[Federal Register Volume 62, Number 249 (Tuesday, December 30, 1997)]
[Proposed Rules]
[Pages 67784-67788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33963]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 59

[AD-FRL-5942-1]


National Volatile Organic Compound Emission Standards for 
Automobile Refinish Coatings

AGENCY: Environmental Protection Agency (EPA).

ACTION: Supplemental proposed rule.

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SUMMARY: On April 30, 1996, the EPA proposed volatile organic compound 
(VOC) emission standards for automobile refinish coatings. In today's 
document, the EPA is proposing several changes to the rule regarding 
applicability, test methods, and multi-colored topcoats.

DATES: Comments. Comments must be received on or before February 13, 
1998.

ADDRESSES: Comments. Comments should be submitted (in duplicate) to: 
Air and Radiation Docket and Information Center (6102), Attention: 
Docket No. A-95-18, U.S. Environmental Protection Agency, 401 M Street, 
SW, Washington, DC 20460.
    Docket. Docket No. A-95-18 is available for public inspection and 
copying from 8:00 a.m. to 5:30 p.m. Monday through Friday, at the EPA's 
Air and Radiation Docket and Information Center, Waterside Mall, Room 
M-1500, Ground Floor, 401 M Street SW, Washington, DC 20460. A 
reasonable fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: For information concerning this 
document, contact Mr. Mark Morris at (919) 541-5416, Organic Chemicals 
Group, Emission Standards Division (MD-13), U.S. Environmental 
Protection Agency, Research Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION: Ground level-ozone, a major component of 
``smog,'' is formed in the atmosphere by reactions of VOC and oxides of 
nitrogen (NOX) in the presence of sunlight. Elevated levels 
of ozone can cause a range of health effects including respiratory 
symptoms (e.g. cough, chest pain, shortness of breath, wheezing, throat 
irritation), increased hospital admissions and emergency room visits 
for respiratory causes (e.g. aggravation of asthma), decreased lung 
function; inflammation of the lung, and possible long-term damage to 
the lungs. Groups at increased risk of experiencing acute health 
effects from ozone include active children, adults who regularly work 
or exercise outside, and people with pre-

[[Page 67785]]

existing respiratory disease. Elevated ozone levels also can cause 
effects such as agricultural crop loss, damage to forests and 
ecosystems, and visible injury to foliage of sensitive species.
    In the 1990 Amendments to the Clean Air Act (Act), Congress 
directed EPA to issue standards to reduce emissions from consumer and 
commercial products because these products, although individually small 
sources of emissions, together contribute significantly to the ozone 
pollution problem. In 1990, consumer and commercial products emitted 
approximately 6 million tons of VOC nationwide, or about 28 percent of 
all man-made VOC.
    Section 183(e) of the Act requires the Administrator to study and 
report to Congress on emissions of VOC into the ambient air from 
consumer and commercial products and their potential to contribute to 
ozone nonattainment levels. In addition, section 183(e) requires the 
Administrator to list those categories of consumer and commercial 
products that account for at least 80 percent of the VOC emissions, on 
a reactivity-adjusted basis, in ozone nonattainment areas and establish 
priorities for their regulation. The list is to be divided into four 
groups, with one group regulated every 2 years until all four groups 
are regulated.
    The EPA submitted the Report to Congress on March 15, 1995, and on 
this same date established the priority list for future regulation of 
the consumer and commercial products that account for 80 percent of VOC 
emissions, on a reactivity-adjusted basis, in nonattainment areas 
(published on March 23, 1995, at 56 FR 15264). Automobile refinish 
coatings are in the first group of products to be regulated. On April 
30, 1996, the EPA proposed volatile organic compound emission standards 
for automobile refinish coatings.
    In today's supplemental notice, the EPA is proposing several 
changes to the rule regarding applicability, test methods, and multi-
colored topcoats. The EPA welcomes comments on these proposed changes.

