Federal Register, Volume 84 Issue 56 (Friday, March 22, 2019)

[Federal Register Volume 84, Number 56 (Friday, March 22, 2019)]
[Proposed Rules]
[Pages 10738-10745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-05174]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 3280 and 3282

[Docket No. FR 6018-P-01]
RIN 2502-AJ42

Streamlining and Aligning Formaldehyde Emission Control Standards
for Certain Wood Products in Manufactured Home Construction With Title
VI of the Toxic Substance Control Act

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.

ACTION: Proposed rule.

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SUMMARY: Through this rulemaking, HUD proposes to implement the
Formaldehyde Standards for Composite Wood Products Act of 2010, which
added Title VI to the Toxic Substances Control Act (TSCA). In addition,
HUD proposes to remove certain aspects of HUD's current manufactured
housing formaldehyde standards requirements that are not addressed by
TSCA, including provisions for a health notice to be posted in every
manufactured home, testing of post-treatment panels after
certification, and testing of certain plywood materials.

DATES: Comment Due Date: April 22, 2019.

ADDRESSES: Interested persons are invited to submit comments regarding
this Proposed Rule to the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development via mail or
electronic submission as indicated below. All submissions and
communications must refer to the above docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit comments, ensures timely
receipt by HUD, and enables HUD to make comments immediately available
to the public. Commenters should follow the instructions provided on
that site to submit comments electronically.
Note: To receive consideration as public comments, comments must
only be submitted through one of the two methods specified above.
Again, all submissions must refer to the docket number and title of the
rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at 202-708-3055 (this is
not a toll-free number). Individuals with speech or hearing impairments
may access this number through TTY by calling the Federal Relay Service
at 800-877-8339 (toll-free number). Copies of all comments received by
HUD by the comment due date will be available for inspection and
downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Teresa B. Payne, Acting Administrator,
Office of Manufactured Housing Programs, Office of Housing, Department
of Housing and Urban Development, 451 7th Street SW, Washington, DC
20410; telephone 202-402-5365 (this is not a toll-free number). Persons
with hearing or speech impairments may access this number via TTY by
calling the Federal Relay Service at 800-877-8389 (toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

The National Manufactured Housing Construction and Safety Standards
Act of 1974 (Pub. L. 93-383; enacted August 22, 1974), as amended by
the Manufactured Housing Improvement Act of 2000,\1\ (42 U.S.C. 5401-
5426) (the ``Act'') provides authority to HUD to establish Federal
manufactured home construction and safety standards. HUD issued
regulations for manufactured home construction and safety standards in
1975, which are codified at 24 CFR part 3280, and manufactured home
procedural and enforcement regulations in 1976, codified at 24 CFR part
3282. See 40 FR 58752, 41 FR 19852. On August 9, 1984, HUD amended its
home construction and safety standards regulations to include
formaldehyde emission levels for composite wood products used in
manufactured homes, product certification and qualifications for
composite wood products, panel identification requirements, testing
requirements for formaldehyde emissions, and a required formaldehyde
emissions health notice for manufactured homes. See 49 FR 32011, 24 CFR
3280.308, 24 CFR 3280.309, and 24 CFR 3280.406.
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\1\ The Manufactured Housing Improvement Act of 2000 (Title VI
of Pub. L. 106-569) created the Manufactured Housing Consensus
Committee (MHCC) to develop proposed revisions to the Federal
manufactured home construction and safety standards.
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Formaldehyde Standards for Composite Wood Products Act of 2010

In 2007, the California Air Resources Board (CARB) issued an
Airborne Toxic Control Measure (ATCM) to reduce formaldehyde emissions
from hardwood plywood, medium-density fiberboard, and particleboard,
products referred to collectively as composite wood products. The CARB
ATCM requires manufacturers to meet formaldehyde emission standards for
the covered composite wood products that are sold, offered for sale,
supplied, or manufactured for use or sale in California. While
suppliers of composite wood products in California must meet CARB
standards, the CARB ATCM does not directly apply to plywood and
particleboard materials when installed in manufactured homes subject to
regulations promulgated by HUD.
The Formaldehyde Standards for Composite Wood Products Act of 2010,
which added TSCA Title VI (Pub. L. 111-199, enacted on July 7, 2010)
(``Formaldehyde Act of 2010''), established new formaldehyde emissions
standards for all hardwood plywood, medium-density fiberboard, and
particleboard, including when incorporated into finished goods, that
are sold, supplied, offered for sale, or manufactured (including
imported) in the United States. The Act created Federal emissions
standards to align with the CARB ATCM Phase 2

[[Page 10739]]

standards for hardwood plywood, medium-density fiberboard, and
particleboard sold, supplied, offered for sale, or manufactured in the
United States, thus alleviating increased burden on the regulated
community. TSCA Title VI also requires EPA to issue regulations
implementing those emissions standards and provides that EPA
regulations cover the following subjects: (a) Labeling, (b) chain of
custody requirements, (c) sell-through provisions, (d) ultra low-
emitting formaldehyde resins, (e) no-added formaldehyde-based resins,
(f) finished goods, (g) third-party testing and certification, (h)
auditing and reporting of Third-Party Certification Program, TPCs,\2\
(i) recordkeeping, (j) enforcement, (k) laminated products, and (l)
exceptions from the requirements of regulations promulgated for
products and components containing de minimis amounts of composite wood
products (but not exceptions to the emission standards). TSCA Title VI
also directs HUD to update its regulation addressing formaldehyde
emission standards to ensure consistency with the standards in TSCA not
later than 180 days after EPA promulgates regulations.
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\2\ 40 CFR 770.7 describes EPA's Third-Party Certification
Program and establishes qualifications to be recognized by EPA as an
EPA TSCA Title VI Product AB.
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EPA Regulations on ``Formaldehyde Emission Standards for Composite Wood
Products''

