United States      Office of Air Quality
Environmental Protection Planning and Standards
Agency
                      Research Triangle Park NC 27711
                                       EPA-453/R-98-006D
                                       August 1998
EPA
National Volatile Organic Compound
Emission Standards for Architectural
Coatings -- Background for
Promulgated Standards

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                                                EPA-453/R-98-006b
         National Volatile Organic Compound
   Emission Standards for Architectural Coatings
          Background for Promulgated Standards

(Architectural Coating Background Information Document)
                 U.S. Environmental Protection Agency
                     Office of Air and Radiation
              Office of Air Quality Planning and Standards
              Research Triangle Park, North Carolina 27711
                                      U.S. Environmental Protection Agency
                                      Region 5, Library (PL-12J)
                          A nonet IQQS    77 West  Jackson Boulevard, 12th Floor
                          August 1998    Chicag0i(L 60604-3590

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                            Disclaimer

This report has been reviewed by the Emission Standards Division
of the Office of Air Quality Planning and Standards,
U.S. Environmental Protection Agency, and approved for
publication.  Mention of trade names or commercial products is
not intended to constitute endorsement or recommendation for use,
Copies of this report are available through the Library Services
Offices  (MD-35),  U.S. Environmental Protection Agency, Research
Triangle Park, N.C.  27711,  (919)541-2777, from National
Technical Information Services, 5285 Port Royal Road,
Springfield, Virginia 22161, (703)487-4650, or from the Internet
(http://www.epa.gov/ttn/).
                               11

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                        TABLE OF CONTENTS
Section                                                      Page
1.0  INTRODUCTION	1-1
     1.1  SUMMARY OF CHANGES SINCE PROPOSAL 	 1-1
          1.1.1  Applicability  and  compliance dates   .... 1-1
          1.1.2  Definitions	1-1
          1.1.3  VOC  Content  Limits  	1-4
          1.1.4  Overlap  Concerns   	 1-4
          1.1.5  Container  labeling requirements  	 1-5
          1.1.6  Variances  provision  	 1-6
          1.1.7  Tonnage  Exemption  	 1-6
          1.1.8  Exceedance Fee Option	1-6
          1.1.9  Recordkeeping  and  Reporting  	 1-6
          1.1.10 Compliance Provisions  	 1-6
          1.1.11 Reorganization of  Rule Text	1-7

2.0  SUMMARY OF PUBLIC COMMENTS AND RESPONSES 	 2-1
     2.1  METHOD OF REGULATION	2-37
          2.1.1  Section  183 (e) Requirements	2-37
          2.1.2  National Rule  Versus Other Strategies  .   .  2-39
          2.1.3  Miscellaneous	2-53
     2.2  PROPOSED STANDARDS  	  2-55
          2.2.1  Applicability  of the Standards   	2-55
                 2.2.1.1    General  	  2-55
                 2.2.1.2    Low-Volume Exemption   	  2-80
                 2.2.1.3    Small Container Exemption  .  .   .  2-88
          2.2.2  Processors as  Regulated Entities   ....  2-90
          2.2.3
          2.2.4
2.2.3.1
2.2.3.2
2.2.3.3
2.2.3.4
2.2.3.5
2.2.3.6
2.2.3.7

2.2.3.8
2.2.3.9

2 .2.3 .10
2 .2.3 .11
2.2.3.12
2 .2.3.13
2.2 .3 .14
Coating
Limits
2.2.4.1
2.2.4.2
General 	
Pigmented 	
Lacquers 	
Quick-dry Enamel 	
Traffic Marking Coating
Sealer 	
Industrial Maintenance
Coatings 	
High Temperature Coating
Extreme High Durability
Coating 	
Swimming Pool Coatings . .
Reformulation 	
Shellac 	
Flow Coating 	
Overlap Issues 	
Categories and VOC Content

General 	
Requests for New Categories
. . 2-94
. . 2-95
. . 2-95
. . 2-97
. . 2-98
. . 2-9S

. . 2-99
. . 2-103

. . 2-103
. . 2-104
. . 2-104
. . 2-105
. . 2-107
. . 2-108

. . 2-124
. . 2-125
. 2-143
                 2.2.4.3   Proposed Categories  	  2-192
                               111

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                  TABLE OF CONTENTS (CONTINUED)


geetion                                                      Page

                  2.2.4.4   Recycled Coatings    	 2-242
          2.2.5   Compliance Time Requirements   	 2-244
                  2.2.5.1   General  	 2-244
                  2.2.5.2   Small Business Compliance Time
                           Extension    	2-252
          2.2.6   Labeling, Recordkeeping and Reporting  .   . 2-256
                  2.2.6.1   Labeling   	 2-256
                  2.2.6.2   Recordkeeping and Reporting     . 2-268
          2.2.7   Determination of Volatile Organic
                  Compound Content   	 2-272
          2.2.8   Variance Provisions  	 2-279
          2.2.9   Clarifications   	2-286
     2.3  IMPACTS	2-289
          2.3.1   Environmental and Energy   	2-289
                  2.3.1.1   HAP Implications   	 2-289
                  2.3.1.2   Emission Reduction  Estimate  .   . 2-290
                  2.3.1.3   Wastewater/Solid Waste
                           Impacts	2-302
                  2.3.1.4   Energy Impacts   	 2-304
          2.3.2   Cost/Economic	2-304
                  2.3.2.1   Reformulation Cost  Estimate  .   . 2-304
                  2.3.2.2   Annual Cost  to Industry  .... 2-320
                  2.3.2.3   Coses not Considered   	 2-338
                  2.3.2.4   Cost-effectiveness   	 2-342
                  2.3.2.5   Disproportionate Impacts on
                           Small Businesses   	2-347
                  2.3.2.6   Effect of Rule on Competition   . 2-360
                  2.3.2.7   Economic Hardship  	 2-367
                  2.3.2.8   Srrall Business Admini strati on   . 2-372
                  2.3.2.9   Definition of "Small Business"   2-3~3
                  2.3.2.10  Cost-Benefit Perspective   .  .   . 2-375
                  2.3.2.11  Executive Order 12866, Small
                           Business Regulatory Enforcement
                           Fairness Act,Unfunded Mandates
                           Reform. Act   	2-376
                  2.3.2.12  Adverse Socioeconomic and
                           Related Impacts	2-378
     2.4  EXCEEDANCE FEE	2-381
          2.4.1   Exceedance Fee Concept   	2-381
          2.4.2   Exceedance Fee Levels	2-389
          2.4.3   Use of Collected Exceedance Fees   .... 2-394
          2.4.4   Exceedance Fee Recordkeeping  and
                  Reporting	2-395
     2.5  REGULATORY NEGOTIATION    	 2-396
          2.5.1   Section 183(e) Requirements and the
                  Architectural Coatings Regulatory
                  Negotiations   	 2-396
                                IV

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                  TABLE OF CONTENTS (CONTINUED)
Section                                                      Page

          2.5.2  Regulatory Negotiations  Committee Was
                 Not  Properly  Constituted  	 2-400
          2.5.3  Regulatory Negotiations  Procedure  .... 2-405
          2.5.4  Miscellaneous	2-409
     2.6  FUTURE STUDY	2-411
     2.7  LEGAL ISSUES	2-420
          2.7.1  Publication requirements of  the  Clean
                 Air  Act  and the Administrative
                 Procedure Act	2-420
          2.7.2  Compliance With the Regulatory Flexibility
                 Act  (RFA) and the  Small  Business
                 Regulatory Enforcement Fairness  Act
                  (SBREFA)   	2-423
          2.7.3  Unfunded Mandate Reform  Act  (UMRA)   .  .   . 2-430
          2.7.4  Environmental Justice  	 2-432
          2.7.5  Executive Order 12866  	 2-434
          2.7.6  The  U.S. Constitution	2-436
                 2.7.6.1   Interstate Commerce Clause   .   . 2-436
                 2.7.6.2   Coating  Manufacturers' First
                           Amendment Rights  (Freedom of
                           Speech,  Association)   	 2-438
                 2.7.6.3   Taking Under the Fifth
                           Amendment	2-444
                 2.7.6.4   The Tenth Amendment
                            (Delegation Powers)  	 2-450
     2.8  OUTREACH	2-452
                                v

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                          LIST  OF  TABLES
                                                             Page

2-1  LIST OF COMMENTERS ON THE PROPOSED NATIONAL ARCHITECTURAL
     COATINGS RULE	2-2

2-2  CONCRETE CURING AND SEALING DATA	2-128
                               VI

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                        1.0  INTRODUCTION

1.1  SUMMARY OF CHANGES SINCE PROPOSAL
     Several changes have been made to the proposed rule as a
result of public comments.   The significant changes to the
proposed rule are presented in this section.  All of the changes
made to the proposed rule and the rationale for these changes are
discussed more fully in responses to comments in chapter 2 of
this document.
1.1.1   Applicability and compliance dates
     The compliance date for manufacturers and importers of
architectural coatings,  except coatings registered under the
Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
(7 USC 136 et sec.) has been extended to 12 months after the date
the final rule is published in the Federal Register.   The
compliance date for coatings registered under FIFRA is 18 months
after publication of the final rule.
1.1.2   Defini tions
     Several changes have been made in the definitions section:

     1.   Definitions for the following seven new coating
          categories have been added:   calcimine recoaters,
          concrete curing and sealing compounds,  concrete surface
          retarders, conversion varnishes,  faux finishing,  stain
          controllers,  and zone markings.   These categories are
          defined in section 2.2.4.2 of this document.
     2.   A sentence has been added to the definition of lacquer
          to clarify that lacquer stains must meet the volatile
          organic compound (VOC)  content limit for stains rather
          than lacquers.  Also,  a definition for -stains,
          including lacquer stains,  has been added.
     3.   The term "community-based paint  exchange"  in the
          definitions section of  the rule  has been changed  to
                               1-1

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     "paint exchange" to include other paint exchanges
     besides community-based ones,  and the definition has
     been amended to exclude architectural coating
     manufacturers and importers.

4.    The definition of "industrial maintenance coating" has
     been revised to reflect that the use of such a coating
     is intended for extreme environmental conditions in an
     industrial,  commercial,  or institutional setting.

5.    In the definition of "shellac",  nitrocellulose has been
     excluded because of overlap with lacquers (the lacquer
     definition in the rule includes  cellulosic or synthetic
     resins).

6.    The definition of "extreme high  durability coatings"
     has been expanded to include in  this category lower VOC
     coatings,  in addition to fluoropolymer-based coatings,
     that also meet the weathering requirements of the
     American Architectural Manufacturer's Association
     (AAMA) Specification 605.2.

7 .    The definition of "pigmented" has been expanded to
     include the following properties of pigments:  color,
     corrosion inhibition, conductivity,  fouling resistance,
     opacity,  and improved mechanical properties.

8.    The minimum temperature requirement in the definition
     of "high temperature coating" has been lowered to
     400 degrees F. to be consistent  with industry practice
     and existing State architectural coating rules.

9.    The definition of "anti-graffiti coating" has been
     amended to remove the phrase "specifically labeled as
     an anti-graffiti coating" to be  consistent with
     labeling requirements for other  coating categories.

10.  A definition of "shop application" has been added to
     clarify that coatings applied in a shop setting or
     during a manufacturing process are not subject to the
     rule.

11.  The definition of "coating" has  been amended to remove
     reference to application as a film because the EPA did
     not intend to limit rule applicability based upon the
     product thickness as applied.  Also,  a sentence has
     been added to further clarify what coatings are
     regulated.  The revised definition follows:   "Coating
     means a material applied onto or impregnated into a
     substrate for protective, decorative or functional
     purposes.  Such materials include, but are not limited
     to, paints,  varnishes, sealants, inks,  maskants,  and
     temporary coatings.  Protective, decorative or


                          1-2

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     functional materials that consist only of solvents,
     acids, bases, or any combination of these substances
     are not considered coatings for the purpose of this
     subpart."

12.  The definition of "architectural coating" has been
     amended to exclude adhesives,  coatings recommended
     solely for shop application, and coatings recommended
     solely for application to non-stationary structures,
     such as airplanes, ships, boats and railcars because
     they were not intended to be covered.  Also,
     definitions of "adhesive" and "shop application" have
     been added to the rule for further clarification.

13.  A definition of "United States" has been added to
     clarify that the rule applies to the 50 States, the
     District of Columbia, and United States territories.

14.  The definitions of "importer"  and "manufacturer" have
     been amended to clarify that any person who repackages
     a coating by transferring it froir. one container to
     another is excluded from these definitions,  provided
     the coating VOC content is not altered and the coating
     is not sold or distributed to another party.  Also, a
     sentence has been added in these definitions for
     further clarification of applicability and a definition
     of "person" has been added to clarify its use in these
     definitions.

15.  Definitions of "in-ported" and "manufactured" have been
     added to clarify the point at  which an architectural
     coating becomes subject to the requirements in the
     rule.

16.  The definition of "graphic arts coating" has been
     revised to delete the reference to "in shop" since shop
     applications are not regulated under this rule.

17.  In the definition of "floor coating",  the word "opaque"
     has been added to further define these coatings,  and a
     definition of "opaque" has been added to the rule.  In
     addition,  the words "in a residential setting" have
     been added to distinguish coatings meant to be subject
     to the 400 g/1 limit for floor coatings from those
     floor coatings intended for use in an industrial,
     institutional,  or commercial setting,  which would be
     subject to the 450 g/1 limit for industrial  maintenance
     coatings.

18.  Although  there were no comments on the definition of
     "sale" in the Definitions section of the proposed rule,
     the Agency deleted this term because it was
     unnecessary.


                          1-3

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1.1.3   VQC Content Limits
     Seven additional categories and associated VOC content
limits have been established for the following coatings:
(1) calcimine recoaters at 475 g/1;  (2) concrete surface
retarders at 780 g/1; (3) concrete curing and sealing compounds
at 700 g/1; (4) conversion varnishes at 725 g/1; (5) faux
finishing/glazing at 700 g/1;  (6) zone markings at 450 g/1; and
(7) stain controllers at 720 g/1.  In addition, the VOC content
limits for some of the proposed coating categories have been
revised as follows:  (1)  antifouling from 400 g/1 to 450 g/1;  (2)
nuclear from 420 g/1 to 450 g/1; (3) clear shellacs from 650 g/1
to 730 g/1; and (4) combined opaque and clear waterproofing
sealers and treatments at 600 g/1  (opaque was proposed at
400 g/1).
1.1.4   Overlap Concerns
     Several changes have been made to address some commenters'
concerns that a coating that is developed and designated for a
particular use by definition could be subject to a more
restrictive limit if the coating is suitable for use in another
category with a lower limit.  In order to address these overlap
concerns,  paragraphs (b) and (c) (l)-(c) (7)of § 59.402 have been
amended,  and new paragraphs  (c) (8)-(c) (15) have been added to
§ 59.402.   The new provisions in paragraphs  (c) (8)-(c) (15)
address overlap concerns in the following categories:

     1.   Varnishes and conversion varnishes that are recommended
          for use as floor coatings are only subject to the VOC
          content limit for varnishes and conversion varnishes,
          respectively.
     2.   Anti-graffiti coatings, high temperature coatings,
          impacted immersion coatings, thermoplastic rubber
          coatings and mastics, repair and maintenance
          thermoplastic coatings, and flow coatings that also
          meet the definition for industrial maintenance coatings
          are only subject to the VOC content limit for that
          particular category  (i.e., not subject to the
          industrial maintenance coating VOC content limit).
     3.   Waterproofing sealers and treatments that also meet  the
          definition for quick-dry sealers are only subject to
                                1-4

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          the VOC content limit for waterproofing sealers and
          treatments.

     4.   Sanding sealers that also meet the definition for
          quick-dry sealers are only subject to the VOC content
          limit for sanding sealers.

     5.   Nonferrous ornamental metal lacquers and surface
          protectants  that also meet the definition for lacquers
          are only subject to the VOC content limit for
          nonferrous ornamental metal lacquers and surface
          protectants.

     6.   Quick-dry primers,  sealers, and undercoaters that also
          meet the definition for primers and undercoaters are
          only subject  to the VOC content limit for quick-dry
          primers, sealers,  and undercoaters.

     7.   Antenna coatings that also meet the definition for
          industrial maintenance coatings or primers are only
          subject co the VOC content limit for antenna coatings.

     8 .   Biturr.inous coatings and mastics that are recommended
          for use as any other architectural coating are subject
          only to the  lirr.it for bituminous coatings and mastics.

1.1.5   Container labeling requirements

     1.   The proposed  labeling requirements were amended to
          clarify that  to rr.eet the labeling requirements for
          containers of architectural coatings,  manufacturers and
          importers are allowed to use either (1)  the VOC content
          limit for the category with which the product is
          required to comply and with which it does comply,  or
          (2) the VOC content of the coating.  In other words,
          the manufacturer or importer is not required to provide
          the actual VOC content of the coating.   The labeled VOC
          content must  account for the manufacturer's or
          importer's thinning recommendation.

     2.   The proposed  requirement for industrial  maintenance
          coatings to be labeled "not for residential use" has
          been modified to allow flexibility in the wording  of
          the labeling  statement.

     3.   The labeling  section of  the proposed rule has been
          modified to allow the date of manufacture or date  code
          to appear on  either the  container lid,  label,  or bottom
          of the can.
                               1-5

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1.1.6   Variances provision
     The variances provision in the proposed rule was not
included in the final rule.  The rationale for this change is
discussed in section 2.2.8 of this document.
1.1.7   Tonnage Exemption
     A VOC tonnage exemption has been included in the final rule,
based upon the proposed low-volume exemption.  Under this
provision, each manufacturer can exempt a total of 23 megagrams
(25 tons) of VOC emissions in the time period from the compliance
date to December 31,  2000; 18 megagrams (20 tons)  in the year
2001; and 9 megagrams (10 tons)  in the year 2002 and in each year
beyond.  The tonnage exemption is discussed in section 2.2.1.2 of
this document.   This provision is designed to accommodate the
needs of small manufacturers, niche markets, and specialty
products while effectively limiting the VOC emissions from the
exemption.  This exemption is needed to help ensure the economic
feasibility of the rule.
1.1.8   Exceedance Fee Option
     Provisions for an exceedance fee option have been included
in the final rule.  Under this approach, manufacturers and
importers have the option of paying a fee, based on the amount
that their coatings exceed the applicable VOC content limits,
instead of achieving the VOC content limits listed in the rule.
This allows manufacturers and importers to continue to market
non-compliant coatings while they develop compliant or new
coatings.  This provision is a market-based incentive to
encourage manufacturers and importers to develop compliant
coatings while at the same time recognizing that for some
manufacturers of some coatings,  additional time is needed.
1.1.9   Recordkeeping and Reporting
     Recordkeeping and reporting requirements have been included
for manufacturers and importers using the tonnage exemption and
exceedance fee option.
1.1.10  Compliance Provisions
     A new section has been included in the rule to consolidate
the proposed rule's provisions for determining compliance.
                               1-6

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Language has been added to clarify the requirements that were
proposed regarding determination of VOC content.
1.1.11  Reorganization of Rule Text
     The rule text has been reorganized for clarity and ease of
understanding.
                               1-7

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           2.0  SUMMARY OF PUBLIC COMMENTS  AND RESPONSES

     The U.S. Environmental Protection Agency  (EPA) received a
total of 243 letters commenting on the proposed standards and the
background information document  (BID) for the proposed standards.
The EPA held a public hearing on July 30,  1996 in Durham, North
Carolina, at which 19 commenters presented oral comments.  In
addition, the EPA held a public meeting on August 13, 1996 in
Rosemont, Illinois, in which 77 persons participated.  At this
public meeting, 18 manufacturers provided company profiles.  Some
commenters provided more than one comment letter or commented at
the public hearing or meeting.  Each letter or comment has a
separate comment number.  Comments are designated as follows:
     •     IV-D-(number) written comment received during comment
          period
     •     IV-F-1(letter) comment received at public hearing
     •     IV-F-2(letter) comment received at public meeting
     •     IV-G-(number) comment received after comment period
     In this promulgation BID, commenters with multiple comment
letters or statements at the hearing or meeting are identified
with a slash between comments.  For example, if a commenter
provided written comments and public hearing comments,  the
commenter is identified as  (IV-D-number/IV-F-l letter).   Copies
of comment letters, meeting transcripts, and telecons are located
in docket A-92-18.  The docket is available for public inspection
between 8:00 a.m.  and 5:30 p.m., Monday through Friday,  at the
EPA's Air and Radiation Docket and Information Center (Mail
Code 6102), 401 M Street S.W., Washington, DC 20460, or by
calling  (202) 260-7548.  A list of the commenters,  their
                               2-1

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affiliations, and the EPA docket number assigned to their
correspondence is given in table 2-1.
     The comments and responses, and therefore the organization
of this document, have been categorized under the following
topics:
          •     Method of Regulation;
          •     Proposed Standards;
          •     Impacts;
          •     Exceedance Fee;
          •     Regulatory Negotiations;
          •     Future Study;
          •     Legal Issues; and
          •     Outreach.

     This document contains summaries and responses to comments
mainly covering the provisions of the proposed architectural
coatings rule.  To avoid duplication, most comments that pertain
to the EPA's study, Report to Congress, and schedule for
regulations under section 183(e) are discussed in a separate
comment/response document, Response to Comments on Section 183(e)
Studv and Report to Congress referred to as the 183-BID.
                               2-2

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  TABLE 2-1.
LIST OF COMMENTERS ON THE PROPOSED NATIONAL
  ARCHITECTURAL  COATINGS RULE
Docket Number
            Commenter and affiliation
   IV-D-01
   IV-D-02
   IV-D-03
   IV-D-04
   IV-D-05
   IV-D-06
   IV-D-07
   IV-D-08
  Mr.  James E.  Thomas,  Jr.
  CEO
  Jetco,  Inc.
  Post Office  Box 11494
  Memphis,  Tennessee 38111

  Mr.  Ned B. Kisner
  President
  Triangle Coatings,  Inc.
  1930 Fairway Drive
  San Leandro,  California  94577

  Mr.  Kisuk Cheung
  Chief,  Engineering Division
  Department of the Army
  U.S. Army Corps of Engineers
  Washington,  DC 20314-1000

  Mr.  Benard R.  Appleman
  Executive Director
  Steel Structures Painting Council
  40  24th Street,  6th Floor
  Pittsburgh,  Pennsylvania  15222-4643

  Mr.  William  A.  Rostine
  President
  Rostine Manufacturing and Supply,  Inc.
  Post Office  Box 8192
  4227C W.  Church
  Springfield,  Missouri 65801

  Mr.  Ronald B.  Child
  Vice President  of Compliance &  Reg.  Affairs
  California Products Corporation
  Post Office  Box 390569
  Cambridge, Massachusetts  02139-0007

  F.H.  McGary
  Vice President  Manufacturing
  Star Bronze  Company,  Inc.
  Post Office  Box 2206
  Alliance, Ohio  44601-0206

  Mr.  Richard  Hardy
  President
  XIM  Products,  Inc.
  1169 Bassett  Road
  Westlake, Ohio  44145
                             2-3

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-09      Mr. Jim Gardner
                President
                Trinity Coatings Company
                Post Office Box 2488
                Fort Worth, Texas 76113-2488

   IV-D-10      Mr. James S. Jennison
                President
                Jennison Industries
                106 Washington
                Post Office Box 965
                Burlington, Iowa 52601

   IV-D-11      Mr. Robert E. Mitchell
                Chairman of the Board
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-12      Ms. Susan J. Binder
                Division Administrator
                Federal Highway Administration
                U.S. Department of Transportation
                State Highway Administration,
                  Maryland Division
                711 West 40th Street,  Suite 220
                Baltimore, Maryland 21211-2187

   IV-D-13      Mr. Robert C. Maindelle
                Environmental Specialist
                Wilsonart International, Inc.
                Post Office Box 6110
                Temple, Texas 76503-6110

   IV-D-14      Mr. Robert E. Mitchell
                Chairman of the Board
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-15      duplicate of Item IV-D-8, removed  from
                docket.

   IV-D-16      Mr. James S. Jennison
                President
                Jennison Industries
                Post Office Box 965
                Burlington, Iowa 52601
                             2-4

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-17      Mr. Gene Bartlow
                President and CEO
                American Wood Preservers Institute
                1945 Old Gallows Road, Suite 150
                Vienna,  Virginia 22182-3931

   IV-D-18      Mr. John F. Montle
                Vice President-Technology
                Carboline Company
                350 Hanley Industrial Court
                St. Louis, Missouri 63144

   IV-D-19      Mr. Benard R. Appleman
                Executive Director
                Steel Structures Painting Council
                40 24th Street, 6th Floor
                Pittsburgh, Pennsylvania 15222-4643

   IV-D-20      Mr. Ben Gavett
                Director of Safety & Compliance
                Golden Artist Colors,  Inc.
                188 Bell Road
                New Berlin, New York 13411

   IV-D-21      Mr. David Schmetterer
                Vice President
                Crawford Laboratories
                4165 South Emerald Avenue
                Chicago, Illinois 60609

   IV-D-22      Mr. S.  William Becker
                Executive Director
                STAPPA/  ALAPCO
                444 North Capitol Street,  N.W.
                Washington, DC 20001

   IV-D-23      Ms. Linda M.  Loreth
                Environmental, Health, and Safety Manager
                A.W. Chesterton Company
                Post Office Box 9101
                Stoneham,  Massachusetts 02180-9101

   IV-D-24      Mr. Christopher L.  Runyan
                Assistant Director of Transportation Policy
                Ohio Department of Transportation
                Central  Office
                Post Office Box 899
                Columbus,  Ohio 43216-0899
                             2-5

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-25      Mr. Robert Senior
                Wm. Zinsser & Company, Inc.
                39 Belmont Drive
                Somerset, New Jersey 08875-1285

   IV-D-26      Mr. Alaistair MacDonald
                CEO
                Specialty Coatings & Chemicals, Inc.
                7360 Varna Avenue
                North Hollywood, California 91605

   IV-D-27      Mr. T. Leon Everett
                President & CEO
                Dan-Tex Paint & Coating Manufacturing
                Company, Inc.
                444 Aston Drive
                Sunnyvale, Texas 75182

   IV-D-28      Mr. Karl R. Schultz
                Environmental Consultant
                DuPont Automotive Products
                Wilmington, Delaware 19898

   IV-D-29      Mr. Ned B. Kisner
                Triangle Coatings, Inc.
                1930 Fairway Drive
                San Leandro, California 94577

   IV-D-30      Mr. James G. Stilling
                Vice President and General Manager
                W.R. Meadows, Inc.
                Post Office Box 543
                Elgin, Illinois 60121

   IV-D-31      Mr. David P. Straub
                Executive Director
                Metal Maintenance Industry Association,  Inc.
                352 Seventh Avenue
                New York, New York 10001

   IV-D-32      Mr. Gregory A. Green
                Administrator
                Air Quality Division
                Oregon Department of Environmental  Quality
                811 S.W. Sixth Avenue
                Portland, Oregon 97204-1390
                             2-6

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-33      Ms. Barbara A. Kwetz
                Director
                Division of Air Quality Control
                Commonwealth of Massachusetts
                Department of Environmental Protection
                One Winter Street
                Boston,  Massachusetts 02108

   IV-D-34      Mr. James M. Lents
                Executive Officer
                South Coast Air Quality Management District
                21865 E. Copley Drive
                Diamond Bar, California 91765-4182

   IV-D-35      Ms. Linda M. Loreth
                Environmental, Health and Safety Manager
                A.W.  Chesterton Company
                225 Fallen Road
                Post Office Box 9101
                Stoneham, Massachusetts 02180-9101

   IV-D-36      Ms. Pamela S. Clark
                Preserve Paint Manufacturing
                2401 Broiller
                Post Office Box 20125
                Houston, Texas 77225

   IV-D-37      Mr. Daniel L. Stein and V.B. Winge
                3M Traffic Control Materials Division
                3M Center Building 582-1-15
                St. Paul, Minnesota 55144-1000

   IV-D-38      Mr. Jimmy D. Adams
                American Coatings,  Inc.
                Post Office Box 1426
                Tomball, Texas 77377-1426

   IV-D-39      Anonymous

   IV-D-40      Mr. Darryl E. Durgin
                Deputy Commissioner
                Minnesota Department of Transportation
                Office of Traffic Engineering
                Mail Stop 725
                1500 West County Road B2,  Suite 250
                Roseville,  Minneapolis 55113
                             2-7

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE  PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and  affiliation	

   IV-D-41      Mr. Don Diller
                Director
                Wyoming Department of Transportation
                Post Office Box 1708
                Cheyenne, Wyoming 82003-1708

   IV-D-42      Mr. Robert Senior
                Wm. Zinsser & Company, Inc.
                173 Belmont Drive
                Somerset, New Jersey 08875-1285

   IV-D-43      Mr. Robert Senior
                Wm. Zinsser & Company, Inc.
                173 Belmont Drive
                Somerset, New Jersey 08875-1285

   IV-D-44      Mr. J. Anthony Ward, III
                Sales Representative
                Farrell-Calhoun Paint
                221 E. Carolina Avenue
                Memphis, Tennessee 38126

   IV-D-45      Mr. Richard B. Cunningham
                President
                Passonno Paints
                500 Broadway
                Watervliet  (Albany), New York 12189

   IV-D-46      Mr. Roy Krill
                Technical Director
                Masterchem Industries, Inc.
                Post Office Box 368
                Barnhart, Missouri 63012-0368

   IV-D-47      Mr. Ron Sorenson
                President
                Hardwood Flooring Distributors, Inc.
                1024 6th Avenue South
                Seattle, Washington  98134

   IV-D-48      Mr. Vic Fazio and Gary Condit
                Members of Congress
                United States House of Representatives
                2442 Rayburn Building
                Washington, DC 20515-0503
                             2-8

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-49      Mr. Edward D. Edwards
                Owner
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-50      Mr. Robert E. Mitchell
                Chairman of the Board
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-51      Mr. Richard B. Cunningham
                President
                Passonno Paints
                500 Broadway
                Watervliet, NY  12189

   IV-D-52      Mr. William M. Smiland
                Law Offices Smiland & Khachigian
                Seventh Floor
                601 West Fifth Street
                Los Angeles, California 90071

   IV-D-53      Mr. Peter Lilholt
                Commissioner of Public Works
                Sullivan County Department Of Public Works
                Post Office Box 5012
                Monticello, New York 12701-5192

   IV-D-54      Mr. Jim Talent
                Member of Congress
                United States House of Representatives
                2442 Rayburn Building
                Washington, DC 20515-2502

   IV-D-55      Mr. Robert E. Mitchell
                Chairman of the Board
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-56      Mr. Matthew G. Martinez,  Michael Bilirakis,
                Julian C. Dixon,  and Lucille Roybal-Allard
                United States House of Representatives
                2442 Rayburn Building
                Washington, DC 20515
                             2-9

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-57      C.W. Glover
                Chief Counsel for Advocacy
                U.S. Small Business Administration
                Office of Advocacy
                Washington, DC 20416

   IV-D-58      Mr. J. Andrew Doyle
                President
                National Paint & Coatings Association
                1500 Rhode Island Avenue,  N.W.
                Washington, DC 20005-5597

   IV-D-59      Ms. Georgette Sturam
                Gensler
                One Rockefeller Plaza, Suite 500
                New York, New York 10020

   IV-D-60      Mr. John Lahey
                President
                Fine Paints of Europe
                Post Office Box 419
                Woodstock, Vermont 05091-0419

   IV-D-61      Mr. Howard Berman
                Senior Vice President
                The Jefferson Group,  Inc.
                1341 G Street, N.W.,  Suite 1100
                Washington, DC 20005

   IV-D-62      Mr. William M. Smiland
                Law Offices of Smiland & Khachigian
                Seventh Floor
                601 West Fifth Street
                Los Angeles, California 90071

   IV-D-63      Mr. Mel Turner
                President
                Standard Paints, Inc.
                1107 West Commerce Street
                Dallas, Texas 75208

   IV-D-64      Mr. Greg N. Manns
                Project Director
                Industry Insights, Inc.
                1585 Bethel Road
                Columbus, Ohio 43220
                             2-10

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-65      Mr. Kevin Bromberg
                U.S. Small Business Administration
                Office of Advocacy
                Washington, DC 20416

   IV-D-66      Mr. Robert E. Mitchell
                Chairman of the Board
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-67      Mr. Howard Berman
                Senior Vice President
                The Jefferson Group,  Inc.
                1341 G Street, N.W.,  Suite 1100
                Washington, DC 20005

   IV-D-68      Mr. Derrick Singleton
                Environmental Engineer
                Fosroc,  Inc.
                150 Carley Court
                Georgetown, Kentucky 40324

   IV-D-69      F.H. McGary
                Vice President-Manufacturing
                Star Bronze Company,  Inc.
                Post Office Box 2206
                Alliance, Ohio 44601-0206

   IV-D-70      Mr. Robert E. Mitchell
                Chairman of the Board
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-71      Mr. David Nordberg
                Consumer & Commercial Products Specialist
                Oregon Department of Environmental Quality
                2020 S.W. Fourth Avenue,  Suite 400
                Portland, Oregon 97201-4987

   IV-D-72      Mr. Richard B. Cunningham
                President
                Passonno Paints
                500 Broadway
                Watervliet, NY  12189
                            2-11

-------
   TABLE 2-1.   LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE  (CONTINUED)


 Docket  Number	Commenter and affiliation	

    IV-D-73       Mr.  Richard B.  Cunningham
                 President
                 Passonno Paints
                 500  Broadway
                 Watervliet,  NY   12189

    IV-D-74       Joseph Fogel
                 The  Garland Company
                 3800 East  91st  Street
                 Cleveland,  Ohio 44105-2197

    IV-D-75       Mr.  Philip Lader
                 Administrator
                 U.S. Small Business Administration
                 Office of  the Administrator
                 Washington,  DC  20416

    IV-D-76       Mr.  James  G.  Ross
                 Regulatory Affairs  Director
                 Hillyard Industries, Inc.
                 Post Office Box 909
                 St.  Joseph,  Missouri 64502-9964

    IV-D-77       Mr.  Ned B.  Kisner
                 Triangle Coatings,  Inc.
                 1930 Fairway Drive
                 San  Leandro,  California 94577

    IV-D-78       duplicate  item,  removed from docket

    IV-D-79       Mr.  Dan Pearson
                 Executive  Director
                 Texas Natural Resource  Conservation
                 Commission
                 Post Office Box 13087
                 Austin, Texas 78711-3087

    IV-D-80       Mr.  Bruce  A.  Berglund
                 Senior Research Chemist
                 Wacker Silicones Corporation
                 3301 Sutton Road
                 Adrian, MI 49221-9397

    IV-D-81       duplicate  item,  removed from docket

    IV-D-82       Mr.  Langely A.  Spurlock
                 Vice President
                 Chemstar
                 1300 Wilson Boulevard
	Arlington,  Virginia 22209	


                             2-12

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-83      Mr. Guy Gruenberg
                Vice President
                RAE Products and Chemicals Corporation
                11630 South Cicero Avenue
                Alsip, Illinois 60658-2599

   IV-D-84      Mr. Bill Maloney
                Washington Wood Floor Supply, Inc.
                15509 NE 90th
                Redmond, Washington 98052

   IV-D-85      Mr. James G. Ross
                Regulatory Affairs Director
                Hillyard Industries,  Inc.
                Post Office Box 909
                St. Joseph, Missouri 64502-9964

   IV-D-86      Mr. Mark S. Horton, CSP
                Regulatory Affairs Manager
                Chemrex, Inc.
                889 Valley Park Drive
                Shakopee, Minnesota 55379

   IV-D-87      Mr. Tim Vance
                Vice President
                Vance Brothers, Inc.
                5201 Brighton
                Kansas City, Missouri  64130

   IV-D-88      Mr. Richard R. Blank
                Managing General Partner
                Broadway Properties
                126 East Fifth Street
                Michigan City, Indiana 46360

   IV-D-89      Mr. Kurt Dayhuff
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver,  Colorado 80239

   IV-D-90      Lynden Henning
                Owner
                Henning Painting Company
                R.Route 3,  Box 183
                Mattoon,  Illinois 61938-9030
                            2-13

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-91      Mr. Laurence G. Starosta
                President
                Maintenance Unlimited, Inc.
                Post Office Box 5
                Palos Heights, Illinois 60463-0005

   IV-D-92      Mr. David N. Titus
                President
                Henning Asphalt Sealing & Striping  Company
                R.Route 3, Box 183
                Mattoon, Illinois 61938

   IV-D-93      Mr. David Altena
                President
                RepcoLite Paints, Inc.
                473 West 17th Street
                Holland, Michigan 49423

   IV-D-94      Mr. Craig Connor
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver, Colorado 80239

   IV-D-95      Mr. Allan J. Rose
                President
                Rose Paving & Sealcoating Company
                408 West Taft Drive
                South Holland, Illinois 60473-2028

   IV-D-96      Mr. Arthur J. Fossa
                Director
                Division of Air Resources
                New York State Department Of Environmental
                Conservation
                50 Wolf Road
                Albany, New York 12233-3251

   IV-D-97      Mr. Philip Lader
                Administrator
                U.S. Small Business Administration
                Office of the Administrator
                Washington, DC 20416

   IV-D-98      Mr. Jack Schroe
                Secretary/Treasurer
                The Bahr Company
                1308 Marquette Drive
                Romeoville, Illinois 60441
                             2-14

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-99      Mr. Dave J. McVey
                D & M Striping
                6437 South Kedvale
                Chicago, Illinois 60629

  IV-D-100      Mr. David Bellinger
                Cascade Pacific Floor Distributors, Inc.
                5021 S.E. 26th Avenue
                Portland, Oregon 97202

  IV-D-101      Mr. Ned B. Kisner
                President
                Triangle Coatings, Inc.
                1930 Fairway Drive
                San Leandro,  California 94577

  IV-D-102      Mr. Patrick Smith
                Smith Wood Floors, Inc.
                40000 Grand River, #108
                Novi, Michigan 48375

  IV-D-103      Mr. Ralph Lorenz
                President
                Ralph's Hardwood Floors
                404 West State Street  (Hwy.54)
                Black Creek,  Wisconsin 54106

  IV-D-104      Ms. Sharilyn McMaster
                2173 Mohican Place
                Boise,  Idaho 83709

  IV-D-105      Mr. Randy Nash
                President
                RR Hardwood,  Inc.
                5125 W.  Gage Street
                Boise,  Idaho 83706

  IV-D-106      Mr. Bruce Whisenhunt
                President
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver,  Colorado 80239

  IV-D-107      Ms. Christine Coates
                Golden State Flooring Company
                449 Littlefield Avenue
                South San Francisco,  California 94080
                            2-15

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-108     Mr. Peter E. Flood
                President
                The Flood Company
                1212 Barlow Road
                Post Office Box 2535
                Hudson, Ohio 44236-0035

   IV-D-109     Mr. Peter W. Harman
                President
                Harman Hardwood Flooring Company, Inc.
                29 Hebard Street
                Rochester, New York 14605

   IV-D-110     Mr. Maxie E. Quinn
                President
                Dyco Paints, Inc.
                5850 Ulmerton Road
                Clearwater, Florida 34620-3989

   IV-D-111     Ms. Lynne Schwan
                Marketing Manager
                Lockwood Flooring
                8249 Brentwood Industrial Drive
                St. Louis, Missouri 63144

   IV-D-112     Mr. Mike Baseman
                President
                Baseman Hardwood Floors, Inc.
                N2926 Jeske Road
                Appleton, Wisconsin 54915

   IV-D-113     Mr. Lawrence Williams
                Indiana Wood Floors, Inc.
                5555 Elmwood Avenue, Suite E
                Indianapolis, Indiana 46203

   IV-D-114     Mr. Mark E. Maxwell
                Industry Manager
                Building Materials Industries
                Dow Corning Corporation
                Midland, Michigan 48686-0995

   IV-D-115     Lon R. Rogers
                Director
                Anchor Paint Mfg. Company
                6707 East 14th
                Post Office Box 1305
                Tulsa, Oklahoma 74101-1305
                             2-16

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-116      Mr. James E. Siebels
                Chief Engineer
                Engineering, Design & Construction
                Department of Transportation
                State of Colorado
                4201 East Arkansas Avenue
                Denver,  Colorado 80222

  IV-D-117      Ms. Susan S.G. Wierman
                Executive Director
                MARAMA
                711 W 40th Street,  Suite 318
                Baltimore, Maryland 21211

  IV-D-118      Mr. Bruce S. Carhart
                Executive Director
                Ozone Transport Commission
                444 N. Capitol St.  N.W.,  Suite 638
                Washington, DC 20001

  IV-D-119      Mr. Jason Grumet
                Executive Director
                NESCAUM
                129 Portland Street
                Boston,  Massachusetts 02114

  IV-D-120      Mr. Leo Hickman
                Regulatory Affairs Manager
                Fosroc,  Inc.
                Construction Division
                150 Carley Court
                Georgetown, Kentucky 40324

  IV-D-121      Ms. Elsie L. Munsell
                Deputy Assistant Secretary of the Navy
                Environment & Safety
                Department of the Navy
                Office of the Assistant Secretary
                1000 Navy Pentagon
                Washington, DC 20350-1000

  IV-D-122      Mr. Jim Sell
                National Paint & Coatings  Association
                1500 Rhode Island Avenue,  N.W.
                Washington, DC 20005-5597
                            2-17

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-123      Mr. Donald V. Ottley
                Vice President
                Ottley Floor Company,  Inc.
                4540 South 200 West
                Salt Lake City, Utah 84107

   IV-D-124      Mr. Steven W. Berlin
                President
                Berlin Flooring, Inc.
                4451 Wellington Road
                Boulder, Colorado 80301

   IV-D-125      Mr. Michael P. Stock
                Vice President
                TK Products
                Division of Sierra Corporation
                11400 West 47th Street
                Minnetonka, Minnesota 55343

   IV-D-126      Mr. Donald F. Theiler
                Director
                Bureau of Air Management
                State of Wisconsin
                Department of Natural Resources
                Post Office Box 7921
                101 South Webster Street
                Madison, Wisconsin 53707-7921

   IV-D-127      Mr. Fred L. Connatser
                President
                Maryland Wood Floors,  Inc.
                1244 Ritchie Hwy.
                Arnold, Maryland 21012

   IV-D-128      Mr. David D. Hood
                President
                Induron Protective Coatings
                Post Office Box 2371
                Birmingham, Alabama 35201-2371

   IV-D-129      Mr. Dwayne M. Fuhlhage
                Environmental & Safety Compliance Officer
                ProSoCo, Inc.
                755 Minnesota Avenue
                Post Office Box 171677
                Kansas City, Kansas 66117
                             2-18

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-130      Mr. William A. Rostine
                President
                Rostine Mfg. And Supply,  Inc.
                Post Office Box 8192
                4227C W. Church
                Springfield, Missouri 65801

  IV-D-131      Mr. Mike Reinmiller
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver,  Colorado 80239

  IV-D-132      Mr. Albert Salter
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver,  Colorado 80239

  IV-D-133      Mr. Steve Marchetti
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver,  Colorado 80239

  IV-D-134      Mr. Gerald W. Lancour
                Director
                Occupational Safety,  Health & Environmental
                Affairs
                McDonnell Douglas Corporation
                Post Office Box 516
                Saint Louis, Missouri 63166-0516

  IV-D-135      Mr. Robert Shepard
                Lebanon  Oak Flooring Company
                3110 Roosevelt Avenue
                Post Office Box 18176
                Indianapolis, Indiana 46218-0176

  IV-D-136      Mr. Lester Markowitz
                Niles Color Center, Inc.
                7652 North Milwaukee
                Niles,  Illinois 60714

  IV-D-137      Mr. Russ Hearing
                General  Manager
                Preserva-Products,  Inc.
                12860 Earhart Avenue,  Suite 102
                Auburn,  California 95602
                            2-19

-------
  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-138     Mr. Guy Gruenberg
                Vice President
                RAE Products and Chemicals Corporation
                11630 South Cicero Avenue
                Alsip, Illinois 60658-2599

   IV-D-139     Mr. Alan J. Walters
                Vice President
                Fancy Colours and Company
                1438 Burgandy Parkway
                Streamwood, Illinois 60107

   IV-D-140     Mr. Jay H. Burrill
                Environmental Coordinator
                Grace Construction Products
                W.R. Grace k Co,-Conn.
                62 Whittemore Avenue
                Cambridge, Massachusetts 02140-1692

   IV-D-141     CenterLine Industries, Inc.
                5380 Bircher Boulevard
                Post Office Box 66802
                St. Louis, Missouri 63166-6803

   IV-D-142     AACCO
                5220 N. 125th Street
                Butler, Wisconsin 53007

   IV-D-143     Mr. Lee Neerhof
                Sales Manager
                Velvit Products Company
                Division of Dynamic Development, Corporation
                Post Office Box 1741
                Appleton, Wisconsin 54913

   IV-D-144     Erickson Decorating Products, Inc.
                6040 North Pulaski Road
                Chicago, Illinois 60646

   IV-D-145     Ms. Janis L. Skidmore
                Secretary/Treasurer
                Meyer Skidmore & Company
                1333 Yarmouth Avenue,  Unit 2
                Boulder, Colorado 80304

   IV-D-146     duplicate of item IV-D-116
                             2-20

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-147      Mr. David L. Westerman
                Vice President
                Carbit Paint Company
                927 W. Blackhawk Street
                Chicago, Illinois 60622-2519

  IV-D-148      Ms. Marylin Zaw-Mon
                Director
                Air and Radiation Management Administration
                Maryland Department of the Environment
                2500 Broening Hwy
                Baltimore,  Maryland 21224

  IV-D-149      Mr. James J. Land
                President
                Pavement Systems, Inc.
                3020 W.  139th Street
                Blue Island, Illinois 60406

  IV-D-150      Mr. Keith Vander Woude
                Vice President
                Perm-A-Seal, Inc.
                Post Office Box 1216
                South Holland, Illinois 60473

  IV-D-151      Ms. Lynn P. O'Brien
                Manager, Regulatory Compliance
                Keeler & Long, Inc.
                Post Office Box 460
                Watertown,  Connecticut 06795

  IV-D-152      Mr. Moorman L. Scott
                Vice President
                The Euclid Chemical Company
                19218 Redwood Road
                Cleveland,  Ohio 44110-2799

  IV-D-153      Harrison Paint Corporation
                Post Office Box 8470
                Canton,  Ohio 44711

  IV-D-154      Mr. James K. Crawford
                General  Manager
                EDOCO
                22039 South Westward Avenue
                Long Beach, California 90810-1681
                            2-21

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-D-155      Mr. Robert E. Mitchell
                Chairman of the Board
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-D-156      Mr. Christopher G. Foster
                Smiland & Khachigian
                Seventh Floor
                601 West Fifth Street
                Los Angeles, California 90071

   IV-D-157      Ms. Lesa K. McDonald
                Environmental/Safety Manager
                Gemini
                Post Office Box 699
                El Reno, Oklahoma 73036

   IV-D-158      Mr. Jay A. Haines
                President/CEO
                Textured Coatings of America, Inc.
                5950 S. Avalon Boulevard
                Los Angeles, California 90003-1384

   IV-D-159      Mr. Robert L. Hawkins, Jr.
                Senior Vice President
                Waterlox Coatings Corporation
                9808 Meech Avenue
                Cleveland, Ohio 44105

   IV-D-160      Mr. Robert L. Hawkins, Jr.
                Senior Vice President
                Waterlox Coatings Corporation
                9808 Meech Avenue
                Cleveland, Ohio 44105

   IV-D-161      Ms. Madelyn K. Harding
                Administrator
                Product Compliance & Registrations
                Sherman-Williams Company
                101 Prospect Avenue, N.W.
                Cleveland, Ohio 44115-1075
                             2-22

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-162      Mr. Banard R. Appleman
                Executive Director
                Mr. Michael J. Masciale
                President
                Steel Structures Painting Council
                40 24th Street, 6th Floor
                Pittsburg, Pennsylvania 15222-4643

  IV-D-163      Ms. Barbara A. Kwetz
                Director
                Division Air Quality Control
                Commonwealth of Massachusetts
                Department of Environmental Protection
                One Winter Street
                Boston,  Massachusetts 02108

  IV-D-164      duplicate of item IV-D-158

  IV-D-165      Mr. Richard Hardy
                President
                X-I-M Products, Inc.
                1169 Bassett Road
                Westlake, Ohio 44145

