination of compliance, and the EPA believes they do not represent 
an undue burden on manufacturers or importers of architectural 
coatings. For all but the initial report, recordkeeping and reporting 
are only required for manufacturers and importers who choose to take 
advantage of optional provisions, including the calculation of an 
adjusted VOC content (based on post-consumer coating content), the 
variance provision, or the exceedance fee approach that is under 
consideration.
    For coatings for which the manufacturer or importer chooses to 
demonstrate compliance by meeting the VOC content levels in the 
proposed table (Table 1), enforcement personnel can compare the VOC 
content of the product to the VOC content statement on the label to 
establish compliance or noncompliance. Therefore, there are no 
reporting or recordkeeping provisions for the manufacturers and 
importers of these coatings beyond initial notification. The initial 
report serves to notify the EPA of the identity of the universe of all 
manufacturers and importers subject to the standards.
    The proposed rule includes reporting and recordkeeping requirements 
for coatings that contain post-consumer coating and for which an 
adjusted VOC content is reported for compliance purposes. Manufacturers 
and importers must maintain the required records for these coatings for 
a period of three years. The required recordkeeping and initial reports 
are essential for the EPA to determine whether coatings are in 
compliance.
    Manufacturers or importers that choose to apply for a variance are 
required to submit a variance application to the Administrator. The 
purpose of this application is for the applicant to provide the 
Administrator with sufficient information on which the decision to 
grant, or not to grant, the variance can be made.
    The reporting and recordkeeping requirements for the exceedance fee 
approach and low volume exemption that is under consideration for 
inclusion in the final rule is discussed in section V.D., and V.E. 
respectively

I. Test Methods

    Under the proposed provisions, compliance with the VOC content 
levels is based on the EPA's Reference Method 24. This is the EPA's 
standard test method for determining the VOC content of coatings.
    A provision allowing use of alternative methods of determining VOC 
content subject to the Administrator's approval is also included in the 
proposed rule.

J. Alternative Regulatory Approaches

1. Other Systems of Regulation.
    Section 183(e)(4) allows the EPA to consider ``any system or 
systems of regulation as the Administrator may deem appropriate, 
including requirements for registration and labeling, self-monitoring 
and reporting, prohibitions, limitations, or economic incentives 
(including marketable permits and auctions of emission rights) 
concerning the manufacture, processing, distribution, use, consumption, 
or disposal of the product.'' Accordingly, the EPA requests comment on 
any alternative to the proposed system of regulation.
2. Regulation with the Use of CTG
    Section 183(e)(3)(C) gives the EPA the flexibility to ``issue 
control techniques guidelines under this Act in lieu of regulations 
required under subparagraph (A) if the Administrator determines that 
such guidance will be substantially as effective as regulations in 
reducing emissions of volatile organic

[[Page 32743]]

compounds which contribute to ozone levels in areas which violate the 
national ambient air quality standard for ozone.''
    In many cases, a CTG can be an effective approach to reduce 
emissions of VOC in nonattainment areas without imposing control costs 
on attainment areas. For example, a CTG may effectively reduce VOC 
emissions from commercial products used in industrial settings where 
the targeted emissions occur at a point of end use which is readily 
identifiable, and at a fixed location. However, a CTG may not be as 
effective as a regulation to reduce emissions in nonattainment areas 
for architectural products because these products are easily 
transportable and widely distributed. This is because an architectural 
coating CTG would prohibit the sale of noncompliant architectural 
coatings in nonattainment areas. A CTG would have the potential 
compliance problems associated with noncompliant products being 
transported into nonattainment areas from neighboring areas and 
neighboring states. In contrast, a regulation could require 
modification of the product itself. Since all products would be subject 
to the same requirements, this would help ensure effective enforcement 
and implementation in all areas.
    It is expected that an architectural coating national rule would 
reduce costs of compliance for companies serving national or large 
regional markets by promoting consistency in VOC requirements across 
the country. In addition, a national rule would help reduce 
recordkeeping and reporting for those manufacturers who sell products 
in both attainment and nonattainment areas. To evaluate the benefits 
(i.e., reduction in cost) to manufacturers from the consistency aspect 
of a national rule, the EPA requests detailed information from 
manufacturers on the cost to comply with a variety of State standards. 
In particular, the EPA requests comment on the administrative cost 
burden (inventory tracking, distribution, labeling, and tracking of 
State architectural coating regulation development) expected to result 
from use of a CTG. In addition, to evaluate the population and product 
mix of manufacturers who may be excluded from regulation under a CTG 
approach, the EPA requests comment on the number and identity of 
manufacturers who sell products solely in attainment areas. To evaluate 
differences in the reformulation cost associated with a CTG versus a 
national rule, the EPA requests comment on the proportion of products 
which would be reformulated if, in general, only nonattainment areas 
were regulated. For example, EPA requests information on whether 
manufacturers would tend to produce one product for attainment areas 
and one for nonattainment areas, only sell products in attainment 
areas, or reformulate all products to be compliant with applicable 
nonattainment area requirements.
    The EPA requests comment on whether and how a CTG approach (by 
itself, or in combination with any other regulatory alternatives) would 
be as effective as a national rule in reducing VOC emissions in ozone 
nonattainment areas. If warranted by comments, a quantitative analysis 
of costs and emission reductions expected from a CTG will be completed.