Applicability

Components of Multiple Manufacturers

    Regulated entities under the proposed rule included only 
manufacturers and importers of complete automobile refinish coatings. 
The VOC content of an automobile refinish coating depends, however, on 
the VOC content levels of all components that make up the coating. 
Coating users sometimes combine components made by multiple 
manufacturers when preparing a coating. Since components themselves are 
not coatings, a manufacturer who produces only hardeners, for example, 
would not be subject to the proposed rule. Such a manufacturer could 
recommend that its hardener be combined with components of other 
manufacturers, possibly resulting in a coating that exceeds the VOC 
content standards of the rule. Such a situation could essentially 
undermine the impact of the proposed rule. In the preamble to the 
proposed rule, the EPA stated that the rule may need to apply to all 
automobile refinish coating component manufacturers and importers to be 
effective. Commenters on the proposed rule recommended that the EPA 
expand the applicability of the rule to include all component 
manufacturers and importers to address the problem of components that 
may result in noncompliant coatings. No commenter was opposed to 
expanding the applicability.
    At the time of the proposed rule, the EPA had not addressed how to 
determine compliance with the rule if applicability were expanded to 
include manufacturers and importers of coating components; therefore, 
the EPA did not propose a compliance mechanism for the rule for 
coatings consisting of components of multiple entities. The EPA is 
proposing in this supplemental notice to include as regulated entities 
all manufacturers and importers of automobile refinish coating 
components. The EPA is thus also proposing a mechanism for determining 
compliance with the rule for coatings consisting of components made or 
imported by multiple entities.
    For the purposes of this proposed rulemaking, an automobile 
refinish coating is defined to include any combination of coating 
components recommended for automobile refinishing by the manufacturer 
or importer of one or more of the coating components. A recommendation 
for use in automobile refinishing that appears on a product container 
or in any product literature shall constitute a recommendation for 
automobile refinishing use.
    Determining compliance for coatings consisting of components made 
or imported by one regulated entity is relatively easy. In general, 
determining compliance with the proposed rule would consist of ``spot 
checking,'' where the EPA would obtain coating components, mix the 
components in the ratios recommended by the regulated entity (on the 
containers or in any product literature), and analyze the resulting 
coating using Reference Method 24. The EPA considered requiring 
regulated entities to perform VOC testing of their coatings on a 
regular basis (e.g., every nth batch) to demonstrate compliance with 
the rule, but believes that such a requirement would be economically 
infeasible. The EPA believes that random spot checks will be adequate 
to encourage regulated entities to assure that all of their coating 
batches are compliant; however, the EPA welcomes comments on other ways 
to demonstrate compliance.
    Determining the compliance of coatings that consist of components 
made or imported by multiple regulated entities is more difficult. The 
EPA considered several options for determining compliance in these 
cases. The EPA considered requiring regulated entities (that recommend 
the use of their components with those of other regulated entities) to 
use Reference Method 24 to test the coatings resulting from their 
recommendations. Using this information, the entities would establish 
the maximum allowable VOC content of their components, and the EPA 
would spot check components to determine compliance. However, the EPA 
has no standard method for determining the VOC content of components. 
Also, the VOC content of a coating is not simply the sum of the VOC 
contents its components, so component VOC content is not necessarily an 
indicator of the VOC content of the overall coating. Therefore, the EPA 
believes it is technically infeasible to determine compliance using 
component VOC content information.
    Because of the technical infeasibility of the approach described 
above, the EPA has concluded that the responsibility for coatings 
should be based on product recommendations. In other words, if an 
entity recommends a combination of components (made or imported by one 
or more regulated entities), then that entity is responsible for the 
compliance of the resulting coating. There may be cases where a coating 
resulting from an entity's recommendation is noncompliant because of 
the components of other entities. Since this occurrence may be beyond 
the control of the recommending entity in some circumstances, the EPA 
considered allowing the entity to provide the EPA with new or existing 
Reference Method 24 test data demonstrating the compliance of the 
coating resulting from their recommendation. This option is technically 
feasible, and is the most appealing since compliance is determined in 
essentially the same way for all regulated entities. It is this option 
that the EPA is proposing in today's

[[Page 67786]]

notice to address coatings consisting of components of multiple 
regulated entities.
    It is important to note that regulated entities would be liable 
only for those coatings they recommend. For example, if a regulated 
entity recommends that three of its coating components be combined and 
used in automobile refinishing, it is responsible for the coating that 
results from that combination. If a regulated entity recommends the 
substitution of one of its components for that of another regulated 
entity, the former entity is responsible for the resulting coating. A 
regulated entity is not responsible for coatings resulting from the 
recommendations of others, even if such recommendations involve the use 
of components of that regulated entity. The EPA solicits comments on 
the compliance mechanism proposed in today's notice.