  IV-D-166      Mr. James S. Jennison
                President
                Jennison Industries
                106 Washington
                Post Office Box 965
                Burlington, Iowa 52601

  IV-D-167      Mr. William M. Tunno
                Chairman/CEO
                Hanley Paint Manufacturing Company, Inc.
                Post Office Box 12130
                El Paso, Texas 79913

  IV-D-168      Ms. Suzanne C. Beamer
                Vice President
                Government Relations & Public Affairs
                International Sign Association
                801 N.  Fairfax Street, Suite 205
                Alexandria, Virginia 22314

  IV-D-169      Mr. Kelley Brandt
                Director, Regulatory Affairs
                The Valspar Corporation
                Post Office Box 1461
                Minneapolis, Minnesota 55440
                            2-23

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   TABLE 2-1.   LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE  (CONTINUED)


 Docket  Number	Commenter and affiliation	

   IV-D-170      Mr.  Michael  P.  Stock
                 Vice President
                 TK Products
                 Division of  Sierra  Corporation
                 11400 West 47th Street
                 Minnetonka,  Minnesota 55343

   IV-D-171      Mr.  Jay H. Burrill
                 Environmental Coordinator
                 Grace Construction  Products
                 W.R.  Grace & Company,-Conn.
                 62 Whittemore Avenue
                 Cambridge, Massachusetts  02140-1692

   IV-D-172      Mr.  Thomas J. Calautti
                 General Manager
                 Fiberlock  Technologies,  Inc.
                 630  Putnam Avenue
                 Post  Office  Box 390432
                 Cambridge, Massachusetts  02139-0802

   IV-D-173      Mr.  Kevin  C.  Hemenway
                 President
                 Kush Paint Company
                 19556 Masonic Boulevard
                 Roseville, Michigan 48066

   IV-D-174      Mr.  Ronald R. Methier
                 Chief
                 Air  Protection  Branch
                 Georgia Department  Of Natural  Resources
                 Environmental Protection  Division
                 4244  International  Parkway, Suite 120
                 Atlanta, Georgia 30354

   IV-D-175      Mr. Mark Uglem
                 Executive  Vice  President
                 Hirshfield's  Paint  Manufacturing,  Inc.
                 4450  Lyndale  Avenue No.
                 Minneapolis,  Minnesota 55412

   IV-D-176      Ms. Holly  M.  Bartel
                 President
                 Glista
                 327 South  Kenyon
	Seattle, Washington 98108	
                             2-24

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-177      Mr. Edward D. Edwards
                5220 Meadville Street
                Greenwood, Minnesota 55331

  IV-D-178      Mr. Ned B. Kisner
                President
                Triangle Coatings, Inc.
                1930 Fairway Drive
                San Leandro, California 94577

  IV-D-179      Mr. Joe Hundley
                Martinsville Emulsion Products Company, Inc
                Post Office Box 5384
                Martinsville, Virginia 24115

  IV-D-180      Mr. Alan R. Schuweiler
                Director of Chemistry
                Tennant
                701 North Lilac Drive
                Post Office Box 1452
                Minneapolis, Minnesota 55440-1452

  IV-D-181      Mr. Jim Van Pelt
                President
                Roof Coatings Manufacturers Association
                6000 Executive Boulevard,  Suite 201
                Rockville, Maryland 20852-3803

  IV-D-182      Mr. Robert B. Walker,  Jr.
                President
                Rose Talbert Paints
                Post Office Box 2658
                Cayce-West Columbia,  South Carolina 29171

  IV-D-183      Mr. Richard D. Williamson
                Vice President
                G & W Enterprises, Inc. dba
                Trinity Coatings Company
                Post Office Box 2488
                Fort Worth, Texas 76113-2488

  IV-D-184      Mr. S.  William Becker
                STAPPA/ ALAPCO
                444 North Capitol Street
                Washington, DC 20001

  IV-D-185      Ms. Nancy S. Bryson
                Crowell & Moring, LLP
                1001 Pennsylvania Avenue,  N.W.
                Washington, DC 20004-2595

                            2-25

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-186      Mr. L.W. Cranford, Jr.
                Sales Manager
                Lindau Chemicals, Inc.
                731 Rosewood Drive
                Columbia, South Carolina 29201

  IV-D-187      Mr. Mark S. Horton
                Regulatory Affairs Manager
                Chemrex, Inc.
                889 Valley Park Drive
                Shakopee, Minnesota 55379

  IV-D-188      Mr. Michael P. Kenny
                Executive Officer
                California Environmental Protection Agency
                Air Resources Board
                2020 L Street
                Post Office Box 2815
                Sacramento, California 95812-2815

  IV-D-189      Mr. Robert J. Nelson
                Director Environmental Affairs
                Mr. Jim Sell
                Senior Counsel
                National Paint and Coatings Association
                1500 Rhode Island Avenue,  N.W.
                Washington, DC 20005

  IV-D-190      Mr. Andrew Schlafly
                President
                The Clean Air Coalition Foundation
                521 Fifth Avenue, 17th Floor
                New York, New York 10175

  IV-D-191      Ms. Linda Waade
                Executive Director
                Mr. Tim Carmichael
                Project Director
                Coalition for Clean Air
                Ms. Gail R. Feuer
                Senior Attorney
                Mr. David S. Beckman
                Senior Project Attorney
                Natural Resources Defense Council
                6310 San Vicente Boulevard, Suite 250
                Los Angeles, California 90048
                             2-26

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-192      Mr. Richard D. Williamson
                Senior Vice President
                G & W Enterprises, Inc. dba
                Trinity Coatings Company
                Post Office Box 2488
                Fort Worth, Texas 76113-2488

  IV-D-193      Mr. Richard Hardy
                President
                X-I-M Products, Inc.
                1169 Bassett Road
                Westlake, Ohio 44145

  IV-D-194      Mr. Donald A. Eckel
                President
                AACCO
                5520 N.  125th Street
                Butler,  Wisconsin 53007

  IV-D-195      Mr. John C. Hukey
                Technical Service Manager
                Dayton Superior Corporation
                402 South First Street
                Oregon,  Illinois 61061

  IV-D-196      Mr. Larry E. Schwietz
                CEO
                L & M Construction Chemicals, Inc.
                14851 Calhoun Road
                Omaha,  Nebraska 68152

  IV-D-197      Mr. Michael P. Stock
                Vice President
                TK Products
                Division of Sierra Corporation
                11400 West 47th Street
                Minnetonka, Minnesota 55343

  IV-D-198      Mr. James K. Crawford
                General  Manager
                EDOCO
                22039 South Westward Avenue
                Long Beach, California 90810-1681

  IV-D-199      Mr. William Miller
                General  Manager
                Symons Corporation
                Post Office Box 744
                Contralia, Illinois 62801
                            2-27

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-200      Shree Nabar
                Technical Director
                Tamms Industries
                7405 Production Drive
                Mentor, Ohio 44060

  IV-D-201      Mr. Moorman L. Scott
                Vice President
                The Euclid Chemical Company
                19218 Redwood Road
                Cleveland, Ohio 44110-2799

  IV-D-202      Mr. Mark S. Horton
                Regulatory Affairs Manager
                Chemrex, Inc.
                889 Valley Park Drive
                Shakopee, Minnesota 55379

  IV-D-203      Mr. Paul Smith
                The Spray-Cure Company
                300 Edwards Street
                Madison, Ohio 44057-3112

  IV-D-204      Carbit Paint Company
                927 W. Blackhawk Street
                Chicago, Illinois 60622-2519

  IV-D-205      RAE Products and Chemicals Corporation
                11630 South Cicero Avenue
                Alsip, Illinois 60658-2599

  IV-D-206      Mr. Kent W. Colton
                Executive Vice President/CEO
                National Association of Home Builders
                1201 15th Street, N.W.
                Washington, DC 20005-2800

  IV-D-207      Mr. Michael P. McCarthy
                President/COO
                Harrison Paint Corporation
                Post Office Box 8470
                Canton, Ohio 44711

  IV-D-208      Mr. James R. Tucker
                Director of Corporate Research  & Development
                Armorall Products Corporation
                6 Liberty
                Aliso Viejo, California 92656
                             2-28

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-209      Mr. Sidney Freedman
                Director
                Architectural Freest Concrete Services
                Precast/Prestressed Concrete Institute
                175 West Jackson Boulevard
                Chicago, Illinois 60604-9773

  IV-D-210      Mr. Larry E. Schwietz
                CEO
                L & M Construction Chemicals, Inc.
                14851 Calhoun Road
                Omaha, Nebraska 68152

  IV-D-211      Mr. James A. Westerhaus
                Regulatory Services Vice President
                Ecolab,  Inc.
                370 N. Wabasha Street
                Saint Paul, Minnesota 55102

  IV-D-212      Mr. Bob Mitchell
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

  IV-D-213      Mr. Marc Freedman
                Director of Government Affairs
                Painting and Decorating Contractors of
                America
                3913 Old Lee Hwy.,  Suite 33-B
                Fairfax, Virginia 22030

  IV-D-214      Smiland & Khachigian
                Seventh Floor
                601 West Fifth Street
                Los Angeles, California 90071

  IV-D-215      Mr. Bernard K.  Zysman
                Technical Services Specialist
                OxyChem
                Post Office Box 344
                Niagra Falls, New York 14302-0344

  IV-D-216      The Architectural Coatings Regulatory
                Negotiation Committee
                ALARM Caucus
                Post Office Box 2488
                Fort Worth, Texas 76113-2488
                            2-29

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	   Commenter and affiliation	

   IV-D-217     Mr. Charles Rushing
                Chief Chemist
                Wellborn Paints
                A Dunn-Edwards Company
                Post Office Box 25645
                Albuquerque, New Mexico 87105-0645

   IV-D-218     Mr. Loren A. Plotkin
                Executive Vice President
                Lighthouse Products
                Post Office Box 1253
                New Smyrna Beach, Florida 32170

   IV-D-219     Mr. Richard B. Cunningham
                President
                Passonno Paints
                500 Broadway
                Watervliet, NY  12189

   IV-D-220     Mr. Richard B. Cunningham
                President
                Passonno Paints
                500 Broadway
                Watervliet, NY  12189

   IV-D-221     Mr. Maxie E. Quinn
                President
                Dyco Paints, Inc.
                5850 Ulmerton Road
                Clearwater, Florida 34620-3989

   IV-D-222     Mr. Bob Cummins
                President
                Wellborn Corporation
                215 Rossmoor S.W.
                Albuquerque, New Mexico 87105
                             2-30

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-D-223      Mr.William G. Schauz
                United States Air Force
                HQAFCESA/CES
                139 Barnes Drive, Suite 1
                Tyndall AFB, Florida 32403-5319

  IV-D-224      Mr. Jim Duffey
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver,  Colorado 80239

  IV-D-225      Mr. Mike Twining
                Palo Duro Hardwoods,  Inc.
                4800 Lima Street
                Denver,  Colorado 80239

  IV-D-226      Mr. Fred L. Zupicich,  Sales Manager
                Mr. Raymond Pavlik,  Vice President
                Dampney Company, Inc.
                85 Paris Street
                Everett, Massachusetts 02149

  IV-F-Ola      Mr. Josie Pradella
                STAPPA/ALAPCO
                444 North Capitol Street
                Washington, DC 20001

  IV-F-Olb      Mr. Barry Jenkin
                Benjamin Moore

  IV-F-Olc      Mr. Bob Mitchell
                Dunn-Edwards Corp.
                4885 East 52nd Place
                Los Angeles, California 90040

  IV-F-Old      Mr. Howard Berman
                Wellborn Paint

  IV-F-Ole      Mr. Mark S. Horton
                Regulatory Affairs Manager
                Chemrex, Inc.
                889 Valley Park Drive
                Shakopee, Minnesota 55379
                            2-31

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-F-Olf     Mr. Marc Freedman
                Director of Government Affairs
                Painting and Decorating Contractors of
                America
                3913 Old Lee Hwy., Suite 33-B
                Fairfax, Virginia 22030

  IV-F-Olg     Mr. Larry Chapman
                Inland Coatings Corp.

  IV-F-Olh     Ms. Lesa K. McDonald
                Environmental/Safety Manager
                Gemini
                Post Office Box 699
                El Reno, Oklahoma 73036

  IV-F-Oli     Mr. Gary Driscoll
                Basic Coatings, Inc.

  IV-F-Olj     Ms. Madelyn K. Harding
                Administrator
                Product Compliance & Registrations
                Sherman-Williams Company
                101 Prospect Avenue, N.W.
                Cleveland, Ohio 44115-1075

  IV-F-Olk     Mr. Don Collier
                Courtauld Coatings

  IV-F-Ol(l)     Mr. Robert Wendoll
                Triangle Coatings
                1930 Fairway Dr.
                San Leandro, California  94577

  IV-F-Olm     Mr. Robert Wendoll
                El RAP
                4885 E. 52nd Pi.
                Los Angeles, California  90040

  IV-F-Oln     Mr. Earle Borman
                Thompson Minwax Co.
                8 Shoremame Club Rd.
                Old Greenwich, Connecticut

  IV-F-Olo     Mr. Jim Sell
                National Paint & Coatings Association  (NPCA)
                1500 Rhode Island Ave., NW
                Washington, DC  20005
                             2-32

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-F-Olp     Mr. Richard Gold
                Holland & Knight
                (Outside Environmental Counsel to NPCA)

  IV-F-Olq     Richard Williamson
                Textured Coatings of America
                4275 Executive Sq., Suite 320
                Lajolla, California  92037

  IV-F-Olr     Mr. Jim Van Pelt
                President
                Roof Coatings Manufacturers Association
                6000 Executive Boulevard,  Suite 201
                Rockville,  Maryland 20852-3803

  IV-F-Ols     Mr. Charleds Brush
                RPM Corp.

 IV-F-02gen     Unidentified commenter at public meeting

  IV-F-02a     Mr. Richard Cunningham
                Passono Paints
                500 Broadway
                Waterolier, New York  12189

  IV-F-02b     Mr. Jay Haines
                Textured Coatings of America
                4275 Executive Sq., Suite 320
                Lajolla, California  92037

  IV-F-02c     Mr. Mark Algaier
                Hillyard Indutries
                P.O.  Box 909
                Box 302 N.  4th St.
                St. Joseph, Missouri  64502

   IV-F02d      Mr. Ned B.  Kisner
                Triangle Coatings
                1930 Fairway Dr.
                San Leandro, California  94577

  IV-F-02e     Mr. Valery Tokar
                Conspec Mkg. & M
                636 S.  66th Terrace
                Kansas City, Kansas  66213

  IV-F-02f     Mr. Larry Schwietz
                L&M Construction, Chem.,  Inc.
                14851 alhoun Rd.
                Omaha,  Nebraska  68152
                            2-33

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)
Docket Number
          Commenter and affiliation
   IV-F-02g
   IV-F-02h
   IV-F-02i
   IV-F-02J
   IV-F-02k
  IV-F-02(I!
   IV-F-02m

   IV-F-02
   IV-F-020
   IV-F-02p
Mr.  D.  John Long
Keeler & Long, Inc.
Box 460
Watertown, Connecticut  06795

Mr.  Sam Jennison
Jennison Ind.
Box 965
Burlington, Iowa  52601

Mr.  Rod Salyer
Koch Materials Co.
4900 S. Mason Ave.
Chicago, Illinois  60638

Mr.  Steven Olson
Hallman Lindsay Paint
501 S.  Bird St.
Sun Prairie, Wisconsin  53590

Mr.  David Westerman
Carbit Paint Co.
927 Blackhawk St.
Chicago, Illinois  60622

Mr.  Robert L. Hawkins
Waterlox Coatings
9808 Meeca Ave.
Cleveland, Ohio  44105

Ace Coatings

Mr.  Jim Robellaro
Valspar Corp.
1191 Wheeling Rd.
Whelling, Illinois  60090

Mr.  Robert Wendoll
El Rap
4885 52nd Pi.
Los Angeles, California  9004C

Mr.  Michael Stock
TK Products
11400 W. 47th St.
Minnetonka, Minnesota  55343
                             2-34

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

  IV-F-02q     Mr. Max A. Baum
                Easterday Paint & Chem. Co.
                1306 E. Bolivar Ave.
                St. Francis, Wisconsin  53235

  IV-F-02r     Mr. Guy Gruenberg
                RAE Products
                11630 S. Cicero Ave.
                Alsip, Illinois  60658

   IV-G-01      Mr. George Baty
                President
                Cresset Chemical Company
                Post Office Box 367
                Weston, Ohio 43569

   IV-G-02      Mr. Richard A. Rosvold
                H.B.  Fuller Company
                Post Office Box 64683
                St. Paul, Minnesota 55164-0683

   IV-G-03      Mr. Henry S. Shaw
                CenterLine Industries, Inc.
                5380 Bircher Boulevard
                Post Office Box 66802
                St. Louis, Missouri 63166-6802

   IV-G-04      Mr. J. Kemp
                Akzo Nobel
                Holmbladsgade 70
                DK2300 Kobenhaven S
                Denmark

   IV-G-05      Mr. J. Andrew Doyle
                President
                National Paint & Coating Association
                1500 Rhode Island Avenue,  N.W.
                Washington, DC 20005-5597

   IV-G-06      Mr. Larry E. Schwietz
                CEO
                L & M Construction Chemicals, Inc.
                14851 Calhoun Road
                Omaha, Nebraska 68152

   IV-G-07      Mr. John C. Hukey
                Technical Service Manager
                Dayton Superior Corporation
                402 South First Street
                Oregon,  Illinois 61061

                            2-35

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  TABLE 2-1.  LIST OF COMMENTERS ON THE PROPOSED NATIONAL
           ARCHITECTURAL COATINGS RULE (CONTINUED)


Docket Number	Commenter and affiliation	

   IV-G-08      Mr. Moorman L. Scott
                Vice President
                The Euclid Chemical Company
                19218 Redwood Road
                Cleveland, Ohio 44110-2799

   IV-G-09      Mr. Michael P. Stock
                Vice President
                TK Products
                Division of Sierra Corporation
                11400 West 47th Street
                Minnetonka, Minnesota 55343

   IV-G-10      Mr. Paul Smith
                The Spray-Cure Company
                300 Edwards Street
                Madison, Ohio 44057-3112

   IV-G-11      Mr. Kenneth S. Petersen
                Director of Sales and Marketing
                Poly-Wall International, Inc.
                8400 Coral Sea Street N.E. #800
                Elaine, Minnesota 55449

   IV-G-12      Mr. Robert Mitchell
                Dunn-Edwards Corporation
                4885 East 52nd Place
                Los Angeles, California 90040

   IV-G-13      Mr. Thomas R. Wood
                Stoel Rives, LLP Attorneys
                Standard Insurance Center
                900 S.W. Fifth Avenue
                Suite 2300
                Portland, Oregon 97204-1266

   IV-G-14      Ms. Jan C. Winn
                Edoco
                22039 South Westward Avenue
                Long Beach, California 90810-1681

   IV-G-15      Ms. Susan N. Stafford
                Stoel Rives, LLP Attorneys
                Standard Insurance Center
                900 S.W. Fifth Avenue
                Suite 2300
                Portland, Oregon 97204-1268	
                             2-36

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2.1  METHOD OF REGULATION
2.1.1   Section 183(e) Requirements
     Comment:   One commenter (IV-D-02/IV-D-178/IV-F-1K)  stated
that the objective of a national VOC standard is to reduce ozone
formation, not to reduce "in-the-can" VOC content of coatings,
which is only one factor affecting ozone formation.  The
commenter indicated that the EPA must also consider factors such
as:  (1) emissions per area covered by the coating, (2)  use of
seasonal control strategies, and (3)  whether the coating is
applied in a nonattainment area.  The commenter also stated that
the" EPA must consider the relative reactivity of the emissions.
The commenter suggested that the EPA use a method for relating
emissions per area covered that was presented during the
regulatory negotiations (II-E-7).   The commenter stated that
lowering the VOC content of coatings potentially increases total
VOC emissions  because the film thickness increases.  The
commenter contended that lower VOC coatings or substitutes tend
to produce a thicker film when applied that results in a smaller
surface area being covered with a given amount of a coating.  As
a result,  the  commenter contended that more coatings would be
required and VOC emissions could increase rather than decrease as
a result of the rule.  The commenter pointed out that a method
for relating emissions per area covered was presented during the
architectural  coating regulatory negotiations but did not appear
in the proposed rule.
     Response:   The EPA agrees that the primary objective of this
rule is to reduce ozone pollution across the country and believes
that reduction of the VOC content of coatings is the best
approach under section 183(e)  of the Clean Air Act (Act) to
achieve the reductions.  The EPA believes that the commenter's
suggestion to  consider the emissions per area covered is
impractical for architectural  coatings.  As discussed in
section 2.2.6  of this document, the surface area covered by any
given coating will vary depending upon a number of factors
including the  substrate being  coated and the climatic conditions
                               2-37

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at the time of application.  Thus, the EPA has not related VOC
emissions to area covered by a volume of a given product.
     The EPA believes that the commenter's suggestion to control
VOC emissions during only the ozone season is also not
appropriate.  Restricting the season when end users may apply
architectural coatings is not practical to enforce since end
users include homeowners and contractors applying coatings at
varying times and locations.  In addition, section 183 (e) of the
Act does not provide the EPA with the regulatory authority to
regulate end users via a national rule.  The nature of
architectural coatings as a consumer and commercial product does
not allow for control strategies that reduce emissions during
only the ozone season.  The shelf life and consumption rate of
architectural coatings varies greatly, and no one can accurately
predict that a certain percentage of a product made with a
specified formulation will be consumed and,  thus, cause VOC
emissions during any particular time period.  Because the
consumption rate of architectural coatings is variable and
unpredictable, achieving reductions during only an ozone season
is not a viable control strategy.  A rule based upon an ozone
season could potentially require manufacturers to produce at
least two lines of products (for ozone season and non-season) and
to have a reliable means of tracking products.  Moreover,
determining what would constitute the ozone season for each area
across the nation in light of vastly different topographical and
meteorological considerations would render a seasonal approach
even more complex for the EPA to administer and for regulated
entities to comply with.  The difficulties with enforcement of
such a seasonal rule would also multiply geometrically,  and the
EPA believes that it would thereby jeopardize the ability of the
regulations to achieve the intended VOC emission reductions.  The
EPA, therefore, concluded that uniform levels on the amount of
VOC incorporated into the products would be the most feasible,
most effective, and least disruptive control measure.
     The EPA also maintains that controlling whether individual
coatings are applied in ozone attainment or nonattainment areas
                               2-38

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would be impractical.  Architectural coatings are easily
transportable from one area to another, and therefore, it would
be difficult for a manufacturer to predict accurately where they
may be applied.  The primary objective of rules under
section 183 (e) is to reduce VOC emissions in ozone nonattainment
areas, and the EPA has concluded that the most effective
alternative is to implement a nationwide rule, as discussed in
section 2.1.2 of this document and in section 2.3.1 of the
183-BID.
      The commenter's argument that lowering VOC content limits
would increase VOC emissions due to increased film thickness and
less coverage is contradictory because a coating with more solids
will actually cover a greater surface area.   The assertion that
lower VOC coatings have smaller coverage area is not consistent
with information provided by the manufacturers'  Material Safety
Data Sheets (MSDS),  technical data sheets, and coating can
labels.   For house paint, for example,  this information typically
shows that regardless of the solids content by weight, the
coverage area of the various coatings is relatively similar.  The
EPA contends that compliant coatings have a coverage area that is
equivalent to or better than higher VOC non-compliant coatings.
Hence, it is not expected that a larger quantity of compliant
coating will be necessary to cover the same area.  The EPA has
seen no indication that increased coating usage is required with
compliant coatings.
2.1.2   National Rule Versus Other Strategies
     Comment:   Commenters (IV-D-82, IV-D-120, IV-F-2) argued for
VOC controls that apply only in nonattainment areas instead of
rules that apply in both nonattainment and attainment areas.  One
commenter (IV-D-120)  asserted that a rule applied only in
nonattainment areas would lessen the economic impact on both
manufacturers who market coatings nationwide and those who sell
products solely in attainment areas.   The commenter stated that
because manufacturers have already been operating under the
patchwork of existing regulatory requirements, complying with the
current local and State requirements is likely to be more
                               2-39

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cost-effective than complying with a rule that applies to
products sold in both nonattainment and attainment areas.  The
commenter argued that a rule that applied only to nonattainment
areas would allow it to produce and sell products in attainment
areas that would not be marketable under a rule that applied to
both nonattainment and attainment areas.  The commenter supported
the use of a rule that applied only to nonattainment areas by
arguing that the overarching goal of the rule is to reduce VOC
emissions in areas with ozone levels that violate the ozone
National Ambient Air Quality Standard (NAAQS).   Commenters at the
small business meeting (IV-F-2)  suggested that the EPA consider
issuing a national rule that only applies to nonattainment areas.
One commenter (IV-F-2) contended that a national rule that
applies to nonattainment areas only would reduce the burden on
small businesses while increasing consistency in requirements
across the country.  Another commenter  (IV-F-2)  argued that a
national rule that applied to nonattainment areas only would
focus costs on areas which needed control.   One commenter
(IV-D-82)  objected strongly to the use of nationwide VOC content
limits in future rules and argued that these limits should only
be applied in nonattainment areas.
     Six commenters (IV-D-28, IV-D-33, IV-D-161, IV-D-162,
IV-D-174,  IV-F-lj) opposed the adoption of rules that apply only
to nonattainment areas.  One commenter  (IV-D-161/IV-F-1j) argued
that if the VOC regulation for architectural coatings were
adopted as a Control Technique Guideline (CTG)  that applied only
to nonattainment areas, then the cost per tori of emissions
reduced would increase significantly because the cost of lower
VOC technologies would increase  (due to decrease in sales
volume).  The commenter (IV-D-161) also contended that a CTG
would not produce emission reductions equivalent to those of a
national rule.  The commenter predicted that controlling purchase
and use of regulated coating products within a given
nonattainment area would be difficult and lead to ineffective and
costly enforcement.  Additionally, the commenter contended that
CTG implementation would result in different requirements in each
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nonattainment area.  The commenter argued that such different
requirements in each nonattainment area would result in multiple,
complex compliance burdens for manufacturers.  Another commenter
(IV-D-33) also stated that a national VOC rule for architectural
coatings would be more consistent and cost-effective than a CTG.
The commenter stated that, due to the widespread and variable
distribution of architectural coatings, a rule that applies only
to nonattainment areas is not appropriate.
     Response:  Section 183(e) of the Act authorizes the EPA to
obtain VOC reductions through either regulations or CTG, but
includes certain requirements on each option.  A CTG, by
definition, applies only in nonattainment areas,  whereas rules
generally apply nationwide.  The EPA has discretion to consider a
CTG as a regulatory alternative if the CTG will be substantially
as effective as a national rule to reduce emissions of VOC in
ozone nonattainment areas.  For some product categories, a CTG
can be substantially as effective as a national regulation.  In
fact,  for some products,  a CTG may be significantly more
effective because end users can be targeted rather than suppliers
of the product and, therefore, emission reductions can be
obtained through add-on control technologies, application
equipment specifications,  and work practice standards.  A
national rule,  on the other hand,  is limited to requirements
applicable to the manufacturers,  processors, wholesale
distributors,  or importers of consumer or commercial products.
     Section 183 (e) explicitly authorizes the EPA to include any
system of regulation that  the EPA deems appropriate.  For
architectural coatings,  which are highly transportable and can be
used in any location at any time,  the EPA has determined that
regulations that target products used solely in nonattainment
areas would not be as effective as a national regulation
targeting all manufacturers of all the products.   Thus,  the EPA
has concluded that a rule  applicable only to nonattainment areas
or a CTG would not be the  best means to achieve the intended VOC
emission reductions for architectural coatings.  Architectural
coatings are used primarily by homeowners, contractors,  and a
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wide variety of other types of consumers rather than by a
manufacturing facility in a fixed location.   Transportability of
the products would tend to decrease rule effectiveness for a
nonattainment area only regulation due to the likelihood of
noncompliant products being bought in attainment areas and used
in nonattainment areas.  In contrast,  a national regulation that
applies both in attainment and nonattainment areas will eliminate
the potential for transport of products that would negate the
intended VOC emission reductions of the rule.  A national
regulation will help ensure effective enforcement and
implementation of VOC controls in all areas.
     Comment:  Seven commenters (IV-D-02/IV-F-1(1),  IV-F-lq,
IV-D-16/IV-D-166, IV-D-26, IV-D-73, IV-D-120, IV-D-175) opposed
an architectural coating rule that would apply to areas that are
in attainment of the NAAQS for ozone.   One commenter
(IV-D-02/IV-F-1(1)}  argued that a rule that  applied to both
nonattainment and attainment areas would place a reformulation
burden on hundreds of small businesses that  manufacture and sell
coatings only in attainment areas and, therefore, do not
contribute to the ozone nonattainment problem.  Another commenter
(IV-D-26) stated that consumers in attainment areas should not be
forced to forego the benefits of lower cost, higher quality
coatings in order to reduce ozone in nonattainment areas.
     One commenter  (IV-D-73) stated that, due to different
conditions throughout the nation,  such as lower temperatures or
higher elevations,  a nationwide rule does not make sense.  The
commenter further stated that, by promoting  uniformity, a
nationwide rule limits consumer choices.  According to the
commenter, this helps large manufacturers selling coatings across
State lines and hurts small businesses that  sell coatings only in
attainment areas.  Another commenter  (IV-F-lq) stated that
regulating architectural coatings only in nonattainment areas
could open up coating markets where small businesses can compete
with large businesses by furnishing a niche  product.  One
commenter  (IV-D-175), a manufacturer in Minnesota, sells almost
all of its product within a State that is in attainment of the
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ozone NAAQS, and questioned why the company should be regulated
under this rule.
     Seventeen commenters  (IV-D-28, IV-D-30, IV-D-32, IV-D-33,
IV-D-96, IV-D-117, IV-D-129, IV-D-151, IV-F-la, IV-F-lb, IV-F-lg,
IV-F-li, IV-F-lj, IV-F-lk, IV-F-ln, IV-F-lp, IV-F-ls) supported a
national architectural coating VOC rule.  One commenter  (IV-F-la)
stated that the United States has a significant ozone problem and
cannot afford to overlook or ineffectively regulate any source of
ozone precursors.  The commenter agreed with the EPA that
architectural coatings represent a significant source category
(almost 3 percent of all anthropogenic VOC emissions and almost
10 percent of VOC emissions from all consumer and commercial
products).   Another commenter (IV-D-117) supported establishing a
strong national rule for architectural coatings because
State-by-State control is an ineffective approach and would not
be sufficient to allow nonattainment areas to reach attainment.
One of the commenters  (IV-D-129) stated that the benefits
associated with a national VOC rule for architectural coatings
includes decreased workplace exposure to toxic and flammable
materials and lower toxicity of waste generated in the
manufacturing process.  A State agency  (IV-D-96)  expressed
support for a national rule for architectural coatings,
especially one that obtains the 25 percent creditable reductions
committed to in the 1993 State Implementation Plan (SIP) based on
Reasonably Available Control Technology (RACT).  According to the
commenter,  the rule would allow States to implement and enforce
architectural coating regulations more effectively, and would
help industry to reformulate architectural coatings.
     Response:  The EPA agrees that some areas of the country may
not need reductions in VOC from architectural coatings to attain
the ozone NAAQS.  However, to achieve effective control of VOC
emissions in nonattainment areas from products such as
architectural coatings, a nationwide regulation targeting the
manufacturers of these products is the most effective and
efficient control strategy available to the EPA.
Section 183 (e) (4) of the Act authorized the EPA to determine the
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most effective system or systems of regulation that the EPA
determines is appropriate to obtain reductions of VOC emissions
from consumer and commercial products and aid in attainment of
the ozone NAAQS.   A national rule that focuses on manufacturers
and importers is an effective approach for reducing emissions
from architectural coatings, which are easily transportable and
widely distributed to consumers and contractors for use in
various locations from day to day.
     Many existing nonattainment areas have identified the
control of consumer and commercial products,  such as
architectural coatings,  automobile refinishing coatings,  and
consumer products, in their strategies to reduce VOC emissions to
attain the ozone NAAQS.   In fact, the Ozone Transport Assessment
Group  (OTAG)1  included in its  June 1997  recommendations to the
EPA, a recommendation that the EPA continue to develop, adopt,
and implement stringent national control measures that meet or
exceed emission reduction levels specified by OTAG.  In the case
of architectural coatings, the group recommended future control
requirements in the year 2003 to achieve reductions beyond those
expected from this rule.
     The EPA has concluded that regulation of architectural
coatings in attainment areas may increase the effectiveness of
the rule by eliminating the potential for transport of
non-compliant products into nonattainment areas.  Other reasons
for the EPA's determination that a national rule is the
appropriate regulatory approach for architectural coatings are
discussed below in the remainder of this section.  In addition,
modeling often indicates high emission reduction targets  may be
necessary to meet the ozone NAAQS in the nonattainment areas.
Some States have run out of effective control activities  on the
local level.  For these States, elimination of the possibility
     :OTAG is a group made  up of  State,  Federal,  industry
organizations and environmental groups charged by the EPA with
developing consensus recommendations regarding implementation of
the Clean Air Act as amended in 1990 related to ground-level
ozone problems in the United States.
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for transport of non-compliant products into their jurisdiction
will be helpful in their effort to achieve attainment.
     With regard to the suggestion that the EPA exempt companies
that sell coatings only in attainment areas, the June 25, 1996
proposal requested comment on the number and identity of
manufacturers who sell products solely in attainment areas.  The
EPA made this request to evaluate whether any special provisions
for these manufacturers might be warranted.  A total of five
companies spoke at the small business meeting (IV-F-2) indicating
that they sold almost all of their products in attainment areas,
Two additional companies (IV-D-73, IV-D-175) submitted letters
implying that they also market the majority of their products in
attainment areas.  The EPA believes that the limited response to
this request indicates that there is not sufficient evidence to
support providing such an exemption or special provision.
Moreover, the EPA notes that section 183(e)(1)(C)  explicitly
defines regulated entities to include manufacturers or importers
who sell or distribute their products in interstate commerce.
Even those manufacturers or importers who may not broadly market
their products are nonetheless introducing their products into
interstate commerce, and thus, are within the scope of the
regulations intended by the Act.
     Comment:   Five commenters  (IV-D-129,  IV-D-161, IV-F-lb,
IV-F-lg, IV-F-ls) supported the EPA's proposal of a nationwide
rule that applies to both attainment and nonattainment areas
because it will provide a level playing field for all
manufacturers.  According to one of these commenters  (IV-F-ls),
many products of small,  independent businesses are designed to
meet the needs of niche markets for specialized coatings and the
manufacturers need access to a wide geographical market to sell
the volume or product necessary to make a profit.   The commenter
noted that these companies find it increasingly difficult to
track and comply with different State,  county, and city
regulations of VOC.  Therefore, the commenter argued that small
businesses need an architectural coating VOC rule that applies to
both attainment and nonattainment areas nationwide to compete
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effectively.  Another commenter (IV-F-lg)  noted that it does not
have an in-house sales force and depends on distributors to
market its products.  The commenter indicated that some
distributors are not willing to handle the commenter's products
unless they can market them throughout their territory.  The
commenter noted that ever-changing individual State and local
rules can make it difficult for manufacturers to comply.  Another
commenter (IV-F-lb) argued that a uniform, practical,  Federal
control measure that applies to attainment and nonattainment
areas will allow the sale of high quality coatings to the
consumer and will provide a level playing field for manufacturers
while achieving meaningful reductions in air pollution.
     Response:   The EPA agrees that the national rule will be
advantageous for coatings manufacturers for the reasons stated by
the commenters.   During the development of the architectural
coating rule, industry representatives expressed concern that
differences in State and local requirements for architectural
coatings,  as could occur under a non-nationwide rule or CTG
approach,  would disrupt the national distribution network for
architectural coatings.  The EPA recognizes that for
manufacturers who distribute across wider geographical areas,
rules that apply to both nonattainment and attainment areas
provide the additional benefit of promoting consistency in
regulations, thereby making it easier for companies to compete
with each other.  While promoting national uniformity is one
incidental benefit of the implementation of a national rule, the
EPA notes that it is but one factor that the EPA has taken into
account in determining what system or systems of regulation would
be best to achieve the objectives of section 183 (e) of the Act.
     Comment:  Six commenters  (IV-D-32, IV-D-129,  IV-F-le,
IV-F-lg, IV-F-ln, IV-F-lq) supported a national VOC rule for
architectural coatings because it would be more cost-effective
than a regulatory approach that could result in different
requirements for attainment and nonattainment areas.  Four
commenters  (IV-D-129, IV-F-le, IV-F-ln, IV-F-lq) agreed that a
nationwide VOC regulation for architectural coatings would ease
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the burden on manufacturers to keep track of the applicable
limits, categories, exemptions, and other requirements for
numerous State regulations.  One commenter  (IV-F-lg), a
manufacturer of niche products, supported a national VOC rule for
architectural coating because as a small company, the commenter
lacks the resources to petition each State for variances.
Another commenter  (IV-F-li), a small company that markets in
50 States, stated that its sales volume in any one State is too
low to support the potential cost of relabeling, reformulating,
etc., to meet various State requirements.  A State commenter
(IV-D-32) stated that a national architectural coating rule would
allow the State of Oregon to retire its local architectural
coatings program and apply those resources to other environmental
needs.  According to one commenter (IV-D-129), the time and
expense to comply with the existing patchwork system of State and
regional regulations affecting the architectural coating industry
could be better spent developing lower VOC products and
initiating other pollution prevention programs.
     Five commenters (IV-D-30, IV-D-151, IV-D-161, IV-F-li,
IV-F-lj)  supported a national architectural coatings VOC rule
because it will make compliance easier, and one commenter
(IV-F-la) supported a national rule because it will be easier to
implement and enforce.   One of these commenters  (IV-D-161)
supported the national architectural coating VOC rule because it
will provide consistency regarding compliance among States for
VOC control.  The commenter specifically supported a national
rule that will help to alleviate the difficulty manufacturers
encounter in controlling distribution so that products are not
shipped to areas where the product does not meet a local VOC
content limit.  Another commenter (IV-D-151) stated that a
national architectural coatings VOC rule is desirable because it
allows manufacturers to sell and distribute products freely among
attainment and nonattainment areas.   This commenter also
supported a national architectural coatings VOC rule because it
would simplify recordkeeping.   One commenter (IV-D-30)  stated a
concern that without a national rule,  companies would be subject
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to several State and Federal requirements that would unduly
complicate doing business in the architectural coatings industry.
Another commenter  (IV-F-lj)  faces marketing and logistical
problems because of the various architectural coating VOC rules
and rule variations across the country.
     Response:   The EPA agrees that implementation of a national
rule will help to minimize the patchwork of potentially diverse
regulations across the nation.  Several  industry representatives
have advised the EPA that the cost of producing different product
lines for attainment versus nonattainment areas, as could happen
under a non-nationwide rule or CTG approach,  could be cost
prohibitive because of the duplicative effort of labeling,
storage, and distribution management.  The EPA also recognizes
and agrees that an added benefit of uniform national rules is
that State resources can be redirected to other local regulatory
development efforts to reduce emissions  that contribute to ozone
or other pollutants within a particular State.  Therefore, the
EPA agrees that using a national rule to control VOC emissions
from architectural coatings may be more  cost-effective than other
alternatives for specific categories of  products like
architectural coatings.  The EPA notes,  however, that even with a
national rule for architectural coatings, some areas may choose
to impose additional regulations to obtain greater VOC reductions
as their circumstances may require, and  that section 183(e) of
the Act permits this.
     Comment:  One commenter  (IV-D-96) stated that a national VOC
rule for architectural coatings will play a role in diminishing
the amount of precursor VOC transported from ozone attainment
areas into nonattainment areas throughout the country.
     Response:   The EPA believes that national rules with
nationwide applicability may help to mitigate the impact of ozone
and ozone precursor transport across some area boundaries.
Recent modeling performed by OTAG and others suggests that in
some circumstances VOC emitted outside nonattainment area
boundaries can contribute to ozone pollution in nonattainment
areas -- for example,  by traveling relatively short distances
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into neighboring nonattainment areas.  The EPA has recognized the
potential for VOC transport in the December 29, 1997, Guidance
for Implementing the 1-hour Ozone and Pre-Existing PM10 NAAQS
concerning credit for VOC emission reductions towards rate of
progress requirements.  The guidance indicates that the EPA may
give credit for VOC reductions within 100 kilometers of
nonattainment areas.  In addition, the June 1997 recommendations
made by OTAG supported the EPA's use of VOC regulations that
apply to both nonattainment and attainment areas to implement
section 183(e)  of the Act for certain products.  The particular
product categories OTAG cited for national VOC regulations are
automobile refinish coatings,  consumer products, and
architectural coatings.  The EPA believes that regulation of
products in attainment areas is necessary to mitigate VOC
emissions that have the potential to contribute to ozone
nonattainment in accordance with section 183(e) of the Act.  The
EPA has taken this into account as one of the reasons for
selecting a nationwide VOC rule,  rather than a regulation or CTG
applicable only in nonattainment areas.
     Comment:   Two commenters (IV-D-32, IV-F-la) stated that a
national architectural coating VOC rule will reduce the potential
for consumers or others transporting noncompliant products from
attainment areas into nonattainment areas.
     Response:   The EPA agrees with the point raised by these
commenters and maintains that regulating manufacturers' and
importers' products in both attainment and nonattainment areas is
a more effective approach for reducing emissions from
architectural coatings because these products are easily
transportable and widely distributed to consumers for use in
unlimited locations.  The transportability of products tends to
decrease rule effectiveness for rules that vary by location due
to the likelihood of unregulated, non-compliant products being
bought in attainment areas and used in nonattainment areas.  For
this reason,  effective enforcement of a control strategy for an
architectural coatings rule that affected nonattainment areas
only would be limited.  Therefore, the EPA is promulgating the
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standards for architectural coatings as a national rule.  A
national architectural coating VOC rule will eliminate the
potential for transport of non-compliant products from attainment
areas into nonattainment areas that would negate the
effectiveness of the rule to achieve VOC emission reductions.
     Comment:  One commenter (IV-D-32)  argued that a national
rule for architectural coatings would help prevent future ozone
problems in attainment areas.
     Response:   The EPA agrees that one incidental benefit of the
architectural coatings rule will be reduction of ozone and ozone
precursors nationwide including maintenance areas.  For areas
that previously had been nonattainment areas, States are required
to have a plan to demonstrate maintenance of the ozone standard
over the long term.  Population growth or increased economic
prosperity would be expected to lead to additional use of these
products, which in turn, could lead to increased VOC emissions.
The EPA notes that the purpose of the rule is to obtain VOC
emission reductions from products that have the potential to
contribute to ozone nonattainment, and this goal is furthered by
the final rule.  The potential benefits for maintenance areas are
incidental to this goal.
     Comment:  Two commenters  (IV-F-lg, IV-F-lo) contended that
other provisions in the Act, besides section 183 (e) ,  place
significant pressures on the States to achieve large reductions
of VOC emissions by 1996 and beyond, and inevitably would have
subjected architectural coating products directly and indirectly
to a host of inconsistent State rules.
     Response:   The EPA agrees that many existing nonattainment
areas have identified architectural coatings as a significant
source of VOC emissions in their strategies to reduce emissions
to attain the ozone NAAQS.  As a result, architectural coatings
could be regulated by inconsistent State and local rules.  The
EPA expects the final rule to reduce the need for such State and
local rules and promote uniformity and consistency.
     Comment:  Nine commenters  (IV-D-30, IV-D-117, IV-D-129,
IV-F-lg, IV-F-li, IV-F-lj, IV-F-ln, IV-F-lo, IV-F-ls) supported a
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national rule because it will provide uniform regulations
throughout the country, minimizing the effects of the current
patchwork of architectural coating regulations.  According to the
commenters, uniform regulations are in the best interest of the
entire industry.
     Three commenters  (IV-D-189, IV-F-li, IV-F-lo)  urged the EPA
to utilize its powers under the Act in a way that will promote
consistency of regulation.  However, one commenter (IV-F-le)
noted that the States will still have the option of reducing the
limits further and pointed to California as an example.  The
commenter asked how the EPA is going to ensure that the States
will not use the EPA guidelines as a baseline and reduce VOC
content levels further to obtain more reductions.  The commenter
asked what the economic impact to the industry would be if the
States further reduced VOC content levels and stated that the EPA
had not addressed this issue.
     One commenter (IV-D-30)  stated that it is disadvantageous to
have different VOC content limits in attainment areas and
nonattainment areas.   To promote uniformity,  the commenter urged
the EPA to publish a national architectural coatings VOC rule
with VOC content limits that are stringent enough to address the
need for VOC reductions for as many States as possible.
     One commenter (IV-F-lg)  noted that the lack of a national
rule for architectural coatings made planning for new coating
products,  for production,  for expansion, and for marketing very
difficult if not impossible.   Another commenter  (IV-F-li) stated
that the most difficult situations for small companies to deal
with are a large number of States having different regulations
and a regulatory climate that changes frequently.  For example,  a
large number of States have different labeling requirements.   The
commenter noted that when two States specify different wording
for the labels, the manufacturer has to track and have two
entirely different sets of labels.  The commenter requested a
national architectural coating rule that preempts State
requirements across the board.  At the very least,  the commenter
requested that States be required to adhere to the Federal
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product categories and definitions that are consistent with the
national regulations and be prohibited from requiring specific
legal language that must appear on the label.
     Another commenter (IV-F-lo) noted that several States
completed or started architectural coating VOC rulemakings and
others have announced that they plan to issue architectural
coating rules if the EPA fails to issue a timely national
architectural coating rule.  This commenter encouraged the EPA to
emphasize to the States a preference under section 183(e) of the
Act for a uniform national rule.  The commenter noted that while
acknowledging the authority of the States to act independently,
section 183(e) of the Act also requires that they first consult
with the EPA before developing rules that differ from the
national rule.  The commenter contended that Congress wanted the
States to deliberate carefully on this and urged the EPA to add
language to the preamble of the architectural coating VOC rule to
explain this provision.  The commenter also asked the EPA to
encourage States to make their rules as consistent with the
national rule as possible.
     Another commenter (IV-D-189)  urged the EPA and States to
collaborate cooperatively to reconcile any differences between a
national rule and any State VOC rules for architectural coatings.
The commenter elaborated that State regulations such as "Rule 65"
(South Coast Air Quality Management District) should be included
within this collaborative effort.
     Response:  The EPA agrees that the main purpose of rules
promulgated under section 183(e) of the Act is to reduce VOC
emissions effectively and efficiently in nonattainment areas
utilizing "best available controls."  An incidental benefit of
regulations that apply both in attainment and nonattainment
areas, however, is that they promote consistency in regulations,
thereby reducing the burden on manufacturers of complying with
differing State standards.   To date, the EPA believes that
consistency has already been promoted because many States that
intended to develop their own regulations for architectural
coatings have instead relied on the final rule developed by the
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EPA.  However, the EPA does not expect regulations issued under
section 183(e) of the Act to provide complete uniformity in
requirements across the country for architectural coatings
because some States may continue to need more stringent standards
to meet their air quality goals.  The consultation provisions of
section 183(e)(9) of the Act are designed to promote uniformity
in the event that States or local areas need to adopt
requirements more stringent than those promulgated by the EPA.
This section requires the EPA to maintain and provide relevant
information, studies, and regulations proposed and promulgated to
any State or local government that requests it.  The EPA expects
this service to help States consider options for regulation that
will be consistent with those existing in other States or local
subdivisions.  The EPA anticipates that the promulgation of a
national rule may minimize the need for additional States to
enact architectural coating rules.  The EPA does seek to
encourage uniformity in regulations nationwide, but recognizes
that some areas may continue to need more stringent regulations
in order to alleviate ozone nonattainment conditions within their
jurisdictions, especially those areas with significant ozone
nonattainment problems of long duration.   The EPA notes that
section 183(e) does not preempt any State regulations and that
this reflects the intent of Congress to permit more stringent
State rules where deemed necessary by those States.
2.1.3   Miscellaneous
     Comment:  Two commenters (IV-D-183,  IV-F-lq)  contended that
the best approach for reducing VOC from architectural coatings
would be no architectural coating VOC rule at all.   One commenter
(IV-D-183)  asserted that since the 1950s, VOC emissions from
paint have continually decreased because technology has improved
and consumers demanded water-reducible products.   The commenter
contended that this decline in emissions will continue given the
opportunity and resources without the motivation of VOC limits on
coatings.   The other commenter (IV-F-lq)  expressed concern that a
VOC rule for architectural coatings may prohibit development of
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new coatings that may contain more VOC but last longer and,
therefore, do not require repainting as frequently.
     Response:   The EPA does not believe that a VOC rule will
increase emissions or inhibit development of new technologies.
To the contrary, the EPA maintains that such VOC content limits
will provide guidance on achievable VOC levels to manufacturers
that have not yet reformulated their coatings with currently
available resin technology.  In fact,  the EPA contends that
required VOC content limits will encourage the development of
alternative technologies, such as the newly emerging reactive
diluent technology.  Reactive diluent coatings result in lower
VOC emissions because most of the organic solvents chemically
react to become part of the finished coating rather than
evaporating into the ambient air to contribute to ozone pollution
problems.
     The EPA also believes that the behavior of manufacturers in
developing lower VOC coatings and the public's acceptance of
those products have occurred in conjunction with, and in part
because of, regulatory limits placed on the products in some
States.  The EPA sees no indication that the market would have
moved at the same speed or to the same extent without the impetus
of State and local environmental regulations.  Thus, the EPA
concludes regulating architectural coatings on a national level
will help to further direct market forces to lower VOC
technology.
     Comment:  Two commenters  (IV-D-129, IV-F-ls) stated that a
national VOC rule for architectural coatings will improve the
safety of the work environment.  One coatings manufacturer
(IV-F-ls)  stated that his company changed to lower VOC products
not because of the VOC rule for architectural coatings but
because of customers who wanted to buy products for use in plants
without having to install control equipment to meet local work
place health and safety regulations.  For example, the
commenter's customers do not have to buy an emissions control
system for their wood furniture manufacturing shop if they can
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buy low VOC products that enable them to reduce VOC without
additional shop controls.
     Response:   The EPA agrees that incidental benefits of a
national VOC rule for architectural coatings may include
improvements in the workplace environment by reducing worker
exposure to toxic solvents.  The EPA expects that adoption of the
national architectural coating VOC rule will sometimes result in
solvents with greater toxicity characteristics being replaced
with solvents of lower toxicity.  For example, the EPA expects
the amount of xylene, a toxic solvent, used in coatings to
decrease and the amount of water, a non-toxic solvent, used in
coatings to increase.
     The EPA agrees that the regulatory environment encourages
lower VOC technology.  However,  the architectural coating rule
does not apply to coatings applied as part of manufacturing a
product such as wood furniture.   The EPA has clarified this by
excluding shop-applied coatings from the architectural coating
definition. This section of the final rule provides that this
regulation does not apply to products used in manufacturing
facilities. The EPA notes, however, that the availability of
products with lower VOC content may aid manufacturers who seek to
reduce worker exposures to VOC emissions.
2.2  PROPOSED STANDARDS
2.2.1   Applicability of the Standards
     2.2.1.1  General
     Comment:   One commenter (IV-D-189)  strongly endorsed
community-based paint exchange programs.  However,  the commenter
stated that there is some ambiguity between the exemption of
paint exchanged in these programs and the proposed rule provision
that provided VOC credits to manufacturers for recycled coatings.
Specifically,  the commenter noted that it is unclear whether all
of  the coatings collected in a community-based paint exchange
program that are subsequently recycled by a manufacturer would be
entirely exempt or whether these coatings would be subject to the
rule provisions relating to recycled coatings.
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     Response:   The exemption for coatings collected at a paint
exchange (§ 59.400(c)(4))  is not intended to apply to
manufacturers.   As described in the proposal preamble:
     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.
The exemption for coatings distributed in a paint exchange is
meant to apply to coatings that are not reprocessed by a
manufacturer,  and therefore,  virgin materials such as solvent and
resins are not added to the coatings.  Consequently,  any coatings
collected by a manufacturer would be subject to the recycled
coating provision detailed in § 59.406.  The recycled coatings
provision applies to unused coatings that have been previously
purchased by a consumer, and are subsequently combined with
virgin materials by a manufacturer and are offered for sale as a
recycled coating.
     To clarify the EP.-.'s  intent that the exemption for coatings
collected az a paint exchange is not intended to apply to
manufacturers,  the EPA has modified the definition of community-
based paint exchange as follows:
     "Community-based paint exchange means a program in which
     members of the general public,  excluding architectural
     coating manufacturers and importers,  may drop off and pick
     up usable post consumer architectural coatings in order to
     reduce household hazardous waste."
     Comment:   One commenter (DoD Steering Committee representing
the Army, Navy and Air Force as well as several DoD components
and agencies)  (IV-D-121) recommended that an exemption be given
to any "paint exchange" activity that actively reduces the
hazardous waste stream.  For example, the Navy reportedly has
been phasing in a Consolidated Hazardous Material Reutilization
and Inventory Management Program (CHRIMP),  and the other services
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reportedly have similar programs.  The objective of CHRIMP  is to
provide life cycle management of hazardous materials with the
intent of reducing hazardous waste.  Hazardous Minimization
Centers (HAZMINCEN) are set up to centrally control all hazardous
materials.  All work centers within the command or activity, and
tenant commands who participate in the program are required to
turn in hazardous materials currently held and to use the
HAZMINCEN for all future needs.  The HAZMINCEN, in turn, responds
to customer requests by packaging, repackaging, and/or issuing
(or distributing) the quantity of hazardous materials required to
perform the task at hand.  When the work is completed, the
customer will return any unused portion of the hazardous
materials, and the original container, to the HAZMINCEN.  Center
personnel will examine tne returned hazardous materials and
determine if tne unused porticr. can be retained for reuse by
another customer, if it car. be recycled,  or if it should be
disposed of as hazardous waste by the appropriate agency.   The
commenter did not believe that the EPA intended to regulate such
operations and recommended that the second sentence of the
definition cf "architectural coating manufacturer or
manufacturer" ze revised tc read:  "A person who repackages
architectural coatings as part of a community or industrial-based
paint exchange,  and does net produce,  package, or repackage any
other architectural coatings for sale or distribution in the
United States,  is excluded frorr, this definition."
     Response:   The EPA agrees that it did not intend to regulate
any paint exchanges such as those described by the DoD
representative.   Thus,  the EPA has amended the second sentence of
the definition of manufacturer as follows:   "A person who
repackages architectural coatings as part of a 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...."   Along with this
change,  the EPA has also changed the term "Community-based paint
exchange"  in the Definitions section of the final rule to "Paint
exchange"  to accommodate paint exchanges  other than community-
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based ones and,  thus,  the definition has been revised as follows:
"Paint exchange means  a program in which consumers,  excluding
architectural coating  manufacturers and importers,  may drop off
and pick up usable post-consumer architectural coatings in order
to reduce hazardous waste."  As discussed in the previous
response, the exemption for coatings distributed in a paint
exchange is meant to apply to coatings that are not reprocessed
by a manufacturer and,  therefore,  virgin materials such as
solvent and resins are not added to the coatings.
     Comment:   One commenter (DoD Steering Committee representing
the Army, Navy and Air Force as well as several DoD components
and agencies)  (IV-D-121)  requested clarification that
"manufacturer" in the  proposed rule does not include any
repackaging and internal distribution activities within the DoD,
and that "importer" does net include purely internal distribution
activities.  The co ran enter cited the proposed definition of
"architectural coating manufacturer or manufacturer as a company,
group, or individual that produces,  packages,  or repackages
architectural coatings for sale or distribution in the United
States...."  The commenter also cited the definition of
"repackaging as transfer of an architectural coating from one
container to another container for sale or distribution in the
final container."  The commenter argued that,  as proposed,  these
definitions could lead tc tne unintended regulation of packaging,
repackaging, and distributing activities in both the government
and private sector. According to the commenter,  the DoD
purchases bulk quantities of material (for purposes  of economies
of scale) and distributes these materials internally through
various agencies.  These agencies may also transfer  materials
such as coatings from  one container to another (from a large
container to a smaller container for immediate use)  during these
transactions.   To exclude these types of activities,  the
commenter requested that the EPA clarify that "for sale or
distribution" does not include such internal transfers within DoD
or any other Federal agency even if such transfers include some
amount of repackaging  and recommended adding the following
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definition:  "Architectural coating held by a government.  An
architectural coating that is held by a government for its own
use is not held for sale or distribution even if the coating will
be repackaged and/or transferred between agencies or other
subdivisions of the agency."  The commenter noted that a similar
clarification was made in the final rule for Excise Tax on
Chemicals that Deplete the Ozone Layer and on Products Containing
such Chemicals,  26 CFR Parts 52 and 602.  The commenter suggested
that another approach would be to revise the definition of
manufacturer to target the sources to be regulated as formulators
and reformulators rather than producers, packagers,  and
repackagers.   Finally,  the commenter also recommended adding to
the definitions of manufacturer and importer the qualifying
phrase "in interstate commerce" as in the statutory definition of
regulated entities in secticn lS3(e)  to prevent the rule from
regulating the DcD as a manufacturer or importer of architectural
coatings.
     Response:   The EPA did not intend that the military or other
consumers that perform only repackaging and/or distribution of
architectural coatings for internal use be regulated under the
architectural coatings rule.   Therefore, to clarify that "for
sale or distribution" does net include such internal transfers,
the definition of manufacturer in the final rule has been amended
by adding a third sentence;  a fourth sentence has also been added
for further clarification of applicability as follows:
     Manufacturer means a person who produces,  packages,  or
     repackages architectural coatings for sale or distribution
     in the United States.  A person who repackages  architectural
     coatings as part of a 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.  A person who repackages a coating by
     transferring it from one container to another is excluded
     from this definition, provided the coating VOC  content is
     not altered and the coating is not sold or distributed to
     another party.   For purposes of applying this definition,
     divisions of a company,  subsidiaries,  and parent companies
     are considered to be a single manufacturer.
     Similarly,  the definition of Importer has been  amended as
follows:
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     Importer means a person who brings architectural coatings
     into the United States for sale or distribution within the
     United States.  This definition does not include any person
     who repackages a coating by transferring it from one
     container to another, provided the coating VOC content is
     not altered and the coating is not sold or distributed to
     another party.  For purposes of applying this definition,
     divisions of a company, subsidiaries, and parent companies
     are considered to be a single importer.
     The EPA does not believe it is necessary to add the
suggested phrase "in interstate commerce" to the definitions of
manufacturer and importer in the final rule for further
clarification to address this issue,
     It should also be noted that EPA is using the term "person"
in lieu of "company,  group,  or individual" in these definitions
because the Agency believes this term is more appropriate.  A
definition of person has been added to the final rule.
     Comirent :   One comrr.enter (IY-G-13) requested clarification in
the final rule that after the effective date of the rule,  a
coating manufacturer could "containerize" products manufactured
prior to the effective date.  The commenter stated that
architectural coatings are frequently manufactured for customers
with seasonal needs in advance of when the coatings will be used.
The coating is stored in tanks at the manufacturer's premises
until needed by customers at which point ic is placed into a can,
drum, or tote.  Frequently,  the drums or totes are reusable and
the end user might purchase a tank of coating and then return to
refill its containers until the tank is depleted.   The commenter
noted that the proposed rule does not define "manufacturing."  In
the commenter's opinion, coatings are completely manufactured
once they have been formulated and placed into storage.   In other
words, the commenter believes that if a coating is manufactured
prior to the effective date of the architectural coating rule and
placed into a properly labeled bulk storage tank,  then the
coating can be placed into end-use containers after the effective
date, regardless of whether the coating meets applicable VOC
content limits.  The commenter does not believe this approach
conflicts with the definition of "manufacturer," since that term