After undergoing notice and comment, on December 12, 2016, EPA
promulgated its final rule, ``Formaldehyde Emission Standards for
Composite Wood Products.'' 81 FR 89674. The final rule implements TSCA
Title VI to reduce formaldehyde emissions from composite wood products,
which will reduce exposure to formaldehyde and decrease potential
adverse health effects. The final rule became effective May 22, 2017
and had multiple compliance dates for different provisions.\3\ On
September 25, 2017, EPA extended all the compliance dates: The
manufactured-by compliance date for composite wood products from
December 12, 2017 to December 12, 2018; the compliance date for import
certification provisions from December 12, 2018 to March 22, 2019; the
manufactured-by compliance date for laminated products from December
12, 2023 to March 22, 2024; and the transitional period for needing an
EPA accreditation from December 12, 2018 to March 22, 2019.\4\
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\3\ The EPA final rule, published on December 12, 2016, had an
effective date of February 10, 2017 (81 FR 89674). EPA published a
delay of the effective date from February 10, 2017 until March 21,
2017, in the Federal Register notice on January 26, 2017 (82 FR
8499). The effective date was further delayed until May 22, 2017, in
the Federal Register notice on March 20, 2017 (82 FR 14324). On May
24, 2017, EPA issued a notice of proposed rulemaking seeking public
comment on extending the compliance dates in the EPA final rule (82
FR 23769).
\4\ On September 25, 2017, EPA proceeded with a final rule
extending the compliance dates in the EPA final rule (82 FR 44533).
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On April 4, 2018, EPA published a Federal Register notice that
announced a March 13, 2018, court order. The court order addressed
litigation over the December 12, 2018, compliance date, that resulted
in the compliance date for emission standards, recordkeeping, and
labeling (i.e., the manufactured by date or import date) being reduced
from December 12, 2018 to June 1, 2018. EPA also described the status
of compliance dates and stated that composite wood products
manufactured or imported until March 22, 2019 must be labeled as
compliant with either the TSCA Title VI or CARB ATCM Phase II emission
standards, and regulated products manufactured or imported after March
22, 2019 may not rely on the CARB reciprocity of 40 CFR 770.15(e) and
must be certified and labeled as TSCA Title VI compliant by an EPA TSCA
Title VI TPC with all of the required accreditations.\5\
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\5\ On April 4, 2018, EPA issued an Announcement of Court Order
and Compliance Date rule amending the compliance dates extended in
the September 25, 2017 rule (83 FR 14375).
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Specifically, EPA created a new 40 CFR part 770 entitled
``Formaldehyde Standards for Composite Wood Products'' with four
subparts: Subpart A--General Provisions, Subpart B--EPA TSCA Title VI
Third-Party Certification Program, Subpart C--Composite Wood Products,
and Subpart D--Incorporation by Reference.
Subpart A provides the scope of EPA regulations, which includes
whether provisions apply to panels, component parts, or finished goods,
or all three; effective dates for the standards for different products;
a definition section; exemptions from the hardwood plywood definition
for certain laminated products; and references the penalties for
failing to comply with EPA requirements at 15 U.S.C. 2697.
Subpart B provides the necessary requirements for manufacturers
that plan to participate in the EPA TSCA Title VI Third-Party
Certification Program as an EPA TSCA Title VI product accreditation
body, laboratory accreditation body, or a third-party certifier; and
directions to entities on providing applications, notifications, and
reports to EPA.
Subpart C establishes, among other things, formaldehyde emission
standards for composite wood products offered for sale or manufacture
in the United States. These standards apply regardless of whether the
product is in the form of a panel, a component part, or incorporated
into a finished good. 40 CFR 770.12 prohibits the sale of stockpiled
inventory of composite wood products and establishes standards to
determine whether stockpiling has occurred. 40 CFR 770.15 establishes
certification requirements for composite wood products, providing that
unless exempt, only certified composite wood products, whether in the
form of panels or incorporated into component parts or finished goods
are permitted to be sold, supplied, offered for sale, or manufactured
in the United States. 40 CFR 770.17 and 770.18 establish, respectively,
certification and application requirements for no-added formaldehyde-
based resins and ultra low-emitting formaldehyde resins. Testing
requirements for products with formaldehyde are established in 40 CFR
770.20. 40 CFR 770.21 establishes requirements for panel producers to
have a quality control manual, a designated quality control facility
for conducting quality control formaldehyde testing, and a quality
control manager responsible for emissions quality control. The balance
of subpart C addressees testing and isolating of non-complying lots,
handling composite wood products shipped into the United States for
sample testing, and a requirement for importers, fabricators,
distributors, and retailers to take reasonable precautions to ensure
that the wood product that they sell comply with the emission
requirements under the regulations. Finally, 40 CFR 770.40 and 770.45
establish reporting and recordkeeping requirements for panel producers;
and labeling of panels or bundles of panels sold, supplied, or offered
for sale in the United States, respectively.
Subpart D sets forth the standards that were approved by the
Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part
51 for incorporation by reference standards, which are necessary for
testing in EPA regulations.