K. Solicitation of Comments

    The EPA invites comments concerning the proposed standards, 
particularly as noted in the preceding sections concerning: the 
inclusion of specialty product categories; the technological and 
economic feasibility of VOC levels listed in Table 1; the ability of 
coatings with VOC content levels lower than the proposed levels to meet 
performance needs; the inclusion of processors in the applicability of 
the rule; economic and other impacts on importers; the feasibility of 
requiring coverage information to be displayed on coating labels or 
lids; the effectiveness of a public outreach program versus statements 
on the container label to educate users about the environmental impacts 
of VOC in coatings; and the placement of architectural coatings on the 
consumer products priority list. The EPA also requests information on 
coating categories where recent progress in low VOC resin systems has 
resulted in new low VOC coatings that have been introduced since 1990.
    The EPA requests comment on the inclusion of an exceedance fee 
option for use as a compliance alternative to meeting the VOC levels in 
Table 1. Specifically, the EPA requests comments on the following: the 
appropriate use for revenues generated from the fee; the 
appropriateness of the exceedance fee rate; and the appropriateness of 
the recordkeeping and reporting requirements associated with the fee.
    The EPA requests detailed information on any specialty coatings 
which do not comply with proposed standards, and cannot be cost-
effectively reformulated. The EPA also requests comment on the 
inclusion of a low volume exemption for specialty, niche products. 
Specifically, the EPA requests comment on the following: (1) What would 
be an appropriate cut-off level? (2) To what degree would a low volume 
exemption aid small manufacturers and importers in complying with the 
rule? (3) To what extent would the exemption be used if included in the 
regulation? (4) Would such an exemption be equitable? (5) Would such an 
exemption create incentives for circumvention of the rule?
    In addition, the EPA requests comment on the inclusion of the 
special provision for VOC credit for recycled coatings, the variance 
provision, and the small container exemption. For all of these 
provisions, the EPA requests comment on the expected extent of their 
use by small manufacturers and small importers.
    Comments submitted to the Administrator should contain specific 
proposals and supporting data to allow the EPA to fully evaluate the 
comments. Recommended changes to any of the VOC content levels 
presented in this proposal should include sufficient information for 
the EPA to evaluate the technological and economic feasibility 
associated with such changes. Applicable dates and addresses for the 
submission of comments are included at the beginning of this preamble.

VI. Future Phase Under Consideration

    The EPA believes further VOC reductions beyond those in Table 1 may 
be technologically and economically feasible. A great deal of 
controversy surrounds the proposal of more stringent VOC levels in a 
future phase of regulation. To address the controversy, the EPA will 
participate in a joint study with industry representatives to 
investigate the cost and performance characteristics of coatings with 
VOC contents lower than the proposed levels in Table 1. The 
environmental and economic impacts of requiring lower VOC contents will 
also be assessed. In addition, the EPA will continue to meet with other 
stakeholders regarding the potential for a future phase for the 
architectural coatings rule. After analyzing comments received 
regarding this proposal and following completion of the joint EPA/
industry study, the EPA will evaluate whether further reductions beyond 
the 1997 requirements are technologically and economically feasible. 
The result of this evaluation could be proposal of more stringent VOC 
levels, the proposal of economic incentive approaches, some combination 
of VOC levels and economic incentive approaches, or no further action 
beyond the 1997 requirements.
    The EPA is using this proposal as an opportunity to solicit input 
for use in

[[Page 32744]]

the joint EPA/industry study. The EPA expects to focus effort in the 
study on evaluation of issues which will include the following: the 
cost and economic impact of requiring lower VOC contents than those in 
Table 1, identification of any performance issues associated with lower 
VOC content coatings, and investigation of reactivity considerations 
involved in reformulating architectural coatings. The EPA invites 
comments concerning the planned EPA/industry study, and any input on 
performance, cost or reactivity considerations which should be included 
in the study.
    Because the EPA's data consists of the Emissions Inventory Survey 
of coatings sold in 1990 and on limits in California coatings 
regulations that have been in effect since the late 1980's, the EPA is 
requesting information on coating categories where recent progress in 
low VOC resin systems has resulted in new low VOC coatings being 
introduced into the market since 1990. The EPA requests comments on the 
ability of coatings with VOC content levels lower than those in Table 1 
to meet the performance needs within the category. Cost information on 
these coatings is also requested.