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was defined broadly to include all possible parties that could be
involved in labeling and distributing coatings.  The commenter
asserted that defining manufacturing to include all
containerization steps would make the rule difficult to implement
because a manufacturer would have to close out all of its storage
capacity by the effective date and ensure that all product is
containerized.
     Response:  The EPA does not intend the rule to prevent the
process described by the commenter.  The coating manufacturing
process includes the mixing or agitation of resins (or binders),
solvents,  pigments,  and other components to form an architectural
coating, which is then stored in containers at the manufacturer's
premises for sale or distribution.  A coating that is
manufactured prior to the compliance date (1 year after
publication of the rule in the Federal Register)  of the
architectural coating rule and placed into bulk storage tanks
from which customers fill and refill cans,  drums,  or totes until
the tank is depleted would not be subject to the rule.   A
definition of the term, "manufactured" has been added to the rule
to clarify the point at which a coating is considered to be
manufactured for purposes of this rule.   It is when the coating
ingredients have been combined and put into containers that have
been labeled and made available for sale or distribution.   A
container is defined in the rule as the individual receptacle
that holds the coating for storage and/or distribution.
Therefore,  if a coating is put into a storage container such as
that described by the commenter before the compliance date,  then
it is not subject to the requirements of the rule.   However,  the
container contents would become subject  to the rule with any
addition of coating to the container after the compliance date.
     Comment:   One commenter (IV-G-15)  requested clarification in
the final  rule that after the effective  date of the rule,  a
coatings manufacturer could aggregate coatings manufactured prior
to the effective date,  agitate the coatings,  adjust viscosity,
and return the coating to the field for  use.   According  to the
commenter,  some coatings manufacturers distribute  the coatings in
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large reusable totes, and sometimes it will be months before a
tote is returned for reuse.   When totes are returned, they
typically contain approximately 30 gallons of coating.  The
returned coating is normally returned to the manufacturing
process and ultimately distributed as new coating.  The commenter
was concerned that after the effective date of the rule, this
procedure will not be permitted.  However,  the commenter noted
that it would be possible to aggregate the coating that is
returned and,  after agitation and viscosity adjustment,
distribute the coating in refilled totes.   Otherwise, the
commenter noted that the returned coating would be sent to a
hazardous waste incinerator with the residue ultimately deposited
in a landfill, which does not seem to be in the best interest of
the environment.   The commenter's concern is that the aggregation
of manufactured coatings, agitation of the aggregated coatings,
and adjustment of viscosity by adding solvent might be viewed as
manufacturing, even chough the product has already been
manufactured and is essentially only being thinned to allow its
use rather than disposal.
     Response:  The EPA believes that the commenter can continue
the process it described by treating the coating as "recycled."
After the compliance date of the rule (1 year after the rule is
published in the Federal Register),  manufacturers or importers of
"recycled" architectural coatings can 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
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concent of the recycled coating.  An explicit equation  for the
calculation is in the final rule.
     Comment:   Two commenters  (IV-D-161, IV-D-206) supported  the
exemption for coatings sola in non-refillable aerosol containers.
     Response:  The EPA has retained this exemption in  the final
rule.  Aerosol paint is considered a specialty paint product  and
typically involves a specialized division within a paint company.
In addition,  it is a complex product category due to the many
subcategories of aerosol paint, and the range of options to
reformulate include the potential to change propellant
formulations.   Therefore,  the EPA plans to address coatings sold
in non-refillable aerosol containers separately under
section 183 (e) authority.
     Comment :   One commenter (IY-D-171)  maintained that its line
of gypsum or cement-based, spray-applied cementitious fire
protection products should be exempt frorr the rule because the
products do net meet the definition of a "coating."
Specifically,  the commenter stated that these products do not
meet the definition of a coating because they are not applied in
a "film" as that term is used in the paint and coatings industry.
The comirenter indicated that end users mix these products into a
slurry and spray-apply them tc steel building surfaces during
construction or renovation.  These products are applied to
specified thicknesses typically from 1/2 to 1-1/2 inches but may
range from 5/15 to 3-1/2 inches in unique applications.   These
products are often necessary for the buildings in which they are
applied in order to comply with Federal, State,  or local building
code requirements.  In order for a building to meet the
applicable code,  the depth specified by architects and engineers
is strictly followed.   The commenter reasoned that coatings of
this thickness are not a film and that their products are,
therefore,  excluded from, the rule.
     Response:  The EPA disagrees that the coatings,  as described
by the commenter,  should be exempt from the rule.   To clarify
what is meant  by a coating,  the EPA has  modified the definition
of coating in  the final rule to read as  follows:   "Coating means
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a material applied onto or impregnated into a substrate for
protective, decorative or functional purposes.  Such materials
include, but are not limited to, paints,  varnishes, sealants,
inks, maskants, and temporary coatings."   The EPA has removed the
reference in the definition to application as a film because the
EPA did not intend to limit rule applicability based upon the
product thickness as applied.  Consequently, based on the
commenter's description of the line of gypsum or cement-based,
spray-applied cementitious fire protection products,  these
products would fall under the fire-retardant/resistive coating
category.  These produces would be subject to a VOC content limit
of 450 grarr.s 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.
     Comment :   Tv;o concenters (IV-D-134,  IV-F-2) requested
clarification of the rule's applicability to coatings recommenced
for architectural uses and non-architectural uses.  One commenter
(IV-D-134) expressed concern that a coating formulation that
meets the definition of an architectural coating may also be used
by manufacturers of aerospace parts,  ships,  furniture,  or
miscellaneous metal parts to meet specific applications in these
industries.  The commenter stated that industrial users ofter.
depend on coating formulations to meet other CTG or National
Emission Standard for Hazardous Air Pollutants  (NESHAP)
requirements that may have higher VOC levels than the limits in
the proposed architectural coating rule.   The commenter suggested
that the EPA clarify that coatings provided for these regulated
manufacturing activities are not also subject to the
architectural coating rule.  According to the commenter,  this
would ensure that coating suppliers can provide coatings that
meet the performance requirements and regulatory levels
appropriate to each.  The commenter suggested revising
§ 59.400 (c) by adding a new paragraph as follows:  "(6)  Coatings
that are subject to the requirements of a National Emission
Standard for Hazardous Air Pollutant or Control Technology
Guideline."
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     One manufacturer  (IV-F-2) was concerned about this issue
because his company markets the same coating as both a product
finish and as an architectural coating.  The commenter asked
whether the sales of coatings marketed as product finishes are
subject to the rule.
     Response:  As stated in the definition of architectural
coatings, the rule applies to coatings recommended for field
application to stationary structures and their appurtenances, to
portable buildings, to pavements, or to curbs.  Therefore, the
rule does not apply to coatings that are marketed solely for shop
application, such as in a manufacturing setting, or coatings
marketed solely for application to non-stationary structures,
such as aircraft, ships, boats, and railcars.  The definition of
architectural coating has been amended in the final rule to
clarify this point.  A coating that is recommended by the
manufacturer or importer for use as an architectural coating is
subject to the architectural coatings rule even if the coating is
also recommended for non-architectural uses.  The fact that a
coating regulated by the architectural coatings rule may also be
subject to other rules with different requirements does not alter
the manufacturer's or importer's obligation to meet the
requirements of the architectural coatings rule when it
recommends use of the product as an architectural coating.
Consequently,  the EPA has not added the exemption paragraph
suggested by commenter IV-D-134 to the final rule.
     Comment:   One commenter (IV-D-76)  inquired whether
solvent-based floor waxes and solvent-based terrazzo seals will
be regulated by the architectural coating rule.  In a follow-up
conversation,  the commenter (IV-E-54)  described its terrazzo
sealer as "a buffable solvent-based coating consisting of 85 to
90 percent solvent and 10 to 15 percent wax that is used as a
wear surface and soil retardant for terrazzo floors."
     Response:  Floor waxes,  such as those described by the
commenter,  are not regulated under the architectural coating
rule.   Floor waxes are covered under the National Volatile
Organic Compound Emission Standards for Consumer Products in the
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floor polish or wax category.  The definition of "floor coating"
in the architectural coatings rule has been modified for the
final rule and clarifies that only opaque coatings are included
in this category.  Since floor waxes are not opaque floor
coatings, they are not covered by this rule.
     Comment:   One commenter  (IV-D-76) asked if products sold to
institutions,  such as schools and municipalities, would be exempt
under the architectural coatings rule.
     Response:   The architectural coating rule does not contain
an exemption for coatings that are sold by manufacturers to
institutions,  such as schools and municipalities.  The commenter
failed to provide a rationale for adding such an exemption to the
final rule.  Section 183(e)  likewise does not stipulate that
there should be any such differentiation.
     The EPA based VOC content limits in the rule on the best
available control given the performance requirements of the
coatings in each coating category.  The performance requirements
for coatings used in institutions, such as schools and
municipalities,  are similar to those encountered in other
locations,  such as private office buildings and Federal office
buildings.   Therefore,  an exemption of coatings sold to
institutions cannot be justified on the basis of unique
performance requirements.
     Negligible emissions.
     Comment:   Three commenters (IV-D-02/IV-D-178/IV-F-1(1),
IV-D-120, IV-F-lm) suggested that the EPA exempt low volume
categories that contribute negligibly to VOC emissions.  One
commenter  (IV-D-02/IV-D-178/IV-F-1(1)) stated that small
businesses with low volumes of production rely on their suppliers
to develop new resin systems that allow the manufacturer to
develop lower VOC coatings.   As an example,  the commenter
(IV-D-02, IV-F-1(1)) cited two graphic arts coatings -- bulletin
enamels and lettering enamels.  The commenter reasoned that such
niche products with small markets do not justify the research
costs necessary for a replacement product with low VOC emissions.
The commenters stated that the EPA should not issue a rule that
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might put companies out of business when their relative
contribution to the ozone nonattainment problem is small.
Several commenters  (IV-D-30, IV-D-120, IV-D-209, IV-F-lm, IV-F-2)
suggested regulating only the 15 categories that cause 90 to
95 percent of the annual aggregate VOC emissions associated with
architectural coatings.  The commenters contend that this would
still achieve the purpose of the rule while causing less of an
economic impact on manufacturers.
     Response:   The EPA agrees that some categories of
architectural coatings are larger contributors than others to
both VOC emissions and VOC emission reductions.  The 15 largest
categories actually represent 88 percent of the emissions, or
approximately 494,000 tons, rather than 90 or 95 percent as cited
by the commenters.  The remaining categories represent 12 percent
of the emissions  (approximately 67,314 tons) and account for
12,702 tons of the anticipated VOC emission reductions from the
architectural coating rule  (II-I-8).   The EPA considers this a
significant amount of VOC emissions and reductions.  To put this
in perspective,  if the EPA combined these categories of coatings
into a separate category,  that category would rank 16th out of
the 21 categories of all consumer and commercial products listed
for regulation under section 183 (e) (on the basis of tons of VOC
emissions per year in nonattainment areas).   As with all
categories of consumer and commercial products, even if no one
product has an enormous amount of VOC emissions, the EPA is
concerned with the total aggregate amount of emission reductions.
By their very nature, individual consumer and commercial products
may not have a large impact on ozone nonattainment, but in the
aggregate, their impact is significant.  This fact was one of the
motivations behind Congress' enactment of section 183 (e) of the
Act.
     In developing the proposed rule,  the EPA recognized that it
may not be economical for some manufacturers to reformulate
certain lower volume products.  Rather than exempting these lower
volume products,  the EPA proposed VOC content limits in the upper
range of VOC content limits in existing State rules for these
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categories.  For categories for which no State standards exist,
the EPA included the categories in the architectural coating rule
and proposed VOC content limits based on discussions with
industry representatives and end user groups,  petitions from
stakeholders prior to proposal, and public comments from
companies providing support for inclusion of the categories and a
suggested VOC content limit.  Some manufacturers within these
niche markets have successfully developed lower VOC coatings in
anticipation of VOC requirements.   Therefore,  rather than exempt
these types of products, the final rule includes VOC limits at
levels expected to be in the upper range of VOC contents for the
particular type of product.  The final rule also provides
compliance flexibility for these types of low-volume coatings in
the form of a tonnage exemption and an exceedance fee.   The
tonnage exemption is designed to accommodate a limited amount of
niche category coatings for which it may not be economical for
manufacturers to devote any reformulation efforts.   In addition,
the exceedance fee provides manufacturers additional time to
reformulate their coatings by allowing the manufacturer or
importer the option of paying a fee, based on the amount that the
VOC content limits are exceeded, instead of achieving the limits
in the rule.
     Comment:  One commenter (IV-D-23) requested an exemption for
coatings that are essentially 100 percent solids and have only a
negligible VOC content.  The composites manufactured by this
commenter are used to reinforce or improve the strength of
concrete and metal and to improve resistance to abrasion,
corrosion, and chemical attack.  The commenter stated that
regulating these products as coatings creates the compliance
burden of testing, labeling, and reporting with no impact on
reducing VOC emissions.
     Response:  The EPA has not created an exemption for coatings
that are essentially 100 percent solids and have only a
negligible VOC content.  The EPA recognizes the concern of the
commenter that in some cases a regulatory burden could be imposed
on an architectural coating manufacturer that would not result in
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any VOC reductions.  However, for manufacturers of products that
already comply, this burden would be limited to the following two
compliance requirements:   (1)  a one-time initial report
identifying the company and the product categories in which the
compliant products are marketed, and (2) labeling that reflects
the date of manufacture and either the VOC content of the coating
or the applicable VOC content in table 1 of the rule with which
the coating is required to comply.  This limited reporting and
labeling burden is necessary to ensure effective enforcement and
to limit the need for enforcement personnel to follow-up with
manufacturers to obtain additional product information on
unlabeled coatings.  Testing of the coating is not required in
the rule; the manufacturer or importer may use other means for
predicting the VOC content of the coating.  (However, the
Administrator may request that manufacturers and importers
demonstrate compliance using Method 24.)  Based upon the
commenter's representation as to the VOC content of its products,
the EPA believes that the commenter will have only a limited
burden under the rule.
     Comment:   One commenter (IV-D-120) argued that coatings that
do not meet the definition of any specific category should not be
subject to the final rule.  The commenter stated that, as
proposed, the rule provides that a coating not included in a
specific category will default to the category with the most
restrictive limit  (i.e., the flat or nonflat category depending
on its gloss level).   According to the commenter, coatings not in
any existing category are typically very low-volume specialty
coatings with insignificant aggregate amounts of VOC emissions.
The commenter argued that if these coatings must be covered by
the rule, then they should be subject to the highest VOC content
limit permissible under the rule rather than defaulting to the
lower limits for the flat or nonflat category..
     Response:   The EPA disagrees that in the event of ambiguity,
there should be no VOC limitation whatsoever for a coating.  The
EPA has attempted to create appropriate categories with specific
category descriptions to avoid situations in which it is unclear
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what category a coating falls under.   As structured,  the rule
encourages regulated entities to describe and categorize their
coatings accurately and minimizes the incentive for regulated
entities to subvert the rule by arguing that specific coatings do
not meet any of the definitions and,  therefore, are subject to
the highest VOC content allowed.  If  the commenter is correct
that the coatings in question comprise only very small volumes of
sales or small amounts of VOC emissions, the final rule provides
alternative means to address this issue.  The manufacturer could
use the tonnage exemption or the exceedance fee mechanisms to
alleviate potential problems with the situation described.  In
addition, if the EPA determines that  additional categories need
to be created in the future, the rule could be modified to add
new categories.  Such an approach could be appropriate if a
category limit in fact imposes undue  burden or if the EPA
determines that regulated entities are attempting to subvert the
rule through abuse of the category descriptions.
     Adhesives.
     Comment:   Two commenters (IV-D-13, IV-D-37) requested that
the EPA modify the proposed rule to clarify that adhesives are
not regulated under the architectural coating rule.  One
(IV-D-13) commenter requested confirmation that adhesives used in
the application of high pressure decorative laminate  (HPDL)
counter top products to wood, wood composite, or wood fiber
substrates would not be regulated under the proposed rule.  The
commenter  (IV-D-13) stated that the current rule language does
not clearly exclude adhesives.  Another commenter  (IV-D-37)
suggested that in order to address ambiguity about adhesives, the
EPA should change the definition of traffic marking coating to
read as follows:  "A coating formulated and recommended for
marking and striping streets, highways, and other traffic
surfaces including, but not limited to, curbs, driveways, parking
lots, and airport runways.  It does not include adhesives for
traffic marking tape."  Alternatively, the latter commenter
requested the EPA to use a definition of coating that directly
excludes adhesives.  The commenter pointed out that many State
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and local architectural coating VOC rules already exclude
adhesive primers for traffic tapes from architectural coating
regulations because they are covered in adhesive rules.
     Response:   The EPA did not intend to regulate adhesives of
any kind in the architectural coating rule.  The EPA intends to
regulate industrial adhesives as a separate category under
section 183(e)  authority at a future date.  To clarify that
adhesives are not covered under the architectural coating rule,,
the EPA has modified the definition of architectural coating in
the final rule to exclude adhesives.  In addition, a definition.
for adhesives has been added to the rule.
     Shop vs. field application.
     Comment:  One commenter (IV-D-17)  recommended that the EP&
clarify the rule to distinguish between field-applied and
factory-applied coatings.  The commenter recognized that the
definition of architectural coating makes it clear that the rule
is applicable only to field applied coatings,  but suggested that
this distinction should be made more apparent in the rule by
changing the title of table 1 to "Field Applied Architectural
Coating Volatile Organic Compound Content Levels."
     Response:   The definition of architectural coating has been,
modified and a definition for shop application has been added to
the final rule to clarify that coatings recommended for
application in a shop setting or a manufacturing process are not
subject to this rule.  Rather than modifying the title of table 1
as suggested by the commenter,  to further clarify the EPA's
intent, the following sentence has been added to the definition.
of architectural coating:
     This definition excludes adhesives and coatings recommended
     by the manufacturer or importer solely for shop applications.
     or solely for application to non-stationary structures sucfr,
     as airplanes,  ships, boats, and railcars.
     Comment:  One commenter (IV-D-35)  requested that the
definitions of  architectural coating and industrial maintenance
coating be clarified to exclude industrial specialty products.
The commenter implied that its industrial specialty products do

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not fit within the EPA's intended definition of "architectural

coating" and, therefore, should not be regulated under the

architectural coating rule.  The commenter provided the following

three examples of such specialty products:

     (1)  438 Teflon non-stick dry lubricant -  A field-applied
          suspension of solid lubricant (polytetrafluoroethylene)
          bound to the surface with a binder (acrylic resin).
          Used to lubricate and protect smooth,  nonporous
          surfaces to repel water,  prevent materials from
          adhering to surfaces and reduce relubrication.   Used on
          slides,  hoppers,  bins,  chutes,  tanks,  molds,  saw
          blades,  door hinges,  etc.  Primarily sold in 1 gallon
          containers, but is also available in aerosol containers
          for maintenance purposes.  Volatile organic compound
          content = 756 g/1.

     (2)  763 Rust transformer - Electrochemically converts iron
          ions in rust into a receptive base for the application
          of a primer and topcoat.   Consists of phosphoric acid,
          tannic acid, alcohol,  and glycol in a water base.  Used
          on storage tanks, auto or truck bodies,  heavy
          equipment,  bridges,  transmission line towers,  ships,
          piers,  structural steel,  anywhere rust is destroying
          metal.   Primarily sold in 5 gallon or 55 gallon drums.

     (3)  775 Moisture shield -  A field-applied suspension of  wax
          that forms a nonhardening,  nondrying film used to
          shield metal from oxygen and moisture.  Contains
          petrolatum  ia petroleum wax,  i.e.,  Vaseline)  and a
          mineral spirit/naphtha-type solvent.   Used on
          electrical equipment,  electric  motors, and other
          energized equipment,  particularly low voltage
          equipment.   Primarily  sold in '^  gallon containers and
          is also available in pressurized aerosol containers  for
          maintenance purposes.   Volatile  organic  compound
          content = 678 g/1.

     Response:  It is not appropriate to  exempt all industrial

specialty products from the rule.   In order for a  product to be

covered by the architectural coating rule,  it must be a coating

and it must be recommended for field application to stationary

structures and their appurtenances,  to portable buildings,  to

pavements,  or to curbs.  A coating is defined as a material

applied onto or impregnated into a substrate for protective,

decorative,  or functional purposes.   Typically,  coatings  are made

up of resins, solvents, binders,  and pigments.   The EPA

historically has not considered  products  that contain only

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solvents, acids, and or bases to be coatings.  This clarification
has been made in the definition of coating in the final rule.
The EPA also generally does not consider products that function
wet and remain a wet film during their entire functional lifetime
to be coatings.
     The EPA considers the 438 teflon non-stick dry lubricant to
be a coating because it is a material applied onto a substrate
for protective and functional purposes.  The EPA also considers
the product to be an architectural coating because it is used on
the appurtenances of stationary structures such as hoppers, bins,
and tanks.  Specifically, the product would be classified in the
industrial maintenance coating category, due to its exposure to
repeated heavy abrasion,  and would be subject to a VOC content
limit of 450 g/1.
     The EPA does not consider the 763 rust transformer to be a
coating because it is composed only of solvents and acids.
Therefore, this product would not be covered under the
architectural coating rule.
     The EPA does not consider the 775 moisture shield to be a
coating because it remains wet throughout its functional
lifetime.  The functionality of this product is similar to that
of heavy oils used to protect metal from rust during storage and
shipment, which historically have not been considered by the EPA
to be coatings for regulatory purposes.  Therefore,  the
determination that the moisture shield is not a coating is
consistent with other EPA actions.
     Applicability determinations for products not specifically
addressed in response to public comments summarized in this
document will be made by the EPA Regional Office responsible for
implementation and enforcement on a case-by-case basis so that
the particular composition and functionality of the product and
application involved can be considered.
     Comment:   One commenter (IV-D-140) questioned the
applicability of architectural coating rule requirements to a
line of vermiculite products,  including MicroLite vermiculite
dispersions.  The commenter represented MicroLite as an aqueous
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dispersion of vermiculite that is a mostly inorganic,
non-metallic, naturally occurring mineral.  The commenter noted
that there may be trace levels of citrate, but no other organic
content.   The products are not intended for use as architectural
coatings and they are not applied directly to architectural
structures.  However, the products may be applied for fire
retardant purposes to textiles that then are used as a mastic or
facing material for an architectural structure.  Specifically,
the commenter inquired whether these products were required to
meet architectural coating labeling requirements.
     Response:   Based on the commenter"s description, these
products would not be subject to the architectural coating rule
requirements since the products are not intended for use as
architectural coatings and are not applied directly to
architectural structures.
     Comment:  One commenter (IV-D-76) asked whether the rule
will exempt solvents such as acetone and methyl siloxanes.
     Response:   The architectural coating rule controls emissions
of VOC from architectural coatings.  The definition of VOC in the
rule cross-references the VOC definition in 40 CFR 51.100.  The
current definition of VOC in 40 CFR 51.100 exempts acetone and
methyl siloxanes.  Therefore, these compounds are not regulated
by the architectural coating rule.
     Comment:  One commenter (IV-D-189)  expressed concern that
the proposed rule provided no exemption for coatings that are
registered under the FIFRA.   The commenter stated that these
coatings, to the extent that they are inconsistent with the
national rule's requirements, will have to go through another
FIFRA registration incorporating the requirements of the national
rule.  Because of the length of time and complexity of getting
FIFRA registration, the commenter recommended that a provision
exempting coatings for which a FIFRA registration has been
applied be included in the final rule.  To accomplish this
exemption, the commenter recommended that the following be added
as § 50.400(c)(6):
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      (6)  Until an amended registration is complete, the
          provisions of sections 59.400-407 shall not apply to
          any coating currently registered under the Federal
          Insecticide, Fungicide, and Rodenticide Act (7 USC 136
          et seq.) for which an amended registration is filed,
          provided the following conditions are met:

      (i)  Within 6 months after the promulgation of this rule,
          the registrant or manufacturer has filed a complete
          application for an amendment to the registration with
          all formulation, labeling, and all data requirements
          necessary to amend the registration and needed to meet
          the VOC content limits prior to the date the VOC limits
          become effective.

      (ii) Proof of such filing is submitted to the EPA within one
          month of the date of the filing.

      (iii) All responses  to the EPA's requests for additional
           information  (or changes to the label or other
           information requiring another  submittal) must be
           submitted within 90 days of the EPA's request.

           This exemption becomes void and the previously exempt
           products can no longer be manufactured nor imported
           if the registrant fails to complete all conditions
           shown above and/or when the EPA turns down the
           amendment application.

     Response:   For coatings that are registered under FIFRA for

which the manufacturer or importer must obtain an amended FIFRA

registration incorporating the requirements of this rule,  the

final rule provides a compliance period of 18 months after

promulgation of the rule; this is six months longer than the

compliance period for all other architectural coatings.   In the
decision to allow the 18-month compliance period,  the EPA

considered the commenter's suggestion to allow 6 months after
promulgation of this rule to submit a completed application for

FIFRA registration for coatings subject to FIFRA.   The EPA

believes that the 18-month compliance period provided for

coatings subject to FIFRA allows adequate time for the entire

FIFRA submittal and approval process for obtaining an amended

registration for these coatings before they become subject to the

architectural coatings rule.   The manufacturer or importer may be

required by enforcement personnel to provide proof that an
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application for an amended FIFRA registration is being filed or
has been filed.
     Import/export.
     Comment:   One commenter  (IV-D-189) was concerned about the
proposed wording of the exemption of exported coatings in
§ 59.400(c)(1) of the rule.  The commenter stated that by
requiring chat the coating be manufactured exclusively for
export, the exemption would not apply to situations in which
Congress intended it to apply.  For example,  the commenter
asserted that  a manufacturer might produce a coating both for
export as an architectural coating and for distribution in the
United States  for a purpose other than that of an architectural
coating.  The  commenter believes that a strict reading of the
exemption terms in the proposal would disqualify this product
from the exemption.   The commenter recommended deleting the word
"exclusively"  from. § 5S.^OGic} ('-} of the proposed rule.
     Response:  The EPA recognizes the commenter's concern that
manufacturers  should be able to export a coating for use in
architectural  coating markets abroad and still market that same
coating for alternative purposes in the United States.  In
recognition of this possible scenario,  the EPA has amended the
exemption provision in § 59, 400 (c) (I) of the rule as follows:
"(1) A coating that is manufactured for sale or distribution to
architectural  coating m.arkets outside the United States; such a
coating must not be sold or distributed within the United States
as an architectural coating."
     The EPA does not anticipate that many products will qualify
for this disparate treatment abroad and domestically.   If the EFA
determines that this exemption is abused as a means of subverting
the regulation, the EPA will re-examine this question.
     Comment:   One commenter  (IV-D-28)  requested that the EPA
clarify what is meant by "imported for sale or distribution in
the United States."   Specifically, the commenter asked how the
rule applies to the non-contiguous States, Puerto Rico, Virgin
Islands, District of Columbia, Guam,  and American Samoa.  The
commenter pointed out that narrow definitions would leave
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loopholes allowing non- compliant, products in the United States by
circuitous channels.
     Response :  It is the EPA's intent that the rule will apply
not only in the 50 States, but in all the U.S. territories as
well.  The definition of  "State" in section 302 (d) of the Act,
which provides definitions that are generally applicable in the
Act, includes U.S. Territories.  To make this clear, a definition
of United States has been included in the final rule.
     Comment :   One commenter  (IV-D-21) questioned how the
proposed rule affects coatings sold to domestic customers who
resell them to other countries.  Specifically, the commenter
wanted to know if high VOC products could be invoiced and shipped
to domestic purchasers as long as they were marked for export.
Also, the commenter asked what will be required for export
marking .
     Response :  Tnere are no  labeling or certification
requirements for architectural coatings that are exported for use
outside the United States.  However, because enforcement of the
architectural coating rule is expected to include shelf checks of
coatings,  it may be advisable for a manufacturer to label
products intended for expert as such.  This would minimize the
paperwork that a manufacturer would have to produce to show that
these products are intended for export, if the product were to be
checked by an EPA inspector.  Similarly,  for the situations
described by the comment er where a manufacturer invoices and
distributes non-compliant products to domestic points for
subsequent export, it is advisable to include labeling or at
least paperwork identifying these products for export.  In this
way, enforcement personnel can readily identify that the
architectural coating rule does not apply to these products.  As
stated earlier,  if the EPA determines that the exemption in
§ 59. 400 (c) (!)  of the final rule is abused as a means of
subverting the regulations, the EPA will  re-examine this
question .
     Comment :   Two commenters (IV-D-28, IV-F-lb)  supported
provisions that would explicitly exempt stocks of non-compliant
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products manufactured prior to final rule promulgation.   One
commenter (IV-F-lb) favored allowing such products manufactured
prior to the compliance date to be sold after the compliance
date.  The commenter believed there is no real air pollution
benefit to outlawing these products and there is a tremendous
economic and waste disposal savings by not prohibiting their
sale.
     Another commenter (IV-D-28)  pointed out that the rule may
cause certain coatings to become obsolete.  In addition,  stocks
of multi-component non-compliant products may need to be
rebalanced (replenished)  if more of some components are  available
than others.   The commenter suggested that the rule allow
manufacturers to donate obsolete stock to charitable projects and
to allow manufacturers to replenish existing non-compliant stock
volumes of multi-component products.  The commenter suggested
that the EPA could implement a procedure for manufacturers to
notify the EPA of their intent to replenish stocks of components
for non-compliant coatings.  To prevent deliberate misuse of such
a provision,  the commenter suggested that the replenishing could
be limited to less than 20 percent of the remaining inventory of
such a coating.  The commenter pointed out that this provision
would be temporary because stocks of components for non-compliant
coatings needing replenishing would fall to zero after a  few
years.
     Response:   The rule regulates the VOC content of
architectural coatings manufactured or imported on or after the
compliance date (1 year after publication of the rule in  the
Federal Register).  Any product manufactured prior to the
compliance date, whether compliant or non-compliant,  can  be sold
after the compliance date until the stock is depleted. As the
commenters stated, allowing non-compliant products manufactured
prior to the compliance date to be sold after the compliance date
will provide a significant economic and waste disposal savings.
     The EPA does not see the need for a specific provision to
allow manufacturers to replenish existing non-compliant  stock
volumes since the particular components needed to replenish
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existing stocks of multi-component coatings can be manufactured
after the compliance date of the rule using the tonnage exemption
or the exceedance fee provision or both.  Similarly, obsolete
coating system components such as primers can continue to be sold
using the tonnage exemption or the exceedance fee or both.  The
alternatives suggested by the commenter would be difficult to
administer or enforce and would have the potential to delay
development of compliant coatings.
     Comment:  One commenter (IV-D-76) requested clarification on
whether States will still be able to enforce VOC content limits
that are more stringent than those in the architectural coating
rule.
     Two commenters (IV-D-188,  IV-D-191) requested that the EPA
expressly state that the Federal rule establishes a minimum
national standard that may be strengthened locally where
necessary.  One commenter (IV-D-191)  noted that the rule should
represent a national "floor" and not a "ceiling."  The commenter
explained that preemption would have a profound negative effect
in heavily polluted areas where manufacturers have been
accustomed to stricter standards.  The commenter explained that
in some areas of the country, preemption would prevent attainment
of Federal air quality standards mandated by the Act.   The
commenter asserted that if the EPA intends that the rule be
preemptive,  it must state this clearly and the EPA must then
reopen the comment period.
     Response:  The architectural coating rule sets minimum
national requirements.   In areas where State or local  regulations
are in place or are subsequently developed that are more
stringent than the national rule, manufacturers and importers
must meet these more stringent levels.  The final rule has been
amended to include provisions in § 59.410,  State authority,  to
clarify that States are not restricted in establishing and
enforcing their own standards.   Whether or not there are
applicable State rules,  the Federal rule applies.  The EPA notes
that section 183 (e)  does not provide for preemption of State
rules.
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     2.2.1.2  Low-Volume Exemption
     Comment:  Twenty-one commenters (IV-D-08, IV-D-26, IV-D-28,
IV-D-32, IV-D-74, IV-D-93, IV-D-120, IV-D-147, IV-D-151,
IV-D-161/IV-F-lj, IV-D-162, IV-D-176, IV-D-189/IV-F-lo, IV-D-209,
IV-F-lb, IV-Ff, IV-F-li, IV-F-lk, IV-F-lm, IV-F-2q,  IV-G-2)
provided comments on an exemption for coatings produced in low
volumes.  The EPA described this potential provision and
solicited comment on it in the proposal preamble (61 FR 32741).
The EPA described this exemption as a compliance option under
which "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."  The EPA specifically requested
comment on exemptions ranging from 1,000 to 5,000 gallons.  The
exemption,  as described in the proposal, could be used by a
manufacturer for multiple products, provided that each product
was manufactured in quantities less than the cutoff level.  As
described in the proposal preamble, the manufacturer would have
been required to submit a request for the exemption and document
that the product(s)  for which the exemption was requested "served
a specialized use which cannot be cost-effectively replaced with
another, lower VOC product."
     Seventeen commenters  (IV-D-08, IV-D-26,  IV-D-74,  IV-D-93,
IV-D-120, IV-D-147,  IV-D-151,  IV-D-162, IV-D-176,
IV-D-189/IV-F-lo, IV-D-209, IV-F-lb, IV-F-lf,  IV-F-li, IV-F-lk,
IV-F-2q, IV-G-2) supported some form of a low-volume exemption
and four commenters (IV-D-28,  IV-D-32,  IV-D-161/IV-F-1j, IV-F-lm)
opposed a low-volume exemption.
     Support low-volume exemption.  Suggested levels for the
low-volume exemption ranged from 100,000 gallons per product to
less than 1,000 gallons per product.  Specifically,  suggestions
were distributed as follows:
     Suggested Level               Commenters
100,000 gallons per product        IV-D-176
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5,000 gallons per product

<2,000 gallons per product
1,000 gallons per product

Level not specified
IV-D-26,  IV-D-93,  IV-D-120,
IV-D-151,  IV-D-162,  IV-D-209
IV-F-li
IV-D-74,  IV-D-189/IV-F-lo,
IV-F-lk,  IV-F-lb
IV-F-lf,  IV-F-2q
In addition to per-product exemption requests, two commenters
(IV-D-08, IV-G-02) requested an exemption level of 5,000 to
10,000 gallons per category  (i.e., the exemption would be based
on the total gallons of all of the manufacturer's products in a
particular category).   One commenter (IV-D-147) requested an
exemption level of 7,000 gallons per category stating that to
reformulate his company's architectural coating products would be
a cost burden because they would need to hire new personnel and
little if any growth would be expected in the market.  Because
large manufacturers can better accommodate this burden due to
their laboratory staffs and assets devoted to developing new
products, the commenter argued that it is imperative that small
businesses be offered some exemption from this rule that is
commensurate with their production volumes or units sold in
various categories.  As an alternative to the low-volume
exemption per product approach,  the commenter suggested that a
low-volume exemption for all categories combined should be
considered since it would lessen the amount of recordkeeping and
streamline reporting.
     One commenter  (IV-D-08)  stated that the low-volume exemption
would benefit both large and small businesses producing specialty
coatings.  The commenter asserted that this exemption would help
prevent the elimination of certain specialty products and enable
the introduction and development of new solventborne specialty
products.  One commenter (IV-D-120) supported the incorporation
of an exemption that could be used for those products for which
reformulation is not economically or technologically feasible.
The commenter argued that this exemption would help to level the
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playing field between small niche market producers and large
companies, and would likely increase compliance with the rule.
The commenter stressed that the exemption should apply to all
businesses regardless of size.
     One commenter (IV-D-151)  requested that if the EPA does not
create the categories it requested,  that either exceedance fees
or a 5,000 gallon per product low-volume exemption be provided as
an alternative.
     Another commenter (IV-D-93)  supported a low-volume
exemption, of 5,000 gallons or less  (per product implied), but
also suggested the exemption could be determined as a percentage
of the company's total production.  The commenter stated that
this type of exemption would allow it to focus on reducing the
VOC content of larger volume products while continuing to produce
the lower volume products for which reformulation would be more
costly.  The commenter expected that the EPA would phase out the
exemption or reduce it over time.
     One small company (IV-F-2q)  stated that it manufactures
coatings in 10 categories for a total volume of approximately
30 to 40 thousand gallons.   The commenter's company picks up the
low volume (1 to 200 gallon) orders  that larger companies are not
willing to fill.  The commenter stated that a low-volume
exemption would help it maintain its position as a marketer of
niche products.
     One commenter (IV-F-li) supported the low-volume exemption
as the only practical means for keeping particular small volume
products available to customers.   The commenter stated that it
will not be economical to reformulate these products because the
cost is spread over so few gallons.   At an exemption level of
1,000 gallons per product,  the commenter believed that abuse of
this category will be self-limiting because the costs of labels,
special manufacturing, inventory, and marketing would prevent
cheating.  The commenter recommended a level no higher than
2,000 gallons per product with severe sanctions for anyone caught
cheating.
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     Another commenter  (IV-D-189/IV-F-lo)  supported the
low-volume exemption because it would allow certain niche needs
to be met without having to resort to a variance or amendment to
the rule.  The commenter stated that a limit of 1,000 gallons per
year would be adequate to meet the requirements of industry while
at the same time ensuring that the exemption does not become a
large source of additional VOC emissions.   Three commenters
(IV-F-lf, IV-F-lk, IV-G-2)  supported the low-volume exemption as
an opportunity to make specialized coatings available.  Three
commenters (IV-D-189, IV-F-lb, IV-F-lk)  emphasized that the
exemption should be available to all manufacturers irrespective
of their size.  One commenter (IV-F-lk)  cautioned that there may
be additional reporting and enforcement problems inherent in this
approach.
     One commenter (IV-D-176)  believed the suggested level of
1,000 to 5,000 gallons was too low because it would include only
those one-person or part-time manufacturers who operate out of
their homes and by word of mouth.  The commenter believed that it
fits the EPA's concept of a small, low volume company operating
in a niche market because it is considered by industry analysts
and competitors to be a small firm in the  hardwood floor finish
industry, it employs only 10 employees,  and over 90 percent of
its sales come from four products.  The commenter argued that the
EPA should increase the low volume level to cover small, niche
market firms that will endure great economic hardship because of
the architectural coating rule.   It suggested that the EPA
consider a low-volume exemption level of 100,000 gallons, which
would exclude medium and large sized manufacturers but would
include small companies that focus on niche markets.
     One commenter (IV-F-2gen) asked whether the proposed
low-volume exemption would be based on all of a manufacturer's
sales or on the sales of only one of a manufacturer's products.
If the exemption is on a per product basis, several manufacturers
(IV-F-2gen)  indicated that there would be  some difficulty in
defining a "product."  One manufacturer (IV-F-2gen) suggested
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that a registered formula could be submitted to the EPA as a
means of clarifying what constitutes a product.
     One commenter (IV-D-209)  requested consideration of a cutoff
of 5,000 gallons per product per year.  The commenter stated that
this is an appropriate cutoff to provide some relief for all
manufacturers who sell low-volume niche products for which
reformulation is not economically or technologically feasible.
Without this provision,  the commenter stated that some small
niche businesses could go out of business.
     One commenter (IV-D-74)  who sells more than 500,000 gallons
of coatings and mastics per year requested a low-volume exemption
for two products:   a waterproof masonry product with sales of
796 gallons in 1995,  and a coating used to paint exterior metal
surfaces for roofing applications with sales of less than
400 gallons per year.  The commenter implied that products with
this sales volume are the ones for which an exemption is
appropriate.
     Oppose low-volume exemption.
     Four commenters  (IV-D-28, IV-D-32, IV-D-161/IV-F-lj,
IV-F-lm)  opposed the low-volume exemption for specialty niche
products because they believe it would provide an incentive for
companies to develop purportedly "new" specialty products in
order to keep selling non-compliant coatings.  One commenter
(IV-D-161/IV-F-lj) stated that such an exemption would be subject
to abuse if each color of a specific product line could be
considered a separate low-volume item and separate names could be
created for identical coatings.  Another commenter (IV-D-32)
stated that since many manufacturers produce individual batches
of paint for specific users,  this provision could encourage the
creation of a specialty coating for each end user resulting in
categories such as "horizontal lathe paint," "gantry crane
coating," or "paper plant paint."  In addition, another commenter
(IV-D-161/IV-F-lj) stated that the proposed requirement for the
manufacturer to verify that "the product serves a specialized
need for which a lower VOC product does not exist" is impractical
given that each manufacturer considers its products to be special
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and few manufacturers are familiar with all of the products
offered by all of the other manufacturers.  The commenter stated
that if the EPA decides to adopt such a low-volume exemption, the
cutoff should be set at a level no higher than 500 gallons to
minimize the incentive to use the exemption to circumvent the
rule.  This commenter stated that a 500-gallon cutoff is still
high enough to be of practical use to true specialty niche
products.  The commenter pointed out that volumes of 1,000 to
5,000 gallons are high enough to include many of the lower volume
line items sold by large regional and national manufacturers for
which the exemption is not appropriate.  According to another
commenter  (IV-D-28),  if there is a bonafide need for such
specialty coatings,  a variance provision or a rule modification
would accommodate these products.
      Another commenter (IV-F-lm) stated that the low-volume
exemption would not provide any significant relief because so few
products are manufactured in the range of one to 5,000 gallons
annually.
     One commenter (IV-D-32)  stated the exemption for low-volume
coating categories is not needed and would further weaken the
effectiveness of the regulation, which the commenter suggested
already contains moderate VOC levels.
     Response:   Based on the arguments presented by commenters
about the need for some type of exemption for very low-volume
specialty products for which it is not cost-effective for either
the manufacturer or the resin supplier to devote time and
resources to reformulation,  the EPA believes that some form of
exemption should be included in the final rule to accommodate
these types of  products.   Although in the proposal preamble,  the
exemption was described in terms of a per-product exemption at a
level between 1,000 and 5,000 gallons, the EPA considered the
potential problems highlighted by commenters with this type of
provision and developed a variation on the low-volume exemption
approach to include in the final rule.  Specifically,  the EPA has
added a VOC tonnage exemption to the final rule.  This approach
continues to accommodate the needs of small businesses,  niche
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markets, and specialty products,  as did the proposed low-volume
exemption; but it more effectively limits the VOC emissions
resulting from the exemption.
     Under the VOC tonnage exemption,  each manufacturer can
exempt a total of 23 megagrams (25 tons)  of VOC in the period of
time from the compliance date through December 31,  2000;
18 megagrams (20 tons) in the year 2001,  and 9 megagrams
(10 tons) for the year 2002 and for each year thereafter.  Since
some corporations have multiple companies and/or divisions, an
architectural coatings manufacturer orx importer is defined in the
rule to mean the parent company and not each individual company,
subsidiary,  or division.  Thus, if a corporation (parent company)
has several subsidiaries or divisions that manufacture coatings,
only one exemption per parent company will be allowed annually.
The EPA believes that this is an equitable way of implementing
this provision without sacrificing VOC emission reductions or
providing any advantage of large manufacturers over small
businesses.   For the purposes of the tonnage exemption, the
manufacturer or importer calculates VOC tonnage by multiplying
the total sales volume in liters by the "in the can" VOC content
of the coating in grams per liter of coating including any water
or exempt compounds.  The "in the can" VOC content must include
consideration of the maximum thinning recommended by the
manufacturer.  In the following examples, g/1  (or Ib/gal) is an
abbreviation for grams  (or pounds) of VOC per liter (or gallon)
of coating including water and exempt compounds at the
manufacturer's maximum recommendation for thinning.  For example,
under this exemption in the first year a manufacturer could
exempt 38,300 liters  (10,000 gallons)  of a 600 g/1  (5 Ib/gal)
coating.