HUD's Manufactured Housing Consensus Committee Consultation

On October 25-27, 2016, HUD held a meeting with its Manufactured
Housing Consensus Committee (MHCC). See 81 FR 66288. During the
meeting, HUD shared a preliminary working draft of a rule to amend and
reduce its current requirements for formaldehyde emissions from certain
composite wood

[[Page 10740]]

products, consistent with TSCA and EPA requirements. See Minutes MHCC
Meeting October 25-27, 2016, https://portal.hud.gov/hudportal/documents/huddoc?id=mhcc-oct2016-meetminsfinal.pdf. After discussions,
the MHCC voted to accept the working draft as presented, which cross-
referenced EPA's requirements in HUD's regulations and removed the
health hazard warning requirement in 24 CFR 3280.309, but recommended
that HUD add the EPA required provision for labeling each manufactured
home as being ``TSCA Title VI compliant'' to the data plate of each
manufactured home in 24 CFR 3280.5.

II. Proposed Rule

HUD proposes to revise HUD's current formaldehyde emission
standards for composite wood products used in manufactured housing at
24 CFR part 3280 and 3282 to ensure consistency with the requirements
established by section 601 of TSCA. HUD also proposes to update its
existing formaldehyde emission levels for composite wood products used
in manufactured homes; the certification, qualifications, panel
identification, and testing requirements for formaldehyde emissions;
and third-party certification requirements. HUD, through this proposed
rulemaking, also seeks to revise its recordkeeping requirements, which
reduce the time a producer needs to maintain records; requires
inclusion of a statement indicating compliance with TSCA Title VI on
the data plate; and adds requirements on non-complying lots and
stockpiling, consistent with TSCA Title VI and EPA regulations. Lastly,
HUD proposes to remove the requirement for a formaldehyde emissions
health notice for manufactured homes and remove HUD's existing
requirements in 24 CFR 3280.308(d) for treatment after certification of
plywood and particleboard with substances containing formaldehyde.
HUD believes that the intent of TSCA Title VI was for HUD to align
its requirements in 24 CFR 3280.308 with EPA requirements, including
the scope of products tested and process for testing. The Senate Report
on TSCA noted that in place of defining ``manufactured housing'' as a
``finished product'' under EPA regulations, HUD would be required to
``ensure that the regulation [24 CFR 3280.308] reflects the standards
established by section 601 of TSCA'' and specifically referenced HUD's
plywood and particleboard standards needing to be consistent with EPA's
formaldehyde emissions standard.\6\ The statute itself notes that
following EPA's regulations, HUD shall update its regulations for
consistency with section 601 of TSCA. Both the statute and
congressional intent support HUD's alignment of its regulations with
EPA's regarding the scope of testing and products covered. Therefore,
HUD proposes to no longer use its current scope of regulations that
covered ``plywood and particleboard materials bonded with a resin
system or coated with a surface finish containing formaldehyde'' and
instead adopt EPA regulations coverage of ``composite wood products in
the form of a panel, or composite wood products incorporated into a
component part or finished good,'' as defined by EPA. Composite wood
product means hardwood plywood made with a veneer or composite core,
medium-density fiberboard, and particleboard.
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\6\ S. Rep. No. 111-169 (2010) at 6 and 8.
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In addition to changing the scope of HUD's regulations, HUD
proposes the following specific changes consistent with EPA regulations
and the recommendations on the working draft provided by the MHCC:

Section 3280.5 Data Plate

HUD proposes to include on the manufactured home data plate a
notification that as a finished good that incorporates composite wood
product(s), the finished good is TSCA Title VI compliant. This
certification is construed to cover all products that are incorporated
into the manufactured home, including laminated products not exempted
under 40 CFR 770.4. This change would ensure consistency with the
current product certification scheme that already requires several
other certifications on the manufactured home data plate. It would also
ensure that manufacturers are certifying that all materials,
components, and products used in manufactured homes are TSCA Title VI
compliant and provide public awareness of compliance in place of the
health notice on formaldehyde emissions currently required by 24 CFR
3280.309.

Section 3280.308 Formaldehyde Emission Controls for Composite Wood
Products

In paragraph (a), HUD seeks to adopt, in addition to the
definitions already applicable to this section, EPA definitions at 40
CFR 770.3. HUD's definitions at 24 CFR 3280.2 and 3280.302 covering
manufactured home regulations, including formaldehyde emission
controls, do not conflict with EPA regulations, and incorporation of
EPA's definitions ensures consistency between EPA regulations and HUD
regulations. The relevant terms for which EPA definitions are used
include: Composite core, Component part, Composite wood product, EPA
TSCA Title VI Laboratory Accreditation Body or EPA TSCA Title VI
Laboratory AB, EPA TSCA Title VI Product Accreditation Body or EPA TSCA
Title VI Product AB, EPA TSCA Title VI Third-Party Certifier or EPA
TSCA Title VI TPC, Finished good, Hardwood plywood, Laboratory
Accreditation Body or Laboratory AB, Lot, Medium-density fiberboard,
Non-complying lot, Panel, Panel producer, Particleboard, Product
Accreditation Body or Product AB, Stockpiling, Thin medium-density
fiberboard, Third-party certifier or TPC, Veneer, and Veneer core.
In paragraph (b), HUD proposes to adopt maximum formaldehyde
emission standards that are in TSCA Title VI and EPA regulations at 40
CFR 770.10. This proposed rule, if adopted, would replace HUD's
codified standards that currently apply to all plywood and
particleboard materials bonded with a resin system or coated with a
surface finish containing formaldehyde. The currently codified
regulations set the level for formaldehyde emissions as follows:
Plywood materials shall not emit formaldehyde in excess of 0.2 parts
per million (ppm); and particleboard materials shall not emit
formaldehyde in excess of 0.3 ppm.
This proposed rule covers hardwood plywood made with a veneer core
or composite core, medium density fiberboard, thin medium density
fiberboard, and particleboard. The proposed new maximum levels for
formaldehyde emissions of these composite wood products and component
parts or finished goods incorporating these composite wood products
would be, if adopted, as follows: Hardwood plywood made with a veneer
core or composite core is 0.05 ppm; medium density fiberboard is 0.11
ppm; thin medium density fiberboard is 0.13 ppm; and particleboard is
0.09 ppm. These maximum emission levels would be applicable whether the
composite wood product is in the form of a panel or if composite wood
products are incorporated into component parts or finished goods.
In paragraph (c), HUD proposes to require that as of the effective
date of the final rule, only TSCA Title VI certified composite wood
products, whether in the form of panels or finished goods, must be used
in manufactured homes, consistent with EPA regulations at 40 CFR
770.15. HUD currently requires that manufactured