Touch-Up Coatings

    Two commenters on the proposed rule recommended exempting touch-up 
coatings from the rule. The commenters stated that such coatings are 
sold in small containers, are applied by brush, and are used only for 
minor scratches or nicks that do not require more extensive repair.
    Touch-up coatings differ from typical refinish topcoats in that 
they are typically used by automobile owners to repair minor scratches 
or nicks, require no mixing prior to application, and are sold in small 
containers. Since the EPA has already exempted coatings supplied in 
nonrefillable aerosol containers from the proposed rule, aerosol touch-
up coatings are already exempted under the proposed rule. In this 
notice, the EPA is proposing to exempt all touch-up coatings because 
they are a relatively insignificant emissions source. The EPA is 
proposing the following definition for touch-up coatings, obtained from 
South Coast Air Quality Management District Rule 1151:

    Touch-up coatings are coatings applied by brush, air-brush, or 
non-refillable aerosol can to cover minor surface damage and 
dispensed in containers of no more than eight ounces.

The EPA welcomes comments on the definition and exemption of touch-up 
coatings proposed in today's document.

Test Methods

    One commenter on the proposed rule stated that the EPA had not 
designated a reliable test method for determining the acid content of 
pretreatment wash primers. The proposed method, ASTM Test Method D 
1613-91, covers the determination of total acidity in organic compound 
and hydrocarbon mixtures used in paints and other substances. This 
method consists of a titration using a color indicator to determine the 
endpoint of the titration. The EPA agrees that since some pretreatment 
wash primers are pigmented, tests using color indicators may not work. 
However, the proposed method can be used to determine the acid content 
of the acid-containing component of the primer.
    Pretreatment wash primers typically consist of two components: a 
``base'' coating and a catalyst. The base contains the pigment, and the 
catalyst contains the acid. The catalyst is a mixture of organic 
compounds that contains acid; therefore, it is in the scope of the 
proposed method. The EPA is proposing in this notice that the proposed 
test method be used to determine the acid content of the catalyst, and 
that calculations involving the acid content of the catalyst and the 
mixing ratio of the base to the catalyst be performed to determine the 
overall weight percent of acid in a primer.
    In the proposed rule, anti-glare/safety coatings were included in 
the specialty coating category, and were defined as coatings that do 
not reflect light. One commenter stated that anti-glare coatings do 
reflect some light, and that it would be more appropriate to call such 
coatings ``low gloss coatings'' and specify a gloss value to delineate 
them from other coatings. The EPA agrees, and is proposing in this 
notice to replace ``anti-glare/safety coatings'' with ``low-gloss 
coatings,'' defined as topcoats with specular gloss values of 25 or 
less with a 60 deg. gloss meter. The EPA is proposing that ASTM Test 
Method D 523-89 be used for the determination of specular gloss of 
coatings. This method is used by industry for this purpose. The EPA 
requests comments on the appropriateness of both of the test methods 
described above.

Multi-Colored Topcoats

    One commenter on the proposed rule suggested the addition of a 
coating category for multi-colored topcoats, which are wear-resistant 
and durable coatings used mainly for lining the cargo beds of pickup 
trucks and other utility vehicles. The commenter stated that the South 
Coast Air Quality Management District (SCAQMD) Rule 1151 has a separate 
category and VOC content standard for multi-colored topcoats, and 
recommended the EPA either include a separate category for these 
coatings or include them in the definition of specialty coatings.
    The EPA did not specifically address multi-colored topcoats in the 
proposed rule. Since the EPA has no information indicating that such 
coatings can meet the topcoat standard, and because of their special 
use as protective coatings, the EPA is proposing in today's notice to 
include multi-colored topcoats in the specialty coating category. The 
EPA is proposing in today's notice to define multi-colored topcoats as 
topcoats which exhibit more than one color, are packaged in a single 
container, and are applied in a single coat. The EPA solicits comments 
on this proposed definition of multi-colored topcoats, and the addition 
of such topcoats to the specialty coatings category.