        5 Ibs/gallon * 10,000 gallons - 50,000 Ibs or 25 tons
     Alternatively, a manufacturer could exempt 18,939 liters
 [5,000 gallons) of an 800 g/1  (6.67 Ib/gal)  coating plus
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13,731 liters  (3,625 gallons) of a 550 g/1  (4.58 Ib/gal) coating.
   [(6.67 Ibs/gal * 5,000) + (4 . 58 Ibs/gal * 3,625)] = 50,000 Ibs or 25 tons

Basically, any combination of coatings and volumes  can be
exempted as long as the total emissions from these  products do
not exceed 23 megagrams  (25 tons) in the time period from the
compliance date through December 31, 2000; 18 megagrams  (20 tons)
in the year 2001; and  9 megagrams  (10 tons) in  the  year 2002 and
each year thereafter.
     The EPA has established the tonnage limits to  exempt no more
than 1.5 to 2 percent  of the total expected emission reductions
from architectural coatings in the first year the standard is in
effect.  The EPA intends the diminishing size of the tonnage
exemption to serve a dual purpose of providing  an exemption for
niche products yet also provide incentive for manufacturers and
importers to achieve VOC emission reductions from their products.
The EPA expects that the 9 megagrams (10 tons)  per  year exemption
that goes into effect  in the year 2002 will provide continued
protection for niche products and adequate flexibility for
unforeseen future needs, while effectively limiting emissions due
to the exemption of limited amounts.  The EPA expects the initial
tonnage exemption will allow manufacturers and  importers to
exempt one to three coatings in quantities up to 27,000 liters
(7,100 gallons), thereby accomplishing the intended function of
the originally proposed low-volume exemption.
     This exemption differs from the low-volume exemption in the
proposal preamble in the following ways:
     (1)  The EPA changed the exemption from a per product basis
          to a per manufacturer basis.   This was done to avoid
          the difficulty of defining a "product" and to avoid the
          related potential for abuse by manufacturers in
          designating products for exemption.
     (2)  The EPA changed the exemption level from gallons of
          coating to tons of VOC.  This change was made for two
          primary reasons.  First, it provides  an incentive for
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          manufacturers to reduce the VOC content of the coatings
          for which they claim this exemption.   For example, with
          a 5,000 gallon exemption, the manufacturer could exempt
          5,000 gallons whether the product was 850 g/1 or
          200 g/1.  With a tonnage exemption,  however,  the VOC
          content in each can of coating counts toward the
          allotted exemption.  Therefore,  if the manufacturer
          reduces the VOC content of the coating it wishes to
          exempt, more gallons of that coating could be sold
          under the exemption.  Second, the choice of VOC tonnage
          instead of gallons of coating for the exemption alters
          the exemption from an unknown loss of emission
          reductions to a cap on tons exempted per manufacturer.
          Therefore, this change serves to place an upper bound
          on the emission reductions that are lost through this
          exemption, which allows the EPA to better estimate its
          anticipated impact.

     (3)  The exemption is reduced over time.   The ratcheting
          down of the tonnage exemption from 23 megagrams
          (25 tons), to 18 megagrams (20 tons), and then to
          9 megagrams (10 tons), provides a strong incentive to
          manufacturers using the exemption to continue to seek
          ways to reduce the VOC content of their coatings.

     In addition to the tonnage exemption,  the EPA has also added

several new coating categories to the final rule that address

specific groups of specialty coatings that were identified

through public comment.   The EPA notes that section 183(e)

expressly authorized the EPA to use any system or systems of

regulation that the EPA deems appropriate to achieve the

necessary emissions reductions and to do so with consideration of

what constitutes best available controls (BAG).  The EPA has

concluded that a tonnage exemption is appropriate to meet the
objectives of section 183 (e) , while taking into account factors

such as economic and technological feasibility.

     2.2.1.3.  Small Container Exemption

     The proposed rule specifically exempted coatings sold in

containers with capacities of 1 liter or less from the

requirements of the rule.  Ten commenters  (IV-D-21, IV-D-28,

IV-D-32, IV-D-96, IV-D-185/IV-F-ln, IV-D-189,  IV-D-206, IV-F-lb,

IV-F-li, IV-F-lj) provided comments on the small container

exemption.  Seven commenters  (IV-D-21, IV-D-28, IV-D-185/IV-F-ln,

IV-D-189, IV-D-206, IV-F-lb, IV-F-lj) supported the exemption,


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two commenters  (IV-D-96, IV-F-li) opposed the exemption, and one
commenter  (IV-D-32) supported the exemption but favored a
phaseout of the exemption over time.
     Support.   According to one commenter (IV-D-206), the
exemption will allow small quantities of proven products to
remain on the market.  Two commenters (IV-D-189, IV-D-206) stated
that this exemption is not likely to be abused due to the higher
prices and inconvenience of using small quantities.
     Two commenters  (IV-D-185/IV-F-ln, IV-F-lb)  strongly
supported the small container exemption because it permits
certain useful, low-volume specialty products to continue to
exist for which it is not cost-effective or technologically
feasible to reformulate.  One commenter (IV-D-185/IV-F-ln)
asserted that products sold in small containers have a minimal
impact on air quality.  In addition, the commenter stated that
all States that have passed their own architectural coating rules
offer a small container exemption and have found it to be a
workable and enforceable mechanism.
     One commenter (IV-D-21)  urged that the small container
exemption remain in the rule to allow for unrestricted sale of
products by the quart.  Another commenter (IV-D-28) supported the
exemption of small containers but asked the EPA whether the small
containers are subject to the labeling requirements.
     Opposition. One commenter (IV-D-96)  characterized the small
container exemption as a loophole that the EPA should remove.
The commenter stated that this provision is currently being taken
advantage of in many State architectural coating rules to bypass
VOC content limits.
     Another commenter  (IV-F-li)  stated that the small container
exemption will not primarily benefit small businesses since small
containers are sold by large retail coating manufacturers.
Moreover, this commenter asserted that efficient filling and
labeling of small containers tends to be a capital intensive
operation that is not really suitable for small businesses and
that it is primarily used by large manufacturers.
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     Sunset provision.  One commenter (IV-D-32), in a State
 (Oregon) with an architectural coating rule, encouraged the EPA
to include a future date  (e.g., 2002) after which the small
container exemption would no longer apply.  The suggestion for a
"sunset" provision is based on the commenter's observation that
small containers of non-compliant coatings are purchased to
recover and repair surfaces coated with non-compliant coatings
and that in time surfaces will be replaced with compliant
coatings so that the need for the non-compliant coating will
decrease to zero.
     Response:   The EPA has retained the small container
exemption in the final rule to provide compliance flexibility to
manufacturers.   The EPA anticipates that the exemption will allow
sorre coatings to be offered for sale that do not meet the VCC
content limits  in table 1.  Coatings that fall under the small
container exemption are net subject to labeling or any other
requirement in  the architectural coating rule.  By not including
a "sunset" provision in the rule for the small container
exemption,  the  national rule is more compatible with State rules,
which should help coating manufacturers  with regulatory planning
and compliance.   The EPA believes that abuse of the exemption is
unlikely due to the higher cost and inconvenience to consumers of
using smaller containers.  If the EPA determines that the
exemption is being abused, the EPA may revisit the issue and
modify or relieve tne exemption from the  national rule.   Likewise,
an individual State may choose to be more stringent and modify
its rule to not allow this exemption in  areas  where there is a
need for additional VOC emission reductions.
2.2.2   Processors as Regulated Entities
     Comment:  In the proposal preamble  (61 FR 32737),  the EPA
requested comment on the possible inclusion of "processors" as a
regulated entity.  The EPA suggested that "processor" could be
defined as "an  individual who adds organic thinner to the coating
in a commercial/industrial setting at the point of application."
This would allow the regulation to prohibit an applicator from
using organic solvents to thin a coating beyond the
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manufacturer's recommendation, thereby negating some of  the
emission reductions expected  to be achieved by the rule.  Eight
commenters  (IV-D-28, IV-D-32, IV-D-120, IV-D-161, IV-D-162,
IV-D-189, IV-D-206, IV-D-213/IV-F-lf) stated that the rule should
not regulate processors.  One commenter (IV-D-33) supported the
inclusion of processors as a  regulated entity.
     Oppose.  Four commenters (IV-D-28, IV-D-162, IV-D-206,
IV-D-213/IV-F-lf)  stated that it would be difficult to verify or
enforce  this provision.  One  commenter (IV-D-206) believed
regulation of applicators is  unnecessary because thinning is not
as widespread as believed.  Based on the commenter's experience,
most coatings are used directly from the can because most
painters are uncertain how products will perform after thinning
and do not know how thinning will affect the uniformity of color
over large areas.   One corr.renter  (IV-D-161) believed that at the
proposed VOC ccntent lirrits,   excessive thinning in the field will
not occur.
     One commenter  vIY-D-212,IV-F-lfj stated that the only way a
contractor can continue to meet the demands of customers is to
have the flexibility of chinning a coating on-site when
necessary.   The commenter stated that a painting contractor's job
is to apply a coating at the optimum, consistency.  By restricting
thinning practices,  the ccmmenter asserted that contractors would
potentially be exposed to legal liability for non-performance
under a contract.   In addition,  the commenter stated that a
decision aoout which application method to use is oftentimes made
at the site considering variables such as temperatures and
humidity.  It may be necessary to thin the product on—site in
order to create an optimum, application.
     Two commenters (IV-F-lf,  IV-F-lm)  supported California's
position that permits the thinning of coatings in the field under
abnormal environmental and application conditions.   One commenter
(IV-F-lm) stated that tne provision was specifically introduced
to provide applicators with the ability to apply these coatings
under a range of environmental conditions that are not
necessarily optimal at all times.   One commenter (IV-D-32)  noted
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that a national rule aimed at controlling VOC at the
manufacturing level would minimize the need to regulate
downstream parties such as retailers and commercial painters.
     One commenter (IV-D-189) recommended that the regulation of
end users be handled through State regulations and that the EPA
could encourage regulation through its State Implementation Plan
approval process.  According to another commenter (IV-D-120),
large processors, for example,  are often regulated by air permits
that evaluate the processor's VOC emitting operation and consider
whether the surrounding area is nonattainment or attainment.   The
commenter asserted chat small processors are often regulated in
nonattainment areas under State or local regulations.  For
example, independent air quality management districts of
California require processors to record VOC emitted during
application.
     Five commenters (IV-D-28,  IV-D-121, IV-D-18S,  IV-D-206,
IV-D-213/IV-F-lf) questioned the legal basis for regulation of
end users or applicators ("processors"), stating that
section 183 (e)  of the Act does  not apply to end users or
applicators as  regulated entities.  Two commenters (IV-D-189,
IV-D-213/IV-F-lf) stated that Congress intended the term
"processors"  to mean entities that repackage coating materials or
further enhance finished products before they are offered for
sale to end users.  In support  of a similar argument, another
commenter (IV-D-213/IV-F-lf)  presented the following quote from
the House Energy and Commerce Committee report:  "The
administrator may apply the regulations under this subsection
only at the level of the manufacturer,  processor,  wholesale
distributor or importer."  The  commenter stated that the term
"processor" is used in a context that relates to those who are
manufacturing or distributing the product but not to those who
are using it in the field.
     Support.   One commenter (IV-D-33)  supported expanding the
rule's applicability to include large commercial or industrial
applicators of architectural coatings ("processors")  to guard
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against over-thinning with organic solvents and thus exceeding
the applicable regulatory limit.
     Response:  The EPA considered regulating individuals who add
organic thinner to the 'coating in a commercial or industrial
setting at the point of application as processors as a means to
guard against thinning beyond manufacturers' recommendations.
However, the EPA agrees that enforcement of such a provision
would be difficult because these coatings are applied at such a
wide variety of locations (i.e., not at any set emission points
where the EPA can routinely send enforcement personnel).
Consequently, the EPA believes that regulation of "processors"
will not add significantly to the effectiveness of the rule and,
thus,  did not include them as regulated entities for the final
rule.   The EPA notes that in choosing the best system or systems
of regulation that is appropriate to achieve reductions, the EPA
has examined the capability of enforcement as one factor.  The
EPA believes that setting appropriate VOC content limits for
products is the most feasible means to achieve the objectives of
the statute.
     In response to commenters'  concerns about the need for
applicators to be able to add solvent to the coating at the
application site,  it should be noted that the EPA's rule
regulates the VOC content of a coating including any VOC from
thinning instructions recommended by the manufacturer.   In other
words,  the rule already allows and accounts for VOC added by
applicators in accordance with the coating manufacturer's
thinning instructions.   It is thinning beyond any manufacturer's
recommendation that the EPA was  considering devising a  mechanism
to address.  Given the inherent  difficulties of policing coating
thinning,  the EPA concluded that it is better to anticipate
thinning and set limits that take into account foreseeable added
emissions.   However,  as noted by commenters,  the EPA believes
that most users will not over-thin products because it  may have
adverse product performance  effects.   In the event that some
areas  like California need additional controls and assurances,
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they may choose to continue to impose their own additional
regulations on users.
2.2.3   Definitions
     2.2.3.1   General
     Comment:   One commenter (IV-D-101)  asked if coatings used on
billboard structures fall in the category of industrial
maintenance, graphic arts, flat or nonflat coatings, or some
other category.
     Response:   As stated in the definition of architectural
coatings,  the rule only applies to coatings "recommended for
field application to stationary structures and their
appurtenances,  to portable buildings,  to pavements,  or to curbs."
This definition excludes adhesives and coatings recommended by
the manufacturer or importer solely for shop applications or
solely for application to non-stationary structures, such as
airplanes,  ships,  boats,  and railcars."   Consequently, steel
beams or other structural components coated in a shop or
manufacturing setting are not subject to this regulation.
However,  if the coating is applied outside of a shop setting
(e.g.,  to an erected billboard),  the paint used to create the
billboard or sign itself would be classified as a graphic arts
coating.   Because the graphic arts coating category specifically
excludes coatings used on structural components,  the paint used
to coat the structural components of the billboard  (e.g., the
steel beams that support the billboard or sign/  would be
classified as an industrial maintenance coating.   These coatings
are high performance coatings used on exterior metal structures
and structural components and,  therefore,  meet the rule's
definition of an industrial maintenance coating.
     Comment:   One commenter (IV-D-101)  requested that the EPA
identify the category that the following products would fall
into:  paints for yard furniture,  paints for children's metal or
wooden wagons,  craft paints,  and correction fluid (white-out).
     Response:   Because the rule applies to coatings used on
"stationary structures and their appurtenances,"  coatings applied
to yard furniture and wagons would not be covered under the rule
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because furniture and wagons are not stationary structures.
However, because these types of coatings are rarely marketed for
such a limited application and instead may be intended for more
general uses  (i.e., coating exterior metal surfaces), it is
likely that consumers purchasing coatings for these applications
would choose a coating for general use on steel or wood.  The
more general usage coating purchased by the consumer for these
applications would likely fall into categories such as
rust-preventative, flat, or nonflat coating.
     Craft paints and correction fluid are not included in the
definition of architectural coatings because these are applied to
paper products rather than to stationary structures and,
therefore, are not subject to the rule.  In addition, containers
of coatings that are 1 liter or less and aerosol spray paints are
not subject to this rule.
     2.2.3.2   Pigmented
     Comment:   One commenter (IV-D-162) stated that in addition
to imparting color, pigments are used to provide corrosion
inhibition, conductivity, fouling resistance,  opacity,  and to
improve mechanical properties.
     Response:  The EPA has expanded the definition of pigmented
to include the additional properties of pigments identified by
the commenter.  Therefore, the definition in §59.401 of the final
rule now reads as follows:  "Pigmented means containing finely
ground insoluble powder used to provide one or more of the
following properties:  color; corrosion inhibition; conductivity;
fouling resistance; opacity; or improved mechanical properties."
     2.2.3.3   Lacquers
     Comment:   One commenter (IV-D-189) suggested eliminating the
word "wood" from the definition of lacquer.  The commenter
explained that limiting this category to only lacquers formulated
for use on wood substrates is unnecessary.   In fact, the
commenter noted that lacquers are used on a variety of substrates
where a fast drying, clear,  high gloss protective finish is
desired.  Another commenter (IV-F-1)  also asked why the
definition of lacquer is specifically limited to wood finishes.
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     Response:   Although the EPA recognizes that lacquers are
used on a variety of substrates, the EPA purposefully limited the
definition of lacquers to wood coatings because: applications on
other substrates are covered by other categories.   The VOC
content limits for the other categories reflect consideration of
the need for lacquer application to the non-wood substrates.  For
example, a lacquer coating used on concrete would need to comply
with the VOC content limit for the category that relates to that
application  (e.g., the concrete curing and sealing category)
rather than its resin type (e.g.,  a lacquer).   Consequently, the
EPA did not alter the definition of lacquer in the final rule as
suggested by these commenters.
     Comment:  One commenter (IV-D-161)  asserted that nonferrous
ornamental metal lacquers are a subcategory of lacquers.   The
commenter proposed reformatting table 1 and showing nonferrous
ornamental metal lacquers as a subcategory of  the lacquer
category.
     Response:   The EPA does not agree that table 1 should be
reformatted to show nonferrous ornamental metal lacquers as a
subcategory of lacquers because the category of lacquers is
limited to applications to wood.  However,  to  address potential
overlap for coatings that meet the definitions of both the
nonferrous ornamental lacquers category and another category
(e.g., the industrial maintenance category), § 59.402(c)  of the
final rule has been amended to clarify that the limit for
nonferrous ornamental lacquers is meant to apply.
     Comment:  One commenter (IV-D-161)  advocated that the EPA
clarify the definitions of lacquers and lacquer stains.  The
commenter pointed out that although the preamble  (61 FR 32739)
states that lacquer stains would meet the stain VOC content limit
(550 g/1) rather than the lacquer limit (680 g/1), current State
regulations require lacquer stains and lacquer sealers to meet
the VOC content limit for the lacquers category rather than the
VOC content limit for the stain or sealer category.
     Response:   The EPA included lacquer sanding sealers in the
lacquers category because these coatings perform more like
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lacquers, whereas lacquer stains function more like semi-
transparent stains and, thus, they are regulated under the clear
and semitransparent stains category.  This is consistent with at
least one State's regulation of lacquer stains (A-92-18,
II-D-185, IV-E-36).  In addition, only one State  (Kentucky)
architectural coatings rule has a lacquer stain category with a
VOC content limit of 550 g/1, which is the same limit as the
clear and semi-transparent stain category in the final rule.
Therefore, the EPA has added a sentence to the definition of
lacquer to clarify that lacquer stains must meet the VOC
requirements for stains rather than lacquers.
     2.2.3.4   Quick-dry Enamel
     Comment:   Two commenters (IV-D-189,  IV-F-2)  recommended that
the EPA modify the definition for "quick-dry enamel" by removing
the requirement that the dry film must have a gloss of 70 or
above on a 60 degree meter (measures the specular reflectance of
the paint at a 60-degree angle).   One commenter (IV-D-189)  argued
that the primary criterion for a coating to be considered a
quick-dry enamel is that it is a nonflat coating which meets a
specific dry time and,  therefore, the gloss requirement is
unnecessary.
     One manufacturer  (IV-F-2)  was concerned because it has a
low-VOC quick-dry enamel that does not have a gloss of 70 or
higher as required in the quick-dry enamel definition.  Another
commenter (IV-F-2) stated that the gloss restriction had been
removed from State regulations.   The commenter asked the EPA to
explain why it included this restriction in the proposed rule.
     Response:   The EPA has not removed the 70 or above gloss
restriction in the definition of  "quick-dry enamel" as requested
by the commenters.  Because this  category is expected to be used
by manufacturers to sell nonflat  enamels  that do  not meet the
380 g/1 VOC content limit for general nonflat coatings,  the EPA
asserts that  it is important to limit the quick-dry category to
coatings meeting both high-gloss  and quick-dry criteria to
restrict the  use of the category  to situations where the consumer
desires both  of these properties.   The proposed definition  is
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consistent with all but one of the existing State architectural
coating regulations that the EPA reviewed that recognize this
category.  During a recent analysis of a 1995 paint
characterization study conducted by Harlan and Associates
(IV-J-16), the nonflat coatings portion of the study showed that
most coatings labeled as quick-dry enamels really did not meet
the dry times according to ASTM D1640 and other performance
tests.  However, recent resin development work has resulted in
high quality, acrylic, high-gloss coatings with quick dry times
(IV-J-16).  Coatings that do not meet the film gloss of 70 or
more would be subject to the nonflat coating VOC content limit of
380 g/1.
     2.2.3.5   Traffic Marking Coating
     Comment:  One commenter (IV-D-189)  pointed out that the
addition of a zone marking category would necessitate removing
references to driveways and parking lots from the definition of
traffic marking coating.
     Response:   The references to driveways and parking lots have
not been deleted from the definition of traffic marking coatings
because traffic marking coatings sold in containers of more than
5 gallons would be subject to the traffic marking VOC content
limit of 150 g/1.  The EPA has established a separate category
for zone markings and the following definition has been added to
the definitions section of the final rule:  "Zone marking coating
means a coating formulated and recommended for marking and
striping driveways, parking lots, sidewalks, curbs, or airport
runways, and sold or distributed in a container'with a volume of
19 liters  (5 gallons) or less."  Zone marking coatings are
restricted to a VOC content of 450 g/1.   Coatings for airport
runways, driveways, parking lots, sidewalks, and curbs can be
either zone marking coatings (if they are sold in containers with
a volume of  19 liters  (5 gallons) or less) or traffic marking
coatings  (if the container is larger than 19 liters); so the
reference to these areas still appears in the traffic marking
coating definition.
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     2.2.3.6   Sealer
     Comment:  One commenter  (IV-D-161) stated that the proposed
definition of  "sealer" precludes the use of a sealer as the final
coating in a coating system.  The commenter supplied two
instances where a sealer would be applied as a final coat over
other coatings:   (1) waterproofing sealers can be the only
coating applied to the substrate, and yet by definition these are
sealers; and  (2) horizontal surfaces like decks, patios, and
walkways can be stained and then have a sealer applied to protect
the stained substrate from wear.  The commenter mentioned a line
of semi-transparent stains for concrete patios, sidewalks, and
similar surfaces where a sealer is recommended to protect the
concrete from damage, wear, and water penetration.  The commenter
designated this final coat as a sealer.  The commenter contended
that without a sealer, surfaces will wear unevenly and need
reapplication of other coatings.  The commenter stated that these
coatings are not generally considered varnishes since performance
characteristics are a result of the penetration of the material
into the stained substrate.  The commenter recommended that the
definition of sealer be amended to include such uses by adding
the phrase "to prevent harm or damage to porous substrates."
     Response:  It was not the EPA's intent to preclude the use
of a sealer as the final or only coating of the system, and the
EPA does not believe that the proposed definition suggested this.
Therefore,  the EPA does not believe it is necessary to add the
suggested phrase to the definition of sealer in the final rule.
     2.2.3.7   Industrial Maintenance Coatings
     Comment:  One commenter  (IV-D-158) stated that the
industrial maintenance coatings category,  as proposed,  limits
industrial maintenance coatings to industrial,  commercial, or
institutional applications.  The commenter maintained that the
purpose of this category should be to allow a high performance
coating to prevent substrates from degradation when exposed to
extreme environmental conditions.  Therefore,  the commenter
suggested changing the industrial maintenance coatings definition
so that "acute or chronic exposure to corrosive,  caustic,  or
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acidic agents, or to chemicals, chemical fumes, or chemical
mixtures or solutions" and "in industrial,  commercial, or
institutional situations" are not part of the definition.
     Another commenter (IV-D-189/IV-F-10) stated that the
reference to industrial,  commercial,  or institutional situations
in the industrial maintenance coatings definition implies that
use should be limited to these situations.   Instead,  the
commenter asserted that the use of industrial maintenance
coatings should be allowed whenever a substrate needs protection
from extreme conditions,  regardless of setting.  The commenter
argued that the preamble and §59.403(b)  of  the proposal
demonstrated that it is not the intent of the EPA to limit the
use of industrial maintenance coatings to industrial, commercial,
or institutional situations.   In addition,  the commenter noted
that some of the extreme environmental conditions the EPA listed
in the definition do not properly represent the conditions for
which these high performance coatings have  been formulated.
Specifically, the commenter recommended that the EPA modify the
definition of industrial maintenance  coatings as follows to
eliminate references to setting and to properly represent
conditions for use:
     "Industrial maintenance coatings" means high performance
     coatings, including primers, sealers,  undercoaters, and
     intermediate and top coats,  formulated and recommended to
     protect substrates from degradation when exposed to one or
     more of the following conditions:
(revised)    1.    Frequent  scrubbing or  abrading  including
                  mechanical  wear and  repeated cleaning  with
                  industrial  agents and/or  disinfectants;
(new)         2.    Steam;
(revised)    3.    Continuous  or repeated exposure  to  temperature
                  above 200 °F;
(revised)    4.    Immersion in  water or  wastewater or chronic
                  exposure  of surfaces to moisture condensation;
(revised)    5.    Exposure  to chemicals  such as acids, alkalies,
                  organic  solvents, oxidizing or  reducing agents,
                  salt  spray, or  other corrosive  materials  or

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                  mixtures,  including exposure by immersions,
                  splash,  spill,  or fumes;  or
 (no change)  6.    Exterior exposure of metal  structures and
                  structural components.
     One commenter  (IV-D-183) expressed concern that the
 industrial maintenance coating category definition is  too easy to
 misinterpret.  The commenter added that it is too easy to change
 one word in the category definition and ban these products  from
 places where they might be needed.  However,  the commenter  was
 not specific and did not recommend any changes.
     Another commencer (IV-D-85) requested that the EPA better
 define the coating categories and minimize overlap.  In
 particular, the commenter recommended adding:  "not to include
 schools and public Duildings" to the definition of industrial
 maintenance coatings to eliminate any loopholes.
     Response:   The EPA's intent is to limit the use of these
 higher VOC coatings to extreme environmental conditions as
 provided in the definition of industrial maintenance coatings
 (§59.401) and in §59.405(b).  The EPA has therefore maintained
 the reference to "industrial, commercial,  or institutional
 situations" because these are the settings under which these
 types of extreme conditions listed in the definition of
 industrial maintenance coatings are typically found and the
 commenters did not provide information to the contrary.  The EPA
 intentionally sen the proposed VOC content limit;  for industrial
 maintenance coatings based on more rigorous performance
 specifications  than those typically needed for residential
 applications.  However,  the use of industrial maintenance
 coatings is not prohibiced in residential areas.   At proposal,
 the EPA noted (61 FR 32742)  in the discussion of  the labeling
 requirements for containers of industrial maintenance coatings
 that the use of industrial maintenance coatings was not
prohibited in residential settings where extreme  environmental
 conditions are  present and for which an industrial maintenance
 coating would provide the most viable protection.   The EPA has
 amended the industrial maintenance coating labeling requirement
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in the final rule to allow greater flexibility.  The manufacturer
or importer can select from the following statements to comply
with the industrial maintenance labeling requirements.
     1.    "For industrial use only";
     2.    "For professional use only";
     3.    "Not for residential use" or "Not intended for
          residential use"; and
     4.    "This product is intended for use under the following
          conditions: (list of conditions from the industrial
          maintenance coating definition that apply)".
     The EPA has reviewed the suggested revision of the
industrial maintenance coatings definition that one of  the
commenters suggested more properly represents the conditions for
which these high performance coatings have been formulated.
However,  the suggested addition of steam as one? of the  extreme
conditions could oe interpreted to include bathrooms in
residential settings, which the EPA does not intend to  include.
Also,  the extreme environmental conditions listed in paragraph 5
of the suggested revision appear to expand greatly the  conditions
listed in paragraph 2 of che proposed definition without any
technical basis.  The suggested revision to the definition
includes a change in temperature conditions for application from
250 °F to 200 °F.  However, since 200 °F is a temperature
condition that may be able to be met  by a wide variety  of coating
types including some interior flat latex paints (A-92-18,
Item II-D-165), the EPA believes that this change would not
reflect  the extreme conditions for which this category  was
intended.  Moreover, the EPA has not  added the suggested phrase
to exclude schools and public buildings from the definition of
industrial maintenance coatings because the EPA believes that
schools  and public buildings may require the use of higher
performance coatings than those typically needed for residential
applications.  For these reasons,  the EPA has determined that no
further  changes to the industrial maintenance coatings  definition
are necessary.

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     2.2.3.8   High Temperature Coating
     Comment:  One commenter  (IV-D-189) suggested that the EPA
lower the minimum temperature requirement for the high
temperature coating category from 500 °F to 400 °F.  The
commenter reported that this is the minimum temperature
requirement specified in all current State architectural coating
rules.  The commenter also stated that the current requirement of
500 °F does not reflect current industry consensus on what
constitutes a high temperature coating.
     Response:  The EPA agrees that the minimum temperature
requirement for the high temperature coating category should be
400 °F to reflect industry usage and to be consistent with
existing State rules and, therefore, has modified the definition
of high temperature coating accordingly in the final rule.  This
change will enhance the compatibility between the national rule
and State regulations that should help coating manufacturers with
regulatory planning and compliance.
     2.2.3.9   Extreme High Durability Coating
     Comment:  One commenter  (IV-D-101) pointed out that the
definition of extreme high durability coating at 800 g/1 includes
only fluoropolymer-based coatings meeting AAMA
specification 605.2.  The commenter also stated that this
excludes other coatings that meet AAMA 605.2,  which requires
5 years of south Florida exposure,  and have VOC contents in the
range of 500 g/1.  The commenter also noted that the resin for
manufacturing the flouropolymer-based coating is exclusively
licensed to three large multi-national paint manufacturers and is
unavailable to small companies.
     Response:  The EPA agrees that other coatings,  in addition
to fluoropolymer-based coatings,  that also meet the weathering
requirements of AAMA 605.2,  should be classified as extreme high
durability coatings.  According to follow-up information
(IV-E-44),  these coatings are used only for touch-up of metal
panels that are precoated in a factory setting.  During
transition from the factory to the field for assembly,  the panels
are sometimes scratched or chipped and, thus,  on-site touch-up is
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needed.  Therefore, the EPA has expanded the definition of
extreme high durability coating in the final rule to include
these coatings, as follows:  "Extreme high durability coating
means an air dry coating, including a fluoropolymer-based
coating, that is formulated and recommended for touch-up of
precoated architectural aluminum extrusions and panels to ensure
the protection of architectural subsections and that meets the
weathering requirements of American Architectural Manufacturer's
Association specification 605.2, section 7.9."
     2.2.3.10  Swimming Pool Coatings
     Comment:   One commenter (IV-D-101)  asked the EPA whether
swimming pool coatings could be used on other surfaces.  The
commenter informed the EPA that the monkey cages at University of
California,  Davis have been painted with swimming pool paint
because they are washed down regularly and are subject to harsh
chemicals.
     Response:   The architectural coatings rule applies to
manufacturers and importers of coatings.  The manufacturer or
importer would determine the applicable VOC content limit for a
coating by comparing the recommended uses of the coating to the
definitions of the various coating categories in the rule.  If
the coating is recommended for use on swimming pools and is not
recommended for use in other categories, the VOC content limit
would be the limit specified for the swimming pool category
(i.e., 600 g/1).   There is nothing in the rule that would
preclude someone from using this coating on other surfaces with
similar performance requirements.
     2.2.3.11  Reformulation
     Comment:   One commenter (IV-D-101), who attended the public
meeting on August 13, 1996, requested that the EPA clarify the
term  "reformulation" used during the meeting.  To the commenter,
reformulation meant adjusting a formula by changing additives,
solvents, or pigmentation but using the same resin.  In contrast,
the commenter believes that any definition of reformulation that
contemplates requirements that result in switching resins in the
formula constitutes a product ban.
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     Response: The EPA does not specify a definition of
reformulation in the regulation since that term is not used in
the regulation.  Reformulation can consist of minor adjustments
in coating VOC contents or larger adjustments involving a change
in resin technology.  For purposes of the cost analysis,
"reformulation" also includes activities required to place the
compliant product on the market, such as:  product testing,
modifying labels, or changing marketing materials.  The
adjustments to formulas that are necessary to comply with the VOC
content limits for categories in the rule would still result in
produces that would meet the end use requirements of the
categories; therefore,  they would not constitute product bans.
     2.2.3.12  Shellac
     Comment :   One commenter (IV-D-25/IV-F-ls) pointed out that
the proposed shellac category allows manufacturers to have
broader formulation latitude than the traditional definition of
shellac.  The commenter argued chat the broad definition of
shellac would enable manufacturers to create and extend the
volume of coatings containing alcohol to shellac markets and
other end uses.  The commenter requested that the proposed
definition of shellac be cnanged to the traditional definition to
avoid any VOC emission loopholes.   The traditional definition of
shellac defines the base resin used in both clear and pigmented
shellac formulas as "formulated solely with the resinous
secretion of the lac beetle (laccifer lacca),  thinned with
alcohol, and forms a film by solvent evaporation without chemical
reaction."  The commenter stated that several States use the
traditional shellac definition and several have allowed the use
of additional natural resins.   The commenter stated that the
shellac category was created because its existence was
self-defining and self-limiting.  The commenter explained that
use of the non-traditional definition would result in additional
VOC emissions and create market confusion because shellac has
been a definable product class for decades.   The commenter
explained that VOC emissions from shellac remain at constant
levels because shellac  is available only from a limited
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geographic area in Southeast Asia which makes the supply limited,
keeps the price high, and limits the uses to odor control,  storm
sealing, knot and sap streak sealing,  and fire damage
restoration.  If the definition is not changed,  the commenter
requested that the shellac category be retitled to "Natural
resin/alcohol formulations" to avoid label and marketplace
confusion.
     Response:  Although the EPA recognizes the commenter's
concern that the definition of shellac in the proposed rule is
broader than the traditional definition and, therefore,  allows
additional natural resins, the EPA has decided to retain the
broader definition of shellac in the final rule (with the
exception of nitrocellulose resins as noted below).   The EPA
believes that consumers can evaluate which natural resins  (i.e.,
products that compete with the resinous secretions of the lac
beetle)  are preferable for specific applications.
     The commenter is correct that several States use the
traditional shellac definition,  but the majority of the State
rules reviewed define shellac broadly as a coating "formulated
with natural resins."  The review of the State rules also
revealed that nitrocellulose resins were excluded from several
State rules; some State rules also excluded gum resins.   The EPA
has revised the shellac definition to exclude nitrocellulose
resins to avoid overlap with the Lacquer category.   As to the
commenter's concern that the use of the broader definition would
result in additional VOC emissions, the EPA believes that there
will be no significant emission increase because many States
already use the broader definition for the shellac category.
     The commenter also requested that if the shellac definition
was not changed, that the category be retitled to "natural
resin/alcohol formulations" to avoid label and marketplace
confusion.  Even though the requested traditional definition of
shellac is not being used, the EPA has not retitled the Shellac
category.  The EPA maintains that "shellac" is the most
appropriate term to use to define the category,  which includes
the resinous secretions of the lac beetle as well as other
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natural resins, because this category name is consistent with
many State architectural coating regulations.  In addition,  the
term "shellac," in the broader sense of the definition, is so
commonly recognized by both homeowners and professional users
that the EPA maintains that it may be more confusing to use  any
other term.
     2.2.3.13  Flow Coating
     Comment:  One commencer (IV-D-26) suggested that the
definition of  flow coating be expanded to include other forms of
flow coatings, such as coatings that are applied to glass windows
in cars, residential buildings, and commercial buildings using a
flow machine.  The commenter noted that window flow coatings are
used for the following purposes:  (1) reduction of glare,
(2) reduction  of heat-load on the room/vehicle,  (3)  reduction of
fabric fading, and (4) decorative appearance as these coatings
are frequently tinted.
     Response:  The EPA's flow coating category was created  for
coatings used by electric power companies to coat the surface of
transformer radiators and protect the utility transformer units
from corrosion.  These coatings must be extensively thinned  to
allow them to  flow down into the radiator and create an even
film.  Thus,  this limited-use category requires a high VOC
content level  and there is no substitute for this product.  The
type of coatings described by the commenter,  thus,  would not be
considered a flow coating under this definition.   Follow-up
information received from the commenter (IV-E-9)  revealed that
their flow coating is predominantly field-applied to glass
windows (including building and automobile windows)  by a flow
machine, but is sometimes applied in a shop environment.  These
coatings are translucent liquid coatings used to  provide
reduction of fabric fading,  glare,  and heat-load,  as well as a
decorative appearance (tinted).  Later follow-up  information
(IV-E-9) revealed that very limited quantities are sold in some
regulated areas under the small container exemption of State
rules.   Also,  the commenter is  currently developing a waterborne
formulation and believes it will have a compliant  product soon.
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Because of different performance requirements and uses for the
two types of coatings,  the EPA has not expanded the definition of
flow coating as suggested.
     The architectural  coating rule only applies to coatings
recommended for application to stationary structures outside of a
shop setting and consequently,  would not cover coatings intended
solely for glass on automobiles or any applications in a shop
setting.  However,  coatings recommended for application to
building windows on-site would be considered architectural
coatings.  These coatings would fall under either the flat or
nonflat coatings category with a VOC content limit of 250 g/1 or
380 g/1, respectively,  or the industrial maintenance category.
     Comment:   One commenter (I-F-li)  expressed that in the
definition of  VOC content, the "Ws" term should be defined as
"weight of volatiles in grams," not "weight of the VOC in grams."
     Response:   The definition of VOC content was corrected in
the proposed rule on September 3,  1996 (61 FR 46410); the
correction notice defines the "Ws" term as "weight of volatiles,
in grams."  The final rule includes this correction.
     2.2.3.14   Overlap  Issues
     Flow coatings.
     Comment:   A small  manufacturer (IV-F-2g) of flow coatings
suggested adding a statement in the final rule that industrial
maintenance coatings sold as flow coatings are subject to the
limit for flow coatings.
     Another commenter   (IV-D-151)  reported that most flow
coatings are industrial maintenance coatings that are thinned by
adding 0.5 to  1.5 gallons of solvent per gallon of product and
meet the VOC content of 450 g/1 based on maximum recommended
thinning for spray,  airless spray, brush,  and roller
applications.   The commenter explained that once the flow coating
category designation is made,  the coating is no longer in
compliance because the  most restrictive VOC content limit
applies.  The  commenter proposed that an exemption be made so
that industrial maintenance coatings used as flow coatings would
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be subject to the VOC content limit for flow coatings rather than
the lower VOC limit for industrial maintenance coatings.
     A third commenter  (IV-D-162) suggested that maintenance
coatings used for flow coatings be subject to the VOC content
limit for flow coatings (650 g/1) rather than the limit for
industrial maintenance coatings  (450 g/1).   The commenter
explained that extra thinner is necessary to impart required flow
properties.
     Response:  As stated in a previous response, the flow
coating category was created specifically to include coatings
used by electric power companies to maintain protective coating
systems on utility transformer units.  Therefore, the EPA
intended that flow coatings manufactured for this purpose be
subject to the 650 g/1 VOC content limit.   Therefore, to avoid an
overlap of applicability for this category,  the final rule
clarifies in §59.402 (c) that flow coatings that also meet the
definition for industrial maintenance coatings are subject only
to the VOC content limit for flow coatings.
     Antenna coatings.
     Comment:   One commenter (IV-D-101)  asked if primers
formulated and recommended for application on antennas were
considered to be antenna coatings or primer coatings for purposes
of VOC requirements.  The commenter explained that some primers
are specifically formulated to be transparent to the radio
frequency in use.  The commenter implied that most of the primers
used on antennas that are manufactured by the commenter's company
have VOC contents below 530 g/1  (the EPA's  proposed limit for
antenna coatings) but would not meet the general primer category
VOC content limit (350 g/1)  or the limit for industrial
maintenance coatings (450 g/1).  Another commenter (IV-F-2)  also
inquired about primers used on antennas and stated that their
antenna primer coatings cannot meet the limits for the primer,
sealer,  and undercoater categories.
     Response:   The EPA considers primers  specifically formulated
and recommended for application to antennas  to be subject to the
VOC content limit of 530 g/1 for antenna coatings because the
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specialty needs that antenna coatings have apply to primer and.
top coat applications.  For clarification, the EPA has added the
following to the list of exceptions to the most restrictive
requirement under §59.402 (c) :   "Antenna coatings that also meet
the definition for industrial maintenance coatings or primers are
subject only to the VOC content limit in table 1 for antenna
coatings."
     Floor coatings and varnishes.
     Comment:   Several commenters  (IV-D-07,  IV-D-69, IV-D-76,
IV-D-85, IV-D-93,  IV-D-180, IV-F-li, IV-F-2  [two public meeting
commenters]) requested clarification regarding products included
in the varnishes and floor coalings categories and the associated
VOC content limits.  One commenter  (IV-D-85)  suggested that the
EPA remove the floor coating category and keep all varnishes at
the 450 g/1 limit in order to eliminate confusion and maintain
consistency.  The commenter was perplexed that varnishes used as
floor coatings would be required to meet a lower VOC content
limit than varnishes used in other applications since floor
finishes require more abrasion resistance and would be easier to
develop within the 450 g/1 level.
     One commencer (IV-D-76) chat produces wood gym floor
finishes stated that based on cable 1 of the rule,  several
different coating categories and VOC content limits could apply
to its product.   The commenter requested the EPA make a
determination on the appropriate controls for that product.
     Two commenters (IV-D-85,  IV-D-93)  requested clarification on
whether the floor coating category includes  clear floor finishes,
such as those used on gym floors, or paint (opaque), or both.
One commenter (IV-D-93) asserted that only paints could be made
to comply with the proposed VOC content limit of 400 g/1 for
floor coatings.
     Another commenter (IV-D-07)  indicated that the proposed VOC
limit for wood varnishes should be 450  g/1 as provided in several
State regulations including New Jersey,  Texas,  Massachusetts, and
Metropolitan New York, and that they have developed a new formula
accordingly.  Two commenters (IV-D-07,  IV-D-69) referred to the
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clause in the proposed rule requiring a coating marketed  in more
than one category to comply with the category with the lowest VOC
content limit, which would mean that varnishes used on floors
need to comply with the limit for floor finishes  (400 g/1).  The
commenters noted that lacquers are given an exemption even though
they are used on floors and have a higher VOC content.  The
commenters suggested either giving varnishes an exemption or
inserting the word "opaque" in the floor coating definition to
correct the situation.
     A small coatings manufacturer (IV-F-2) requested
clarification on whether the VOC content limit for floor
varnishes will be 400 g/1 or 450 g/1.  This company stated that
it would have a great deal of testing to do if the level is
400 g/1.  The commenter indicated that it has marketed a 350 g/1
product in California but it was not commercially successful.
The commenter stated cnac a 350 g/1 product requires two coats on
a refinished floor co get the same gloss and performance as one
coat of the 450 g/1 product, and that 450 to 500 g/1 products
provide the best performance.   Another manufacturer (IV-F-2)
noted that at the 400 g/1 level,  floor coatings can be applied in
coats that are too thick,  resulting in coating "skin"  and
underlying coating that never dries.
     Four commenters (IV-D-153,  IV-D-161,  IV-D-185 and
IV-D-189/IV-F-lo) recommended that the EPA modify the  rule to
clarify that the varnish coating category is meant to  apply in
situations where a varnish is applied to a floor.   As  proposed,
one commenter (IV-D-189)  noted that varnishes recommended for use
on floors could be interpreted to be floor coatings and thereby
subject to the more stringent floor coating VOC content limit.
The commenter stated that the floor coating category,  which was
created during the regulatory negotiation,  was never intended to
cover varnishes used on floors.   Another commenter (IV-D-161)
pointed out that the floor coating category was developed during
negotiations as a high performance coating to be used  in
residential settings in lieu of an industrial maintenance
coating,  not to encompass all  coatings that can possibly be used
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on floor surfaces.  Another commenter (IV-D-185) stated that
varnishes used, on floors still need to provide the performance
characteristics of other varnishes but with a higher degree of
abrasion resistance.  The commenter maintained that the current
definition of floor coating lacks sufficient specificity and does
not address the potential for overlap between floor coatings and
varnishes.  This problem only became apparent in subsequent State
rulemakings,  such as in Kentucky, Oregon,  and Washington where it
has been effectively addressed.  According to the commenter, in
order to clarify the definition,  Kentucky added the word "opaque"
to the definition.  Alternatively, Oregon and Washington added an
exemption paragraph to clarify that the most restrictive limit
does not apply to varnishes used as floor coatings.
     One commenter  (IV-F-2)  stated that the rule affects
approximately three-quarters of the gym floor products it
manufactures.  Its products are floor varnishes that under the
proposed rule must meet the floor coatings VOC content limit of
400 g/1.  The manufacturer stated that this coating should
instead be subject to the limit for varnishes,  which is 450 g/1.
     Two commenters (IV-D-153,  IV-D-207)  recommended that the
definition of varnishes include floor varnishes in the 450 g/1
category so the tough,  abrasion-resistant varnishes designed for
use on floors are not subject to the 400 g/1 limit of the floor
coating category.  One commenter  (IV-D-207) stated that a floor
varnish must be low enough in viscosity for successful
application.   Another commenter  (IV-D-161) recommended adding the
following to §59.402(b):   "Varnishes that may be recommended for
use as floor coatings shall only be subject to the VOC limit in
table 1 for varnishes."  The commenter stressed that this
recommendation conforms with the rule interpretations industry
has been subject to throughout the country.
     Four commenters (IV-F-2) suggested adding the term "opaque"
to the definition of floor coating.  One of the commenters
suggested that if chis change were made it would no longer apply
to clear floor varnishes.  One of the commenters suggested that
the change would clarify whether a gloss floor paint would be
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classified as a floor coating.  Two other commenters  (IV-D-185,
IV-D-189) suggested inserting the word "opaque" into  the
definition of floor coating and/or adding varnish to  the list of
exceptions in §59.402 (c) in order to eliminate confusion.
     One commenter  (IV-D-189) also suggested editorially revising
the proposed floor coating definition by moving and inserting the
phrase "with a high degree of abrasion resistance" after opaque
coating.  The definition would then read as follows:   "Floor
coating means an opaque coating with a high degree of  abrasion
resistance that is formulated and recommended for the  application
to flooring,  including out not limited to decks, porches, and
steps."
     Another commenter  (IV-D-169)  recommended that opaque floor
paint be regulated at 400 g/1 level and varnishes including those
used on floors should be regulated at 450 g/1 and enamels at
380 g/1.  The commenter pointed out that the word "gloss" may be
in the name "gloss floor varnish"  so it should not be  regulated
as a nonflat coating at 380 g/1.
     Response:   The EPA agrees that the floor coating  category
was not; intended to cover varnishes used on floors.   Rather, the
EPA intended floor varnishes to be subject to the limit for the
varnish category.   To clarify this intent,  varnishes have been
added to the list of exceptions to the most restrictive
requirement under §59.402(c)  as follows:   "Varnishes and
conversion varnishes that are recommended for use as floor
coatings are subject only to the VOC content limit in  table 1 for
varnishes and conversion varnishes,  respectively."  Also, the
editorial suggestion to move the phrase "with a high degree of
abrasion resistance" in the definition of floor coating has been
made.  In addition,  the EPA has added the term opaque  to the
floor coating definition to further resolve the overlap concerns.
With regard to the comments on wood gym floor finishes, these
coatings would be subject to the varnishes  category with a VOC
content limit of 450 g/1.
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     Anti-graffiti coating.
     Comment:   One commenter (IV-D-189)  recommended that the EPA
remove the phrase "specifically labeled as an anti-graffiti
coating" from the definition of anti-graffiti coating.  Two
commenters  (IV-D-161, IV-D-189) requested that the EPA add
anti-graffiti coating to the list of coatings under § 59.402(b)
that are exempt from the most restrictive use provision.  One
commenter  (IV-D-189)  pointed out that requiring containers of any
architectural coating to be specifically labeled with their
architectural coating category designation is redundant.  If a
coating's use description recommends it for application to a
substrate to deter adhesion of graffiti and to resist repeated
scrubbing and exposure to harsh solvents, cleaners or scouring
agents used to remove graffiti, the use information by itself
identifies the coating as an anti-graffiti coating.
Consequently,  the commenter argued that there is no need to label
it as an anti-graffiti coating.
     Response:   The EPA agrees with the commenter that the phrase
"specifically labeled as an anti-graffiti coating" should be
removed from the definition of anti-graffiti coating to be
consistent with labeling requirements for other coating
categories and has revised the final rule to reflect this change.
Also, to resolve any overlap issues in categorizing anti-graffiti
coatings used as industrial maintenance coatings, the EPA has
added anti-graffiti coatings to the list of exceptions to the
most restrictive requirement paragraph.   This paragraph was added
because the EPA did not intend the more restrictive industrial
maintenance limit to apply to an anti-graffiti coating that
otherwise meets the definition of an industrial maintenance
coating.
     Comment:   Two commenters  (IV-D-161, IV-D-189) expressed
concern about products that fall into more than one category and,
therefore, are subject to more than one VOC content limit.  One
commenter  (IV-F-2b)  suggested,  for coatings that fall into two
categories, that the manufacturer be allowed the option to market
the coating in the category with the higher limit.  Two
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commenters  (IV-D-161, IV-D-189) maintained that there is a
problem with the proposed wording in §59.402(b).   This section
stated that the lower VOC content limit applies if "any
representation is made that the coating may be suitable for use
in more than one of the coating categories...." [emphasis added].
The commenters maintained that this implies the issue of
categorization is controlled by "suitability for use" rather than
which definition the coating meets.  The commenters explained
that a coating designated for a particular use could be subject
to a more restrictive limit associated with another coating if it
is suitable for another use with a lower VOC content requirement.
One commenter (IV-D-161)  specifically mentioned that a coating
could be suitable for use on floor surfaces,  but  not meet the
floor coating definition.  For example, a deck stain is
categorized as a stain rather than as a floor coating,  since the
stain does not meet the definition for a floor coating,  not
having sufficient film build to produce a high degree of abrasion
resistance.  However, the wording of proposed subsection (b)
implies that a deck stain would need to meet the  floor coating
limit.  The commenters (IV-D-161,  IV-D-189) recommended the
following change to §59.402(b):  "...any representation is made
that the coating meets the definition of more than one of the
coating categories...."  The commenters added that each of the
exceptions to the most restrictive limit provisions in
§59.402(b)  (l)-(7)  also provides "suitable for use" as the
criteria for the exception.  The commenters suggested that each
of these provisions state either of the following:  "...that may
also be recommended for use as...," or "...that may also meet the
definition for the particular category."
     The commenters believed that these changes would alleviate
any misunderstanding of the intention of this section and of the
interpretation of the appropriate limits for a particular
coating.
     Response:   The EPA's intent is for the coating category
definitions to be used to determine which category and VOC
content limit is applicable for a given coating.   The EPA agrees
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that clarification is needed in the proposed § 59.402(b) and has
made the following change:  "...any representation is made that
indicates that the coating meets the definition of more than one
of the coating categories listed in table 1 of this subpart, then
the most restrictive VOC content limit shall apply."  This change
clarifies that categorization and the appropriate VOC content
limit are controlled by category definition, rather than its
"suitability for use" in more than one category.   Also, as
suggested by the commenter,  the wording for the exceptions to the
most restrictive limit provision which provides "suitable for
use" as the criteria for the exception in § 59.402(c) (l)-(7) of
the final rule has been revised accordingly to use more effective
language to read "...that meets the definition of ..." or
" . . .that are recomrr.end.eci for use as . . . "  These changes are being
made because,  as pointed out by the commenters, a coating may be
recommended for a particular use,  but it may not  meet the
category definition.   For example,  varnishes may be recommended
for use as floor coatings but they do not meet the final
definition of floor coatings (i.e.,  they are not  opaque).
     Comment:   Four commenters (IV-D-161,  IV-D-181,  IV-D-189,
IV-F-lr) provided comments on categories that overlap.  For
example, three commenters (IV-D-181,  IV-D-189,  IV-F-lr) cited the
following case where categories overlap and provided the
following for §59.402(b) of the rule:
     Bituminous coatings and mastics  that may be  recommended for
     use as primers or undercoaters shall only be subject to the
     VOC level in table 1 for bituminous coatings and mastics.
     Two commenters (IV-D-181,  IV-F-lr) stated that certain roof
surface preparation products,  known as "bituminous primers,"
require a lower viscosity than regular bituminous coatings in
order to fill the irregularities of the surface.   These
commenters requested that the rule clarify that these bituminous
roofing products are not regulated under the primers and
undercoaters category.   One commenter (IV-D-181)  cited three
reasons for the clarification:   (1)  roof coatings and metallic
pigmented coatings are both defined as "non-bituminous"