[[Page 10741]]

homes with installed plywood and particleboard comply with and certify
that formaldehyde emissions meet standards. Exclusively using phenol-
formaldehyde resins or finishes are excluded from this requirement.
EPA's regulations at 40 CFR 770.15 require a certification that the
composite wood products meet the new formaldehyde emission standards by
June 1, 2018. EPA's regulations at 40 CFR part 770 also provides a
narrow list of exceptions and alternative product certification
procedures for producers of composite wood product panels made with no-
added formaldehyde-based resins and for producers of composite wood
product panels made with ultra low-emitting formaldehyde resins. HUD
proposes to adopt 40 CFR 770.15 certification requirements and the same
limited exemptions and alternative certification procedures for
consistency with EPA's requirements.
In paragraph (d), HUD proposes that composite wood panels used by
entities covered under HUD's regulations must be labeled by a panel
producer consistent with EPA labeling requirements at 40 CFR 770.45.
HUD currently requires that each plywood and particleboard panel that
is installed in manufactured homes is stamped or labeled to identify
the product manufacturer, date of production and/or lot number, and the
testing laboratory certifying compliance with this section. In place of
HUD's current requirements, 40 CFR 770.45 of the EPA final rule
requires that panels or bundles of panels that are used in the United
States are labeled with the panel producer's name, the lot number, the
EPA TSCA Title VI TPC number, and a statement that the products are
TSCA Title VI certified. EPA also sets forth at 40 CFR 770.45 the
process for labeling composite wood panels that are bundled and not
individually labeled.
In paragraph (e), HUD proposes to require that each manufactured
home include certification labeling indicating that the home, as a
finished good, has been produced with panels or products that comply
with formaldehyde emission requirements set by HUD and 40 CFR part 770.
EPA regulations require that each composite wood product, whether in
the form of panels or incorporated into component parts or finished
goods that are sold in the United States, must include a product
certification, with a few minor exemptions. Exemptions are included for
producers of composite wood product panels made with no-added
formaldehyde-based resins (40 CFR 770.17) and for producers of
composite wood product panels made with ultra low-emitting formaldehyde
resins (40 CFR 770.18). This certification requirement would be
consistent with EPA requirements. HUD is also proposing to remove the
health notice on formaldehyde emissions, recognizing the reduced
formaldehyde emissions levels of composite wood products incorporated
as panels or component parts of manufactured homes as a finished good
that is required to be TSCA Title VI compliant evidenced by the
certification label.
In paragraphs (f) and (g), HUD proposes to incorporate EPA's
limitation on the sale, supply or offering of composite wood products
from non-complying lots in the United States; and the prohibition of
the sale of inventory determined to be stockpiled inventory (see 40 CFR
770.12) of composite wood products.\7\ HUD currently addresses the
handling, use, and certification of non-complying plywood and
particleboard materials at 24 CFR 3280.308(b)(6) but does not address
stockpiling requirements for manufacturers. Incorporating EPA
provisions would make clear that restrictions and certification
requirements authorized by TSCA Title VI, and included in EPA
regulations, are applicable to manufactured housing.
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\7\ See, 83 FR 14375 (April 4, 2018).
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Section 3280.309 Health Notice on Formaldehyde Emissions

HUD is proposing to remove the requirement for providing a Health
Notice on formaldehyde emissions in each manufactured home, 24 CFR
3283.309, given the increase in ventilation standards and decrease in
formaldehyde levels. The ventilation standards have changed
significantly since the health warning was required in 1984. In 1984,
HUD required ventilation only by openable glazed areas equal to 4
percent of each habitable room's floor area (40 FR 40270). As part of a
set of changes that affected energy conservation and indoor air
quality, Federal standards were changed, effective in October 1994, to
require whole house ventilation (58 FR 55003). This change increased
ventilation requirements beyond the ventilation provided by openable
glazed areas in each habitable room. The change required mechanical
and/or natural ventilation capable of providing 0.35 air changes per
hour continuously, or at an equivalent hourly rate. This standard
allowed 0.25 air changes per hour to be provided by natural
infiltration/exfiltration. The remaining 0.10 air changes per hour are
to be provided by mechanical ventilation. In 2005, the standards were
changed again to include the whole house ventilation requirement from
an air changes per hour requirement to a cubic feet per minute
requirement sized based upon interior floor area. The change in
standards removed consideration of natural infiltration/exfiltration as
a factor in ventilation systems while retaining provisions for openable
glazed areas in each habitable room in addition to the whole house
ventilation requirements (70 FR 72042).
HUD believes the change to ventilation standards, coupled with the
new lower compliance levels required in this proposed rule, supports
the removal of the health notice from manufactured homes. This is
because the decreased maximum formaldehyde emission levels will reduce
exposure to formaldehyde that will result in avoided adverse health
effects, such as eye irritation and nasopharyngeal cancer, and reduce
the risk of asthma and allergic conditions in young children (see
discussion at 81 FR 89677-78, December 12, 2016 and Economic Analysis
of the Formaldehyde Standards for Composite Wood Products Act Final
Rule, July 2016, EPA-HQ-OPPT-2016-0461-0029, www.regulations.gov).
Further, conventional homes have no similar requirement for a health
notice and HUD has not received consumer complaints in recent years
that identify or otherwise indicate formaldehyde emissions are an
appreciable concern based on complaint data, a basis for HUD's initial
rulemaking (46 FR 43466). Additionally, the inclusion of the compliance
requirement on the home data plate that the home is TSCA Title VI
compliant is a more permanent notification that identifies that the
materials used in the manufactured home meets the national standards.