Administrative Requirements

Paperwork Reduction Act

    The Office of Management and Budget (OMB) approved the information 
collection requirements contained in the April 30, 1996, proposed rule 
(61 FR 19005) under the provisions of the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq., and assigned OMB control number 2060-0353. The EPA 
estimated there were thirty regulated entities under that proposed 
rule. In today's supplemental proposal, the EPA is proposing to expand 
applicability; however, this expansion of applicability serves mainly 
to elucidate which entity is responsible for a given coating. The EPA 
does not expect a significant increase in the number of regulated 
entities as a result of today's action because most entities that make 
or import coatings also make or import coating components. Therefore, 
the EPA's original estimate of regulated entities accounts for the 
entities that would be subject as a result of today's supplemental 
proposal.

Executive Order 12866

    Under Executive Order 12866 [58 FR 51735 (October 4, 1993)], the 
EPA must determine whether a regulatory action is ``significant'' and 
therefore subject to OMB review and the requirements of this Executive 
Order to prepare a regulatory impact analysis (RIA). 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

[[Page 67787]]

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. Today's 
supplemental proposal is not a ``significant regulatory action'' within 
the meaning of the executive order.

Executive Order 12875

    To reduce the burden of federal regulations on States and small 
governments, the President issued Executive Order 12875 on October 26, 
1993, entitled Enhancing the Intergovernmental Partnership. In 
particular, this executive order is designed to require agencies to 
assess the effects of regulations that are not required by statute and 
that create mandates upon State, local, or tribal governments. This 
regulation does not create mandates upon State, local, or tribal 
governments.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice-and-comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions.
    The EPA performed an Initial Regulatory Flexibility Analysis (IRFA) 
to determine the extent of any impacts under the proposed rule. This 
IRFA was included in the docket for the proposed rule. In this 
supplemental proposal, the EPA is proposing to expand the class of 
regulated entities to include all automobile refinish coating component 
manufacturers and importers. For the purposes of this supplemental 
proposal, the EPA is now updating the IFRA.
    The EPA estimates there are about 20-25 companies producing 
automobile refinish coating components. At least 10 of these are large 
companies that have the majority of the industry market share. The EPA 
believes that the remaining 10-15 companies have fewer than 500 
employees and are therefore small entities in accordance with Small 
Business Administration regulations. Several of the small companies 
produce only thinners and reducers. The thinners/reducers used in low-
VOC coatings are not significantly different from those used in 
conventional coatings; therefore, the proposed rule will not have a 
significant impact on manufacturers of thinners/reducers because 
little, if any, reformulation of these components will be necessary 
under the proposed rule. Some of the remaining small companies already 
produce low-VOC coating components because they operate in areas that 
already have State or local automobile refinish rules in effect. Most 
State and local rules are at least as stringent as the proposed 
national rule. The EPA concludes, therefore, that the proposed rule 
would not have a significant impact on these companies.
    The remaining small companies will be impacted by the proposed 
rule, but the EPA believes that the impact will not be significant. The 
impacts of the proposed rule are from process modifications, training, 
and reporting requirements, as discussed in the IRFA. Process 
modifications are those changes that may be necessary for the 
production of low-VOC (high-solids) coatings, including the use of 
different mixing and pumping equipment. Some manufacturers affected by 
State and local rules have already complied with those rules by 
changing the recommended mixing ratios of components and have not 
changed the components themselves in a significant way; therefore, few 
process modifications have likely been necessary in these cases. Where 
process modifications are necessary, their impact will not be 
significant; when such impacts are examined assuming that they will be 
passed on to the user (as was done in the IFRA), the impacts do not 
significantly affect the cost of coatings or refinish jobs.
    The EPA believes that the impacts from training and reporting 
requirements will be minimal. Many States have developed automobile 
refinish rules since the time the impacts analysis for the proposed 
national rule was performed, and the regulated entities have already 
taken steps to comply with such regulations. It is likely that most, if 
not all, regulated entities are already familiar with low-VOC coatings; 
therefore, the need for training (and, thus, training costs) are likely 
overstated in the analysis for the proposed rule. Training was 
estimated to cost less than $500 per individual for the proposed rule. 
For small entities with few employees needing training, this cost would 
not be significant. Reporting requirements of the proposed rule consist 
of an initial report that provides the EPA with basic information about 
regulated entities (name, location, etc.), and periodic reports (if 
necessary) to explain any date codes that regulated entities may use to 
indicate the manufacture date of components. Given the limited nature 
of the reporting requirements, the EPA believes that the impact of the 
reporting requirements will not be significant.
    The EPA does not have data sufficient to quantify precisely the 
impact of the proposed rule by measures such as percentage of sales, 
but the nature of the impacts are such that the impacts will be small. 
The EPA bases this conclusion upon the information that was reasonably 
available to Agency, and hereby solicits further relevant information 
regarding the cost of compliance with the proposed rule.
    There are several aspects of the proposed rule which the EPA has 
instituted to minimize any impacts to small entities. First, the EPA 
has proposed not to require a regulated entity to perform initial VOC 
testing of its coating components or any of the coatings that might 
result from the combination of the entity's components with those of 
other regulated entities. The EPA believes that such an approach would 
have required regulated entities to perform numerous tests which, in 
the aggregate, could have imposed significant costs upon regulated 
entities. The EPA believes that such a requirement would have had a 
disproportionate impact upon small entities. Instead, the EPA has 
proposed to link responsibility for a coating's compliance with the 
regulated entity's recommendations for use. The EPA will assure 
compliance by ``spot-checking'' the VOC content of the coatings that 
result from such recommendations.
    Second, the EPA has proposed not to require a regulated entity to 
perform periodic VOC testing of its coating component batches. The EPA 
considered requiring regulated entities to periodically test batches of 
their components to ensure that the VOC content of coatings resulting 
from the combination of such components would be compliant. As 
discussed above, compliance with the proposed rule will be determined 
by the spot-checking of coatings. Regulated entities may rely on 
formulation data only to assure themselves of their compliance, or they 
may decide to perform some VOC testing for this purpose, but the EPA is 
not requiring batch testing. The EPA believes that not requiring batch 
testing will limit the impact upon regulated entities and, in 
particular, will help to alleviate impacts upon small entities.
    Finally, the EPA has proposed not to require recordkeeping by 
regulated entities. The EPA considered requiring regulated entities to 
maintain records containing information on coating component batches 
but determined that such records would not aid significantly in the 
enforcement of the standard. As