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materials,  (2) bituminous primers was  identified as a possible
subcategory of bituminous coatings during the regulatory
negotiations, and  (3) there is no chance that this clarification
would be susceptible to abuse because  of the nature of bituminous
products.  Another commenter  (IV-F-lr) added that if bituminous
primers are classified under the more  stringent primer and
undercoater limitations, their use would be prohibited.  Also,
the use of a bituminous primer improves adhesion of the
bituminous and other materials placed  on top of the primer.  This
commenter believed that the EPA intended to include all
bituminous coatings in their own category and also urged the EPA
to add a bituminous "exception" under  § 59.402(b).
     Another commenter  (IV-D-161) provided a list of categories
which overlap with the industrial maintenance category when used
in industrial, commercial,  or institutional settings.  The
commenter recommended inserting an exception paragraph in
§ 59.402(b) of the final rule for the  following categories:
antenna coating,  bituminous coatings,  high temperature coatings,
impacted immersion coatings,  thermoplastic rubber coatings and
mastics, repair and maintenance thermoplastic coatings, and
pretreatment wash primers.   The commenter maintained that
reformatting table 1 to reflect a subcategorization of the
industrial maintenance category will not work since they may be
legitimately recommended for use in residential as well as
industrial, institutional,  or commercial settings.   The commenter
recommended amending § 59.402(b)  as follows:

     Antenna coatings that also meet the definition for
     industrial maintenance coatings or primers shall only be
     subject to the VOC level in table 1 for antenna coatings.

     The commenter recommended adding clauses for the other
overlapping categories except for pretreatment wash primers for
which the commenter recommends amending paragraph (b)(6)  as
follows:

     Pretreatment wash primers that may be recommended for use  as
     primers or that meet the definition for industrial
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     maintenance coatings shall only be subject to the VOC level
     in table 1 for pretreatment wash primers.
     Response:  The EPA agrees that the most restrictive VOC
content limit was not meant to apply to these coating categories
that were developed for more specific applications in industrial,
commercial, or institutional settings (i.e., when a coating meets
both the industrial maintenance coating definition and one of the
more specific category definitions).   Therefore, the EPA has
included language in the final rule to clarify its intent.
First,  the commenter's suggestion for pretreatment wash primers
has been incorporated.  Second, the EPA has added a new paragraph
in §59.402 (c) (8)  for varnishes to address additional situations
where a particular coating is recommended for more than one end
use.  Third, the EPA has added an exception paragraph (c)(9) for
the following categories, which overlap with the industrial
maintenance category when used in industrial, commercial, or
institutional settings:  anti-graffiti coatings, high temperature
coatings,  impacted immersion coatings, thermoplastic rubber
coatings and mastics, repair and maintenance thermoplastic
coatings,  and flow coatings.   (As discussed in a previous
response on flow coatings,  the Agency has added flow coatings to
this paragraph to avoid any possible overlap.)  Although not
requested by the industry,  the Agency has added flow coatings to
this paragraph to avoid any possible overlap.  Paragraph  (c)(9)
of § 59.402 in the final rule reads as follows:
     Anti-graffiti coatings, high temperature coatings,  impacted
     immersion coatings, thermoplastic rubber coatings and
     mastics, repair and maintenance thermoplastic coatings, and
     flow coatings that also meet the definition for industrial
     maintenance coatings are subject only to the VOC content
     limit in table "L for their respective categories (i.e., they
     are not subject to the industrial maintenance coatings VOC
     content limit in table 1).
       As discussed in the next comment and response, a separate
paragraph has been added in the rule for bituminous coatings and
mastics that are recommended for use as any other architectural
coating, including primers and undercoaters.  Therefore, the
commenter's recommended changes for bituminous coatings and
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mastics have not been made.  As discussed previously, a separate
exception paragraph has been added in § 59.402 (c) for antenna
coatings that overlap with industrial maintenance coatings and
primers.
     Comment:  One commenter (IV-D-161)  recommended that the rule
clearly state that shellacs, lacquers, and bituminous coatings
are shellacs, lacquers, and bituminous coatings by definition and
that the VOC content limit for these chemically defined
categories should apply rather than any other coating category
for which they might also meet the definition.  The commenter
noted that the definitions for lacquers, shellacs, and bituminous
coatings are based on their chemistry while most other
definitions are performance, use, and property oriented.  Thus,
the commenter contended that these categories can essentially
overlap all categories because they can perform some specific
function such as primers, sealers, quick-dry sealers, roof
coating,  undercoaters,  nonflats, flats,  stains, etc.
     The commenter argued that reformulation would affect
performance of the products and, therefore, they should not have
to meet the limits of other categories.   The commenter
recommended revising § 59.402(b)(2)  to read:  "Lacquer coatings
that may be recommended for use as any other architectural
coating shall only be subject to the VOC level in table 1 for
lacquers."  The commenter suggested that § 59.402(b)(4)  be
changed similarly.  The commenter also recommended adding
paragraph (b)(8)  to read as follows:  "Bituminous coating and
mastics that may be recommended for use as any other
architectural coating shall only be subject to the VOC level in
table 1 for bituminous coatings and mastics."
     A third commenter (IV-F-lj) stated that lacquers overlap
with other categories such as flats, nonflats, primers,  and
stains.  Another commenter (IV-F-2)  also pointed out that
lacquers potentially overlap several categories.
     Response:   The EPA agrees with the commenters that in
general the definitions for lacquers,  shellacs, and bituminous
categories are based on the chemistry of these coatings and can
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overlap many other categories in terms of their uses.  Therefore,
the EPA has revised § 59.402(c) (4)  for shellacs as recommended.
For lacquers, paragraph  (c)(2) has been amended as follows:
"Lacquer coatings  (including lacquer sanding sealers) that are
also recommended for use in other architectural coating
applications to wood, except as stains, are subject only to the
VOC content limit in table 1 for lacquers."  As explained earlier
in this section, the EPA has concluded that lacquers used as
stains should meet the stain VOC content limit.  Exception
paragraph  (c)(15) has been added to § 59.402 for bituminous
coatings and mastics that are recommended for use as any other
architectural coating.
     Comment:  Two comrr.enters (IV-D-161, IV-D-189) were concerned
about category overlap when industrial maintenance coatings are
recommended for application as floor coatings in an industrial,
institutional,  or commercial setting.  According to one commenter
(IV-D-161), the floor coating category was developed during the
regulatory negotiation as a high performance category to be used
in residential settings in case the industrial maintenance
coatings were precluded from use in such settings.  To resolve
the overlap, one of the commenters (IV-D-189)  recommended that
the definition of floor coating be amended by adding "in
residential situations" in the following manner:  "Floor coating
means a coating with a high degree of abrasion resistance that is
formulated and recommended for application to flooring including,
but not limited to decks, porches,  and steps in residential
situations."  The commenter also recommended resolving the
overlap by amending proposed paragraph  (b)(7)  in § 59.402 to read
"Industrial maintenance coatings that may also be recommended for
use as primers or floor coatings shall only be subject to the VOC
level in table 1 for industrial maintenance coatings."
     One commenter (IV-D-161) also addressed the overlap issue in
the case where an industrial maintenance coating is recommended
to cover holes or cracks in an industrial, institutional, or
commercial application.  This use potentially overlaps coatings
in the mastic texture coating category.  To resolve this overlap,
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the commenter suggested, amending paragraph  (b) (7)  in  §  59.402  as
follows:   "(7) Industrial maintenance coatings  that may also be
recommended for use as primers or mastic texture coatings  or
floor coatings shall only be subject to the VOC level in table 1
for industrial maintenance coatings."
     Response:  Similar to varnishes used as floor coatings, the
EPA did not intend that industrial maintenance coatings  used as
floor coatings be subject to the more restrictive  floor  coatings
VOC content limit.  For coatings intended for use  in  industrial
maintenance situations, the higher industrial maintenance  coating
limit of 450 g/1 applies, due to higher performance requirements.
The same is true for industrial maintenance coatings  intended  for
use as mastic textured coatings.   For industrial maintenance
coatings used as floor coatings,  the overlap has been resolved as
suggested by the commenter by revising the definition of "floor
coating" to mean a coating with a high degree of abrasion
resistance that is formulated and recommended for application  to
flooring including, but not limited to decks, porches, and steps
in residential situations.  For mastic textured coatings,  the
overlap has been resolved as suggested by amending the exception
paragraph as follows in § 59.402(c)  of the final rule:   "(7)
Industrial maintenance coatings that are also recommended  for  use
as primers, sealers,  undercoaters,  or mastic texture coatings  are
subject only to the VOC content limit in table 1 for industrial
maintenance coatings."
     Comment:   One commenter (IV-D-171)  inquired about the
applicable category for a line of concrete waterproofing products
that it markets as primers that are applied to a substrate prior
to application of self-adhesive waterproofing membranes.  This
product is typically applied to sub-grade concrete structures and
functions as a primer.  The commenter explained that the
waterproof primers condition the  chalky surface of the concrete
by coalescing concrete dust prior to application of the
membranes.   According to the commenter,  these primers do not
precede subsequent coatings since the waterproof membranes are
not coatings.   In addition,  these primers do not block
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efflorescence.  The commenter asserted that the definition of
sealer is most appropriate based on the function of these
waterproofing primers as a surface conditioner.
     Response:  The information provided by the commenter
indicates that these products function as sealers because the
coatings fulfill one of the purposes of a sealer listed in the
definition,  "to condition chalky surfaces," and therefore, appear
to be subject to the VOC content limit of 400 g/1 for sealers.
     Comment:   One commenter (IV-D-161) requested that quick-dry
sanding sealers that meet the quick-dry primers,  sealers and
undercoaters category level of 450 g/1 be allowed to meet the
sanding sealers limit of 550 g/1.  According to the commenter, an
overlap occurs because sanding sealers usually dry quickly to
allow complete surface preparation in the shortest time possible.
The commenter recommended the addition of a new paragraph in
§ 59.402(b)  to resolve any possible overlap:  "Sanding sealers
that also meet the definition for quick-dry sealers shall only be
subject to the VOC level in table 1 for sanding sealers."
     Response:  The EPA agrees that sanding sealers that dry
quickly and therefore meet the definition for quick-dry sealers
should only be subject to the VOC content limit for sanding
sealers at 550 g/1 because the sanding sealer category is a
specific application for which a higher VOC content is allowed.
Therefore,  § 59.402(c) has been amended by adding an exception
paragraph for sanding sealers to avoid this unintended overlap.
     Comment:   One commenter (IV-D-161) was concerned that some
waterproofing (treatment) sealers may not dry quickly enough to
meet the definition requirement for quick-dry sealers and, thus,
would be subject to the lower limits.   The commenter stated that
this is unreasonable since the quick drying characteristic does
not reduce the need for the higher VOC content level associated
with the waterproofing (treatment)  sealer category.   The
commenter submitted the following new paragraph for § 59.402(b)
as a possible solution:  "Clear waterproofing (treatment) sealers
that also meet the definition for quick-dry sealers shall only be
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subject to the VOC level in table 1 for clear waterproofing
(treatment) sealers."
     The commenter also requested an exception to the most
restrictive level for quick-dry primers, sealers, and
undercoaters that meet the definition for primers and
undercoaters.
     Response:  The EPA agrees that the most restrictive limits
should not apply in situations where a coating is formulated for
a specific use, but unintentionally meets the definition of
another coating with a more restrictive limit.  Therefore, the
EPA has amended § 59.402 (c) to add exception paragraphs for
waterproofing sealers and treatments that also meet the
definition for quick-dry sealers; and for quick-dry primers,
sealers, and undercoaters that also meet the definition for
primers and undercoaters,  as recommended by the commenter.
     Comment:  Two commenters  (IV-D-04, IV-D-11)  stated that the
EPA should publish the proposed coating definitions in the
Federal Register and extend the public comment deadline since the
proposed rulemaking did not include definitions for the
55 categories of coatings identified for regulation.  As a former
regulatory negotiation committee member, one commenter (IV-D-04)
attested that significant issues surrounded definitions of
categories.  Another commenter (IV-D-11) stated that different
definitions in existing State rules and the proposed rule's
categories creates confusion as to what coatings are to be
included in a particular category.
     Response:   At proposal in June 1996,  the EPA made the
definitions for the coating categories available to the public
through the EPA's Technology Transfer Network (TTN)  (a network of
electronic bulletin boards developed and operated to provide
information in air pollution control)  and the architectural
coating rule docket.   Then, on September 3,  1996 (61 FR 46410),
the EPA published the proposed regulatory text,  including the
definitions and on October 8,  1996 (61 FR 52735)  extended the
public comment period from the original closing date of August 30
to November 4,  1996.   The EPA believes that this process gave
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notice to all interested parties of the types of issues and
concerns the EPA had in developing appropriate categories and
definitions.  Based on public comments received on the proposed
rule, the EPA has revised several definitions in the final rule
for clarification.  To the extent possible,  the EPA has included
architectural coating definitions that are consistent with
existing State rules.
2.2.4   Coating Categories and VOC Content Limits
     The EPA received a variety of comments on the VOC content
limits in the proposed rule.  The bulk of the commenters targeted
specific categories.  Some commenters requested that new
categories be added to the rule to accommodate specific coatings.
In most cases, this type of request was based on the
manufacturer's determination that the coating did not fit into
one of the proposed coating categories, or the proposed VOC
content limit for the category in which the coating fell was not
achievable by the particular coating.  These comments are
summarized in section 2.2.4.2, Requests for New Categories.  In
addition, some commenters stated that specific categories in the
proposed rule should have either lower or higher VOC content
limits.  These comments are summarized in section 2.2.4.3,
Comments on Existing Categories.
     In addition to category-specific comments, the EPA received
many comments that were more general.  These commenters stated in
broader terms that the proposed VOC content limits were either
(1) appropriate,  (2) too stringent, or (3) too lenient.  One of
these commenters provided an alternative table of VOC limits for
1997 and a table of VOC limits for 2002.   These comments are
summarized in section 2.2.4.1.  Another commenter (IV-D-216) also
provided an alternative table of VOC limits for 24 coating
categories, which contained two phases, one for implementation
nationwide 3 years after promulgation of the rule and another for
implementation only in designated ozone nonattainment areas
6 years after promulgation of the rule.
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     2.2.4.1   General
     Comment:
     Introduction.  Many commenters provided general comments on
the overall stringency of the VOC content limits in the proposed
rule.  Seven commenters  (IV-D-28, IV-D-181,  IV-D-189, IV-D-206,
IV-D-213/IV-F-lf,  IV-F-lk, IV-D-185/IV-F-ln) stated that the
proposed limits were reasonable and achievable.  Thirteen
commenters  (IV-D-22/IV-F-la, IV-D-33, IV-D-34, IV-D-96, IV-D-117,
IV-D-118, IV-D-119, IV-D-126, IV-D-174,  IV-D-188, IV-D-190,
IV-D-191, IV-D-215) stated that they did not support the rule
because the proposed limits were too lenient and should be made
more stringent.  Eight commenters (IV-D-12,  IV-D-44, IV-D-110,
IV-D-115, IV-D-158, IV-D-180, IV-D-192,  IV-F-2a)  stated that the
proposed limits were too restrictive and should be made less
stringent.  One commenter (IV-D-216) argued that their table of
alternative VOC limits represented the most environmentally
beneficial,  cost-effective,  and technologically and economically
feasible method for regulating architectural coatings consistent
with the requirements of section 183 (e)  of the Act.
     General comments in support of the proposed rule.  Seven
commenters  (IV-D-28, IV-D-181,  IV-D-189,  IV-D-206,
IV-D-213/IV-F-lf,  IV-F-lk, IV-D-185/IV-F-ln) stated that the
limits in the proposed rule were reasonable and achievable.
     Two of the commenters  (IV-D-28, IV-D-185/IV-F-ln) stated
that the proposed VOC limits represented best available controls
(BAG).   One of the commenters (IV-D-28),  a supplier of industrial
maintenance coatings and certain other categories of coatings
listed in the proposed rule, pointed out that the EPA has
selected BAG based on all available data,  State rules,
information from the regulatory negotiation, industry inputs, and
the EPA's own expertise.  The commenter recommended that the EPA
maintain the proposed VOC content limits since they were
developed using the best available data,  given the time and cost
restrictions.
     One commenter  (IV-D-185/IV-F-ln) voiced strong support for
the proposed rule.  The commenter stated that, for stains,
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varnishes, and waterproofing sealers, the proposed VOC content
limits would achieve maximum feasible reductions in VOC emissions
that are both technologically and economically feasible.  The
commenter stated that the standards for these categories were
tough, but fair, and will allow the industry to continue to
produce quality products and to continue to formulate and sell
effective products that can provide satisfactory performance.
The commenter stated that the proposal struck an excellent
balance between the competing perspectives that have been
expressed about the feasibility of achieving VOC reductions.
     One commenter (IV-D-189),  a national trade association
representing approximately 500 paint and coatings manufacturers,
raw material suppliers, and distributors, stated that the
proposal is fundamentally consistent with its position that a
national rule must be economically and technologically feasible.
The commenter stated that the rule strikes a fair balance between
environmental concerns and the need to maintain the economic
viability of the industry.  The commenter stated that,  for the
most part, the proposed coating categories are consistent with
the recommendations that the organization submitted to the EPA in
April 1995.  Also, the commenter stated that it appreciated the
EPA's proposal of VOC requirements which recognize the need for
(and allow the continued use of) solventborne coatings in certain
specialty areas, as well as in some more general usage categories
such as industrial maintenance, floor coatings, rust preventative
coatings, concrete protective coatings, and nonflat coatings.
The commenter stated that the rule adequately addresses the fact
that the same architectural coating must be able to perform in
all regions and climates of the United States.
     Another commenter  (IV-D-213/IV-F-lf), representing a
national association of coating users, stated that the proposed
table of standards would not be disruptive for the majority of
the coatings its members are using.  The commenter stated that
the organization has a membership of over 3,000 professional
coating contractors and that every coating that is on the market
is used by some of its members.  The commenter stated that the
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proposed table of standards fit squarely within current
technologies and is consistent with various existing State
regulations.  The comtnenter stated that further reductions in the
VOC content limits would adversely affect coating performance and
could ultimately result in more VOC emissions due to a shorter
coating lifetime.
     One commenter  (IV-D-206), representing a national trade
association with a membership of over 180,000 architectural
coating users, stated that the proposed table of VOC content
limits will not significantly increase construction costs and
will not appreciably reduce coating performance.  The commenter
maintained that the limits for interior and exterior nonflat
alkyd trim paint, and many other coatings,  are as low as they can
be without adversely affecting performance.
     General comments opposing the proposed rule -- too lenient.
Thirteen commenters (IV-D-22/IV-F-la,  IV-D-33, IV-D-34, IV-D-96,
IV-D-117,  IV-D-118,  IV-D-119,  IV-D-126, IV-D-174,  IV-D-188,
IV-D-190,  IV-D-191,  IV-D-215)  stated that they did not support
the proposed rule because the VOC content limits were too lenient
and, therefore, do not represent BAG.
     One commenter  (IV-D-190)  explained that the EPA's
determination of BAC does not reflect the substantial
developments in paint and coatings technology since 1990.   The
commenter quoted public hearing comments indicating that raw
material suppliers and large paint companies have developed new
low-VOC technologies and maintained that the EPA has not asked
these companies exactly what their capabilities are.  The
commenter stated that the dominant companies are abandoning low-
VOC coating development since existing products already
comfortably satisfy the proposed VOC content limits.  The
commenter asserted that the Act imposes a duty on the EPA to
identify systematically these lower-VOC technologies.  Another
commenter (IV-D-191) stated that the data the EPA used to
determine BAC is outdated.  The commenter stated that cost-
effective technologies currently exist in just about every
category that have significantly lower-VOC contents than those
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proposed by the EPA.  Both commenters (IV-D-190, IV-D-191)
pointed out that the EPA stated in the preamble to the proposal
that "EPA was aware of numerous examples of low VOC systems which
perform better than the traditional higher VOC systems."
     Two commenters (IV-D-33, IV-D-215)  claimed that the proposed
rule reflects the status quo, and manufacturers will merely
continue to produce and sell products at existing VOC content.
     Nine of the commenters  (IV-D-22/IV-F-la,  IV-D-33,  IV-D-34,
IV-D-96, IV-D-126,  IV-D-174, IV-D-188, IV-D-190, IV-D-191) cited
the existence of more stringent State and local architectural
coating regulations that have been in place for many years as
evidence that the proposed limits are not BAC.   One commenter
(IV-D-22/IV-F-la) noced that over 170 manufacturers are already
meeting tighter standards that have been in effect for almost a
decade in most metropolitan areas of California, as well as
several other States [no reference cited].   One commenter
(IV-D-34)  pointed out that the technology assessments published
for the 1989 Suggested Control Measure (SCM)  by the California
Air Resources Board (CARB) and the California Air Pollution
Control Officers Association (CAPCOA) indicated the availability
of coatings in various categories that are below the proposed
limits.  One commenter (IV-D-33)  pointed out that several air
quality management districts in California have stricter limits
and manufacturers have complied with these limits for years.
     One commenter  (IV-D-191) stated that the proposed rule
represents a "least common denominator"  approach to rulemaking
and fails to set standards at levels that will  move the industry
forward sufficiently to reduce the VOC content  of coatings.
     Several commenters (IV-D-22/IV-F-la, IV-D-96,  IV-D-174)
stated that the rule does not obtain the VOC reductions that are
achievable, falls short of State VOC reduction  goals,  and may
result in States adopting more stringent control measures for
this source category.   One commenter (IV-D-22/IV-F-la)  stated
that State rules may have differing requirements,  leading to the
administrative,  technical, and marketing problems the EPA hoped
to avoid with a Federal rule.  Two commenters (IV-D-22/IV-F-la,
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IV-D-174) added that because the rule is less stringent than
existing State regulations, it may force them to seek VOC
controls on other source categories that may not be as cost-
effective.
     One commenter  (IV-D-22/IV-F-la) provided an alternative
table of VOC content limits with more stringent limits for
several categories that would achieve a 30 percent reduction on a
solids basis.  The commenter stated that the more stringent VOC
limits were based on the 1989 CARS Suggested Control Measure.
The commenter also omitted several specialty coating categories
that it deemed to have unenforceable definitions and readily
available low-VOC alternatives.  The commenter stated that the
more stringent levels represent BAG and, therefore,  should be
reflected in the rule.  (The commenter also suggested a second
phase of VOC limits that would take effect in the future.  For
comments and responses regarding the suggested second phase of
VOC limits see section 2.6).  Six commenters (IV-D-33,  IV-D-34,
IV-D-117, IV-D-118,  IV-D-126,  IV-D-215)  supported the more
stringent VOC limits presented by commenter IV-D-22/IV-F-la and
stated that they are a fair and responsible compromise based on
achievable limits.  The commenter (IV-D-22/IV-F-la)  stated that
if the EPA adopts the proposed standards in table 1 of the rule,
almost all State and local agencies will accept the national rule
as a sufficient level of control rather than seeking more
stringent limits.
     General Comments Opposing The Proposed Rule -- Too
Stringent.  Nine commenters (IV-D-12,  IV-D-44,  IV-D-110,
IV-D-115, IV-D-158,  IV-D-175,  IV-D-180,  IV-D-192,  IV-F-2a) stated
that the VOC content limits in the proposed rule were too
restrictive and should be made less stringent.   These commenters
stated that the limits should be raised because low-VOC products
(i.e.,  products meeting the proposed standards)  do not perform as
well as higher (non-compliant)  VOC products.
     One commenter  (IV-D-110)  stated that raw material suppliers
are working diligently to provide new technology to paint
manufacturers to re-develop products.   However,  at this point,
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the commenter claimed that it has not been able to achieve the
quality, durability and pricing to replace these products.
Another commenter (IV-D-115)  concurred that available paint raw
materials are not adequate to reformulate every non-compliant
coating the paint industry offers and still meet performance
requirements. The commenter expressed concern that emission
limits on high-quality protective coatings that are too strict
would prohibit their production and use.   The commenters
(IV-D-110, IV-D-115) did not cite any specific coating categories
for which reformulation was not achievable or adequate to meet
performance needs, but rather argued their points in general
terms.
     Two commenters (IV-D-12, IV-D-110)  questioned the
performance characteristics of low-VOC coatings.  One commenter
(IV-D-12)  recommended that the coatings industry conduct further
performance studies.  The commenter indicated that its laboratory
experience with low-VOC coatings shows that they are usually
thick and that the formulas would require considerable thinning
to apply.   The commenter further maintained that over-thinning is
a frequent problem with many contractors, which can have several
consequences:  coatings that dry too fast, increased runs and
drips,  shortened shelf life due to the settling of heavier
pigments,  effects on opacity, and may cause polymerization.  The
commenter recommended that the rule require manufacturers to
produce paint that is pre-thinned and ready to apply to solve
issues associated with over-thinning.   Also,  the commenter
explained that using low-VOC coatings would be counterproductive
if the use of the coatings result in more emissions due to more
coatings applied, more thinners needed,  and more frequent
applications required.  Another commenter  (IV-D-180) added that
when establishing VOC content limits,  the EPA should consider
that higher-VOC coatings that only require a single application
could result in less total VOC emissions than using a low-VOC
coating that does not perform as well.
     A small coatings manufacturer  (IV-F-2a)  with 13 employees
and $6 million in sales stated that they do not know how they
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could reformulate the 40 percent of their coatings that do not
meet the proposed limits since any changes they make will affect
the coating performance.  Currently the coatings they sell in
areas with architectural coatings regulations (e.g., regulated
areas of New York and New Jersey) do not perform as well as their
other coatings and contain more long oil alkyds with poor gloss
properties.
     One commenter (IV-D-158) stated that the proposed rule would
require a massive reformulation of products in the paint and
coating industry.  The commenter claimed that some organizations
were supporting lower limits based on improper data or based on
environmental conditions which do not represent circumstances in
other areas.
     One commenter (IV-D-216),  representing an organization of
local and regional coating manufacturers, submitted an
alternative national rule for architectural coatings,  which
included a table of VOC content limits for 24 coating categories.
The table contained one phase of VOC content limits for
nationwide implementation 3 years after promulgation of the
regulation and another phase for implementation only in
designated ozone nonattainment areas 6 years after promulgation
of the regulation.  The commenter stated that its approach would
treat people equally, address the demands of section 183 (e) of
the Act, and allow the forces of supply and demand to run the
market.  The commenter argued that implementing its first phase
of VOC content limits would reduce VOC emissions from
architectural coatings nationwide by 18 percent, and implementing
the second phase would reduce emissions in designated
nonattainment areas by 32 percent.  The commenter asserted that
its approach promoted reformulation,  rather than substitution,
and therefore, it is the most effective system for obtaining VOC
emission reductions.   The commenter maintained that its approach
addressed the substitution problem by establishing emission
limits that are achievable through reformulation using current
technology.
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     Response:   The EPA believes that the final rule represents
best available controls (BAG).   The Act defines "best available
controls" as "the degree of emissions reduction that the
Administrator determines on the basis of technological and
economic feasibility,  health, and energy impacts,  is achievable."
The statute thus explicitly authorizes the EPA to take into
consideration various factors and to exercise its discretion to
choose achievable VOC concent limits.  In developing the rule,
the EPA considered many factors in evaluating the economic and
technological feasibility of different VOC content levels and
different degrees of produce reformulation.   These factors
included:
     •     Limits in State/local regulations
     •     VOC content and sales information
     •     Performance considerations
     •     Cose  considerations
     •     Market impacts

The sources of  information for these factors included:

     •     Pre-proposal letters
          The 1992 industry survey (collected 1990 data)
     •     Public comments on the proposed rule
     •     Follow-up discussions with commenters to gather
          additional technical  information
     •     EPA expertise
     •     State/local regulations and pre-proposal discussions
          with State/local regulators
     •     Input from coating manufacturers and other stakeholders

Considering all these factors,  the EPA concluded that the VOC
content limits  in table 1 of the rule,  along with the exceedance
fee provisions  and the tonnage  exemption,  represent BAC for
architectural coatings.   The EPA's process for developing BAC was
described in the proposal preamble (61 FR 32737) .
     Technical  feasibility and coating performance issues.
Throughout this rulemaking,  there has been debate over the degree
to which VOC content levels in architectural coatings can be
reduced and on the performance  characteristics of low-VOC
coatings.  The  term "performance" means the  coating qualities