Section 3280.406 Air Chamber Test Method for Certification and
Qualification of Formaldehyde Emission Levels

HUD currently requires that all plywood and particleboard
materials, if bonded with a resin system or coated with a surface
finish containing formaldehyde--except for phenol-formaldehyde resin
systems or finish--be tested in a large air chamber, ASTM E 1333-96.
The test is required for initial certification and thereafter, at least
quarterly. The testing must be certified by a nationally recognized
testing laboratory (24 CFR 3280.406).
In paragraph (a), HUD proposes to adopt all EPA definitions at 40
CFR 770.3 for the HUD revised 24 CFR 3280.406. Incorporation of EPA's

[[Page 10742]]

definitions ensures consistency between EPA's regulations and HUD's
regulations for purposes of test methods for certifying and qualifying
formaldehyde emission levels.
In paragraph (b), HUD seeks to adopt EPA's testing standards at 40
CFR 770.20(a). EPA's 40 CFR 770.20(a) requires testing of unfinished
panels within 30 days of the panel's production. HUD also seeks to
adopt EPA's timing requirements at 40 CFR 770.20(b) for testing panels.
Particleboard and medium-density fiberboard would be tested at least
once per shift (8 or 12 hours, plus or minus 1 hour of production) for
each production line for each product type. Particleboard and medium-
density fiberboard panel producers are eligible for reduced quality
control testing if they demonstrate consistent operations and low
variability of test values. Hardwood plywood would be tested at a
frequency determined by the weekly production levels of the product.
The EPA regulations also include quarterly testing requirements at 40
CFR 770.20(c). The EPA testing requirements also provide an additional
option for small air chamber testing, ASTM D6007-14, consistent with
EPA regulations, and updates the requirements for testing to the ASTM E
1333-14 edition. The proposed rule, if adopted, would continue to
require quarterly testing and that such testing be supervised by EPA
TSCA Title VI TPCs and performed by TPC laboratories. In paragraph (c),
HUD proposes to require that samples for testing that are not produced
in the United States but are shipped into and transported across the
United States for quality control or quarterly testing, must comply
with 40 CFR 770.24, requires that such panels must not be sold, offered
for sale or supplied to any entity other than a TPC laboratory before
testing and if test results for such products demonstrate compliance
with the emission standards in this subpart, the panels may be
relabeled in accordance and sold, offered for sale, or supplied.
HUD's current testing qualification requirements cover but do not
specifically address imported products. HUD is proposing to update
HUD's requirements to reflect the testing of products that are shipped
into and transported across the United States, to make clear that such
products if used must be tested in accordance with the new testing
procedures proposed by HUD.

Section 3280.407 Quality Control Testing, Manuals, and Facilities

In paragraph (a), HUD proposes to adopt the EPA definitions at 40
CFR 770.3. Incorporation of EPA's definitions ensures consistency
between EPA's regulations and HUD's regulations with respect to quality
control testing and qualifying formaldehyde emission levels.
In paragraph (b), HUD proposes to require EPA's quality control
testing and frequency of testing for hardwood plywood made with a
veneer core or composite core, medium density fiberboard, and
particleboard at 40 CFR 770.20(a) and (b). Consistent with EPA's
regulations, HUD would also adopt EPA's additional quality control
testing procedures. EPA's 40 CFR 770.20(a) requires testing of
unfinished panels within 30 days of the panel's production. In
accordance with 40 CFR 770.20(b), particleboard and medium-density
fiberboard must be tested at least once per shift (8 or 12 hours, plus
or minus 1 hour of production) for each production line for each
product type. Particleboard and medium-density fiberboard panel
producers are eligible for reduced quality control testing if they
demonstrate consistent operations and low variability of test values.
Hardwood plywood must be tested at a frequency determined by the weekly
production levels of the product.
In paragraph (c), HUD proposes to adopt the requirement that a
panel producer have a written quality control manual, designate a
quality control facility for conducting quality control formaldehyde
testing under 24 CFR 3280.406, and designate a person as quality
control manager with adequate experience or training to be responsible
for formaldehyde emissions quality control consistent with 40 CFR
770.21.

24 CFR Part 3282 Manufactured Home Procedural and Enforcement
Regulations

HUD seeks to adopt the definition for ``finished good'' at 40 CFR
770.3 for purposes of clarifying the scope of what is subject to the
recordkeeping requirements consistent with EPA requirements. The
adoption of the term ``finished good'' in HUD's definition section, 24
CFR 3282.7, will identify goods that must comply with recordkeeping
requirements in 24 CFR 3282.212 and 3282.257. Recordkeeping
requirements in 24 CFR 3282.212 and 3282.257 use the terms
``Component'', ``Distributor'', ``Purchaser'', and ``Retailer'' that
are already in HUD's current definition section. While EPA has
different definitions for those terms, HUD believes that its existing
definitions are broad enough to capture the scope of EPA's
recordkeeping requirements. Therefore, HUD is not proposing to adopt
those EPA definitions in 24 CFR part 3282 but maintains its own
definitions for those terms.