VII. Administrative Requirements

A. Public Hearing

    A public hearing will be held, if requested, to provide opportunity 
for interested persons to make oral presentations regarding the 
requirements in the proposed regulation in accordance with Section 
307(d)(5) of the CAA. Persons wishing to make oral presentation on the 
proposed regulation for architectural coatings should contact the EPA 
at the address given in the ADDRESSES section of this preamble. Oral 
presentations will be limited to 15 minutes each. Any member of the 
public may file a written statement before, during, or within 30 days 
after the hearing. Written statements should be addressed to the Air 
and Radiation Docket and Information Center at the address given in the 
ADDRESSES section of this preamble and should refer to Docket No. A-92-
18.
    A verbatim transcript of the hearing and written statements will be 
available for inspection and copying during normal business hours at 
the EPA's Air and Radiation Docket and Information Center in 
Washington, DC (see ADDRESSES section of the preamble).

B. Executive Order 12866

    Under Executive Order 12866, the Agency must determine whether the 
regulatory action is ``significant'' and therefore subject to Office of 
Management Budget (OMB) review and the requirements of the Executive 
Order. The Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of the Executive Order, the EPA has 
determined that this rule is a ``significant regulatory action'' under 
criterion (4) above, based on both the long regulatory negotiation 
process that preceded this proposal and the novel use of economic 
incentives (potential exceedance fees) for this industry. Therefore, 
the proposed regulation presented in this notice was submitted to the 
OMB for review as required. Any written comments from the OMB to the 
EPA and any written EPA response to those comments will be included in 
Docket No. A-92-18, listed at the beginning of this notice under the 
ADDRESSES section of this preamble.

C. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the OMB under the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq. An Information Collection Request (ICR) 
document has been prepared by the EPA (ICR No. 1750.01) and a copy may 
be obtained from Sandy Farmer, Office of Policy Planning and Evaluation 
(OPPE) Regulatory Information Division; U.S. Environmental Protection 
Agency (2136); 401 M Street., SW, Washington, DC 20460 or by calling 
(202) 260-2740. This ICR document is also available on the EPA's OAQPS 
TTN bulletin board under the Clean Air Act Amendments menu. See the 
SUPPLEMENTARY INFORMATION section of this preamble for information on 
accessing the EPA's TTN electronic bulletin board.
    The information required to be collected by this proposed rule is 
necessary to identify the regulated entities who are subject to the 
rule and to ensure their compliance with the rule. The recordkeeping 
and reporting requirements are mandatory and are being established 
under authority of Section 114 of the CAA. All information submitted as 
part of a report to the Agency for which a claim of confidentiality is 
made will be safeguarded according to the Agency policies set forth in 
title 40, Chapter 1, part 2, subpart B, ``Confidentiality of Business 
Information'' (see 40 CFR 2; 41 FR 36902, September 1, 1976, amended by 
43 FR 39999, September 28, 1978; 43 FR 42251, September 28, 1978; 44 FR 
17674, March 23, 1979).
    The total annual reporting and recordkeeping burden for this 
information collection averaged over the first three years is estimated 
to be 37,447 hours and $1,279,469. This is the estimated burden for 500 
respondents (i.e., architectural coating manufacturers).
    The average burden, per respondent, is 75 hours per year. The total 
reporting, recordkeeping, and labeling burden for an individual 
respondent will vary depending on the compliance option chosen. 
Respondents choosing to meet the VOC levels will have the lowest 
reporting, recordkeeping, and labeling burden, whereas, manufacturers 
and importers that use the option of calculating an ``adjusted VOC 
content'' (for recycled coatings) will have the highest reporting, 
recordkeeping, and labeling burden. The proposed rule requires an 
initial one-time notification from each respondent. Respondents whose 
coatings products have a VOC content that is less than or equal to the 
VOC content levels have no periodic reporting requirements. Respondents 
choosing the recycled coatings provision must submit annual reports. 
Respondents choosing the variance provision must submit a one-time 
report requesting the variance.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This estimate includes 
the time needed to: (1) Review instructions; (2) develop, acquire, 
install, and utilize technology and systems for the purposes of 
collecting, validating, and verifying information; processing and 
maintaining information; and disclosing and providing information; (3) 
adjust the existing ways to comply with any previously applicable 
instructions and requirements; (4) train personnel to be able to 
respond to a collection of information; (5) search data sources; (6) 
complete and review the collection of