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 that  are  acceptable  to  consumers  and  that maximize the  interval
 required  between recoating.   Performance is particularly
 difficult to assess.  As discussed  in the preamble to the
 proposed  rule  (61 FR 32738),  these  acceptable qualities can vary-
 significantly  depending on  the consumer and the coating category.
 There  is  no consensus within  the  architectural coatings industry
 on standards by which to evaluate acceptable coating performance.
 Therefore, the EPA requested  comment  on the technical feasibility
 of the limits  in the proposed table of standards and on
 performance issues.  The proposal requested documentation, tests,
 and factual evidence to support or  refute claims about
 performance and the  technical feasibility of low-VOC systems.
     The  EPA evaluated all  information that was submitted by
 commenters pertaining to the  feasibility of the rule and sought
 additional information that was reasonably available.   In
 evaluating the degree of emission reduction that represents BAG,
 the EPA took into consideration that  these requirements would
 apply to  all areas of the country and to all manufacturers of
 architectural coatings within a specific time frame  (i.e.,
 approximately 1 year from promulgation).   Based on the public
 comments  received,  a number of changes were made to the proposed
 rule.  These changes are discussed  in section 2.2.4  (Coating
 Categories and VOC Content Limits)  of this document.   In some
 cases, commenters claimed that the  proposed limits in the rule
 were not  feasible or did not  represent BAC,  but provided no data
 to support the general claim.  In such cases,  the EPA sought
 additional information that was reasonably available and
 considered the comments in the context of the overall BAC
 determination,  but often found no basis for making substantive
 changes to the proposed rule.
     Relationship of BAC to State regulations.   State and local
 regulations were one of the factors used by the EPA to develop
 BAC.   As stated in the proposal preamble (61 FR 32737),  State and
 local architectural  coating requirements were used prior to
proposal as a starting point  in determining "what categories and
 associated VOC levels might constitute the degree of  emissions
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reduction that represents BAG."  After proposal, the EPA used
State and local architectural coating retirements as a factor in
the evaluation of public comments on VOC content limits.
     However, the EPA does not agree with commenters who believe
that at a minimum BAG for the national rule should be equivalent
to or more stringent than the lowest emission limits that exist
in any State regulation  (as presented in a table of standards by
one commenter).  In the development of a national rule under
section 183(e),  the EPA has the obligation to determine that the
emission limics are technologically and economically feasible on
a national scale.  State and local VOC limits are based on
coating performance under the local meteorological conditions and
patterns of coating demand,  some of which may be very different
than in other locations.  Moreover, based on local air quality
and existing regulatory programs,  a State or local agency may set
rules based on a oalancing of technological,  economic,  and
environmental factors that might differ from the balance
appropriate for a national rule.
     Therefore,  the EPA departed from the State and local
requirements where other factors,  such as information on VOC
content and sales,  performance,  costs,  and market effects,
indicated that the limits were not technologically or
economically feasible on a national scale.
     The role of tne exceedance fee and tonnage exemption in BAG.
While the EPA believes that the technology exists to meet the
limits in table 1,  some manufacturers may need more time to
obtain the necessary technology for some coatings.   Still other
manufacturers may choose not to reformulate some of their
specialty products that are produced in low volume.  The
exceedance fee and tonnage exemptions were adopted into the final
rule, in part, to minimize impacts on the supply of coating
products.  The exceedance fee (discussed in section 2.4)  is
intended to allow manufacturers and importers additional time to
develop low-VOC formulations while providing appropriate economic
incentives for most manufacturers ultimately to comply with the
VOC limits of the rule.  The tonnage exemption  (see
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section 2.2.1.2} is intended to allow manufacturers and  importers
the flexibility to continue to market certain low-volume product
lines where reformulation of a specialty product used for unique
applications may not be cost-effective.  The EPA believes that
all available data indicate that the system of regulation adopted
in the final rule, consisting of VOC content limits, an
exceedance fee provision, and a tonnage exemption, reflects BAG
for the architectural coatings category.
     Consideration of new low-VOC coatings. The EPA recognizes
that the 1992 industry survey that the EPA used as one of the
factors for developing BAG collected 1990 data.  Although the
data in this survey is now 8 years old, it still represents the
most complete survey of the architectural coating industry  (it
captured approximately 75 percent of the coating volume).   In
addition,  the industry survey was only one of the many factors
used in determining BAG.  Information on advances since 1990 were
obtained from over 300 preproposal letters, over 200 public
comment letters, over 40 follow-up telephone calls,  and
information obtained from State regulatory agencies.  The EPA
believes that the final rule represents BAG based on the survey
database and other data available to the EPA.
     The EPA acknowledges that there are coating technologies in
existence with VOC contents lower than those listed in table 1.
However,  section 183(e)  of the Act does not require the EPA to
set BAG at the level of the lowest-VOC product.  It requires that
the EPA determine BAG based on "the degree of emissions reduction
that the Administrator determines on the basis of technological
and economic feasibility,  health,  and energy impacts,  is
achievable."  The statute thus directs the EPA to consider and
balance a number of factors in establishing the appropriate
controls.   To determine whether a more stringent rule would meet
the criteria for BAG in che future,  the EPA would need to
undertake additional study of the architectural coatings
category.   See section 2.6 for discussion of such a study.
     Comment:   Two commenters (IV-D-119,  IV-D-191)  criticized the
rule as being too lenient.   Both recommended setting more
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stringent emission limits that are more technology-forcing and
using innovative mechanisms (e.g., emissions trading and emission
fees) to allow needed flexibility.  One commenter (IV-D-191)
stated that innovative mechanisms such as persuasive emission
fees and other new approaches were absent from the proposed rule.
Another commenter (IV-D-119)  believed that the EPA is giving up
an opportunity to hold sources to strict standards while allowing
flexibility through the use of market-based programs, such as the
EPA's draft Open Market Trading Rule.  The commenter suggested an
alternative format of strict  limits with the opportunity and
flexibility of emissions trading.  The commenter argued that
emissions trading provides incentives for sources that have lower
compliance costs to over-control and sell the excess reduction
credits to sources with higher compliance costs.   This allows for
cost-effective controls and alleviates the need to set standards
to accommodate the "lowest common denominator."
     Response:  Under section 183(e) , the EPA has the obligation
to demonstrate chat the architectural coating rule is achievable,
considering technological and economic feasibility and other
factors.   The EPA has sec the VOC content: limits  at  what it
believes to be sufficiently stringent levels,  taking into
consideration these factors.   In doing so,  the EPA has also
provided appropriate mechanisms to make the limits achievable.
The exceedance fee provision  and the tonnage exemption provide
the necessary flexibility for the level of the emission limits in
the rule.
     The exceedance fee allows more time for manufacturers to
develop new product formulations and provides a less costly
compliance approach for manufacturers selling low volume products
for which it is noc cost-effective to reformulate.   The EPA
believes that the fee rate is sufficiently persuasive to
encourage manufacturers ultimately to reformulate to the levels
of the rule.  The fee rate is at the upper end of the range of
incremental VOC reduction costs imposed by regulations on other
industries.  At this time,  the EPA does not believe  that
providing any additional flexibility (through emissions trading
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or other approaches)  justifies more stringent emission  levels  in
the rule.
     Several alternative market-based approaches were considered.
The emission fee was  considered the most appropriate due  to
simplicity, and it would be  less complex and burdensome for this
industry than emission  trading schemes, due to the changing
nature of  the product lines  and the complexity of the
recordkeeping that would be  required for emission trading.
     Comment:  One commenter (IV-D-96) stated that, were  a State
to repeal  its more stringent rule in place of the national rule,
it might trigger a legal challenge that the rule encourages
backsliding, which contravenes provisions in the Act.
     Response:  Promulgation of a Federal architectural coatings
rule in no way forces a State to repeal any regulation that
requires more stringent VOC  emission limits.  The Act expressly
preserves the right of  States to adopt regulations that are more
stringent than Federal  rules.  Any State, therefore, that chooses
to relax its regulations following promulgation of today's
Federal rule,  does so at its  own choice.  The commenter is
correct that "no backsliding" provisions under the Act prohibit
relaxation of VOC emission limits that result in an increase in
emissions in certain nonattainment areas.  If existing
regulations for architectural coatings are relaxed in such areas,
the backsliding provisions would require contemporaneous emission
reductions from other sources to balance the emission increase
from architectural coatings.  Some States have laws that prohibit
their emission standards from being more stringent than the
Federal rules.   The backsliding requirements,  where applicable,
would apply in these circumstances as well.
     Comment:   One commenter  (IV-D-191)  stated that the
negotiated approach to rulemaking had produced a significantly
stronger standard which the  EPA has ignored in the proposed rule.
     Response:   The EPA attempted to use the regulatory
negotiation procedure to develop the basis of the proposed rule
(see section IV.B of the proposal preamble).   During the
negotiations,  stakeholder groups proposed a number of standards
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with varying levels of stringency.  Based on these proposals, the
facilitator and the EPA prepared a number of different options
for the potential regulation.  In the end,  the negotiating
committee could not reach agreement on a rule, and the regulatory
negotiations concluded without consensus.  Therefore,  the
commenter is not correct that the negotiated approach produced a
stronger standard.
     Comment:   Three commenters  (IV-D-22, IV-D-33, IV-D-34)
expressed concern that the less stringent limits in the Federal
rule would undermine local rulemaking efforts.
     Response:   Because of the severity of their ozone problem,
some areas may need more emission reductions than provided in the
architectural coatings rule in order to meet the national ambient
air quality standard for ozone.  The Federal rule does not
prohibit the adoption of more stringent State rules.
     The Federal rule represents best available controls on a
national basis.  The EPA believes that the rule represents a
control level that is reasonable under the range of
technological,  environmental, and economic conditions that exist
nationwide.  In developing their own rules,  States consider only
local conditions and do not have to account  for national patterns
of consumer demand, varying weather and atmospheric conditions,
or other technological or economic factors that affect the
reasonableness of controls.  At the State level, therefore, local
circumstances may lead to different conclusions as to the degree
of control that is appropriate for some coatings.  The Federal
rule should not be interpreted as signifying that more stringent
levels of control are not feasible under some circumstances.
     Comment:   One commenter  (IV-D-190) stated that the BAG
determination methodology was flawed because the EPA did not
perform an independent survey of the coatings industry.
     Response:   The survey of coatings manufacturers was only one
of several factors considered in developing the final rule.  The
survey was conducted during the regulatory negotiation.  The
questionnaire was developed by the EPA and the committee.  The
survey was distributed and compiled by the National Paint and
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Coatings Association  (NPCA).  The NPCA hired an independent
contractor to compile and summarize the responses to protect the
confidentiality of certain  information in the survey.
     The EPA has no reason  to believe that the information from
the survey is flawed.  The  EPA believes that the survey
represents the best compilation of coatings data available today.
The Act does not require that all data used in a rulemaking be
collected by the EPA.  The  EPA can utilize any data that are
deemed by reasonable judgment to be accurate and representative
of the industry.
     Comment:   According to one commenter (IV-D-190), the
regulatory development process was merely a discussion between
the EPA and the National Paint and Coatings Association  (NPCA),
which represents manufacturers pushing for lenient limits.  The
commenter stated that no labor, environmental, or consumer groups
had submitted comments or evidence.
     Response:   The EPA encouraged participation of all
interested parties throughout the rulemaking process.  In
developing the proposed rule, the EPA met with many stakeholders
and shared drafts of the rule with a number of representatives of
industry, environmental groups (e.g.,  Natural Resources Defense
Council), consumer groups,  labor organizations,  and health
organizations.   After proposal, the EPA notified these same
groups about the Federal Register notice to ensure their
opportunity to comment.  More than 200 comment letters were
received in response to the proposed rule.  All significant
comments were evaluated and treated as equally important.
     Comment:   Regarding the availability of alternative
compliance systems, one commenter  (IV-F-le)  listed three
suppliers who offer low- or no-HAP solvents that are still
100 percent VOC.  The products have a vapor pressure limit that
meets the requirements for the consumer product adhesive
regulations but not the architectural coating VOC rule.
One commenter (IV-D-32) listed several circumstances where low-
VOC coatings have been introduced since 1990 with favorable
consumer response.   These products include low and no-solvent
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flat and non-flat interior coatings,  no-VOC exterior coatings,
and industrial maintenance coating category products.   According
to the commenter, the dominant view within the resin
manufacturing and coating manufacturing industries is that new
technical advances permit dramatic further reductions in the VOC
content of architectural coatings with no appreciable loss of
performance.  Another commenter (IV-D-73)  added that tremendous
VOC reductions have been made with the market shifting to latex
paints.  One commenter  (IV-D-175)  stated that the coatings
industry is doing a relatively good job moving to non-solvent
base latex coatings.  The commenter also stated that recent
technological advances and market forces are driving the industry
to latex waterborne systems.   The commenter stated that only
about 15 percent of the products produced by the company are
solvent-based.
     Response:   The comments support the EPA's position that many
low- and no-VOC coatings are available and that additional ones
are being developed that can meet performance needs as well as
the requirements of the rule.  Based on other available
information and comments received, the EPA believes that it is
technologically feasible to achieve the VOC content limits for
coating categories required in the final rule, and these comments
provide further support.
     Comment:  One commenter  (IV-D-45) stated that one problem
with the proposed regulation is that the architectural coating
industry is not all single purpose market type sales and implied
that the proposed rule should accommodate coatings that could be
classified under multiple categories.
     Response:   The EPA acknowledges that many architectural
coatings are used for multiple purposes.  In the final rule, the
EPA accommodates many multiple-use coatings in § 59.402(b) by
exempting those type coatings from the most restrictive VOC
content limit if that limit was not intended to apply.  In fact,
the EPA has greatly expanded that section in the final rule in
response to comments regarding category overlap issues.
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     Comment:  One commenter  (IV-D-02/IV-F-1[1])  maintained that
the EPA should incorporate the concept of different standards for
different seasons into the rule.  The commenter pointed out that
VOC emissions contribute to ozone formation primarily in late
summer and early fall.  The commenter suggested that the EPA
allow higher VOC coatings during the non-ozone seasons.  The
commenter maintained that this would allow small businesses
selling into high-VOC niche markets to continue to operate.  The
commenter (IV-F-1[1J) also stated that failures of low VOC-
coatings are more prevalent in the winter season, when ozone
exceedances rarely, if ever, occur.
     Response:   Although the EPA appreciates the reasoning behind
this comment, it would be neither practical nor enforceable to
set different standards for different seasons.  The architectural
coating rule sets standards for coating manufacturers'  sales and
distribution of coatings rather than end users' application of
these coatings.  The rule has no mechanism to constrain when end
users can apply these coatings.  In addition, such a provision
would not be practical to apply to the end users in the
architectural coating sector since these end users include
homeowners and a variety of contractors applying coatings at a
variety of locations throughout the year.  Enforcement of a
provision limiting coating application to non-ozone seasons would
require monitoring of these types of applications and locations,
which would not be practical.   Use of an ozone season approach
would also be very burdensome for manufacturers and importers
because they would have to produce different lines of products
for the ozone season and non-ozone season,  and begin tracking
products to insure that they were only distributed and sold
during the appropriate season at the given locale.  The EPA does
not believe that such burdens, especially for small businesses,
would be insignificant.
     Comment:  One commenter  (IV-D-28)  requested that the EPA
make two changes to Table 1 -  Architectural Coating VOC Content
Level.   First,  the commenter suggested that the EPA should adjust
the figures on the table to two significant figures because the
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method used to determine compliance (Method 24 of appendix A of
part 60) is only reliable up to two significant figures.  Second,
the commenter suggested the EPA should add a second column to the
VOC content table to list the VOC content limits in non-metric
form.
     Response:   Based on the commenter's suggestion,  the EPA has
added a column for non-metric (English)  units to table 1.  The
metric units will be used for enforcement.  The EPA is using two
significant figures in table 1 of the final rule for the VOC
content limits,  the same as in the proposed rule.
     Comment:   One commenter (IV-D-28)  suggested an alternative
control approach whereby each manufacturer would reduce its
overall VOC emissions by 20 percent from a 1990 baseline by
July 1, 1996,  by making reductions in products chosen by the
manufacturer.   The commenter suggested that this would foster
cost-effectiveness, and an annual certification of product mix
and end-use VOC content could provide regulators with an adequate
verification and enforcement mechanism.   According to the
commenter, any increase in sales volume that had the effect of
raising emissions over the 20 percent reduction during 1 year
would have to be compensated by a lower VOC product mix the
following year.
     Response:   The EPA appreciates the commenter's suggestion.
However, a similar approach was explored during the regulatory
negotiation, and it became clear that too many problems made the
approach unworkable, such as establishing a proper baseline, the
potential inequities between small and large businesses, and
significant administrative burdens.
     Comment:   One commenter (IV-F-le)  stated that in order to
warranty the effectiveness of their water-based products, they
recommend the product be applied at ambient temperatures of
50 °F or higher and under stringent humidity conditions.   (The
commenter did not cite a specific example.)  The commenter
pointed out that construction does not stop in the northern U.S.
during the winter when temperatures are at 30 °F or less.  The
commenter asserted that this issue needs to be addressed.
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     Response:   The EPA agrees that certain coatings,
particularly waterborne products, must be applied within a
certain temperature range and that humidity can also be a
consideration.   In fact, those were considerations in the EPA's
decision to create two new coating categories:  zone marking and
concrete curing and sealing compounds.  In general,  however,
coating manufacturers need to assess these factors and make the
coating users aware of any special requirements to ensure
successful application of the coating product.  Moreover, the EPA
notes that solventborne coatings also have limitations in use
under severe conditions.
     2.2.4.2   Requests for New Categories
     Lead-based paint encapsulant and asbestos encapsulation.
     Comment:   One commenter  (IV-D-172)  requested that the EPA
create a new category for lead-based paint encapsulant and
asbestos encapsulation products with a 350 g/1 VOC content limit.
However, in follow-up information (IV-G-26),  the commenter
revised their position to request that the EPA establish a VOC
content limit of 250 g/1 for these two types of products.  The
company's primary lead-based encapsulant has a VOC content of
141 g/1.  The commenter stressed that there may be performance
limitations for water-based coatings below 250 g/1 for specific
end-use encapsulation problems such as for floor coatings.  The
commenter explained that these water-based products have special
coalescent, wet-edge, freeze-thaw, and viscosity properties.  The
commenter implied that these formulations will prevent asbestos
dust and aged lead paints from contaminating the environment.
The commenter mentioned that the products are in nationwide use
and that the EPA has recently published guidelines for the use
and application of lead-based paint encapsulant.
     Response:   In follow-up information (IV-G-26),  the commenter
stated that the company had been successful in reformulating its
lead-based paint encapsulant and asbestos encapsulation products
to meet a VOC content level of 250 g/1,  therefore the EPA sees no
benefit to creating a separate category for these two product

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types.  In the absence of a specific category,  these products are
subject to the flat or nonflat category (depending on the gloss
level of the coating).   For flat coatings,  the VOC content limit
is 250 g/1 and for nonflat coatings, the VOC content limit is
380 g/1.  The EPA obtained follow-up information from another
manufacturer (IV-E-60)  that indicated that  low-VOC encapsulation
products are available.  Also, according to a September 1993
article on asbestos encapsulants (IV-B-4),  one company has
successfully recoated old siding containing asbestos with a
system that meets the most stringent regulations for VOC.  The
system consists of water blasting,  spot priming bare metal with
an epoxy mastic,  applying a full coat of a  waterborne acrylic,
and topcoating with a high-solids polyurethane.   A stadium was
recoated using this system.  In response to the commenter's
concern about encapsulation paints used on  floors,  if these
products are recommended by the manufacturer solely for
application to floors and the product meets the definition of a
floor coating,  the product would be subject to the VOC content
limit of 400 g/1 for floor coatings.
     Alkali-resistant primers.
     Comment:  Three commenters (IV-D-189,  IV-F-lg,  IV-F-lk)
requested that the EPA recognize an alkali-resistant primers
category at 550 g/1 VOC.  One commenter (IV-D-189)  requested the
category be defined as follows:  primers formulated to resist
reaction with alkaline materials such as lime,  cement,  soap,  etc.
One commenter (IV-F-lk) did not agree with  the statement in the
proposal preamble that latex coatings can perform the function of
alkali-resistant primers under the most difficult conditions.
     Response:   The EPA reviewed its basis  for not creating this
category and, since no new information was  presented to justify
establishing a category for alkali-resistant primers, the basis
for the EPA's decision not to create this category is the same as
stated in the proposal preamble (61 FR 32739, June 25,  1996,
third column).   That is, significant overlap between
alkali-resistant primers and the more general primer category is
apparent, and comments were received before proposal regarding
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the ability of lower-VOC latex coatings to perform the function
of alkali-resistant primers  (61 FR 32739).   In addition, only one
State architectural coating rule contains a category for alkali-
resistant primers, with a VOC content limit of 560 g/1.   In the
final rule, these coatings are subject to the primers and
undercoaters category VOC content limit of 350 g/1.
     Oil-modified urethane.
     Comment:  One commenter  (IV-D-21) requested a separate
coating category for oil-modified urethane with a VOC content
limit of 520 g/1 that would not be superseded by other categories
having lower limits, such as the floor coatings category
(400 g/1).   The commenter stated that its product line has VOC
contents ranging from 477 to 519 g/1.  Oil-modified urethane
coatings are used for finishing and refinishing residential
hardwood floors, gymnasium floors, and other sports floors.  The
commenter stated that despite 6 years of effort,  the company has
been unable to reformulate its oil-modified urethane products to
the proposed 400 g/1 content limit for floor coatings.  The
commenter cited problems with failure to cure properly and to
perform satisfactorily at a level below 477 g/1.   Waterborne
urethane/acrylic coatings are being used (mostly in California);
however, the commenter stated that these coatings do not result
in the same appearance,  durability and life to floors as the oil-
modified urethane and that more coats of waterborne coatings are
needed for floors.  As proposed,  the commenter stated that the
rule would cause its company to lose most of its  business for
that market, which represents over 11 percent of  annual  sales
($698,000).  The commenter requested an exceedance fee as an
alternative compliance option if the EPA does not create a
separate coating category.
     Another commenter (IV-D-211)  also recommended adding a new
specialty category,  "Clear coatings for sports floors" using
oil-modified urethane and water dispersed formulations.   The
commenter requested a higher VOC content limit of 550 g/1.   In
follow-up information (IV-E-6),  the commenter stated that its
oil-modified urethane products have a VOC content between 500 and
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550 g/1, and these products are not sold in regulated areas.
According to the commenter, this new category fits the concept of
high performance coatings that the EPA considered but did not
propose as a general category.  These are clear or semi-
transparent coatings formulated to provide a durable, solid
protective film for wood floors used for sports and are not
intended for residential use.   According to follow-up information
(IV-E-6), as the solvent content of oil-modified urethane is
reduced, there are problems such as reduced flowability, more
chance of ridges of excess product, and increased drying time.
The commenter cited the demanding performance requirements of
these coatings, which are developed specifically to work with
maple and its characteristics  of porosity,  hardness,  and
dimensional changes with moisture and temperature.  The commenter
referred to the results of a survey conducted by the Maple
Flooring Manufacturing Association in 1993 regarding problems
with water reducible urethane  used on hardwood floors,  including
gym floors.  The problems included panelization or splitting,
excessive scuffing, and slipperiness.   In follow-up information
(IV-E-6), the commenter noted  that its company does sell a water
dispersed formulation compliant product in regulated areas, but
there are application and performance problems associated with
this product.  The commenter also indicated that this company is
the largest direct marketer of sports floor coatings (IV-E-6).
The commenter maintained that  the creation of a separate category
would obviate the need for extensive reformulation in this small
category at this time.
     Response:  After review and evaluation of these comments and
follow-up information, the EPA has determined that the 450 g/1
VOC content limit is appropriate and that a separate coating
category for oil-modified urethane is not warranted.   Due to the
change being made in the floor coating definition in the final
rule, the commenters would be  subject to the varnishes coating
category with a VOC content limit of 450 g/1, rather than the
400 g/1 limit proposed for floor coatings.  Two commenters after
proposal of the rule  (IV-D-69, IV-D-207) indicated that a VOC
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content limit of 450 g/1 is achievable for varnishes used on wood
floors, and manufacturers at the public meeting held on
August 13, 1996  (IV-F-02) requested a VOC content limit of
450 g/1 for the varnish category.  Before proposal, one
manufacturer  (II-E-47) commented that the 450 g/1 limit seems to
be the lowest practical limit for polyurethane varnishes.  Prior
to proposal, another commenter  (II-D-195) stated that the most
commonly used varnish for wood floors is polyurethane and that
this product cannot be manufactured at a VOC content of less than
450 g/1 and meet performance needs.  Also, one commenter
(IV-D-85), a manufacturer of gym floor finishes, suggested the
EPA keep the 450 g/1 limit for all varnishes (floors, walls,
cabinets etc.).   In addition to these comments, the EPA
considered that all of the State rules reviewed have a VOC
content limit of 450 g/1 or less for varnishes, except Texas
(540 g/1)  and one county in California (650 g/1).
     Although the EPA has not raised the VOC content limit as
requested by the commenter,  the EPA has provided alternative
mechanisms supported by the commenter.  An exceedance fee
provision and a tonnage exemption are included in the final rule
for compliance flexibility.   These provisions could allow the
commenters to maintain sales from this product line until the
product can be reformulated to meet the 450 g/1 VOC content
limit.
     Porcelain repair coatings.
     Comment:   One commenter (IV-D-26) recommended adding a
category to define porcelain repair coatings.  These coatings are
used to repair and maintain bathroom and kitchen fixtures such as
sinks,  bathtubs,  and shower enclosures.  The company stated that
the VOC content  of the coatings is 600 g/1 and, therefore, it
cannot meet the  proposed VOC content limit of 450  g/1 for
industrial maintenance coatings.  Follow-up information provided
by the commenter (IV-E-9)  noted that reformulation attempts have
not been successful because the required technology is not yet
available from resin manufacturers.  The commenter obtained a
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small-container (1 liter) exemption (available to all companies
in commenter's area)  for these products and,  thus,  they are
currently sold in a local regulated area in California.   The
commenter estimates growth for this category to be  about
2-3 percent per year depending on the aging of hotels/motels and
housing, and the ratio of rebuilding versus refurbishment.
     Response:   After review and evaluation of the  information,
the EPA has determined that a separate category for "porcelain
repair coatings" is not warranted.   According to one State agency
(IV-E-28),  there are several manufacturers of compliant porcelain
repair coatings that meet a 420 g/1 VOC content limit.
Therefore,  the EPA concludes that the need for this type of
coating can be met through the industrial maintenance coating
category with a VOC content limit of 450 g/1.  Although the
industry-wide annual sales volume is not available, it  is
expected that these would likely be considered low-volume
coatings relative to other coatings covered by the  rule.  Thus,
the tonnage exemption in the final  rule could offer compliance
flexibility.  Even though the majority of end uses  for  these
coatings are in industrial and commercial situations,  there are
some residential uses of these coatings, such as ceramic fixture
repair.  Similar to existing local  regulations, the final
architectural coating rule includes a small-container (1 liter or
less) exemption that also provides  flexibility to continue to
market these coatings and to satisfy existing and future customer
needs.
     Zinc-rich coatings.
     Comment:  One commenter  (IV-D-18) suggested that the EPA
create a zinc-rich coatings category with a VOC content limit of
350 g/1 instead of including these  coatings in the  metallic
pigmented coating category with a VOC content limit of  500 g/1.
The commenter suggested defining a  new category of  metallic
pigmented coatings as zinc-rich coatings, which are those
materials where at least 50 percent by weight of the dry film is
zinc metal.  These coatings are routinely applied in both shop
applications and in the field to protect against corrosion.
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According to the commenter, steel members for highway bridges are
always at least coated with a corrosion-resistant primer in the
shop and are frequently or normally completely coated with
primer, intermediate coat, and topcoat in a fabrication shop
before shipping to the field to be erected.  These shop
applications are regulated under requirements (e.g.,  CTG)  for
miscellaneous metal parts.  The commenter referenced and attached
an article entitled "Environmental Exposure Testing of Low VOC
Coatings for Steel Bridges" by John Peart of the Federal Highway
Administration and Robert Kogler, Jr. of Ocean City Research
Corporation which was published in the Journal Of Protective
Coatings & Linings in January 1994.  According to the commenter,
the study,  which included 3 to 4 years of exterior marine
exposure of a variety of coatings, concluded that the performance
of several low-VOC test systems  (using a zinc-rich primer)  meet
or exceed that of the best performing traditionally high-VOC
systems.  Furthermore, the author states that several companies
have marketed products meeting 350 g/1 for five to ten years and
offered a list of waterborne and solventborne zinc-rich coatings
that are commercially available.
     Response:  The EPA appreciates the identification of these
lower-VOC content zinc-rich coatings with a VOC content at or
below 350 g/1 that showed performance that meets or exceeds that
of conventional higher-VOC content coatings during steel bridges
exposure testing.  However, due to the potential broadness of the
category to applications outside of those highlighted by the
commenter,  the EPA did not create a new category for zinc-rich
coatings.  Specifically,  other comments (II-D-75, II-D-156)
received before proposal indicated that there are major
differences between types and uses of zinc coatings and that it
may not be feasible or correct to apply VOC content levels
designed for one technology to completely different technology.
For example,  one commenter (II-D-156) manufactures an ultra-high
performance coating that contains 95 percent zinc in the dried
film with a VOC content of 385 g/1.  It is a one-component
product based on an organic binding system, which the commenter
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argued makes it highly effective in field locations where the
following specifications exist: (1) high performance cannot be
compromised, (2) near perfect surface preparation cannot be
attained and (3) mixing of two or more components is impractical.
The commenter stated that a typical application of this product
might be a structural steel frame for a large,  multi-story
building.  The commenter also referred to the 1994 study cited by
commenter IV-D-18 and noted that it concluded that low-VOC
waterbased zinc coatings do not work in a field environment.
     Other comments  (II-D-75,  II-D-79,  II-D-111)  received before
proposal specifically requested that zinc-rich coatings be
classified in the category of metallic pigmented coatings:
(1) due to the difference in allowable limits between metallic
pigmented coatings and industrial maintenance coatings
(420-450 g/i)(this limit would ban the production of metallic
zinc coatings)   (IV-D-75,  IV-D-79,  IV-D-111),  and (2)  because
reformulation efforts have been unsuccessful  (II-D-75).  In
addition, California Air Quality Management Districts  (Sacramento
and South Coast),  New York City Metropolitan area,  New Jersey,
Kentucky, Massachusetts,  Rhode Island,  and Oregon architectural
coating regulations nave a category for metallic  pigmented
coatings at 500 g/1 that are defined the same as  or similar to
the proposed category definition in the architectural coating
rule.  Metallic pigmented coatings are exempt in  the counties of
Butte and El Dorado in California and in Maricopa County in
Arizona.  There are no State regulations specifically for zinc-
rich coatings.
     Faux finishing/Glazing.
     Comment:  One commenter (IV-D-20)  suggested  that the EPA
create a "Faux finishing/glazing"  category with a VOC content
limit assigned based on formulation "including water" because the
company could not meet the proposed VOC content limit of 380 g/1
for nonflat interior coatings.   Based on formulation including
water, the calculated VOC content of the colors can range up to
340 g/1.  However, because the products are waterborne, the VOC
"less water" calculation results in a range up to 700 g/1.  The
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VOC content limit for a similar category  (Japan/faux finishing
coatings) has been proposed by California's South Coast Air
Quality Management District at 700 g/1.   This category would
address waterborne acrylic finishes and other waterborne products
with miscible VOC that are designed to retard drying time.  The
commenter stated that these products provide open time required
for wet-in-wet decoration techniques, such as faux wood grain,
faux marble and simulated aging, which require the finish to
remain wet for an extended period of time.  The commenter stated
that, to date, there has not been an identifiable way to
reformulate these products to achieve a lower VOC content while
maintaining the characteristics required for acceptable use.  The
commenter suggested that this specialty category be defined as
follows:  "Faux finishing/glazing is used for wet-in-wet
techniques,  such as faux wood grain, faux marble, and simulated
aging, which require the finish to remain wet for an extended
period of time."  The commenter stated that the "do-it-yourself"
market is more confined than the professional market to sales in
pint and quart sizes, and this market comprises the majority of
sales (Docket Item IV-E-7).   Larger quantities,  a gallon or
above, are generally used by professionals who are coating large
spaces.
     Response:  Upon review and evaluation of available
information,  the EPA has determined that creating a separate
category for faux finishing/glazing with a VOC content level of
700 g/1 is warranted.  The faux finishing/glazing category is
defined in the final rule as suggested by the commenter.  This is
a specialized, limited use category.  According to the commenter,
there are no competing compliant products on the market, and
despite 2 years of reformulation efforts, this coating cannot
meet the proposed VOC content limit of 380 g/1 for nonflat
interior coatings.  Waterborne technology is an emerging market
for these products.
     The California-South Coast AQMD has recently amended its
rule for this category from 350 g/1 to 700 g/1 because the lower
VOC content limit could not be achieved.  The South Coast AQMD
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VOC content limit will be reduced again to 350 g/1 on
January 1, 1999 if this level is achievable.
     The commenter stated that the majority of these products are
sold in containers that are less than 1 liter in size.
Therefore, the majority of the faux finishing/glazing sales will
not be subject to the architectural coatings rules since it does
not apply to coatings sold in containers of 1 liter or less.
     Stain controllers.
     Comment:   One commenter (IV-D-185)  requested that the EPA
clarify the coating category of "sealers" by excluding "stain
controllers" from that category.  In follow-up information
(IV-E-Cohagan),  the commenter asserted that these products cannot
achieve the proposed 400 g/1 content limit for sealers based on
three years of unsuccessful reformulation efforts.  According to
the commenter,  it is technologically infeasible to reformulate
stain controllers to achieve the proposed 400 g/1 VOC content
limit.   The current VOC content of these products is 714 g/1.
The 400 g/1 limit for sealers would force a very high solids
content,  which would make these products unfit for use as
prestains.  "Stain controllers" (also called "wood conditioners"
or "prestains")  are coatings that are applied to soft woods
before applying a stain to prevent uneven penetration or
blotching of the stain by filling those pores where excess
penetration would occur.  The commenter asserted that in order to
be effective,  stain controllers must have a very low solids
content because excessive solids will overload the texture of the
substrate so that the wood will not properly accept the stain.
Water cannot be added to these products because they are used
almost exclusively to treat interior fine wood and contact with
water would produce an undesirable grain-raising effect in the
wood.   According to the commenter,  stain controllers are low-
volume,  specialized products that are important to the consumer
and have a minimal effect on air quality.  The commenter defined
a "stain controller" as "a conditioner or pretreatment product
formulated and recommended for application to wood prior to the
application of a stain in order to prevent uneven penetration of
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the stain."  In follow-up information  (IV-E-Cohagan), the
commenter revealed chat about 97 percent of total sales  for these
coatings are exempt under the small container exemption  in
regulated areas.
     Response:  After review and evaluation of these comments and
the follow-up information, the EPA has determined that a new
category for stain controllers with a VOC content limit  of
720 g/1 is warranted.  As suggested by the commenter, the
category of stain controllers is defined as "conditioners or
pretreatment products formulated and recommended for application
to wood prior to the application of a stain in order to prevent
uneven penetration of the stain."  According to the commenter,
reformulation attempts during the last 3 years have been
unsuccessful, and the commenter considers it technologically
infeasible to reformulate stain controllers at the proposed VOC
content limit of 400 g/1 for sealers (the category the commenter
would be subject to under the proposed rule).   According to the
commenter,  there are competing compliant waterbased coatings on
the market,  but there are performance problems with these
coatings.   The EPA believes that this is an example of a low-
volume, specialty niche coating for which it may not be cost-
effective for the manufacturer to continue reformulation
attempts.   Therefore, the EPA has created a separate category for
stain controllers.
     Concrete/masonry conditioners.
     Comment:  Three commenters (IV-D-06,  IV-D-172,  IV-D-189)
requested that the EPA create a concrete/masonry conditioners
category with a VOC content limit of 780 g/1.   One commenter
(IV-D-189)  provided the following definition:   "A low-solids
lacquer which is formulated and marketed specifically for use as
a conditioner or sealer of concrete and masonry surfaces."   The
commenter pointed out that this category and definition is  in the
Massachusetts architectural coating rule with a VOC content limit
of 780 g/1.   The commenter explained that concrete masonry
conditioners are required to tie up and bond to a concrete
surface any loose material before topcoating.   This  conditioner
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is needed in order to apply a latex finish directly to a concrete
surface that cannot be power washed.  Two commenters  (IV-D-06,
IV-D-172) stated that any attempt to apply latex finishes
directly over these loose particles will result in catastrophic
disbondment failure.  The commenters argued that the use of the
conditioner allows for a greater use of lower-VOC latex coating
as topcoats on masonry surfaces.  One commenter (IV-D-172)
advised that these products are presently in nationwide use.
This commenter claimed that the proposed rule bans these products
which cannot be formulated under 250 g/1 VOC.   Two of the
commenters  (IV-D-06, IV-D-172)  stated that the use of the
masonry/concrete conditioners extends the life of the latex top
coat resulting in reduced VOC emissions and reduced costs when
compared to use of latex paint without the conditioner.
     Two commenters (IV-D-06,  IV-D-172) also claimed that
repeated research projects have shown that waterborne, low-VOC
trial masonry conditioners cannot achieve the success of the low-
solids solvent acrylic coatings.
     Response:   Based upon an evaluation of these comments and
follow-up information (IV-E-38), the EPA has determined that a
new coating category for concrete/masonry conditioners at 780 g/1
is not warranted.   This product will be subject to the sealers
category with a VOC content limit of 400 g/1.   The EPA believes
that establishing this category would create overlap with the
sealers category.   The new category would allow higher VOC
content coatings where sealer products at or below 400 g/1 VOC
content can perform the coating function because the EPA's
definition of the sealer category includes coatings used to
"condition chalky surfaces."  According to a follow-up discussion
(IV-E-38) with the National Concrete Masonry Association (NCMA),
the term "conditioner" is not typically used when referring to
coatings used on concrete masonry walls or concrete blocks.  The
NCMA stated that acrylic, latex or cement-based paints are used
on concrete masonry as water repellents and no conditioner is
needed or used before these coatings are applied.   The NCMA
provided a copy of its specifications for these applications,
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which included the types of water repellents and general
guidelines for application of surface treatments.  The
commenters1  (IV-D-06, IV-D-172)  comparison, that the lifetime
cost and VOC emissions of latex paint without the conditioner are
much greater than if a conditioner is used, would be true for
most coatings that use a primer.  The final rule contains
compliance flexibility such as the tonnage exemption for low
volumes of production and/or the exceedance fee.  These
provisions could be used by the commenters for the continued
manufacture of this coating.
     Calcimine recoater.
     Comment:  Three commenters (IV-D-06, IV-D-172,  IV-D-189)
recommended that the EPA add a "calcimine recoater"  category to
the final rule.  These coatings are formulated to repaint
ceilings painted with calcimine.  Two commenters (IV-D-06,
IV-D-189)  suggested a VOC content limit of 475 g/1,  and the other
commenter  (IV-D-172) made no recommendation on the VOC content
level.  The commenters explained that water soluble  calcimine
paints were used in Victorian and Early American houses,
especially on ceilings.  Calcimine recoater products are made
with limed vegetable oils and are light, puffy and gel-like.  Due
to their low density, they do not disbond calcimine  ceiling
coatings.   One commenter (IV-D-189)  indicated that the coating is
a specialized, low-volume usage coating for which a  category is
currently included in the Massachusetts architectural coating
rule.  The other commenter  (IV-D-172)  gave typical VOC content
levels of 450-465 g/1 for the company's products and stated that
calcimine recoaters are the only economical way to handle the
repainting of calcimine coated surfaces.  The commenter explained
that conventional (250 g/1 VOC)  high-solids flat alkyd paints do
not level well or dry properly and eventually cause  calcimine
ceiling paint to peel in sheets.  The commenter presented two
ways to handle the repainting of calcimine:  to soften and scrape
off all the calcimine and repaint the ceiling, or to use a
coating formulated for calcimine recoating.  The first method,
the commenter explained, is labor intensive and costly.  Thus,
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the commenter concluded that the lack of a calcimine recoater
category will create a significant hardship for owners of early
American and Victorian houses.   The commenter asserted that the
proposed rule would essentially ban this coating which cannot be
reformulated under 250 g/1  (the VOC content limit for interior
flat coatings).
     Response:  Upon review and evaluation of this information,
the EPA has determined that a separate category should be
established for calcimine recoaters with a VOC content limit of
475 g/1, the same limit as the  Massachusetts rule requires for
this category.  The EPA amended the final rule to include this
category with the following definition:   "Calcimine recoater
means a flat solventborne coating formulated and marketed
specifically for recoating calcimine-painted ceilings and other
calcimine-painted substrates."   This definition is nearly the
same as used in the Massachusetts rule.   This is a low volume,
specialized coating used in limited, specific circumstances.
These products reportedly cannot be reformulated to meet the
250 g/1 content limit for interior flat  coatings.  The
composition of calcimine recoaters is unique and there is no
substitute for the function of  these coatings.
     Adhesion promoters.
     Comment:  Two commenters (IV-D-08,  IV-D-189) requested that
the EPA create a category for "adhesion  promoters" with a VOC
content limit of 680 g/1.  One  commenter (IV-D-189)  offered a
definition of adhesion promoter as:
     "a high performance coating specifically formulated and
     recommended for the thin film application to difficult to
     paint, hard, glossy surfaces  (including, but not limited to
     plastics, fiberglass, polished metal such as door locks and
     ceramics) to provide improved adhesion of subsequent coats."
The commenters asserted that these are specially formulated
coatings used to improve the adhesion of coatings to surfaces
that are hard and glossy such as polished metal, ceramics,
plastics, and fiberglass.  They are applied in very thin films
just prior to the topcoating of the surface.  The commenters
stated that these unique coatings are clear or contain very low
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levels of pigmentation and in order to obtain the thin film
thickness, the solids content of these coatings must be kept low.
Therefore, the VOC content of the products is relatively high.
One commenter  (IV-D-08) noted that new alternative water-based
formulas have performance limitations due to water sensitivity on
hard, glossy surfaces.  Both of the commenters noted that several
State automotive refinishing rules as well as the proposed
national rule for automobile refinish coatings set a precedent
for a special category of adhesion promoters.  One commenter
(IV-D-189) maintained that although formulations are somewhat
different, the need and rationale for applying a thin film of
adhesion promoting material to a difficult-to-paint surface is
the same.
     One commenter (IV-D-08)  maintained that the imposition of
lower VOC content limits would result in an adverse economic
impact on the small business manufacturers,  users,  and
applicators of these coatings.  Based on their actual experience
dealing with the State rules, they quoted a reformulation cost of
over $80,000.  In addition,  the commenter estimated that the
additional amount of VOC that would result from the creation of
this category would be less than 200 tons per year in the
architectural coating market.  Follow-up information (IV-E-23)
from this commenter revealed that its company manufactures other
primers and these primers can be reformulated to meet the VOC
content limit of 350 g/1.  Competitors make thicker primers that
meet the VOC content limit of 350 g/1.  However,  the commenter
stated that adhesion promoters require 680 g/1 for thin-film
applications on substrates such as glazed porcelain tile and
formica cabinets and paneling refinishing (surfaces that were not
intended to be painted).   The commenter estimates growth for
these coatings to be 10 percent over the next 5 years.
Currently, the commenter sells this coating in small containers
in regulated areas.   If a category is not established for
adhesion promoters,  this commenter (IV-D-08)  requested a small-
volume exemption of 5,000 to 10,000 gallons.
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     Response:   Based upon consideration of these comments and
follow-up information obtained from the commenter (IV-E-23),  the
EPA has not established a separate category for adhesion
promoters in the final rule.  Without this separate category,
these coatings are subject to the primers and undercoaters VOC
content limit of 350 g/1.  Similar to alkali-resistant primers,
there is significant overlap between adhesion promoters and the
general primers and undercoaters category due to the broadness of
the definition for adhesion promoters.   The EPA believes that
creating this category would allow the use of higher-VOC content
coatings for which lower-VOC content coatings would be
acceptable.  The commenter could continue the sale of adhesion
promoters in small containers (1 liter or less),  which are not
regulated under this rule, while continuing reformulation
efforts.  The tonnage exemption and exceedance fee provisions of
the rule could also provide additional compliance flexibility.
     Marine/architectural coatings.
     Comment:  One commenter (IV-D-173)  suggested that the EPA
establish a category for marine/architectural coatings for hulls
and decks of yachts, fishing boats, and working ships.  The
commenter stated that these coatings are also used on steel,
wood, and concrete block structures painted between October and
May when the weather is freezing and rainy.  The commenter
explained that waterborne coatings have not been developed as a
viable substitute, and high-solids coatings would be difficult to
spread and would not dry quickly enough due to dew,  frost, and
rain.
     Similarly, the commenter supported the use of solventborne
marine/industrial deep color alkyd enamels that provide rust
prevention on old metal surfaces on seawalls in Michigan.  The
commenter explained that seawalls are best painted in the winter
because during the summer, boats in the wells splash water on the
surfaces causing the paint to run into the water.  The commenter
also stated that compliant waterborne and high solids coatings
would not last as long and that painting more frequently would
put more solvent in the air.  The commenter concluded that the
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EPA was moving hastily and that the use of existing paints should
be allowed until quality compliant paints can be formulated and
tested.  No definition or VOC content limit was suggested for
marine coatings.
     Response:  The architectural coating rule only applies to
coatings used on stationary structures and, therefore, the rule
would not cover the coating or recoating of yachts and boats.
Based on consideration of the limited information submitted by
the commenter, including follow-up information (IV-E-12),  the EPA
has determined that a separate specialty category for
marine/architectural coatings used on stationary structures, such
as seawalls, is not warranted.  The commenter's description of
the coatings indicates that they would fall under the industrial
maintenance category with a VOC content limit of 450 g/1.   In
follow-up information (IV-E-12), the commenter did not recommend
a specific VOC content limit or specify a definition for these
coatings and did not know the VOC content of its existing marine
coatings.  The commenter estimated that the company's total
annual production of all products is 15,000-20,000 gallons.  The
commenter could consider the tonnage exemption and/or exceedance
fee in the final rule, while continuing reformulation efforts.
     Concrete curing and sealing compounds.
     Comment:   Seven commenters (IV-D-86, IV-D-187/IV-F-le,
IV-D-152, IV-D-154, IV-D-170,  IV-D-210,  IV-F-2e,  IV-G-17)
requested that the EPA create a new category for "concrete curing
and sealing compounds" with a VOC content limit of 700 g/1.  Two
of the commenters  (IV-D-86, IV-D-152)  suggested the following
definition for concrete curing and sealing compounds:  "A liquid
membrane-forming compound marketed and sold solely for
application to concrete surfaces to reduce the loss of water
during the hardening process and which seals old and new concrete
providing resistance against alkalis,  acids, and UV light, and
providing adhesion promoting qualities."  Another commenter
(IV-D-154)  recommended that the EPA include in the definition the
requirement that the coating meet the recently-developed American
Society for Testing and Materials (ASTM) C1315-95 standard to
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provide a clear distinction between high performance,  permanent
sealers and those materials designed principally as curing
compounds with some sealing characteristics.   Without  a separate
category, the commenters would be subject to the proposed
concrete curing compounds category VOC content limit of 350 g/1.
     A follow-up discussion with one of the commenters (IV-E-13)
clarified that concrete curing and sealing compounds are
typically used on buildings, while concrete curing compounds are
used on highways.  The commenter added that the 1990 VOC
Emissions Inventory Survey under-represented these coatings and
concrete form release compounds because they are not made by
paint manufacturers; they are made by the construction industry.
Specifically, two commenters (IV-D-170, IV-D-210)  noted that the
survey of coating manufacturers and the EPA failed to  recognize
the concrete curing and sealing compounds industry and stated
that over 10 million gallons of concrete curing and sealing
compounds are produced annually, much higher than the
331,000 gallons of concrete curing compounds accounted for in the
survey.  One of the commenters  (IV-D-152)  distinguished curing
compounds as having the single function of providing moisture
retention for curing to produce design strength and other desired
properties.  In comparison, curing and sealing compounds function
as longer term sealers that provide protection, aesthetics, and
durability in addition to curing.  The EPA contacted all of the
commenters for clarifications and follow-up.   In follow-up
discussions  (IV-E-13, IV-E-15, IV-E-16, IV-E-17,  IV-E-18,
IV-E-37, IV-E-49, IV-E-50), the commenters asserted that the
proposed VOC content limit of 350 g/1 is not technologically
feasible for the concrete curing and sealing compounds category
and, if applied to this category, will force the use of
waterbased technology with inadequate performance.  Based on
sales and VOC content information submitted by the commenters,
about 25 percent of the current production of concrete curing and
sealing compounds have VOC content levels ranging from
751-850 g/1, while slightly more than half of the total
production is in the 701-750 g/1 range.  According to one of the
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commenters  (IV-D-152), the requirements of aesthetics and
longevity coupled with the need for applications over wide
temperature and humidity ranges can only be met with solvent-
based systems.
      One commenter  (IV-D-170) pointed out that ASTM recognizes a
separate category for concrete curing and sealing and that
current specifications from the Department of Transportation and
the Corps of Engineers cannot be satisfied with current
waterborne technology.  On the other hand, one of the commenters
(IV-D-154) indicated that States with VOC standards in place,
such as California and New Jersey, have not seen the need for
making a distinction between  "concrete curing" and "concrete
curing and sealing" because waterborne products are available to
meet both requirements.  However,  the commenter elaborated that
drawbacks of waterborne formulations are low-temperature
performance and low-temperature stability.  This commenter
asserted that a VOC content limit of 675 to 700 g/1 will permit
effective concrete curing and sealing compounds to be marketed.
Another commenter (IV-D-170)  argued that California and New
Jersey are not influenced by the weather conditions of other
states such as Minnesota, North Dakota,  South Dakota, Wisconsin,
and Nebraska.  Moreover, in a follow-up discussion with one
commenter (IV-E-37), it was again pointed out that one of the
main problems with waterborne coatings is that they will not
coalesce at temperatures below 50 °F.   The commenter stated that
solventborne products can be used at temperatures as low as
30 °F.   Another commenter (IV-D-170) cited several other
drawbacks to the use of waterborne technology such as shrinkage
cracks due to late saw cutting and curling of slabs caused by
different water content between the top and bottom of the slab.
In addition, the winter and freeze/thaw cycles have deleterious
effects on uncured/sealed concrete.  One commenter (IV-D-210),  a
small family-owned business that produces coatings for the
concrete industry, referred to the ongoing development of
waterborne cure/sealer coatings since 1989,  but to date the
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business has been unable to develop a waterborne cure/sealer that
will perform as effectively as the solventbased coatings.
     One commenter  (IV-D-152)  stated that specifying a VOC
content limit of 700 g/1 for the concrete curing and sealing
category would allow formulations with solids in the 25 to
30 percent range.  The commenter pointed out that a formulation
with solids over 30 percent is impractical due to technical
limitations, and most curing and sealing compounds sold today
fall into the 10 to 15 percent solids range with a VOC content
greater than 800 g/1.  Two of the commenters (IV-D-86, IV-D-170)
argued that the EPA would see a 33 to 39 percent VOC emission
reduction as a result of the combination of increased coverage
(through use of higher solids) and the recommended VOC content
limit of 700 g/1 if all the curing and sealing market converts to
higher solids formulations (i.e., 25 to 30 percent solids).
Follow-up discussions with several manufacturers (IV-E-37,
IV-E-17, IV-E-15, IV-E-18)  confirmed that the limiting factor on
lower-VOC solventborne products is the solids content.  The
manufacturers stated that the highest possible solids content is
30 percent  (VOC content of 650 g/1); and the use of higher solids
presents application problems, they do not bond well, and they
wear more quickly.
     A small business that manufactures (IV-F-2e)  concrete
sealers and concrete curing compounds stated that there is no
such thing as a true waterbased concrete coating because there
are always coalescing problems.  The commenter stated that
waterbased concrete curing and sealing coatings do not work and
recommended that the EPA make a distinction in the rule between a
concrete curing and sealing coating versus a concrete curing
compound.
       Response:  Based on review and evaluation of information
submitted by the commenters and follow-up information provided by
six manufacturers of concrete curing and sealing compounds
(IV-E-13,  IV-E-15, IV-E-17, IV-E-18, IV-E-37, IV-E-50), the EPA
has determined that a separate category for concrete curing and
sealing compounds should be established with a VOC content limit
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of 700 g/1, as recommended by the commenters.  The definition is
as follows:
     Concrete curing and sealing compound means a liquid
     membrane-forming compound marketed and sold solely for
     application to concrete surfaces to reduce the loss of water
     during the hardening process and to seal old and new
     concrete providing resistance against alkalis, acids, and
     ultraviolet light, and provide adhesion promotion qualities.
     The coating must meet the requirements of ASTM C1315-95,
     Standard Specification for Liquid Membrane Forming Compounds
     Having Special Properties for Curing and Sealing Concrete.