24 CFR Part 3282.212 TSCA Title VI Requirements

HUD proposes that consistent with EPA, manufacturers maintain bills
of lading, invoices or comparable documents that include a written
statement from the supplier that the components or finished goods are
TSCA Title VI compliant consistent with 40 CFR 770.30(c) and that
manufacturers must maintain such records for a minimum of 3 years from
the date of purchase, consistent with 40 CFR 770.40.

24 CFR Part 3282.257 TSCA Title VI Requirements

HUD proposes that consistent with EPA, retailers and distributors
maintain bills of lading, invoices or comparable documents that include
a written statement from the supplier that the component or finished
goods are TSCA Title VI compliant consistent with 40 CFR 770.30(c) and
retailers and distributors must maintain such records for a minimum of
3 years from the import date or the date of purchase or shipment,
consistent with 40 CFR 770.40.

III. 30-Day Public Comment Period

In accordance with HUD's regulations on rulemaking at 24 CFR part
10, it is HUD's policy that the public comment period for proposed
rules should be 60 days. In the case of this proposed rule, however,
HUD has determined there is good cause to reduce the public comment
period to 30 days for the following reasons:
First, HUD is proposing to implement the standards in Title VI of
TSCA as required by the Formaldehyde Standards for Composite Wood
Products Act of 2010 consistent with EPA's rule. Title VI requires that
``after the date of promulgation of regulations pursuant to section
601(d) of the Toxic Substances Control Act (as amended by section 2),
the Secretary of Housing and Urban Development shall update the
regulation contained in section 3280.308 of title 24, Code of Federal
Regulations (as in effect on the date of enactment of this Act), to
ensure that the regulations reflects the standards established by
Section 301 of the Toxic Substances Control Act.'' HUD believes that
the intent of the statute is for HUD's

[[Page 10743]]

regulations to mirror EPA's regulation. If the statute intended HUD to
implement its regulations in a different way, HUD would have been
required to implement Title VI of TSCA upon its passage and not after
EPA issued regulations. Given the lack of discretion HUD is provided in
implementing Title VI of TSCA, HUD believes that a longer comment
period is unnecessary.
Second, EPA in its rulemaking took comment on how to harmonize
EPA's regulatory program under TSCA Title VI with HUD's manufactured
home program, and what steps should be taken so that the programs are
complementary. 78 FR 34820 at 34841. The majority of commenters agreed
that HUD and EPA should ensure that the regulations are consistent and
clear, while one commenter stated that the Formaldehyde Standards for
Composite Wood Products Act of 2010 was unnecessary given HUD's
existing regulations.\8\ EPA received minimal comments on this
question, all of which recommended streamlining the rule. EPA also
addressed many other comments in its rule in order to come up with the
current standards. Given HUD is adopting EPA's standards that have
already been subject to notice-and-comment rulemaking and the feedback
from commenters on how HUD and EPA should ensure consistency across
agencies, HUD believes that a shortened time frame for public comment
is appropriate.
---------------------------------------------------------------------------

\8\ See U.S. EPA Formaldehyde Emission Standards to Composite
Wood Products--Response to Comments. 2016. Docket #EPA-HQ-OPPT-2016-
0461-0034, at http://www.regulations.gov.
---------------------------------------------------------------------------

Lastly, maintaining a separate set of standards for compliance,
reporting, recordkeeping and labeling for the manufactured housing
industry is unnecessary. EPA has set a national standard for all
products, and maintaining separate, different HUD standards is
inconsistent with the intent of the Formaldehyde Standards for
Composite Wood Products Act of 2010. EPA's regulations, which are
compliant with Title VI of TSCA, has stricter standards than HUD's
current regulations and, thus, all available products will need to
comply with those stricter standards. Maintaining HUD's current
formaldehyde emissions standards would also be inconsistent with the
statutory requirement that HUD's regulations reflect the standards
required to be developed by EPA under Title VI of TSCA. The longer HUD
delays issuance of its final rule, the longer the manufactured housing
industry will be subject to two conflicting Federal regulations which
is burdensome and confusing.
Given the statutory requirement and above justifications, HUD
believes that good cause exists to reduce the public comment period to
30 days. All comments received during the 30-day public comment period
will be considered in the development of the final rule.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, and safety effects; distributive impacts; and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility.
Under Executive Order 12866 (Regulatory Planning and Review), a
determination must be made whether a regulatory action is significant
and, therefore, subject to review by the Office of Management and
Budget (OMB) in accordance with the requirements of the order. This
proposed rule was determined to be a ``significant regulatory action''
as defined in section 3(f) of the Executive order, but not an
economically significant regulatory action, as provided under section
3(f)(1) of Executive Order 12866. Any changes made to the proposed rule
subsequent to its submission to OMB are identified in the docket file,
which is available for public inspection in the Regulations Division,
Room 10276, Office of General Counsel, Department of Housing and Urban
Development, 451 Seventh Street SW, Washington, DC 20410-0500.

Executive Order 13771

Executive Order 13771, entitled ``Reducing Regulation and
Controlling Regulatory Costs,'' was issued on January 30, 2017. Section
2(a) of Executive Order 13771 requires an Agency, unless prohibited by
law, to identify at least two existing regulations to be repealed when
the Agency publicly proposes for notice and comment or otherwise
promulgates a new regulation. In furtherance of this requirement,
section 2(c) of Executive Order 13771 requires that the new incremental
costs associated with new regulations shall, to the extent permitted by
law, be offset by the elimination of existing costs associated with at
least two prior regulations. For the reasons discussed in the
Regulatory Impact Analysis (RIA), this proposed rule has been
determined to be an Executive Order 13771 deregulatory action.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501-3520), an agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless the
collection displays a valid control number. The Office of Management
and Budget (OMB) has issued HUD control number 2502-0253 for the
information collection requirements under the Manufactured Home
Construction and Safety Standards Act Reporting Requirements. HUD will
update the existing OMB control number to include the minimum time
required for entities to maintain bills of lading, invoices or
comparable documents that include a written statement from the supplier
that the component or finished goods are TSCA Title VI compliant for a
minimum of 3 years from the date of purchase, consistent with 40 CFR
770.30(c).