[[Page 32745]]

information; and (7) transmit or otherwise disclose the information.
    The exceedance fee alternative compliance mechanism being 
considered for inclusion in the final rule would require quarterly 
reports of fees by the manufacturers choosing this option. In addition, 
these manufacturers would keep records for each coating product on 
which fees are paid. The average annual burden increase for each 
manufacturer choosing this option is 194 hours.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, OPPE Regulatory Information Division; U.S. Environmental 
Protection Agency (2136); 401 M Street SW; Washington, DC 20460; and to 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, 725 17th Street NW; Washington, DC 20503; marked 
``Attention: Desk Officer for the EPA.'' Include the ICR number in any 
correspondence. Since OMB is required to make a decision concerning the 
ICR between 30 and 60 days after June 25, 1996, a comment to OMB is 
best assured of having its full effect if OMB receives it by July 25, 
1996. The final rule will respond to any OMB or public comments on the 
information collection requirements contained in this proposal.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires the 
EPA to consider potential adverse impacts of proposed regulations on 
small entities and to consider regulatory options that might mitigate 
any such impacts. It is currently the EPA's policy to perform a 
regulatory flexibility analysis of the potential impacts of proposed 
regulations on small entities whenever it is anticipated that any small 
entities may be adversely impacted. Because it is anticipated that some 
small architectural coating manufacturers could be adversely impacted 
from implementation of the proposed standards, a regulatory flexibility 
analysis was performed.
    The analysis of small entity impacts focused on the potential 
impacts on small manufacturers producing architectural coatings. For 
the purpose of this analysis, small manufacturers were considered to be 
firms with less than $10 million of total gross annual revenues from 
the sale of architectural coatings and less than $50 million in total 
gross annual revenues from all products. Using this definition, 
potentially 85 percent of architectural coating manufacturers are 
considered small manufacturers. A copy of the technical memorandum 
titled ``Economic Impact and Regulatory Flexibility Analysis of the 
Proposed Architectural Coatings Rule'' is included in the public 
docket.
    Reducing VOC content generally requires a fixed investment for 
reformulation of each product to its respective regulatory level. 
Because, on average, coatings sold by small manufacturers are sold in 
smaller quantities than the industry average (an estimated 67,000 
liters per product versus 377,000 liters per product), the cost of 
reformulation per unit sold may in some cases be significantly higher 
for small manufacturers. To meet the limitations in Table 1, the 
estimated ratio of annualized reformulation cost to revenues for small 
manufacturers equals approximately 3.5 percent as opposed to a ratio of 
only about 0.4 percent for the entire industry. Thus, it may be 
difficult for small coating manufacturers to pass control costs to 
consumers in product markets where competition with larger 
manufacturers is significant. This impact will be reduced to the extent 
that small manufacturers are provided reformulation technologies from 
larger resin suppliers. Still, the EPA has recognized a need to include 
special compliance provisions in the rule to avoid adverse economic 
impacts upon small manufacturers.
    The economic impacts on small manufacturers were taken into 
consideration in establishing both the categories and VOC levels. 
Special effort was made to consider the economic feasibility of VOC 
levels for product categories in which small manufacturers have a 
disproportionate presence. The small container exemption, compliance 
variance, and consideration of an exceedance fee option and low volume 
exemption are also included in the proposed rule primarily to reduce 
small business impacts.
    Because the per-unit costs of the economic incentive options are 
constant with respect to volume sold, and because the per-unit 
reformulation cost is higher for small-volume products than large-
volume products, an economic incentive option, such as a fee, if 
included, is more likely to be beneficial to and adopted by small 
manufacturers than by large manufacturers. The results of the economic 
analysis suggests that the fee option is likely to provide a cost-
saving alternative to reformulation for relatively low-volume products 
with VOC content fairly close to the regulatory VOC levels. Estimated 
annual reformulation cost savings minus fee payments associated with 
the fee option equals approximately $5.0 million. In addition, the fee 
option reduces foregone profits by roughly 0.3 million for products 
which otherwise would have been removed from the market. It is 
anticipated that most of these savings would accrue to small 
manufacturers.

E. Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under Section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, Section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of Section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
Section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
Section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    Today's rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, or tribal 
governments or the private sector. The rule imposes no enforceable 
duties on any of these governmental entities. In any event, EPA has 
determined that this rule does not contain a Federal mandate that may

[[Page 32746]]

result in expenditures of $100 million or more for State, local, and 
tribal governments, in the aggregate, or the private sector in any one 
year. Thus, today's rule is not subject to the requirements of Sections 
202 and 205 of the UMRA.

F. Enhancing the Intergovernmental Partnership under Executive Order 
12875

    In compliance with Executive Order 12875, the EPA has involved 
State and local governments in the development of this rule. State and 
local air pollution control associations participated in the regulatory 
negotiation and have also provided regulatory review. State and local 
air pollution control representatives participated in the regulatory 
negotiation and have also provided input into subsequent regulatory 
development.

List of Subjects in 40 CFR Part 59

    Environmental protection, Air pollution control, Architectural 
coatings, Consumer and commercial products, Incorporation by Reference, 
Ozone, Regulatory negotiation, Volatile organic compound.

Table 1.--Architectural Coating Volatile Organic Compound Content Levels
   [Unless otherwise specified, units are in grams of VOC per liter of  
 coating thinned to the manufacturer's maximum recommendation excluding 
  the volume of any water, exempt compounds, or colorant added to tint  
                                 bases.]                                
------------------------------------------------------------------------
                                                               Effective
                       Coating category                         Apr. 1, 
                                                                  1997  
------------------------------------------------------------------------
Antenna coatings.............................................        530
Antifouling coatings.........................................        400
Anti-graffiti coatings.......................................        600
Bituminous coatings and mastics..............................        500
Bond breakers................................................        600
Chalkboard resurfacers.......................................        450
Concrete curing compounds....................................        350
Concrete protective coatings.................................        400
Dry fog coatings.............................................        400
Extreme high durability coatings.............................        800
Fire-retardant/resistive coatings:                                      
    Clear....................................................        850
    Opaque...................................................        450
Flat coatings:                                                          
    Exterior.................................................        250
    Interior.................................................        250
Floor coatings...............................................        400
Flow coatings................................................        650
Form release compounds.......................................        450
Graphic arts coatings (sign paints)..........................        500
Heat reactive coatings.......................................        420
High temperature coatings....................................        650
Impacted immersion coatings..................................        780
Industrial maintenance coatings..............................        450
Lacquers (including lacquer sanding sealers).................        680
Magnesite cement coatings....................................        600
Mastic texture coatings......................................        300
Metallic pigmented coatings..................................        500
Multi-colored coatings.......................................        580
Nonferrous ornamental metal lacquers and surface protectants.        870
Nonflat coatings:                                                       
    Exterior.................................................        380
    Interior.................................................        380
Nuclear coatings.............................................        420
Pretreatment wash primers....................................        780
Primers and undercoaters.....................................        350
Quick-dry coatings:                                                     
    Enamels..................................................        450
    Primers, sealers, and undercoaters.......................        450
Repair and maintenance thermoplastic coatings................        650
Roof coatings................................................        250
Rust preventative coatings...................................        400
Sanding sealers (other than lacquer sanding sealers).........        550
Sealers (including interior clear wood sealers)..............        400
Shellacs:                                                               
    Clear....................................................        650
    Opaque...................................................        550
Stains:                                                                 
    Clear and semitransparent................................        550
    Opaque...................................................        350
    Low solids...............................................    \1\ 120
Swimming pool coatings.......................................        600
Thermoplastic rubber coatings and mastics....................        550
Traffic marking coatings.....................................        150
Varnishes....................................................        450
Waterproofing sealers and treatments:                                   
    Clear....................................................        600
    Opaque...................................................        400
Wood preservatives:                                                     
    Below ground wood preservatives..........................        550
    Clear and semitransparent................................        550
    Opaque...................................................        350
    Low solids...............................................   \1\ 120 
------------------------------------------------------------------------
\1\ Units are grams of VOC per liter of coating, including water and    
  exempt compounds, thinned to the maximum thinning recommended by the  
  manufacturer.                                                         

    Dated: June 18, 1996.
Carol M. Browner,
Administrator.
[FR Doc. 96-16009 Filed 6-24-96; 8:45am]
BILLING CODE 6560-50-P