     There are several reasons for establishing this category.
Manufacturers of coatings for the concrete industry were not
fully represented in the VOC Emissions Inventory Survey and,
therefore, insufficient data were collected to evaluate concrete
curing products in the proposed rule.  Based on comments received
on the proposal, the EPA has determined that the categories of
"concrete curing" and "concrete curing and sealing" have
different performance characteristics; i.e,  concrete curing and
sealing compounds function as longer term sealers that provide
protection, aesthetics, and durability in addition to curing.
There are two separate ASTM methods available for each of these
categories because ASTM Committee experts as well as the
Department of Transportation and Army Corps of Engineers consider
them separate,  distinct categories with different performance
requirements.  The VOC content limit of 350 g/1 for concrete
curing reportedly cannot be -achieved by the concrete curing and
sealing industry for all applications.  Although waterborne
products are available that meet the VOC content limit of
350 g/1, commenters cited several drawbacks such as low-
temperature performance and low-temperature stability.
     Although the commenters stated that most curing and sealing
compounds fall into the 10 to 15 percent solids range with a VOC
content greater than 800 g/1,  the information the commenters
provided to the EPA (table 2-2)  shows that the products with VOC
contents ranging between 701 and 750 g/1 had the largest sales
volume  (about 53 percent).   Also, based on this information, the
EPA has determined that a VOC content limit of 700 g/1 for the
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concrete curing and sealing category is technologically feasible,
allowing formulations with 25 to 30 percent solids,  which is
reportedly an acceptable range to meet performance requirements.
Based on analysis of information provided and as requested by
nearly all of the commenters, the EPA believes a VOC content
limit of 700 g/1 is appropriate for this category.  This limit
will reduce VOC emissions from this category by an estimated
28 percent.
     Concrete surface retarders.
     Comment:  Two commenters from the same company (IV-D-68,
IV-D-120) and another commenter  (IV-D-209)  maintained that
concrete surface retarders should not be covered by the
architectural coating rule on the grounds that these products do
not meet the proposed definition of a coating.  Two commenters
(IV-D-68, IV-D-120; stated that concrete surface retarders are
used in the production of exposed aggregate finishes for
architectural precast concrete panels for buildings that last
more than 3C years.  These commenters explained that surface
retarders effectively disrupt the chemistry of freshly poured
concrete by altering cement hydration.  This causes the surface
tc not harden re a specified depth known as "depth of etch."
                              2-164

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Concrete surface retarders are formulated, to control etch thereby
giving various options to precasters for different job
applications.  Both commenters (IV-D-68, IV-D-120) explained that
after application,  concrete surface retarders are given
14-72 hours to affect the concrete system,  after which time the
non-hardened cement surface (and the concrete surface retarder)
is either brushed,  blown, or washed away to give an
architecturally pleasing surface of exposed aggregate.  Both
cominenters explained that the concrete surface retarder does not
forrr. a coating, but interacts chemically with the cement to
prevent hardening where the concrete surface retarder is applied,
allowing the retarded matrix of cement and sand at the surface to
be washed away to create an exposed aggregate finish typically
requiring no further treatment.  All of the commenters pointed
out that New Jersey and Texas do not regulate concrete surface
retarders because they do not meet their definition of a coating
and are,  therefore,  exerrpt from their architectural coating
rules.
     Two commenters (IV-D-120,  IV-D-209) challenged the legal,
technical,  and environmental basis for regulating concrete
surface retarders since emissions from this category were not
addressed in the EPA survey.  If  an exemption is not granted on
the basis that these products do  not meet the definition of a
coating,  the commer.ters requested an exemption be granted on the
basis of a categorical or lov;-volume specialty niche.   The
commenters base their request on  data from the National Paint and
Coatings Association (NPCA)  and the Precast/Prestressed Concrete
Institute (IV-D-209)  that illustrates that  concrete surface
retarders constitute less than  0.03 percent of the architectural
coatings market.
     If the EPA decides that concrete surface retarders are
considered to be coatings,  the  commenters requested that a new
category be created similar to  the masonry/concrete conditioner
category and VOC content limit  of 780 g/1 used in the
Massachusetts rule  and suggested the following definition:
"Concrete surface retarder means  a low-solids coating which is
                              2-166

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formulated and marketed specifically for use as a conditioner of
concrete surfaces to achieve an exposed aggregate finish".  Two
commenters (IV-D-120, IV-D-209) discussed the progress in resin
technology with regard to VOC reductions from concrete surface
retarders and concluded that the VOC content of retarders cannot
readily be reduced through resin technology.  According to these
coilmenters,  current technology has yet to provide a low-VOC
content concrete surface retarder that effectively performs to
necessary field requirements in all applications.  They stated
that water-based concrete surface retarders have been developed,
but do not perforrr. nearly as v/ell as solvent-based concrete
surface retarders in terms of application,  usage and performance.
According to one commenter (IV-D-120),  concrete surface retarders
are used in a unique and specific application and constitute
merely C.G1  percent  {15C,OCC gallons)  cf the total coatings sold
by trie coating industry and less tr.an C.03 percent of
architecturs_ coating- s o _ o .
     According to frllo'.:-uc information from the largest
manufacturer of retarcers (IY-E-24),  the volume of their concrete
retarders used "on-site" (in the field)  is not anticipated to
exceed 5,000 gallons 'less than 2 percent of their total
production)  per year.  The commenter stated that concrete
retarders are generally used in a manufacturing setting at a
precast facility.  Tne commenter stated that there are
approximately 40C precast plants in the U.S. that employ about
13,500 people.  If these plants are required to meet the proposed
VOC content  limit,  the commenter asserted that precasters would
not have available an effective,  alternative product and some
plants would be forced out of business.   According to the
commenter,  establishing a VOC content  limit of 780 g/1 would not
cause a significant contribution to air pollution nationally
because emissions from concrete surface retarders evidently were
not significant enough to include them as part of the coatings
emissions study when the proposed regulation was being developed,
     Response-.  First,  the EPA notes  that when concrete surface
retarders are recommended solely for  use in the production of
                              2-167

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exposed aggregate finishes for architectural precast concrete
panels in a manufacturing seating at a precast facility, which is
the typical situation, they are not subject to this rule.
Second, the EPA has considered the argument that these products
are not coatings and has concluded that concrete surface
retarders contain resins and solvents and serve a functional
purpose (retarders are applied to the surface and then washed
away to achieve an exposed aggregate finish) and, thus, meet the
rule's definition of a coating.  The architectural coating rule
defines a coating as follows:
     Coating rr.eans a material applied onto or impregnated into a
     substrate for protective,  decorative or functional purposes.
     Such materials include,  but are not limited to, paints,
     varnishes, sealants, inks, maskants,  and temporary coatings.
     Protective,  decorative,  or functional materials that consist
     only of solvents, acids, bases,  or any combination of these
     substances are net considered coatings for the purpose of
     this subcart.
Consequently,  these products are subject to the architectural
coating rule.   Third,  concrete surface retarders that are used in
the field at the actual job location are subject to the rule, and
the EPA has created a nev; category for concrete surface retarders
with a VOC content limit of 780 g/1.   This limit is based on
information provided by the comm.enters that indicates it is
technologically and economically feasible.  No information was
available to the EPA to support a lower limit.   In the final
rule,  concrete surface retarder is defined as
     "a mixture of retarding ingredients such as extender
     pigments,  primary pigments,  resin,  and solvent that interact
     chemically with cement to prevent hardening on the surface
     where the retarder is applied,  allowing the retarded mix of
     cement and sand at the surface to be washed away to create
     an exposed aggregate finish."
Based on information received from one large manufacturer
(IV-E-24)  of these products,  the volume of retarders used in the
field or "on-site"  is relatively low (less than 5,000 gallons per
year).   These products reportedly cannot be reformulated to meet
the VOC content limit of 250 g/1 for interior flat coatings,
which the products would be subject to in the absence of a