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4; approved March 22, 1995) (UMRA) establishes requirements for Federal
agencies to assess the effects of their regulatory actions on state,
local, and tribal governments, and on the private sector. This proposed
rule does not impose any Federal mandates on any state, local, or
tribal government, or on the private sector, within the meaning of the
UMRA.

Environmental Review

A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant
Impact is available for public inspection between the hours of 8 a.m.
and 5 p.m. weekdays in the Regulations Division, Office of General
Counsel, Room 10276, Department of Housing and Urban Development, 451
Seventh Street SW, Washington, DC 20410-0500.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking

[[Page 10744]]

requirements unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This proposed rule would regulate establishments primarily engaged in
making manufactured homes (NAICS 32991). The Small Business
Administration defines a small manufactured homes manufacturing
business as one that does not exceed 1,250 employees. Of the 222 firms
included under this NAICS definition, approximately 35 produce
manufactured homes subject to HUD's Manufactured Housing Construction
and Safety Standards. Other entities covered by this NAICS code build
non HUD-code prefabricated buildings. Of the 35 manufacturers subject
to HUD's Manufactured Housing Construction and Safety Standards, 31 are
considered to be small businesses based on the threshold of 1,250
employees or less.
HUD believes the de minimis cost of adopting this proposed rule,
specifically the change to the data plate, will be offset by the
savings that result from the changes in materials subject to testing
and the removal of the health notice. Therefore, HUD has determined the
impact of this proposed rule, if adopted, on all entities, to include
small entities, will not be significant.
As required by statute, EPA published a final rule that established
new formaldehyde emission standards for composite wood products. As
also required by statute, HUD's proposed rule would update HUD's
existing formaldehyde requirements to align with and reflect those
issued by EPA. Despite the new requirements, as discussed in HUD's
regulatory impact analysis, HUD anticipates there will not be any new
or additional cost impacts resulting from implementation of this
proposed rule--other than de minimis costs to change the template used
to create the data plate. Initially, composite wood products at EPA
reduced formaldehyde levels are currently the majority of products
available in the marketplace. This circumstance exists because of
similar requirements currently in effect in California under CARB ATCM.
CARB ATCM requires composite wood products used in manufactured housing
shipped to California to already comply with CARB requirements. As with
many industries, rather than procuring special products for different
final destinations, manufactured housing producers are likely to
procure products that can be used in homes that it can ship anywhere.
This impact analysis includes all segments--manufacturers,
retailers, and consumers, including small entities. In EPA's final
rule, which affected a much broader number and type of small entities,
for example, EPA determined in Table 2 of its final rule, that 99
percent of small business firms with cost impacts of more than 1
percent of revenues will have annualized costs of less than $250 per
year.
In addition, this proposed rule, if adopted, would provide cost
savings for HUD's manufactured housing manufacturers covered by this
rule by eliminating the burden of placing the health notice
(approximately $270,270 a year), testing structural plywood and
retesting panels after a finishing is added. Therefore, while the
proposed rule, if adopted, would affect a substantial number of small
entities, 31 out of the 35 affected entities (86 percent), it would
likely result in a reduction of costs or a de minimis cost. For the
reasons stated above, HUD knows of no instance of a manufacturer with
fewer than 1,250 employees that would be significantly affected
economically by this rule. Therefore, although this proposed rule, if
adopted, would affect a substantial number of small entities, HUD has
determined that it would not have a significant economic impact on
them.
Notwithstanding HUD's determination that this rule would not have a
significant economic effect on a substantial number of small entities,
HUD specifically invites comments on its RIA, this certification, and
any less burdensome alternatives to this rule that will meet HUD's
objectives as described in this preamble.

Executive Order 13132, Federalism

Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has Federalism implications if the rule
either imposes substantial direct compliance costs on state and local
governments or is not required by statute, or the rule preempts state
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This proposed rule would not have
Federalism implications and would not impose substantial direct
compliance costs on state and local governments or preempt state law
within the meaning of the Executive Order.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance (CFDA) Program number
for Manufactured Housing Construction and Safety Standards is 14.171.

List of Subjects

24 CFR Part 3280

Housing standards, Manufactured homes.

24 CFR Part 3282

Consumer protection, Manufactured homes.

Accordingly, for the reasons stated above, HUD proposes to amend 24
CFR parts 3280 and 3282 as follows:

PART 3280--MANUFACTURED HOME CONSTRUCTION AND SAFETY STANDARDS

0
1. The authority citation for part 3280 is revised to read as follows:

Authority: 15 U.S.C. 2697, 42 U.S.C. 3535(d), 5403, and 5424.

0
2. In Sec. 3280.5, add paragraph (i) to read as follows:

Sec. 3280.5 Data plate.

* * * * *
(i) The statement: The manufacturer certifies this home is TSCA
Title VI Compliant.
0
3. Revise Sec. 3280.308 to read as follows:

Sec. 3280.308 Formaldehyde emission controls for composite wood
products.