[[Page 67788]]

stated above, the only reporting requirements are an initial report 
that allows the EPA to determine the universe of regulated entities, 
and reports that explain date codes if such codes are used to indicate 
the date of manufacture. The EPA believes that minimization of 
recordkeeping and reporting requirements will help to decrease impacts 
upon small entities.
    For the foregoing reasons, the EPA anticipates that the proposed 
rule will not have a significant impact on a substantial number of 
small entities. The EPA believes that this conclusion is appropriate 
with respect to all entities to be regulated under the proposed rule, 
including the component manufacturers and importers encompassed by this 
supplemental proposal.

Unfunded Mandates Act of 1995

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, the EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate, or to 
the private sector, of $100 million or more.
    The EPA has determined that today's action does not include a 
Federal mandate that may result in estimated costs of $100 million or 
more to either State, local, or tribal governments in the aggregate, or 
to the private sector. Therefore, the requirements of section 202 of 
the Unfunded Mandates Act do not apply to this action.

Electronic Submission of Comments

    Comments may be submitted electronically by sending electronic mail 
(e-mail) to: [email protected]. Electronic comments must 
be submitted as an ASCII file, avoiding the use of special characters 
and any form of encryption. Comments will also be accepted on diskette 
in WordPerfect 5.1 or ASCII file format. All comments in electronic 
form must be identified by the docket number A-95-18. No Confidential 
Business Information (CBI) should be submitted through e-mail. 
Electronic comments may be filed online at many Federal Depository 
Libraries.

List of Subjects in 40 CFR Part 59

    Environmental protection, Air pollution control, Automobile 
refinish coatings, Consumer and commercial products, Volatile organic 
compounds.

    Dated: December 9, 1997.
Richard D. Wilson,
Acting Assistant Administrator for Air and Radiation.
[FR Doc. 97-33963 Filed 12-29-97; 8:45 am]
BILLING CODE 6560-50-P