(a) Definitions. For purposes of this section, the definitions
found in 40 CFR 770.3 apply.
(b) Formaldehyde emission levels. The following maximum
formaldehyde emission standards apply whether the composite wood
product is in the form of a panel, or is incorporated into a component
part or finished good:
(1) For hardwood plywood made with a veneer core or composite core,
the maximum level is 0.05 parts per million (ppm) of formaldehyde;
(2) For medium density fiberboard, the maximum level is 0.11 ppm of
formaldehyde;
(3) For thin medium density fiberboard, the maximum level is 0.13
ppm of formaldehyde; and
(4) For particleboard, the maximum level is 0.09 ppm of
formaldehyde.
(c) Product certification and continuing qualification. Only
certified composite wood products whether in the form of panels or
incorporated into component parts or finished goods, are permitted to
be used in manufactured homes sold, supplied, offered for sale, or
manufactured in or imported into the United States, consistent with
Environmental Protection Agency (EPA) product testing requirements at
40 CFR 770.15. See Sec. 3280.406 for testing requirements for product
certification and testing requirements for continuing

[[Page 10745]]

qualification of formaldehyde emission levels.
(d) Panel label. Manufactured homes must use panels or bundles of
panels that are labeled by a panel producer consistent with the
labeling requirements at 40 CFR 770.45.
(e) Finished good certification label. Each manufactured home must
be provided with a finished good certification label indicating that
the home has been produced with composite wood products, or finished
goods that contain composite wood products, that comply with the
formaldehyde emission requirements of this Part 3280 and 40 CFR part
770 consistent with Sec. 3280.5(i).
(f) Non-complying lots. Composite wood products from non-complying
lots (i.e., lots that exceed the applicable formaldehyde ppm) are not
certified composite wood products and may not be used in manufactured
homes except in accordance with section 40 CFR 770.22.
(g) Stockpiling. The use of stockpiled inventory of composite wood
products, whether in the form of panels or incorporated into component
parts or finished goods, in manufactured homes, is prohibited in
accordance with EPA regulations at 40 CFR 770.12(b) through (d).
(h) Third Party Certification. All composite wood products in
paragraph (b) of this section must be certified by an agency or
organization that has been recognized to participate in the EPA TSCA
Title VI Third Party Certification Program.

Sec. 3280.309 [Removed]

0
4. Remove Sec. 3280.309.
0
5. Revise Sec. 3280.406 to read as follows:

Sec. 3280.406 Air chamber test methods for certification and
continuing qualification of formaldehyde emission levels.

(a) Definitions. For purposes of Sec. 3280.406, the definitions
found in 40 CFR 770.3 apply.
(b) Testing requirements. Testing of panels made of hardwood
plywood made with a veneer core or composite core, medium density
fiberboard, thin medium density fiberboard, and particleboard for
compliance with Sec. 3280.308(b) must be performed pursuant to the
general requirements of 40 CFR 770.20(a) and (b), for certification
testing, pursuant to one of the air chamber test methods specified in
40 CFR 770.15, and, for quarterly testing, pursuant to one of the air
chamber test methods specified in 40 CFR 770.20(c).
(c) Samples for testing. Samples for testing not produced in the
United States, but shipped into and transported across the United
States for quality control or quarterly testing, must comply with 40
CFR 770.24.
0
6. Add Sec. 3280.407 to read as follows:

Sec. 3280.407 Quality control testing, manuals, facilities, and
personnel.

(a) Definitions. For purposes of this section, the definitions
found in 40 CFR 770.3 apply.
(b) Quality control testing. Quality control testing is required
for hardwood plywood made with a veneer core or composite core, medium
density fiberboard, thin medium density fiberboard, and particleboard
must be performed in accordance with the general requirements in 40 CFR
770.20(a) and by one of the test methods and at the frequency specified
in 40 CFR 770.20(b). Panels being tested with an equivalence,
correlation or alternative method must ensure compliance with the
requirements of 40 CFR 770.20(d).
(c) Quality control manuals, facilities, and personnel. A panel
producer must have a written quality control manual, must designate a
quality control facility for conducting quality control formaldehyde
testing under this section, and must designate a person as quality
control manager with adequate experience and/or training to be
responsible for formaldehyde emissions quality control consistent with
40 CFR 770.21. A panel producer means a manufacturing plant or other
facility that manufactures (excluding facilities that solely import
products) composite wood products (hardwood plywood made with a veneer
or composite core, medium-density fiberboard and particleboard) on the
premises.

PART 3282--MANUFACTURED HOME PROCEDURAL AND ENFORCEMENT REGULATIONS

0
7. The authority citation for part 3282 is revised to read as follows:

Authority: 15 U.S.C. 2697, 42 U.S.C. 3535(d), 5403, and 5424.

0
8. In Sec. 3282.7, add the definition ``finished good'', in
alphabetical order, to read as follows:

Sec. 3282.7 Definitions.

* * * * *
Finished good has the meaning provided in 40 CFR 770.3.
* * * * *
0
9. Add Sec. 3282.212 to read as follows:

Sec. 3282.212 TSCA Title VI Requirements.

Manufacturers must maintain bills of lading, invoices or comparable
documents that include a written statement from the supplier that the
component or finished goods are TSCA Title VI compliant for a minimum
of 3 years from the date of import, purchase, or shipment, consistent
with 40 CFR 770.30(c) and 40 CFR 770.40.
0
10. Add Sec. 3282.257 to read as follows:

Sec. 3282.257 TSCA Title VI Requirements.

Retailers and distributors must maintain bills of lading, invoices
or comparable documents that include a written statement from the
supplier that the component or finished goods are TSCA Title VI
compliant for a minimum of 3 years from the date of import, purchase or
shipment, consistent with 40 CFR 770.30(c) and 40 CFR 770.40.

Dated: March 13, 2019.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2019-05174 Filed 3-21-19; 8:45 am]
BILLING CODE 4210-67-P