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specific category of concrete surface retarders.  The composition
of concrete surface retarders is unique and there is no lower-VOC
content substitute for the function of these products in all
applications.  Therefore, the EPA has created this low-volume,
specialty niche category with a VOC content limit of 780 g/1 in
the final rule.
     Low solids coatings.
     Comment:  Two commenters (IV-D-185,  IV-D-189) urged the EPA
to provide a "low-solids" subcategory for all types of
architectural and industrial maintenance coatings and to include
in these subcategories those products that have less than one
pound of solids per gallon of coating.  The commenters pointed
out that this would be similar to the low-solids subcategory in
the proposed rule under stains and wood preservatives.  One
commenter (IV-D-185)  recommended that the references to low-
solids stains and low-solids wood preservatives in §§ 59.402(c)
and 59.403(a)(3) of the proposed rule should then be changed to
"low-solids coatings."  The commenter stated that the concept of
a low-solids coatings category is beneficial because it ensures a
minimal VOC content that benefits both consumers and the
environment.  The commenter stated that low-solids coatings are
applied on a volume,  not solids,  basis.  Therefore,  the VOC
content should be calculated including water and exempt solvent
in order to avoid delaying or preventing the introduction of
innovative products that can significantly reduce VOC emissions.
One commenter  (IV-D-189)  defined low-solids subcategories in part
as containing 1 pound or less of solids per gallon (0.12 kg
solids/1)  of coating materials and for which at least half of the
volatile component is water.
     Response:   The EPA has no data or information upon which to
base a VOC content limit for low-solids coatings in architectural
coating categories other than stains and wood preservatives.  For
stains and wood preservatives,  it is clear that at a very low
level of solids content,  the coating coverage is dependent on
volume rather than the amount of solids in the coating.   For
other applications that have very low solids (e.g.,  lacquers for
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metal),  the solids content still dictates the amount of coating
used (rather than volume) and for this type of coating more
gallons would be needed to achieve the same coverage as a higher-
solids coating.  Consequently, the EPA has not added a general
low-solids coatings category to the final rule.
     Tung oil finishes.
     Comment:  Forty percent of one commenter's (IV-F-2(1))
products are specialty tung oil finishes (an oil varnish or
sealer)  for wood.  Follow-up information provided by the
commenter  (IV-E-14) indicates that some tung oil finishes are
clear and some are opaque.  The commenter stated that the VOC
content ranges from 600 to 700 g/1 for its tung oil finishes.
This product is used on floors, furniture,  and paneling.  The
commenter has developed some waterborne products for other
applications but not for wood because waterborne products tend to
raise the wood grain.   The ccrnr.enter argued that the VOC content
of these products must be high for penetration.  The commenter
stated that reformulation attempts have not been successful.
Because these tung oil finishes cannot be reformulated and still
meet performance needs, the commenter requested that these
products either be exempted from the regulation or be placed in a
specialty category.  The commenter did not suggest a definition
for this category.
     Response:   Based upon review and evaluation of these
comments, fcllow-up information from the commenter and other tung
oil manufacturers, and State architectural coating rules, the EPA
has determined that a separate category for tung oil finishes is
not warranted.   Tung oil finishes would be subject to the
varnishes category or the waterproofing sealers category with a
VOC content limit of 450 g/1 or 600 g/1, respectively, depending
on how the coating is marketed and sold.  In follow-up
information  (IV-E-14), the commenter revealed that a compliant
product  (335 g/1 VOC content) is sold in regulated areas for
limited purposes.  Moreover, the EPA is not aware of any State
architectural coating rules that have a separate category for
tung oil finishes.
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     According to  follow-up  information  from one  coating
manufacturer  (IV-E-45),  the  term  "tung oil" is used  generically
within the industry and  it could  be  100 percent vegetable  oil,  or
a varnish for furniture  and  floors,  or a waterproofing  sealer,
depending upon its recommended use.  This manufacturer  markets  a
similar product as a waterproof ing sealer and submitted comments
(IV-D-169) on the VOC  content iirr.it  for waterproofing sealers
that were marked confidential.  In addition, follow-up
information obtained from another manufacturer  (IV-E-46) revealed
that it markets tung oil as  a rubbing finish topcoat, which  is
sold as a varnish.  This manufacturer stated that this  product
must be applied extremely thin and,  thus, a high VOC content of
650 g/1 is needed  for  this varnish;  however, this manufacturer
did not request a higher VOC content limit  for varnishes than the
proposed lirr.it of 450  g  1.  According to a publication  on  floor
finishes  <, IV-J-lj, many  oil varnishes, in the past, were domestic
versions of marine products  (such as spar varnish).
     The EPA believes  tnat a separate category for tung oil
finishes is not appropriate since the VOC content of these
products depends en the  intended use, which is regulated through
the limits established for tne various usage categories (e.g.,
varnishes and waterproofing sealers).  Tne EPA notes that  the
final rule provides compliance flexibility through the  exceedance
fee and tonnage exemption, if needed, that would allow  the
corrjr.enter to continue  to market this specialty coating  to meet
customer needs.
     Lacquer stains.
     Comment:   Three commenters (IV-D-09/IV-D-183, IV-D-189,
IV-F-lq)  requested that the EPA create a new category for lacquer
stains because they are an integral part of a fine wood finishing
system which includes clear lacquer  finishes and lacquer sanding
sealers.   Two of tne commenters (IV-D-183,  IV-D-189)  suggested a
VOC content limit of 7SO g/1 for the new category and recommended
the following definition:  "Lacquer stains:  Semi-transparent
stains formulated and recommended specifically for use in
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conjunction with clear lacquer finishes and lacquer sanding
sealers."
     Two of the commenters (IV-D-09/IV-D-183,  IV-D-189) explained
that lacquer stains:   (I)  provide highlighting and minimal
coloring to unfinished wood surfaces;  (2)  enhance the natural
beauty of wood; and (3)  bring out the natural  wood grain by
coloring primarily the softer portion of the grain.  These
commenters also seated that lacquer stains provide no protection
for the substrate and, therefore, must be top  coated with a clear
coat.   Two commenters (IV-D-183,  IV-D-189) explained that the
primary use for lacquer srains is in new construction by
professional painters.  Lacquer stains are applied via spraying
to bare wood and are primarily used when wood  (cabinets,  molding,
and paneling)  is finished  en sice for the first time.   The same
commenters spaced tnat lacquer stains are a productivity tool for
the painting contractor because they dry quickly,  are compatible
with lacquer sealers and topcoats,  and can allow many finishing
jobs to be completed within the same day.   One' commenter
(IV-D-183) argued that without lacquer stains  to color and
enhance the weed there will be little use for  clear lacquer
finishes.  According tc this commenter,  the other stain
categories in tne proposed architectural coating rule are finish
coat products that perforrr very similarly to an exterior paint
and are not useable in producing  the furniture-like finish that
is produced with lacquer stains and finishes.   The commenter does
not recommend oil-based wiping stains as a replacement for
lacquer stains because:   (1)  90 percent  or more of the wiping
stain must be wiped from the surface being stained,  creating
waste that becomes a spontaneous  combustion problem and
(2) inter-coat adhesion problems  cause film failure of the
finished product.  In addition,  oil wiping stains  require hand
wiping and at least overnight drying before the lacquer sealer
and topcoat may be applied.  According to another commenter
(IV-D-189), waterbased stains present drying problems,  but also
have additional problems zf grain raising and  "blushing"  of the
lacquer topcoat which is caused by the retention of water in the
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wood.  Another commenter  (IV-F-lq) added that lacquer  stains  are
made with cellulose, which is compatible with the wood,  and with
the same resin used in the sealer and topcoat, which eliminates
intercoat adhesion problems between lacquer stain and  a  lacquer
sealer.  Two of the commenters  (IV-D-09/IV-D-183, IV-D-189)
maintained that the semi-transparent and opaque  stains for which
categories were established in  the proposed rule are finish coat
products, whereas lacquer stains are not finish  coats.
     Response:   The EPA has carefully reviewed the information
submitted by the commenters and has determined that a  separate
category for lacquer stains with a VOC content limit of  780 g/1
is not warranted.   The lacquer stains specialty  category was  one
of the categories considered for inclusion in the proposed rule
based on requests froir seme manufacturers  (61 FR 32739,
June 25,  19S61 .   It was excluder, because the EPA was concerned
that tne overlap zez:.eer. lacquer stains and the more general
stain categcrles would allc.-. h_gner VCC content  lacquer  stains
for uses in which lower VIC content stains would be acceptable
substitutes.   The EPA dees not agree with the commenters'
reasoning that  a category cf lacquer stains is warranted based on
their representation that tne otner stain categories are "finish"
products.  Neither tne definition of opaque stains (350  g/1)  nor
the definition  of clear and serri-transparent stains (550 g/1)
indicate that these stain categories are limited to finish
products.  Similar co lacquer stains,  the proposed stains
categories do not provide protection for the substrate and
generally must  be coated with a top clear coat.   A review of
State architectural coating rules showed that only Kentucky has a
category for lacquer stains with a VOC content limit of  550 g/1;
no other States  have a separate category for lacquer stains.
Moreover, this  VOC content limit of 550 g/1 for lacquer stains is
the same as the  EPA's proposed VOC content limit for
semi-transparent stains.   In addition,  at least one State
regulatory agency (California-South Coast)  regulates lacquer
stains as stains.   Therefore,  the EPA believes that it is
appropriate to  regulate lacquer stains in the more general
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category of stains.  As stated in a previous response in
section 2.2.3 of this document, §59.402(b)(2) of the final rule
has been amended to clarify that lacquer stains would be
classified in the general stains categories.
     Zone marking coatings.
     Comment:   Twenty-three commenters,  including coating
manufacturers, distributors, contractors,  the Department of
Defense, and one national trade association submitted comments on
zone marking coatings.  Nine of these commenters,  including four
coating manufacturers  (IV-D-45, IV-D-63,  IV-D-153/IV-D-207,
IV-D-183),  two distributors (IV-D-87, IV-D-139), one user
(IV-D-88),  and one national trade association  (IV-D-189)
requested that the EPA create a separate category for zone
marking coatings.  The commenters indicated that the proposed VOC
content limit of 150 g/1 for traffic  marking coatings would
essentially ban the use of solventborne zone marking coatings and
force the use of water-based coatings.   One commenter (IV-F-2)
does not believe that parking lot marking coatings that will
achieve the proposed VOC content limit  are available.  Another
commenter (IV-D-73) stated that its zone marking coatings do not
meet the proposed limit for traffic marking coatings at 150 g/1,
but the commenter did not provide any basis for this statement.
Two commenters  (IV-D-183, IV-D-207) suggested that the EPA
establish a VOC content limit of 450  g/1 for the category.  One
commenter (IV-D-63) suggested that the  EPA create a category for
coatings for privately owned parking  areas classified as a low-
volume coating with a VOC content limit of 425 g/1 and labeled
for use on parking lots only.  Alternatively, the commenter
suggested that parking lot coatings could be considered a niche
market because it is such a small percentage of total coating
volume when compared to coatings used on highways; this
manufacturer makes less than 1500 gallons per week.  The
commenter stated that the proposed VOC content limit for traffic
marking coatings was much lower than limits for other categories,
which was unfair.  This commenter added that the use of acetone
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as a solvent as a means to achieve the proposed limit would be
entirely too dangerous due to its high flammability.
     Commenters also suggested definitions for the new category
they sought.  The commenters proposed the following zone marking
definitions:  "Coatings formulated and recommended for marking or
striping curbs,  driveways, parking lots, and sidewalks"
(IV-D-183); and "Coatings formulated and recommended for marking
and striping airport runways, parking lots, curbs, driveways, and
industrial traffic patterns" (IV-D-153/IV-D-207).   This commenter
added that these areas must be marked for safety whenever the
need arises, without regard to temperature.
     A Department of Defense (DOD) Steering Committee  (IV-D-03,
IV-D-121),  representing the Navy, Air Force,  and Army, as well as
several DOD components and agencies,  requested that for emergency
airfield marking operations, the EPA exempt traffic marking
coatings used on airfields and other military facilities under
cold weather conditions.   One of the commenters (IV-D-121)  argued
that existing waterborne airfield coatings cannot  be  successfully
applied at temperatures below 55°F.  The commenter stated that
the typical VOC content of its solventborne coatings  is 350 g/1
to 400 g/1.  The commenter explained that when airfield markings
become obscured, they no longer provide visual cues for safe
operation of aircraft and support vehicles and,  therefore,  must
be remarked immediately,  regardless of temperature.  The
commenter stated that in northern climates, operations could be
terminated or severely degraded if solvent-based materials are
not available for use at lower temperatures.
     Three coating manufacturers  (IV-D-44,  IV-D-45, IV-D-93)
stated that oil-based zone marking paint could not be
manufactured at  a VOC content of 150 g/1.  One commenter
(IV-D-45) stated that fast drying, medium oil alkyds  are the only
available medium for the high level of pigment in  the coatings.
According to this commenter, customers have deemed latex coatings
unacceptable when used on crosswalks and high traffic parking
lots.   Another commenter  (IV-D-93) suggested that  the EPA
consider an exceedance fee mechanism and small quantity exemption
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based on 5,000 gallons, or as a percentage of the company's total
production in the final rule.
     Three commenters  (IV-D-87,  IV-D-88,  IV-D-139)  were concerned
that the quality and durability of the proposed lower-VOC content
traffic marking coatings have not been proven in parking lot
applications, especially over pavement coatings such as coal tar
and asphalt emulsion sealers.  They suggested that coating
manufacturers conduct more testing and product improvement.
     Seven parking lot striping contractors (IV-D-90,  IV-D-91,
IV-D-92, IV-D-95, IV-D-99, IV-D-149,  IV-D-150) argued that the
proposed regulation would be extremely detrimental to small
private sector parking lot striping contractors who would no
longer be able to operate and requested that these small
businesses be exempted from the regulation for several reasons.
First, individuals and small businesses cannot afford the cost of
waterbcrne coating application equipment,  estimated at $12,000 by
one commenter (IV-D-90) and ranging from $25,000 to $40,000 by
another commenter (IV-D-149), not including any work force
retraining costs.  Two other commenters (IV-D-87,  IV-D-139)
expressed concern that small businesses would need to purchase at
least $4,000 of new equipment in order to switch from
solvent-based to water-based coatings.  Second,  the commenters
claimed the work season in northern climates will be reduced by
about two months each year, thereby greatly reducing a small
business's ability to keep a competent work force and stay
financially viable (IV-D-139, IV-D-149, IV-D-150).   Third, the
commenters questioned the compatibility of the proposed coatings
with coal tar and asphalt emulsion sealers (IV-D-87, IV-D-88,
IV-D-139,  IV-D-149).   Fourth, use of the proposed coatings for
work done at night and in parking garages in a constantly
changing climate, frequently when the temperature is below 50 °F,
was also questioned  (IV-D-149).   Fifth, commenters asserted that
waterbased coatings used in previous applications have not
lasted, resulting in marketing,  warranty,  and customer education
problems  (IV-D-91, IV-D-99, IV-D-149).
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     Three commenters  (IV-D-93, IV-D-189, IV-D-207) explained
that the marking and striping of curbs, driveways, and sidewalks;
and parking lots, fire lanes, and handicap zones in commercial
areas  (supermarkets, banks, shopping centers, etc.) present
unique application requirements because much of this marking must
be done at night when these areas are not in service.  At night,
humidity is less than ideal.  Therefore, these products must dry
extremely quickly.  The commenters asserted that waterborne
products do not perform well in these applications because of the
dry time constraints and adverse conditions under which these
products are sometimes applied.  One commenter  (IV-D-207) argued
that these products are not intended for use as traffic marking
coatings and should be given a separate category.  The commenter
maintained that these products are needed for the small
independent striping contractor to survive and traffic marking
coatings meeting the proposed VOC content limits do not work for
zone marking.  Two other commenters  (IV-D-63, IV-F-lq) also
maintained that higher humidity and lower temperatures would
prevent water-based paints from curing properly.  One commenter
(IV-D-63)  argued that waterbased coatings must be applied in
temperatures above 45 °F with humidity lower than 75 percent to
produce a satisfactory film.
     One distributor selling to small contractors  (IV-D-87)  and
four small businesses  (IV-D-63, IV-D-183, IV-D-207, IV-F-lq) were
also concerned that the rule would cause small businesses to cut
jobs or close because the proposed VOC content limit would force
applicators to use water-based coatings.  One commenter  (IV-D-63)
explained that most large government contractors have
sophisticated equipment that uses heat to accelerate dry time and
glass bead technology; however, small companies cannot afford
such equipment.
     Another distributor (IV-D-83)  who sells coatings to over
500 small and medium-sized contractors recommended a total
exemption of traffic and zone marking coatings that are used for
private sector work that could be implemented based on a label
change and container size of 5 gallons.  The commenter gave the
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following reasons for this request: (1)  contractors do not have
the equipment necessary for the new coatings;  (2)  waterborne
coatings show signs of premature wear as early as 60 days after
application which could lead to accidents; (3)  many contractors
are part-time and could be put out of business by the higher cost
of material and required equipment; and (4)  private sector
applications generate more wear than public roadways due to less
structured and more frequent traffic patterns.
     Response:   The EPA has carefully evaluated the reasons
presented in the comments and agrees that a separate category for
zone marking coatings should be established in the final rule
with a VOC content limit of 450 g/1, as suggested by several
commenters.   The EPA is limiting the zone marking coating
category to coatings sold in containers of 5 gallons or less.
Available information (IV-E-20) reveals that State Departments of
Transportation buy traffic marking coatings in larger than
5-gallon containers,  and the military airfields typically
purchase coatings in 5-gallon containers and transfer the
coatings to 1-gallon or 1-quart containers.   The EPA believes
that this size restriction will discourage the use of zone
marking coatings in large-scale applications such as those for
general traffic markings intended for public roads and highways.
Also,  according to available information  (IV-6-5), only about
10 percent of traffic marking coatings are used in areas such as
parking lots and garages.  Thus, creation of this category will
result in only a limited amount of additional  VOC emissions.  The
category is defined in the final rule as follows:   "Zone marking
coating means a coating formulated and recommended for marking
and striping driveways,  parking lots,  sidewalks, curbs, or
airport runways, and sold or distributed in a  container with a
volume of 19 liters (5 gallons) or less."
     The EPA established this category to satisfy both economic
concerns of small applicators as well as performance
considerations for coatings used on airport runways, particularly
emergency airfield markings, and commercial service areas during
cold and very humid weather conditions.   The commenters argued
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chat higher humidity and  icv:er  temperatures  at night prevent
waterborne coatings frorr.  curing properly  in  commercial  service
areas.  Continued availability  of  solventborne coatings for use
in these special situations will ensure safe airport operations
and eliminate the drying  time constraints under which waterborne
coatings are sometimes applied.
     The decision to allow the  use of  solventborne  coatings at a
VOC content limit of 450  g/1 in zone marking applications
eliminates the need for small business applicators  to purchase
new application equipment that  would have been required for
waterborne coatings.
     Conversion varnishes.
     Comment:   Twenty-eight commenters  (IV-D-47, IV-D-84,
IV-D-89, IV-D-94, IV-D-98, IV-D-100, IV-D-102 to IV-D-107,
IV-D-109,  IV-D-111 tt IV-D-112, IV-D-123, IV-D-I24, IV-D-127,
IV-D-131 to IV-D-133,  IV-D-135, IV-D-136, IV-D-144, IV-D-I45,
IV-D-175,  [six of tnese are frrrr the same company], IV-G-G4)
expressed concern ever the effect  cf the architectural  coating
rule on the availability  of tv:c specialty top coats, known  as
"Swedish Finisr.es",  used  in the hardwood floor finish industry.
The comrenters asserted tnat the proposed VOC content limits for
floor coatings (4CO g/lj   and varnishes  (450  g/1) cannot  be
achieved by their niche rrarket, specialty conversion varnishes
due to substantial cnemtcal,  application, and performance
differences.   The two top coats are manufactured in Sweden  and,
according to the manufacturer,   these coatings cannot be
reformulated to become VCC compliant because of their chemical
makeup(IV-D-1C5,  IV-D-109, IV-D-124, IV-D-144,  IV-D-176,
IV-G-04).   Tne current VOC contents range from 535 g/1  (IV-G-04)
to 725 g/i (IV-D-176)  and, according to the manufacturers,  any
efforts to reformulate the top  coats would affect their
performance and their ability to compete in  the specialty
conversion varnish coatings niche market.  Several commenters
made recommendations to the EPA about how to modify the  rule to
accommodate these coatings.   Eleven commenters (IV-D-89, IV-D-94,
IV-D-103,  IV-D-105,  IV-D-106,  IV-D-107, IV-D-131,  IV-D-132,
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IV-D-133, IV-D-145, IV-D-176) argued that the EPA should consider
an exemption for low-volume, specialty niche products such as
specialty conversion varnish coatings.  One commenter (IV-D-113)
suggested that coatings serving a specialty market and for which
there is no equivalent replacement be exempted from the
regulation.  This commenter also suggested that the EPA consider
exemptions for products that are sold in low volumes.  Ten other
commenters (IV-D-47, IV-D-84, IV-D-98, IV-D-102,  IV-D-109,
IV-D-111, IV-D-123, IV-D-135, IV-D-136,  IV-D-144)  requested that
specialty conversion varnish coatings be exempted from the rule.
     Three commenters  (IV-D-47,  IV-D-104, IV-D-127)  expressed
concern that these types of specialty conversion varnish coatings
will no longer be available in sizes larger than 1 liter (such as
1- and 5-gallon sizes).  One commenter (IV-D-104)  expressed
additional concern that limiting specialty conversion varnish
coatings to 1-quart containers would result in more wasted finish
and more containers in landfills, negating the intent of the
proposed rule.  Twelve commenters (IV-D-84, IV-D-98,  IV-D-103,
IV-D-105, IV-D-107, IV-D-111, IV-D-112,  IV-D-113,  IV-D-124,
IV-D-135, IV-D-136, IV-D-144) expressed concern that the proposed
rule would eliminate specialty conversion varnish coatings
altogether.
     One commenter  (IV-D-176) recommended that the EPA establish
a new category for conversion varnishes with a VOC content limit
of 725 g/1 due to the differences in chemical make-up and
performance between wood floor finishes and conversion varnish
top coats and provided the following definition for this unique
niche market:  "Specialty conversion varnish coating means a
clear acid-curing coating with a polyvinyl butyryl resin blended
with amino resins and supplied as a single-component product.  It
produces a hard, durable clear finish designed for professional
application to wood flooring."  As stated previously, the
commenter argued that these coatings cannot be reformulated due
to their chemical make-up.  Any reformulation of the two top
coats would reportedly affect their unique performance
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capabilities and their ability to compete in the specialty
conversion varnish coatings niche market.
     Another commenter (IV-G-04) also requested that the EPA
create a new category for conversion varnishes for the same
reasons stated in the previous comment  (chemical and performance
differences), but requested a VOC content limit of 560 g/1.  This
commenter stated that they have received approval from the State
of Oregon to sell their existing coatings (with VOC contents
ranging from 535 g/1 to 560 g/1) to professional users until
January 1, 1998.  For this commenter's conversion varnishes, urea
resins are combined with alkyd resins which produces a finish of
relatively high solids content with a short drying time.  This
coating is used as both a sealer and finish coat, so no special
sanding sealer with high VOC content is necessary.  The commenter
stated that reformulation efforts with suppliers of alkyds and
urea resins are ongoing and will continue.   The commenter stated
that oil-modified urethanes that comply with the proposed rule
also exist,  but these coatings still have some limitations and
are very expensive.   The commenter estimated that a total of only
about 200,000 gallons of this type of conversion varnish coating
(urea-alkyd resin)  is used in the United States per year, which
they estimated to be less than 5 percent of the floor finishing
market nationwide.   According to this commenter,  without this
coating, which would be banned at the proposed VOC content limit
of 450 g/1 for varnishes,  hundreds of contractors will lose the
businesses on which they have built their reputation for the past
25 years.
     Performance characteristics.  According to commenters, these
specialty conversion varnish coatings have  unique performance
capabilities which make them more desirable than competitive
coatings  (IV-D-89,  IV-D-94,  IV-D-102,  IV-D-105, IV-D-106,
IV-D-107,  IV-D-109,  IV-D-111, IV-D-112,  IV-D-113, IV-D-123,
IV-D-131,  IV-D-132,  IV-D-133).   First,  the  coatings can be
applied in 24 hours or less versus 2 days for waterborne coatings
(IV-D-103, IV-D-176).   Second,  according to the commenters, the
coatings are more durable (IV-D-47,  IV-D-84, IV-D-89,  IV-D-94,
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IV-D-100, IV-D-102, IV-D-103, IV-D-106, IV-D-107, IV-D-109,
IV-D-111, IV-D-112, IV-D-113, IV-D-123, IV-D-124, IV-D-131,
IV-D-132, IV-D-133, IV-D-127, IV-D-144, IV-D-145, IV-D-176) and
flexible  (IV-D-100, IV-D-102, IV-D-104, IV-D-107, IV-D-109,
IV-D-144, IV-D-145, IV-D-176) and have a crystal clear appearance
that makes the hardwood floor more attractive (IV-D-102,
IV-D-103, IV-D-111, IV-D-123, IV-D-144, IV-D-176).  The
commenters claimed that these finishes require less maintenance
because they are less likely to scratch, peel, or chip  (IV-D-47,
IV-D-84, IV-D-112, IV-D-176).  When small scratches and light
wear occur,  the commenters asserted that they are easily repaired
without the need for sanding and recoating (IV-D-47, IV-D-84,
IV-D-102, IV-D-107, IV-D-145, IV-D-176).  Typical finishes using
specialty conversion varnish coatings reportedly last over
10 years versus 2 to 3 years for waterborne finishes (IV-D-47,
IV-D-84, IV-D-89, IV-D-94, IV-D-105,  IV-D-106, IV-D-131,
IV-D-132, IV-D-133, IV-D-176).
     In addition, one commenter (IV-D-112)  requested that the EPA
consider the durability and maintenance requirements of a coating
when establishing VOC content limits.  Several commenters
(IV-D-47, IV-D-89, IV-D-94, IV-D-100, IV-D-103,  IV-D-105,
IV-D-106, IV-D-111, IV-D-127, IV-D-131, IV-D-132, IV-D-133,
IV-D-145) stressed that using a specialty conversion varnish
coating requires fewer coacs than when using comparable
waterborne finishes.  Specifically, the commenters stated that
the specialty conversion varnish coating requires one coat of
sanding sealer and one coat of finish versus three to five coats
for other types of finishes.  The commenters claimed that this
equates to lower overall VOC exposure over the floor's lifetime.
     Economic impact.   Two conversion varnish top coats are
marketed and sold by a small company (IV-D-176)  of 10 employees.
Over 90 percent of the company's sales revenue comes from these
two coatings that are used in conjunction with one of the
company's compliant sanding sealers.   Thus, if these coatings are
not exempted from the proposed rule,  the company stated that they
will be put out of business.
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     Twelve other commenters  (IV-D-47, IV-D-98, IV-D-100,
IV-D-102, IV-D-103, IV-D-111, IV-D-113, IV-D-123, IV-D-135,
IV-D-136, IV-D-144, IV-D-145) stated that the proposed rule would
cause them a loss in sales or business if these coatings were no
longer available.  Five commenters  (IV-D-98, IV-D-100, IV-D-103,
IV-D-109, IV-D-112) expressed concern that the unavailability of
these coatings would adversely affect their business or cause
them economic hardship or financial difficulty.  Two commenters
(IV-D-84, IV-D-103) argued that the proposed rule would cause
them or their clients to lose their competitive advantage.  One
commenter (IV-D-145) claimed that the majority of their business
depends on their ability to provide these coatings.
     Eleven commenters (IV-D-84, IV-D-89, IV-D-94, IV-D-102,
IV-D-106, IV-D-111, IV-D-127, IV-D-131, IV-D-132, IV-D-133,
IV-D-144) argued that the proposed rule would be a hardship on
contractors who use specialty conversion varnish coatings and
have built their reputation on these coatings.  One commenter
(IV-D-103) expressed concern that it would be unable to compete
in outlying areas due to increased prices resulting from the
additional travel costs incurred because waterborne finishes
require an extra day to apply.  Also,  three commenters (IV-D-84,
IV-D-100, IV-D-105) expressed concern that contractor employees
would need to be retrained resulting in burdensome costs for the
contractor.   One commenter (IV-D-145)  argued that the proposed
rule would be a hardship on employees because the need for
employee retraining could result in employees losing their jobs.
     Four commenters (IV-D-104,  IV-D-107, IV-D-109,  IV-D-112)
specifically discussed the loyal and dedicated following that
these conversion varnishes have among many contractors and
consumers and how consumers would continue to demand the high
performance and quality provided by these coatings.   Another
commenter (IV-D-105) expressed concern over the loss to the
consumer that will occur if these coatings become unavailable.
Finally,  one commenter (IV-D-123)  expressed concern that the lack
of these coatings could result in consumers choosing floor
coverings other than wood.  Another commenter  (IV-D-104)  pointed
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out that there are medical benefits provided by hardwood floors
over carpeting, citing an example in which a child's asthma
virtually disappeared after a change from carpet to hardwood
floors.
     Three commenters (IV-D-111, IV-D-112,  IV-D-113) also raised
several economic issues regarding the regulatory development
process.  One commenter (IV-D-111)  suggested that the EPA
consider the impact that regulations will have on coatings and
companies that depend on those coatings.   The commenters
recommended that the EPA consider such questions as:  (1) What
coatings will be eliminated?  (2) What companies will be damaged
or put out of business?  (3) How many independent flooring
contractors will lose business when the finish system they built
their reputation on is no longer available?  Two of the
commenters (IV-D-124,  IV-D-127)  requested that the EPA review the
impact of the proposed rule on small flooring businesses.
     One commenter  (IV-D-113)  maintained that it is unfair for
the EPA to apply VOC content limits to an entire industry without
considering the distinctions between coatings and applications.
The commenter argued that high-volume coatings can afford to
reformulate.   On the other hand, the commenter believed that low-
volume specialty coatings should be considered separately.  One
commenter (IV-D-102) stated that including specialty conversion
varnish coatings in a "one rule fits all" type of regulation,
with no consideration of coating performance arid uniqueness, is a
great injustice to the contractors who use them and the
homeowners who rely on them.
     Chemical differences.   One commenter  (IV-D-176) recommended
that more detailed definitions for wood floor finishes be
included in the rule because the company's two conversion varnish
top coats do not fit into the definitions provided by the EPA.
The commenter based this recommendation on  (1) chemical
differences between specialty conversion varnish coatings and the
definitions in the proposed rule for floor coatings and
varnishes, (2) the inability to reformulate specialty conversion
varnish coatings within the next 3 years, and (3) the niche
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market that these types of floor finishes serve.  The commenter
claimed that specialty conversion varnish coatings are more
sophisticated forms of conversion varnishes.  According to the
commenter, there are clear chemical differences between a varnish
and a conversion varnish, and there are also clear chemical
differences between a conversion varnish and a specialty
conversion varnish coating.
     First, the commenter explained that specialty conversion
varnish coatings use a combination of polyvinyl butyryl and amino
resins and rely on an acid catalyst to initiate the reaction.
However, specialty conversion varnish coatings are delivered in a
pre-catalyzed, single package system.  This single package system
is accomplished by stabilizing or blocking the reaction with the
solvent system.  Because specialty conversion varnish coatings
use a system of ionic bonding between two very different resins
(polyvinyl butyryl and amino resins), they also provide a much
tougher coating than one that cures through oxidation.
     In defense of adding a definition for specialty conversion
varnish coatings based on the unique chemistry of these coatings,
the commenter  (IV-D-176)  cited the precedent established by the
EPA in categorizing coatings that often reflect chemical
differences and unique specialty products.
     Second,  because specialty conversion varnish coatings use
polyvinyl butyryl resin,  the commenter argued that they cannot be
reformulated with current technology to become compliant at the
proposed VOC content limits.  There are three strategies that the
commenter has tried unsuccessfully for reducing the VOC content:
reformulation with acetone, reformulation with a lower viscosity
resin,  and emulsification of the coating made at very high
viscosity  (low VOC)  in water.  The commenter presented the
details of problems associated with the unsuccessful attempts at
reformulation in these areas.
     Third, due to its chemical differences, which lead to
significant differences in performance and quality, specialty
conversion varnish coatings serve a niche market in the hardwood
floor finish industry (IV-D-47,  IV-D-84,  IV-D-100, IV-D-102,
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IV-D-103, IV-D-105, IV-D-107, IV-D-111, IV-D-124, IV-D-127,
IV-D-135, IV-D-136, IV-D-145, IV-D-176).  According to one
commenter (IV-D-176),  there are only three companies that compete
in this small sector of the industry and,  according to its trade
publications, their total coatings account for only 3 percent of
the hardwood floor finish market.  This commenter stated that all
of these specialty conversion varnish coatings are marketed and
sold only to licensed professional wood flooring contractors.
     Low-volume limit.  One commenter  (IV-D-176) regarded the
suggested potential exemption level of 1,000 to 5,000 gallons as
too low because it would include only those one-person or part-
time manufacturers who operate out of their homes and by word of
mouth.  The commenter contended that these manufacturers fit the
EPA's concept of a small,  low-volume company operating in a niche
market because they are considered by industry analysts and
competitors to be a small firm in the hardwood floor finish
industry, they employ only ten employees,  and over 90 percent of
their sales come from four products.  The  commenter maintained
that the low-volume level should be increased to cover small,
niche market firms that will endure great  economic hardship
because of the architectural coating rule.  The commenter
suggested that the EPA consider a low-volume level of
100,000 gallons, which would exclude medium- and large-sized
manufacturers but would include small companies that focus on
niche markets.
     Exceedance fees.   Several commenters  (IV-D-105,  IV-D-107,
IV-D-176) also supported an exceedance fee as an option for
maintaining the availability of specialty  conversion varnish
coatings.  One commenter (IV-D-176)  argued that a reasonably
priced exceedance fee provides a way for relatively small,  low-
volume companies to survive new stricter VOC laws.  According to
the commenter, it also provides a way for  unique, niche market
coatings that cannot currently be reformulated to meet the VOC
content limits and maintain performance characteristics to
survive.
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     Variances .  One corrmenter  (IV-D-176) asserted  that  a
variance as currently proposed by the EPA would not be useful  for
specialty conversion varnish coatings.  These coatings have  a
unique chemical makeup that has not been successfully
reformulated and the development of resin technology in  the  next
few years that could make reformulation successful  is improbable.
The commenter  argued tnat a variance would only extend the time
available to continue research, which would likely  fail  to
produce a comparable compliant product.
     Response:   After evaluation of available information, the
EPA has determined that a new category for conversion varnishes
is warranted.  The EPA has established the category with a VOC
content limit  of 725 g/1,  as suggested.  The following
definition,  v.hich was suggested by two of the three manufacturers
(IV-E-3S.',  is  includec in tne final rule:  "Conversion varnish
means a c'^ear  acid coring ccating with an alkyd or other resin
blended v.'itn amnc resir.s and supplied as a single-component or
2-corrpcnent product.   Conversion varnishes produce a hard,
durable,  clear f_msn designed for professional application  to
wcod flooring.   Tne filir. fcrmaticn is the result of an acid-
catalyzed condensation reaction, affecting a transetherification
at the reactive ethers of tne amino resins."
     This category has ceen created for several reasons.   This
coating category represents a niche market that has chemical
differences tnat can c>e specified to distinguish it from the
broad category of varnishes and ensure that this category is
limited to the applications for which it is intended.   Three
manufacturers market  these coatings.   Due to the chemical makeup
of conversion varnishes,  these manufacturers have reportedly been
unable to reformulate these coatings to meet the 450 g/1  VOC
content limit  for varnishes.   The information available to the
EPA indicates  that there is no lower-VOC substitute for this type
of coating and tnat it is  not tecnnologically feasible to
reformulate it  at this time.   Only three companies compete in
this niche market and',  according to its trade publications,  these
coatings  represent a  small portion (about 3 percent) of the total
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national hardwood floor finishing market.   As such,  the EPA
believes that no significant increase in VOC emissions will
result from providing a higher VOC content limit for this
specialty niche category and that it is important to preserve
this market for the hardwood floor finishing industry.
     Elastomeric high performance industrial finishes.
     Comment:  One commenter (IV-G-02)  requested that the EPA
establish a new category to encompass approximately 10 different
coatings under the company's product line with the following
definition:  "Elastomeric high performance industrial finishes
means a coating formulated and recommended to provide a weather,
moisture, or abuse barrier on top of insulated piping and tanks
on cold work systems as a component of insulation systems with
moisture permeance less than 0.10 U.S.  perms."  The commenter
proposed that this category have a VOC content limit of 650 g/1.
The commenter argued that this limit would allow this specialized
category of coatings to continue to be available for nationwide
use .
     The commenter argued that this product line would fall into
either the flat or nonflat coatings category in the proposed
rule, with a VOC content limit of either 250 g/1 or 380 g/1
(specular gloss testing has net been done on these coatings).
This product line has VOC contents much higher than allowed under
either the flat or nonflat categories.
     According to the commenter,  these coatings consist primarily
of solvent and Hypalon with VOC contents ranging from 495 to
635 g/1 of coating.  These coatings function as a weather,
moisture, and abuse barrier on top of insulated piping and tanks
on cold work systems.  For example, these coatings are used over
insulation on a liquid nitrogen tank and the associated piping
system.  By adding to the insulating properties, these coatings
also function as an energy conservation coating to the insulation
system.  These systems typically operate at a temperature range
of -40 °F to +250 °F.  Also, the materials in the insulated
system have a temperature range of -250 °F to +32 °F.
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     The commenter claimed that these specialized coatings differ
from other coatings in the following ways:
     1.   Offer the best chemical resistance available against
          many industrial chemicals;
     2.   Display unmatched long-term weatherability;
     3.   Exhibit unmatched toughness, resisting punctures by
          hail, dropped tools, etc.;
     4.   Function in a service temperature range of -40 °F to
          +250 °F; and
     5.   Have a very low moisture vapor permeability,  which is
          very necessary for cryogenic work.
     The commenter sells these products in small quantities (less
than 5,000 gallons) nationwide and in larger quantities
internationally.  If a new category is not established for these
coatings, the commenter supported the inclusion of a low-volume
category exemption of 5,000 to 10,000 gallons in the final rule.
     Response:   After review and careful consideration of this
request, the EPA has determined that a new category for
elastomeric high performance industrial finishes is not
warranted.  As described by the commenter, these coatings
function as a weather,  moisture,  and abuse barrier on top of
insulated piping and tanks on cold work systems.  As such, these
coatings would fall in the industrial maintenance coatings
category, which includes high performance industrial coatings
that are exposed to one or more extreme environmental conditions
such as those described by the commenter.  The industrial
maintenance coatings category has a VOC content limit of 450 g/1.
Moreover, none of the State architectural rules reviewed have a
category for elastomeric high performance industrial finishes.
Since these products are sold in quantities of less than
5,000 gallons in the United States,  the commenter could consider
using the tonnage exemption and/or the exceedance fee in the
final rule as alternative compliance options.  These provisions
could allow the continued sale of these coatings.
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     Thermoplastic  (treatment)  sealer.
     Comment:   One commenter (IV-G-11/IV-E-25}  requested that the
EPA establish a new category for thermoplastic treatment sealers
with a VOC content limit of 630 g/1.  The commenter argued that
these coatings cannot be reformulated to meet the proposed VOC
content limit of 400 g/1 for opaque waterproof treatment sealers.
The commenter explained that the opaque waterproof treatment
sealer VOC content limit applies because the coatings are used
for waterproofing basements and foundations, and currently, on a
trial basis,  in one municipal swimming pool.  Since these
coatings seal surfaces and reduce microbial adhesion,  the
commenter stated tnat they are also useful for providing more
sanitary environments for food,  animals and water containers.  In
follow-up information, the ccmirenter  (IV-E-DeZurik) maintained
that the thermoplastic ruicoer coatings and mastics category
definition in the proposal does not apply because the commenter's
products are hard tnermoplastic coatings that contain less than
15 percent by weight of thermoplastic rubbers in the total resin
solids.  The commenter iIV-E-25,-  suggested the following new
category definition:  "Thermoplastic  (treatment)  sealer means a
coating applied tc porous surfaces.  This coating comprises a
styrene-containinc joinder resin dissolved in organic solvent
wherein styrene constitutes at  least 85 percent by weight of the
binder resin and forms £ hare coating with minimal deformation
that binds securely zo concrete."
     The commenter implied that the durability of the coatings
would justify a VOC content higher than 400g/l.  The commenter
estimated that the coating material would last  150 years;
however, the company does not have data on the  lifetime of its
coatings since this is a nev; coating technology.   The commenter
claimed that its coatings will  outlast most other coatings,
including tar,  which is a competing foundation  coating.
Furthermore,  the commenter asserted that there may be unfavorable
characteristics from competing  products:  tar may leach into the
ground and water and has associated health hazards, and epoxies
may require replacement for repair.  This is the only coating
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manufactured and marketed by this small business.  The commenter
 (IV-E-25) stated that the company's annual production of this
coating  is 85,000 gallons, with a cost of $8 to $10 per gallon.
Although the commenter claimed that the coating cannot be
manufactured to meet the 400 g/1 VOC content limit for opaque
waterproofing treatment sealers with current technology without
reducing performance and durability, the company has developed a
coating which complies with California's Rule 66  (at a VOC
content of 420 g/1).  This coating is more expensive to produce
because the raw materials cost more.
     Response:  The EPA has carefully evaluated the information
presented by the commenter and has determined that a new category
for thermoplastic  (treatment)  sealers with a VOC content limit of
630 g/1 is not warranted.  As described,  thermoplastic sealers
are used for waterproofing basements and foundations and,  thus,
would be classified under the category of waterproofing sealers
and treatments.  However, as discussed in section 2.2.4.3 of this
document, in the final rule, the EPA has combined the clear and
opaque waterproofing treatment sealer categories into one
category with a VOC content limit of 600 g/1.  The decision to
combine the categories is consistent with State architectural
coating rules.   Based on evaluation of information provided by
the commenter,  the EPA's decision to combine opaque and clear
waterproofing treatment sealers into one category with a VOC
content limit of 600 g/1, and considering the compliance
flexibility in the final rule (the exceedance fee and tonnage
exemption provisions),  the EPA believes that the commenter can
continue to manufacture the coating in a competitive manner
without affecting its performance and durability.  The EPA notes
that the commenter has successfully developed a lower VOC product
for use in California.   The EPA supports the development of such
lower VOC products.  The rule includes a tonnage exemption and an
exceedance fee provision that will assist the commenter.
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     2.2.4.3   Proposed Categories
     Antifouling coatings.
     Comment:  Two commenters (IV-D-173,  IV-D-189)  requested a
higher VOC content limit for the antifouling category.  One
commenter  (IV-D-189)  suggested that the EPA increase the VOC
content limit for the antifouling category to 450 g/1 and the
other commenter did not specify a level.   The commenter that
requested the 450 g/1 limit explained that the coating industry
deemed the 400 g/1 limit too low to allow for adequate
application and use as an architectural coating.   The commenter
maintained that it is inappropriate to apply the  same VOC level
as provided in the Shipbuilding and Ship Repair (Surface Coating)
Operations NESHAP to architectural coatings without recognizing
the significant differences between the two end uses:
(I) antifouling architectural coatings are generally not applied
at fixed manufacturing/repair facilities where painting
conditions are more easily controlled, and (2)  the shipbuilding
rule explicitly provides a cold weather thinning  exemption to its
limit of 400 g/1, which allows a facility to thin the regulated
coating so that the VOC content is higher than the limit
specified during cold weather coating operations.   This is a
feature the commenter considered essential for architectural
coatings as well.  The other commenter (IV-D-173)  explained that
antifouling marine coatings save enough fuel to offset emissions
from the paint.  The commenter explained that antifouling marine
coatings are subject to naval specifications so reformulation and
approval are expensive and time consuming.   The commenter stated
that if the 400 g/1 VOC content limit were retained in the final
rule, the commenter's estimated lost sales would  be $70,000 for
the antifouling category,  in addition to expected sales losses
for other products.
     Response:   The antifouling coating category  in the
architectural coating rule includes coatings used on stationary
structures, such as docks,  sea walls, boat slips,  etc.  These
coatings are similar, and perhaps the same in some cases, as
those used to coat ships.   After consideration of the comments,
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the EPA agrees that these architectural coatings may need extra
thinning in cold weather situations and, therefore, has raised
the VOC content limit for antifouling coatings to 450 g/1 in the
final rule to allow for such cold-weather thinning.  Also,
similar to nuclear coatings, these coatings are subject to some
of the same extreme environmental conditions as industrial
maintenance coatings and must meet other rigorous requirements,
such as those under the FIFRA.  Moreover,  this is one of 17
specialty coating categories that did not appear in existing
State architectural coating rules, and no data were collected in
the 1990 VOC Emissions Inventory Survey.  Therefore, the EPA
believes that a low volume of coatings will be affected by this
change.
     Bituminous coatings and mastics.
     Comment:   One commenter  (IV-D-181), a national trade
association comprised of 60 roof coating manufacturers and their
suppliers,  supported the proposed VOC content limits for roof
coatings,  bituminous coatings and mastics, and metallic pigmented
coatings,  and the inclusion of all bituminous coatings in the
bituminous coatings and mastics category.   Two commenters
(IV-D-30,  IV-D-114)  suggested reducing the proposed VOC content
limit of 500 g/1 for bituminous coatings and mastics.  One
commenter (IV-D-30)  stated that existing technology permitted the
manufacture of bituminous coatings at a VOC content limit of
350 g/1.  The other commenter (IV-D-114) recommended adopting one
roof coating category that includes bituminous materials at a VOC
content limit of 300 g/1 for several reasons.  The commenter
pointed out that the proposed Federal regulation,  unlike State
rules,  classifies competing roofing products into different
categories with significantly different VOC content limits.  The
commenter notes, for example, that bituminous materials and other
roof coatings are subject to the same VOC content limit (300 g/1)
in both the California Bay Area Air Quality Management District
and the South Coast Air Quality Management District regulations.
In the proposed rule,  the commenter complained that bituminous
materials (500 g/1)  used for roof coating would be granted a VOC
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content limit that is twice the limit for non-bituminous roof
coatings  (250 g/1).   The commenter maintained that this would
create a large cost  advantage for bituminous manufacturers and
would allow them to continue to pollute.   Furthermore,  at the
proposed VOC content limit, the commenters claimed that
manufacturers of non-bituminous roof coatings that reformulated
to meet State (300 g/1)  VOC regulations would need to reformulate
again to meet the lower Federal VOC content limit (250  g/1).   The
commenter reportedly already spent several thousand dollars to
reformulate to 300 g/1 to meet the roof coating VOC content limit
in the State rule.
     The commenter stated that the background documents for the
proposed Federal regulation provide no justification for separate
categories for bituminous and roof coatings or the reduction of
the State VOC content limit of 300 g/1 to 250 g/1 for roof
coatings.  The commenter maintained that  allowing a higher VOC
content for bituminous roof coatings and restricting non-
bituminous roof coatings below the VOC control level found in
existing State rules puts non-bituminous roof coating
manufacturers at a competitive disadvantage.
     Response:   The  EPA has reviewed its  basis for establishing
the proposed category for bituminous coatings and mastics and VOC
content limit of 500 g/1 and has decided to retain this category
and limit in the final rule.  The EPA reviewed information
submitted by the National Roof Coatings Manufacturers Association
(comprised of 60 bituminous and nonbituminous coating
manufacturers and suppliers), before proposal (II-D-56),
regarding the composition,  specialized manufacture,  performance,
and use limitations of these coatings.  According to this
information, a significant portion of these coatings are needed
for repair and maintenance of existing roofs, as well as for
installing new roofing systems.  The trade association claimed
that waterborne bituminous coatings and mastics are not practical
in many of the applications where solventborne bituminous
coatings and mastics are used and that coating performance
comparisons between waterborne and solventborne bituminous
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coatings and mastics range from good to very poor, depending on
conditions.  In particular, before proposal the national Roofing
Contractors Association  (also II-D-56), which has over
3,500 members represented in all 50 States, argued that there is
no viable alternative in many circumstances and pointed to
bituminous primers as an example of this.  According to this
trade association, if the VOC content level were reduced by any
significant amount in these primers, the adhesion properties, the
application process, and the life of the roof will suffer
dramatically.
     Before proposal, one coatings manufacturer (II-D-125) argued
that the average VOC content for bituminous coatings is 400 g/1.
Currently, the State of Arizona and the California-South Coast
Air Quality Management District have a VOC content limit of
420 g/1 for bituminous coatings and mastics.  In addition, after
proposal the national Roof Coatings Manufacturers Association
(IV-D-181) supported the proposed VOC content limit of 500 g/1
for bituminous coatings and mastics.  In order to satisfy
performance requirements of bituminous coatings and mastics
nationwide, the EPA has retained this category with a VOC content
limit of 500 g/1 in the final rule.
     The EPA disagrees that the roof coating category limit
should be raised from 250 g/1 to 300 g/1.  Although there are
several State architectural coating rules that have a VOC content
limit of 300 g/1 for roof coatings, the EPA believes that the
national Roof Coatings Manufacturers Association's support
(IV-D-181) of the proposed VOC content limit for roof coatings at
250 g/1 provides convincing evidence that this limit is being
achieved nationwide.  Therefore, the EPA has retained this limit
in the final rule.
     Roof coatings.
     Comment:  One commenter (IV-D-74)  produces less than
400 gallons per year of a roof coating with VOC content levels
ranging from 453 g/1 to 509 g/1.  The commenter requested a
variance for roof coatings (a VOC content limit of 250 g/1 was
proposed and this limit was retained in the final  rule).
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     Response:   As discussed in section 2.2.8 of this document,
the proposed variance provisions have not been retained in the
final rule.  However, the final rule includes a VOC tonnage
exemption that could be used for low-volume products such as
those described by the commenter.
     Dry fog coatings.
     Comment:   Three commenters (IV-D-44, IV-D-182,  IV-F-2m)
stated that the proposed VOC content limits for dry fog coatings
should be raised.  None of the commenters recommended a specific
VOC content limit.  One commenter (IV-F-2m)  stated that the
400 g/1 limit was impossible to meet.  Two commenters (IV-D-44,
IV-D-182) stated that the limit would affect performance
characteristics.  One commenter (IV-D-44) specified that dry fog
coatings at 400 g/1 VOC content would have increased drying time,
poor leveling properties, and poor durability.  The commenter
stated that drying time is a critical performance characteristic
for several coatings including dry fog coatings.  The commenter
stated that two options to reduce VOC content exist:   increase
solids or reduce solvents.  According to the commenter,  both
options increase drying time.  Both commenters stated that they
did not have documentation that could be made public to support
their arguments.
     Response:   The EPA has retained the proposed VOC content
limit of 400 g/1 for dry fog coatings based on consideration of
the 1990 VOC Emissions Inventory Survey and requirements in State
architectural coating rules.  According to the 1990 VOC Emissions
Inventory Survey, approximately 84 percent of waterborne and
solventborne dry fog coatings sales were manufactured at or below
400 g/1.  Also, a review of existing State architectural coating
rules reveals several States, including Arizona, Kentucky,
New York, New Jersey, Massachusetts, Rhode Island, and
California-South Coast and Sacramento, have rules that contain a
400 g/1 VOC content limit for dry fog coatings.  Therefore, the
survey data and existing State regulations suggest that dry fog
coatings formulated at or below 400 g/1 VOC content perform at an
acceptable level.
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     Flat coatings.
     Comment;  One commenter  (IV-D-191) stated that the proposed
flat coatings category VOC content limit of 250 g/1 was not
stringent enough.  The commenter recommended a 100 g/1 VOC
content limit for 1997 and a 0 g/1 limit for 2000.  The commenter
reported obtaining and successfully using zero- and low-VOC flat
coatings.  Therefore, the commenter concluded that a zero-VOC
limit for 2000 is technologically and economically feasible.  The
commenter referred to California-South Coast's November 8, 1996,
proposal to phase in a 100 g/1 VOC content limit for the flat
coating category in 2001 and 50 g/1 in 2008.  The commenter
maintained that the California South Coast limits were also too
weak given the time for compliance, although they are more
stringent then the limits in the proposed national rule.  The
commenter reported that 40 percent of the flat coatings on the
market in Southern California meet the 100 g/1 limit and
12 percent meet the 50 g/1 limit.  The commenter maintained that
these coatings are cleaner and safer and that the EPA did not
calculate the cost savings resulting from workers not having to
leave the building during painting operations with these
coatings.
     Response:   The EPA has retained the VOC content limit of
250 g/1 for flat coatings in the final rule rather than lowering
the level as the commenter requested.   The 1990 VOC Emission
Inventory Survey revealed that 45 percent of exterior flat
coatings and 49 percent of interior flat coatings sold were
between the 100 g/1 limit the commenter requested and the
proposed limit of 250 g/1.  In addition,  all of the State
regulations reviewed, including those for California Air Quality
Management Districts, Kentucky,  Rhode Island,  Massachusetts, New
York, New Jersey, and Texas,  have VOC content limits of 250 g/1
for flat coatings.
     Although the EPA acknowledges the use of low-VOC coatings in
Southern California as well as many lower and no-VOC flat
coatings marketed across the country,  the EPA has retained the
250 g/1 VOC content limit based on survey data and State
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architectural coating rules.  As discussed in several responses
in this document, the VOC content limits in the final rule
reflect BAG and were selected after consideration of a variety of
factors on a nationwide basis.  Local areas may find it
appropriate to require more stringent limits based on local
conditions, but the EPA must base national rules on achievability
in all areas of the country under many different conditions.
     Graphic arts coatings.
     Comment:   Two commenters (IV-D-02/IV-D-178/
IV-F-Ol(l), IV-D-168) were concerned about the performance of
graphic arts coatings at the proposed VOC content limit of
500 g/1.   Neither of the commenters suggested an alternative VOC
content limit.  One commenter (IV-D-168) envisioned that the
decrease in the VOC content of graphic arts coatings will affect
their suitability for use in the sign industry.  The commenter
offered some potential impacts on the sign coatings industry,
including difficulty in achieving variation in gloss levels,
varying drying times in the drying room (implying shop-applied
coatings),  need for greater application amounts, and higher
costs.  The other commenter (IV-D-02/IV-D-178/IV-F-01(1))
explained that graphic arts coatings are formulated to address
specific performance needs.  For example,  lettering enamels are
designed to cover in one brush stroke and maintain a sharp edge.
To reduce artist fatigue when painting billboards 8 hours a day,
bulletin enamels were developed with sufficient slip to reduce
draft.  The commenter mentioned that graphic arts coatings are
exempt in the California-Bay Area regulation and urged the EPA to
reevaluate the proposal because they did not know if
reformulation attempts would succeed.  Moreover, the commenter
pointed to the graphic arts category as an example of a niche
market where a replacement system was unavailable because the
small demand does not justify expenditures required for raw
material suppliers to develop a new resin.  The commenter
manufactures 30 different graphics arts coatings that would be
banned by the rule.
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     Response:  Graphic arts coatings recommended by the
manufacturer solely for shop applications are not required to
meet the 500 g/1 VOC content limit.  To clarify this, the
definition of graphic arts coating has been modified by removing
the reference to in-shop coatings, and the definition of
architectural coating has been revised to clarify that coatings
recommended by the manufacturer solely for shop application are
not subject to the rule.  In addition, a definition of shop
application has been added to the final rule.  Although the
commenters asserted that the proposed VOC content limit of
500 g/1 will cause poor performance, they did not recommend an
alternative level.  The EPA has determined that the 500 g/1 limit
for field-applied graphic arts coatings is achievable, based on
survey data and State architectural coating rules.  A review of
existing State regulations revealed several States with lower VOC
limits:  Massachusetts, New York,  New Jersey, and Rhode Island at
450 g/1, and some at 500 g/1 (Kentucky and California-Sacramento
and South Coast).  However,  the category (including shop-applied
coatings)  is exempt in several California counties (Batte,
Calusa, El Dorado, and Feather) and Arizona  (Maricopa County).
Based on the 1990 VOC Emissions Inventory Survey,  approximately
96 percent of these coatings were manufactured with VOC contents
at or below 500 g/1.
     Industrial maintenance coatings.
     Comment:  One commenter (IV-D-18) recommended that the VOC
content limit for the industrial maintenance coatings category
(450 g/1)  be reduced to 350 g/1.  The commenter argued that the
same coatings are applied to miscellaneous metal parts for which
a Control Techniques Guideline  (CTG) document has specified a VOC
content limit of 340 g/1 as reasonably available control
technology.  According to the commenter,  many of the same
coatings are routinely used,  regardless of whether the structure
is field-coated or coated in a fabrication shop.  Another
commenter (IV-D-45)  stated that industrial maintenance products
can be reformulated and manufactured to meet the proposed limits.
The commenter expressed concern about product performance at the
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450 g/1 level, but he did not believe the changes would
jeopardize his business.
     Response:  As discussed elsewhere in this document, the rule
does not apply to shop-applied coatings (see definition of shop
application).   Industrial maintenance coatings is a broad
category that includes many different coatings with a wide range
of end uses and end users.  The CTG for coating of miscellaneous
metal parts applies to coatings that are used in a shop setting
under controlled conditions and for products that are being
manufactured,  often with the use of coating curing ovens.
Industrial maintenance coatings covered by the architectural
coatings rule, on the other hand,  are field applied under many
different climatic conditions and are air-dried.  Thus, it is not
appropriate to assume that they can achieve the same VOC content
levels as shop-applied coatings, although some individual
coatings may be able to.  Although the EPA recognizes that there
are many individual industrial maintenance coatings that have VOC
content levels below the proposed VOC content limit of 450 g/1,
the EPA has decided to retain this limit for industrial
maintenance coatings as a whole since it is consistent with
existing State architectural coating rules and survey data.  A
review of existing State regulations revealed several States with
the same or similar levels,  including Kentucky, New Jersey,
Massachusetts, Rhode Island and New York at 450 g/1; and
California-Sacramento,  Bay Area, and South Coast at 420 g/1.  In
addition, the 1990 VOC Emissions Inventory Survey indicated that
50 percent of industrial maintenance coatings were sold in the
350-450 g/1 VOC content range in 1990, indicating that a large
portion of coatings in this category are in compliance with the
limit.
     Metallic pigmented coatings.
     Comment:   One commenter  (IV-D-18) suggested that the EPA
reduce the VOC content limit for metallic pigmented coatings from
500 g/1 to 350 g/1.  Similar to industrial maintenance coatings,
the commenter stated that many of the same coatings are applied
both in shops and in the field.  The commenter also noted that
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these applications are regulated under the CTG for miscellaneous
metal parts at a VOC content limit of 340 g/1.  Another commenter
 (IV-D-2) argued that they cannot meet the 500 g/1 limit, but
offered no basis for this statement.  One commenter  (IV-D-181), a
national trade association, supported the proposed VOC content
limit for metallic pigmented coatings.
     Response:  As discussed previously, the rule does not apply
to shop-applied coatings.  Although metallic pigmented coatings
are available with VOC contents below 350 g/1, the EPA has
decided to retain the proposed limit  (500 g/1) based on
consideration of existing State architectural coating rules as
well as available survey data on the VOC content of metallic
pigmented coatings and due to the broadness of this category,
which includes applications outside of those highlighted by the
commenter.  For example, other comments  (II-D-75, II-D-156)
received before proposal indicated that there are major
differences between types and uses of zinc coatings, which are
included in the metallic pigmented coatings category, and that it
may not be feasible to apply VOC content limits designed for one
technology to a completely different technology.  A typical
application of zinc-rich coatings would be a structural steel
frame for a large,  multi-story building.  The performance
requirements for such an application would be different than
those for miscellaneous metal parts, particularly in view of the
fact that these metal parts are routinely coating in fabrication
shops as described by one commenter (IV-D-18).
     A review of existing State regulations revealed several
States with a 500 g/1 limit,  including Kentucky, New York,
New Jersey, Massachusetts,  Rhode Island, and California-
Sacramento, Bay Area, and South Coast.  Furthermore,
approximately 90 percent of all metallic pigmented coatings
represented in the 1990 VOC Emissions Inventory Survey data had
VOC contents in the 350-500 g/1 range.
     Nonflat exterior.
     Comment:   One commenter (IV-D-45) requested a VOC content
limit higher than the proposed limit of 380 g/1 for exterior
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nonflat coatings.  The commenter explained that house trim paints
are nonflat exterior coatings that consist of a mixture of high-
gloss enamel and house paint.  The enamel creates desirable
hardness and glossiness that prevent color deterioration.  The
commenter stated that the company manufactured 1,150 gallons of
exterior nonflat coatings (four house trim colors)  in 1994 and
710 gallons in 1995 with VOC contents ranging from 422-449 g/1.
According to the commenter,  the industry has shifted to latex
systems, but these systems have limitations.  Specifically, the
commenter stated that application is limited by cold weather, and
conversion to latex systems is expensive because it requires
two coats plus a primer.
     Response:  The EPA has decided to retain the proposed VOC
content limit for exterior nonflat coatings of 380 g/1 based on
available survey data on the VOC content of nonflat exterior
coatings, existing State architectural coating rules,  and
performance studies of low-VOC coatings (IV-B-4).   The 1990 VOC
Emissions Inventory Survey indicated that about 87 percent of
exterior nonflat coatings were sold at or below the proposed
limit in 1990.  In addition, several existing State regulations,
including Kentucky, Massachusetts, California-Bay Area, Rhode
Island, New York and New Jersey, limit the VOC content of nonflat
coatings to 380 g/1.  Also,  according to studies conducted on the
weathering performance of several different finishes used to coat
aspen siding exposed outdoors on fences in the States of
Wisconsin, Mississippi, and Washington, the best finishes were
acrylic latex coatings.  Even after 10 years of exposure at the
three locations, the studies indicated that two coats of acrylic
latex over an acrylic latex or oil-based primer provided very
good protection and appearance.  The EPA notes that these are
subjective considerations, but the studies confirm that lower VOC
coatings can be effective in this category.  The EPA,  therefore,
believes that the available information indicates that a limit of
380 g/1 is appropriate.  The EPA notes that the final rule
contains a tonnage exemption and an exceedance fee mechanism that
may provide flexibility for the commenter.
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     Nonflat interior.
     Comment:  One commenter declared in two letters
 (IV-D-153/IV-D-207) that the interior nonflat category should be
divided into water-based (380 g/1) and solvent-based (500 g/1)
categories.  According to the commenter, the proposed 380 g/1 VOC
content limit can be met by water-based products; however, there
are still applications where the solvent-based product will
outperform its latex counterpart.  The commenter  (IV-D-153)
provided the example that two coats of a solvent-based enamel
prevents old lead paint from becoming an environmental problem.
The commenter argued that formulating solvent-based coatings with
VOC contents lower than 500 g/1 causes deficiencies in color
retention, gloss retention, viscosity, and application
characteristics and may result in increased solvent use for
thinning.  On the other hand, two commenters (IV-D-172,  IV-E-60)
that manufacture encapsulants for lead-based paint indicated that
their products meet the limit for flat coatings  (250 g/1)  or for
nonflat coatings (380 g/1).  (These coatings are subject to the
limits for the flat or nonflat category, depending on the gloss
level of the coating.)
     One commenter (IV-F-2J) stated that the nonflat coatings
limit should be around 500 g/1 or in the high 400's to
accommodate gloss enamels,  rather than at 380 g/1, but they did
not provide any supporting documentation.  One commenter
 (IV-D-206), a national trade association, stated that the VOC
content limits for interior and exterior nonflat alkyd trim paint
and many other coatings are as low as they can go without
adversely affecting performance.
     Response:   The EPA has decided to retain the proposed VOC
content limit at 380 g/1 for both solventborne and waterborne
nonflat interior coatings.   Approximately 84 percent of the total
nonflat coatings sales in the 1990 VOC Emission Inventory Survey
met this limit,  and approximately 40 percent of the solventborne
nonflat coatings surveyed were at or below this limit.   Also, a
review of existing State architectural coating rules showed only
one State (Texas)  with a VOC content limit higher than the
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proposed limit of 380 g/1 for this category.  Support for the
proposed limit was provided by several of the commenters
mentioned above as well as by a preproposal commenter (II-D-10)
who specified that 350 g/1 would allow superior alkyd semi-gloss
coatings.  In addition, according to a recent study on the
performance of nonflat coatings (IV-B-4), a VOC-free multiphase
latex gloss enamel was compared to several commercially available
conventional VOC latex gloss enamels,  and it achieved gloss and
block resistance equal to or better than conventional coatings.
     Multi-colored coatings.
     Comment:   One commenter (IV-D-191)  argued that the VOC
content limit proposed for multi-colored coatings  (580 g/1) is
too high.  The commenter suggested lower limits of 150 g/1 for
1997 and 0 g/1 for 2000 for this category.  The commenter cited
the November 8, 1996, California-South Coast proposed limit of
420 g/1 for this category as additional  support for his claim
that the EPA's proposed limit is too lenient.  The commenter
believes the proposed national  standard  is too lenient because
one manufacturer with 70 percent of the  Southern California
market already sells multi-colored coatings that meet the 150 g/1
standard.  The commenter did not provide any basis for the
suggested 0 g/1 level for 2000  for this  category.
     Response:  The EPA has decided to retain the VOC content
limit of 580 g/1 for multi-colored coatings based on existing
State architectural coating rules and available survey data on
the VOC content of multi-colored coatings.  A review of existing
State regulations revealed limits on VOC content ranging from
250 g/1  (California-South Coast rule effective January 1, 1998)
to 600 g/1 (Kentucky, New York, New Jersey, Massachusetts, and
Rhode Island regulations).  Thus,  the EPA has concluded that the
580 g/1 limit is appropriate for the range of conditions covered
by the national rule.  Lower limits may  be appropriate for local
areas that must achieve a different balance of considerations for
determining VOC controls than for a rule that applies nationwide.
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     Nuclear coatings category.
     Comment:   Four commenters  (IV-D-18, IV-D-151/IV-F-2g,
IV-D-162, IV-D-189) suggested that a higher VOC content limit is
needed for the nuclear coating category.  Three commenters
(IV-D-18, IV-D-162, IV-D-189) specifically recommended raising
the VOC content limit for nuclear coatings from 400 g/1 to
450 g/1.  Two commenters  (IV-D-18, IV-D-151/IV-F-2g)  pointed out
that having the nuclear coating limit more stringent than for
industrial maintenance coatings is illogical since coatings used
at nuclear facilities are subject to specific rigorous
requirements for use at nuclear facilities.  One commenter
(IV-D-189) argued that the only justification the EPA provided in
the proposal preamble for the nuclear coating category VOC
content limit was that it was consistent with the nuclear
category in the Shipbuilding and Ship Repair NESHAP.   The
commenter stated that the VOC limits for nuclear coatings in the
Shipbuilding and Ship Repair (Surface Coating)  Operations NESHAP
were lower than levels that had been identified by the coatings
industry as necessary for adequate application and use as
architectural coatings.  The commenter argued that it was
inappropriate to apply the VOC content limits of the Shipbulding
and Repair NESHAP to architectural coatings without recognizing
the significant differences between the two end uses:  (1) a
field-applied coating has to be capable of application in a
variety of different settings which cannot be planned for, as
opposed to shipbuilding and ship repair coatings applied at fixed
facilities under generally controlled conditions,  and (2)  the
Shipbuilding and Ship Repair NESHAP provides VOC content
flexibility (i.e.,  a thinning exemption) for coatings applied in
cold weather.   In comparison, the proposed architectural coatings
rule offered no flexibility for cold weather thinning for
field-applied coatings.  Thus,  the commenter recommended
increasing the VOC content limit for nuclear coatings to 450 g/1.
     At the public hearing,  one commenter  (IV-D-151/IV-F-2g)
requested that coatings used in Level 1 containment areas be
exempt from the rule or be subject to a higher limit.
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Specifically, the company's nuclear enamel coating at a VOC
content of 540 g/1 does not meet the proposed limit for nuclear
coatings.  The commenter (IV-D-151/IV-F-2g)  suggested the
following subcategories and VOC content limits for nuclear
coatings:  (1) concrete curing compounds (660 g/1); (2)
primers/surfacers (420 g/1); and (3) finish coatings (540 g/1).
The commenter claimed that these VOC content limits are based on
existing coatings already approved for use in nuclear facilities
for Level I and Level II use.  Based on the EPA proposal, the
commenter explained that they would have to reformulate, retest,
and recertify their nuclear products.  According to the
commenter, testing would cost more than $30,000 per reformulation
and require 6-8 months.  The commenter (IV-D-151)  stated that the
company's nuclear coatings have been tested in accordance with
required specifications ANSI N101.2 and N5.12 for use in nuclear
plants and that the product must be manufactured in compliance
with a quality assurance program that complies with appendix B,
10 CFR 50 and 10 CFR 21.  Each shipment must be accompanied by a
Certificate of Analysis assuring the coating has the same
characteristics as original batches.  In addition to the testing,
the commenter  (IV-D-151) mentioned that their customers must
submit a 10 CFR 5059 review tc the Nuclear Regulatory Commission
(NRC)  in order to modify their license and that submittal is a
long and costly process.  As an alternative to reformulation, the
commenter  (IV-D-151/IV-F-2gl suggested the low-volume exemption
or exceedance fee.  The commenter calculated that the exceedance
fee would increase the current cost of their $75 per gallon
coatings by about $0.40 per gallon  (IV-F-2g) or $0.50 per gallon
(IV-D-151).
     Response:  The EPA agrees that the nuclear coatings category
VOC content limit should not be more stringent than the limit for
industrial maintenance coatings because nuclear coatings are
subject to some of the same extreme environmental conditions as
industrial maintenance coatings as well as other rigorous
requirements.  Also, as pointed out by the commenters,  nuclear
coatings must meet further specifications of the NRC.  For these
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reasons, the EPA concurs that a higher VOC content limit is
justified.  Thus, the EPA has decided to raise the VOC content
limit for nuclear coatings to 450 g/1 which is the same as the
level prescribed for industrial maintenance coatings and also
provides allowance for extra thinning during cold, weather
conditions.  The EPA expects that a limited amount of nuclear
coatings will be affected by this change due to the various
testing requirements and limited number of nuclear facilities.
Also, as pointed out in the proposal preamble  (61 FR 32739),  this
is one of 17 specialty coating categories that did not appear in
existing State architectural coating rules, and no data were
collected in the 1990 VOC Emissions Inventory Survey.
     In addition, the EPA has considered the suggestion to
subcategorize the nuclear coating category into three
subcategories with different VOC content limits:  concrete curing
compounds (660 g/1),  primers/surfacers  (420 g/1), and finish
coatings (540 g/1).   The nuclear coatings category is intended to
include coatings manufactured specifically for use at nuclear
facilities to ensure operational safety and the definition
requires that these coatings meet various requirements.
Therefore,  if these coatings meet the nuclear coating category
definition,  they would be classified as nuclear coatings under
this rule and subject to the VOC content limit of 450 g/1.
Therefore,  the EPA does not believe it is necessary or
appropriate to subcategorize the nuclear coating category with
different limits as suggested.   The final rule includes a tonnage
exemption and exceedance fee option for additional compliance
flexibility if needed.
     Nonferrous ornamental metal lacquers and surface
protectants.
     Comment:   One commenter (IV-D-31)  contended that it is
necessary to retain the proposed VOC content limit for nonferrous
ornamental metal lacquers and surface protectants.   The commenter
argued that none of the lower VOC coatings that have been tested
demonstrate the essential performance characteristics for this
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category such as fast drying time,  easy removal,  and prevention
of oxidation, corrosion, and surface degradation.
     Response:   The EPA has retained the proposed VOC content
limit of 870 g/1 for nonferrous ornamental metal  lacquers and
surface protectants in the final rule.   The EPA's review of
existing State architectural coating rules and information
provided by commenters indicates that this limit  is appropriate.
     Opaque stains.
     Comment:  Three commenters (IV-D-45,  IV-D-93,  IV-F-2)
asserted that opaque stains that are thin flat oil paints with
wood preservative chemicals could not be made to  meet the
proposed VOC content limit of 350 g/1.   Another commenter
(IV-F-2) requested that the limit for opaque stains be raised to
450 g/1.  One commenter (IV-D-45)  said that acrylic flat latex
paints can replace lighter colored stains with better color
retention but have limited application in cold weather.   However,
this commenter asserted that darker stains needed for
outbuildings, fences, decks, and picnic tables cannot be produced
at the 350 g/1 VOC content level.   The commenter's company
produced less than 6,000 gallons of opaque stains in 1995.
Another commenter (IV-D-93) asserted that reformulation would
result in uneven sheen over the variety of substrate conditions
found on stained buildings and that oil-based stains are still
needed for older weathered surfaces.   The commenter argued that
the lowest practical VOC content for opaque stains would be
425 g/1.  This commenter produced 7,950 gallons of opaque stains
in 1995 and 5,000 gallons through August 1996.  Another commenter
(IV-F-2) stated that opaque stains with a VOC content of 350 g/1
have drying problems and too much film build.  Raising the solids
content defeats the purpose of the stain (i.e., penetration
without coating the surface),  and waterborne products do not
perform well.  The commenter stated that the complaint rate for
their waterborne stains is much higher than for their
solventborne stains.
     On the other hand, another commenter (IV-D-185) maintained
that the proposed limits for stains are technologically and
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economically feasible to achieve and yield significant emission
reductions.
     Response:  The EPA has not revised the 350 g/1 VOC content
limit for opaque stains for the following reasons.  The 1990 VOC
Emissions Inventory Survey showed that over 14 percent of
solventborne opaque stains were manufactured with VOC contents at
or below 350 g/1, and all of the waterborne coatings, which
represent 46 percent of the total sales from this category, were
below 200 g/1.  Therefore, 60 percent of all coatings being
manufactured are compliant.  Also, except for one county in
California, the State architectural coating rules reviewed,
including Arizona, California, Kentucky, Massachusetts,
New Jersey, New York, and Rhode Island, have had a VOC content
limit of 350 g/1 for opaque stains for several years over a wide
range of conditions.  The EPA thus believes that because a
significant portion of the products in this category already meet
the proposed limit, it is appropriate to maintain the limit.  The
prevalence of products that meet the limit and the selection of
this limit by States indicates that the it is technologically and
economically feasible.  The commenters producing low volumes of
stains that are not compliant may want to consider the tonnage
exemption and exceedance fee provisions.
     Stains - clear and semi-transparent.
     Comment:  Four commenters  (IV-D-45, IV-D-93, IV-D-175,
IV-F-2)  stated that clear and semi-transparent stains have poor
performance at the proposed 550 g/1 VOC content limit.  One
commenter  (IV-D-45) indicated that high solids stain formulations
meet the VOC requirements but result in a higher rate of consumer
complaints for lap marks and shiny spots.   Furthermore, the
commenters claimed that acrylic latex paint does not penetrate
wood,  penetrate the color white, or allow application of a very
thin film which would prevent peeling.  One commenter  (IV-D-93)
indicated that it has an interior wood stain that will have to be
discontinued because it cannot meet the 550 g/1 limit, thus
leading to lost sales in related products such as varnishes and
lacquers.   The commenter stated that based on early
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investigations there seems to be no way to reformulate this core
product to meet the 550 g/1 limit and maintain the performance
properties of the product.  Additionally,  the commenter reported
that it produced 6,645 gallons of this interior wood stain in
1995 and 3,965 gallons through August of 1996.
     Another commenter (IV-D-175) stated that waterborne stain
systems cannot replace certain solventborne products.   The
commenter explained that the company had poor results when
replacing solventborne interior wood stains and varnishes with
waterborne products.   The company manufactures over
10,000 gallons of these products per year.
     One commenter (IV-F-Olh)  that manufactures stains,
varnishes,  lacquers,  and wood preservatives stated that
reformulation would result in flow problem.s during spray
application.   Tne commenter explained that they sell products to
furniture makers and cabinet shops.
     One commenter (IY-F-2) stated that stains with a VOC content
of 500 g/1 lock great in laboratory tests, but consumers tend to
double coat the product,  resulting in "shiners" in the siding or
flashing.  Tne,/ requested that the EPA raise the limit to 650 or
700 g/1.
     Another commenter (IV-F-2)  stated that the company cannot
meet the proposed VOC content limit of 550 g/1, but offered no
basis for this statement.
     Response:   Tne EPA has retained the VOC content limit of
550 g/1 for clear ana semi-transparent stains.  In reviewing the
VOC content survey data,  the EPA noted that there are  several
peaks in the 1990 VOC Emissions Inventory Survey sales data for
solventborne semi-transparent stains,  which include interior and
exterior stains:  301 to 350 g/1, 501 to 550 g/1,  and 601 to
700 g/1 VOC content.   The highest percentage of coating sales
(21.5 percent)  in the survey for these stains was in the 501 to
550 g/1 range.   Nearly all of the State architectural  coating
rules the EPA reviewed have a VOC content limit of 550 g/1 for
this category,  except California-South Coast, which has a limit
of 350 g/1.  Thus,  products complying with the 550 g/1 limit are
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being used across the country.  The prevalence of products  that
comply with this iirr.it  indicates  that it  is  technologically and
economically feasible.
     Although one commenter mentions products sold  to  furniture
makers and cabinet shops,  it  is important to note that  coatings
applied in shop settings,  such as these applications,  are not
subject to the rule.  As stated at the beginning of  this section,
the definition of "architectural  coating" has been  amended  to
specifically exclude shcp-applied coatings because  they were not
intended to be covered.
     Pretreatment wash  primers.
     Comment.-   One commenter  (IV-D-162) noted that  the  proposed
VOC content iirr.it cf 78G g, 1  for pretreatment wash  primers  is
consistent with tne Shipbuilding  and Ship Repair NESHAP and then
revealed tnat  tr.e_r data snows most products are formulated at
less than a 651 g, 1 YCC content,  implying that lower-VOC content
coatings are a v a ^	a. ,c — e .
     Response:   The £?A has retained the VOC content limit  of
7S1 g 1 for pretreatment wash primers.  In follow-up information
(IV-E-Liston) .  tne ccmrr.enter did not provide the requested  VOC
content data tc support the assertion that most products are
produced at 65C g' '-.   Alsc  there are no known State
architectural  coating rules with a VOC content limit below
730 g/1 for these products.  In addition,  the commenter is
correct chat the lirr.lt of  730 g/1 for pretreatment wash primers
in the architectural coating rule is consistent with the final
Shipbuilding and Ship Repair NESHAP (60 FR 64330;
December 15,  1995)  and the final Control Techniques Guidelines
(CTG)  published on August  27,  1996 (61 FR 44050).  A similar
coating is used in both industries.
     Quick-dry primers,  sealers,  and undercoaters.
     Comment:   Five comm.enters (IV-D-30,  IV-D-43,  IV-D-44,
IV-D-46,  IV-D-182)  provided comments on quick-dry primers,
sealers,  and undercoaters.   Two commenters (IV-D-30, IV-D-43)
indicated that  a lower VOC content limit of 350 g/1  (proposed
450 g/1)  for quick-dry primers, sealers,  and undercoaters can be
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achieved by existing technology and products.   Two cornmenters
(IV-D-44, IV-D-182) argued that the proposed VOC content limit
for quick-dry primers, sealers, and undercoaters was too
stringent and would affect performance or eliminate these
products.  Specifically,  these commenters cited increased drying
time,  poor leveling properties, and poor durability.  These
commenters did not provide any support for this claim or
recommend an alternative limit.
     One commenter (IV-D-43)  referred to effective 350 g/1
solventborne coatings that are higher in solids and slightly more
costly than current options.   The commenter presented their own
products as market evidence that a 350 g/1 VOC content limit for
quick-dry primers, sealers, and undercoaters is attainable.
     One commenter (IV-D-46)  requested that a white pigmented
sealer-primer-stainblocker called "Kilz" be classified under the
quick-dry primers, sealers, and undercoaters category with a VOC
content limit of 450 g/1.  According to the commenter, this
product has been marketed as a quick drying product since its
inception.  Specifically, it meets the American Society for
Testing and Materials (ASTK)  specification D1640 for drying to
touch in one-half hour and can be recoated in two hours.  This
commenter indicated that the product complies with a 450 g/1
limit for this category in the State architectural coating rules
adopted by Kentucky,  Oregon,  and Washington within the last year.
     Response:   The EPA has retained the 450 g/1 VOC content
limit for quick-dry primers,  sealers, and undercoaters based on
consideration of survey data and State architectural coating rule
requirements.  Three of the commenters argued that a VOC content
limit of 350 g/1 or below is achievable with existing technology.
However, based on the 1990 VOC Emissions Inventory Survey, the
EPA notes that 81 percent of these coatings had VOC contents
between 451 and 500 g/1.   Only 5 percent of quick-dry primers,
sealers, and undercoaters were manufactured with VOC contents at
or below 350 g/1.  In addition, as noted by one of the commenters
(IV-D-46), several State architectural coating rules have a VOC
content limit of 450 g/1; Massachusetts has a limit of 500 g/1.
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Thus, reduction of the VOC concent limit is not appropriate.
Similarly, the EPA notes that the prevalence of products  that  can
meet the limit and the existence of similar State limits  confirms
that the proposed limit should not be raised.  Those
manufacturers or importers whose products are above the limit  may
take advantage of the tonnage exemption and the exceedance  fee.
     In regard to the request that a white pigmented
sealer-primer-stainblocker called "Kilz" be classified under the
quick-dry primer,  sealer,  and undercoater category, the EPA
agrees that as described by the commenter, this coating meets  the
definition for this category and would be subject to the  VOC
content limit of 450 g/1.
     Ouick-drv enarrels .
     Comment:   Two corn-Tenters (IV-D-44, IV-D-182) argued  that  the
VOC content limit cf 45C g 1 for quick-dry enair.els was too  harsh
and would affect perfcrrrar.ee cr rray eliminate these coatings.
Specifically,  tne ccmrrenters cited increased drying time, poor
leveling,  and poor durability as characteristics of low VOC
quick-dry enamels.   The comrrer.ters did not currently have
documentation to suppcrt this claim.
     Response:  Tne EPA has retained the 45Q g/1 VOC content
limit for quick-dry enamels based on consideration of survey data
and State architectural  rule requirements.  The 1990 VOC  Emission
Inventory Survey snov:s that 46 percent of solventborne coating
sales are an cr below a VOC content of 450 g/1.   In addition,
several State architectural coating rules are at or below 450  g/1
VOC for quick-dry enamels:   Arizona,  Oregon,  and California  (Bay
Area, Sacramento,  South Coast,  and the counties of Colusa,  El
Dorado,  and Feather).   The EPA believes that this confirms  that
coatings of this type are technologically and economically
feasible at the proposed limit.
     Waterproofing sealers  and treatments.
     Comment:   Nine commenters (IV-D-74,  IV-D-80,  IV-D-114,
IV-D-158,  iv-D-185,  IV-D-208,  IV-F-2  (three commenters)  provided
assessments of the achievability of the proposed VOC content
limit for waterproofing  sealers  and treatments.   Four commenters
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(IV-D-80, IV-D-158, IV-F-2 (two commenters))  suggested that the
EPA raise the VOC content limit and two commenters (IV-D-114,
IV-D-208) suggested that the EPA lower the limit.   One commenter
(IV-D-158) proposed a limit of 700 g/1 for all waterproofing
sealers and explained that this would still require reformulation
of existing technologies yet would allow higher performance
solventborne systems.  This commenter explained that a large
volume of waterproofing sealers are used on concrete structures
to prevent substances from penetrating the concrete and causing
corrosion around the imbedded steel.  This commenter argued that
there are several disadvantages of low-VOC (silane and siloxane)
waterproofing sealers that use water as a reactive diluent:
reduced depth of penetration on dense substrates,  field mixing,
limited shelf life, and increased application frequency.  In
addition, the commenter maintained that there was  no need to
distinguish between clear and opaque waterproofing sealers and
treatments (600 g/1 and 400 g/1,  respectively) since many opaque
sealers penetrate the substrate and perform the same objective as
clear sealers.  Another commenter  (IV-D-74)  manufactures less
than 1,000 gallons annually of a waterproofing sealer with a VOC
content of 750 g/1.  This commenter also produces  a waterborne
product, but it is reportedly not as effective as  the
solventborne product because it does not last as long.
     One commenter  (IV-F-2) argued that manufacturing a
waterproofing sealer with a VOC content of 600 g/1 is not
possible.  This commenter reportedly has spent several hundred
thousand dollars trying to develop a waterborne waterproofing
sealer and was not successful.  The commenter asserted that a
high-solids product will not work because a coating with too much
solids builds a film on the wood.  Another commenter  (IV-F-2)
tried to develop a low-VOC sealer but it had mildew problems.
One commenter  (IV-F-2)  manufactures waterproofing  sealers in the
700 g/1 VOC content range, but it cannot meet the  600 g/1 limit.
     One commenter  (IV-D-80)  suggested a higher VOC content limit
of 700 g/1 for water repellent products for 2 to 3 years to allow
protection of architectural structures while completing
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development and testing of low-VOC waterborne products.  The
commenter elaborated on long-term testing requirements for new
water repellents:  testing typically takes 2 to 3 years for the
Department of Transportation  (DOT) market, formulators for the
do-it-yourself market require a minimum of 1-year exposure data,
and parameters in commercial markets require track records that
may take years to establish.  The commenter reportedly has
invested significant research and development resources in lower-
VOC technology.
     On the other hand, one manufacturer  (IV-D-185)  maintained
that the VOC content limits proposed for waterproofing sealers
are technologically and economically feasible to achieve.
     One commenter (IV-D-208) strongly encouraged the EPA to
adopt a VOC content limit applicable to waterproofing sealers and
treatments, both clear and opaque, of 350 g/1 rather than the
proposed limits of 600 and 400 g/1,  for clear and opaque,
respectively.  The commenter does net believe the proposed limits
for waterproofing sealers and treatments go far enough to push
replacement of obsolete petroleum distillate-based technologies
with low-VOC alternatives already in national production and
distribution.  The commenter referred to their clear
waterproofing sealer and treatment with a VOC content of less
than 160 g/1 that is currently in the consumer marketplace.
According to the commenter,  any concern expressed about the
January I,  1998 timing to implement  new technologies to comply
with a 350 g/1 VOC content limit for waterproofing sealers and
treatments is inconsistent with the  coatings which meet this
proposed limit and are currently available in most home center
stores and mass merchants throughout the country.   Another
commenter (IV-D-114)  manufactures a  high performance
waterproofing sealer with extremely  low emissions (<100 g/1)  as
an alternative to solvent-based pigmented waterproof coatings
which typically emit 400 g/1.
     Response:   Based on evaluation  of the comments and a review
of survey data and State architectural coating regulations,  the
EPA has combined the clear and opaque waterproofing treatment
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sealer categories into one category with a VOC content limit of
600 g/1.  After review and evaluation of the comments, the EPA
agrees that there is no need to distinguish between clear and
opaque waterproofing sealers and treatments since many opaque
sealers penetrate the substrate and perform the same function as
clear sealers.  Furthermore, before proposal,  industry
representatives (II-D-188) argued that multipurpose waterproofing
sealers with a VOC content of 400 g/1 do not meet minimum
performance criteria for clear waterproofing sealers  (that is,
60 percent water repellency for wood and 1 percent or less water
absorption for brick).   The representatives argued that most of
the multipurpose waterproofing sealers at 400 g/1 VOC content are
high solids coatings that leave an oily residue or cause
darkening of the surfaces to which they are applied.  This change
is consistent with existing State architectural coating rules and
survey data, which do not divide the category into clear and
opaque waterproofing sealers and treatments.  The State limits
reviewed for waterproofing sealers and treatments are either
400 g/1 (for example, California and Arizona)  or 600 g/1
(Massachusetts, Kentucky, New Jersey, New York, and Rhode
Island).  Thus, the EPA believes that setting the VOC content
limit at the higher end of the range (600 g/1)  represented in the
State rules will provide the flexibility to ensure that
performance requirements for this entire category will be met on
a nationwide basis, although there may be individual coatings
that can achieve lower limits for some applications.  If
additional time is needed to test low-VOC waterborne coatings,
the final rule offers compliance flexibility through the
exceedance fee and tonnage exemption provisions.
     Shellac - clear.
     Comment:  Two commenters from the same company (IV-D-42,
IV-F-ls) requested that the VOC content limit for clear shellac
be raised from 650 g/1 to 730 g/1.  The commenter (IV-D-42)
explained that the proposed rule would not change the product as
sold  (i.e., the coating is below 650 g/1 as sold), but would
instead require that the thinning instructions be taken off the
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1 gallon and 5 gallon packages.  The commenter believed that
lowering the VOC contents and removing thinning instructions
would result in less informed consumers because thinning is
advantageous in a variety of applications.
     Response:  Based on a review of State architectural coating
rule requirements, the EPA has raised the VOC content limit for
clear shellac from 650 g/1 to 730 g/1 to include thinning
considerations.  All of the State rules reviewed have a VOC
content limit of 730 g/1 for clear shellac.  The use of shellac
is not expected to increase in the future and, therefore,  this
change is not likely to result in a significant emissions
increase.  According to information provided by the commenter in
a separate comment letter  (IV-D-25), the elevated cost and
limited availability of shellac  (referring to secretions of the
lac beetle) minimizes the potential use for this category of
product as a fast dry prime coat, general purpose primer and
clear wood finish.  Certain applications of shellac require
thinning to meet customer needs.  Therefore,  in order to satisfy
the performance requirements and consistent with State rules,  the
EPA maintains that the higher limit of 730 g/1 for clear shellac,
which allows for thinning,  appropriately reflects achievable
levels.
     Wood preservatives - clear and semi-transparent.
     Comment:   One commenter (IV-D-93)  argued that 600 g/1 is the
lowest practical VOC content limit for clear and semi-transparent
wood preservatives.  The commenter explained that these products
are designed to penetrate rather than leave a film on the
surface.  The commenter noted that the company's coatings are
formulated with a VOC content of 620 g/1 and they still get
complaints about residue on the surface.  The commenter added
that their small company had produced 1,967 gallons of clear and
semi-transparent wood preservatives in 1995 and 1,729 through
August of 1996, and that they would have to discontinue
production since they cannot meet the proposed VOC content limit
of 550 g/1 for these products.
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     One commenter  (IV-F-Olh)  that manufacturers wood
preservatives and other coatings stated that reformulation would
result in flow problems during spray application.   The commenter
explained that they sell coatings to furniture makers and cabinet
shops.
     Response:  As discussed elsewhere in this document,  shop-
applied coatings are not subject to the rule.   The definition of
architectural coating specifically excludes coatings recommended
solely for shop application.  The EPA has considered these
comments and has decided to retain the VOC content limit of
550 g/1 for this category based on a review of State
architectural coating regulations.  A review of several State
architectural coating rules revealed that several States
(Kentucky,  Massachusetts,  New Jersey, New York, and Rhode Island)
have a 550 g/1 limit,  while other States (California, except one
county, and Arizona) have a more stringent VOC content limit of
35C g/1 for clear and semi-transparent wood preservatives.  Thus,
the EPA believes that the State rules provide  evidence that the
550 g/1 VOC content limit is achievable and performance needs are
being met.   Since the commenter manufactures low volumes of these
coatings, the tonnage exemption or exceedance  fee should be
considered as compliance alternatives.
     Swimming pool coatings.
     Comment:  One commenter (IV-D-189), representing a national
trade association, requested that the EPA recognize a special
thinning requirement for swimming pool coatings (the proposed VOC
content limit was 600 g/1).  The commenter asserted that the
first coat applied to bare concrete requires a VOC content of
850 g/1 in order to ensure adequate penetration of the initial
coating into the concrete surface.
     Response:  The EPA disagrees that it is necessary to allow
for special thinning for swimming pool coatings.  In the 1990 VOC
Emission Inventory Survey,  93 percent of total swimming pool
coating sales were for solventborne coatings ranging from 501 to
600 g/1 VOC content, as applied, which included maximum thinning.
Some existing State architectural coating rules reviewed
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 (Massachusetts, New Jersey, and New York) have a VOC content
limit of 600 g/1; Kentucky and California have a limit of
650 g/1.  In addition, the EPA is not aware of any State rules
that allow a special thinning requirement for the initial coating
of the pool's surface.  Therefore, the EPA has not made any
change in the VOC content limit for the swimming pool coating
category to allow for special thinning.
     Varnishes.
     Comment:   One commenter  (IV-D-173),  a small manufacturer,
requested a higher VOC content limit for varnishes (proposed at
450 g/1), but did not request a specific limit.  The commenter
argued that these coatings have solids of 30 to 40 percent and
would be extremely difficult to make above 60 percent.  The
commenter also argued that this is a low-volume product for its
company.  The commenter maintained that waterborne varnishes are
not good enough for exterior use because they lift up under wet
conditions.   The commenter elaborated that these coatings are
applied outside on wood structures,  boats, and floors.
     One commenter (IV-D-175)  stated that its company had poor
results when attempting to replace solventborne varnishes with
waterborne systems.   Another commenter (IV-D-73)  stated that its
varnishes do not meet the proposed VOC content limit for
varnishes, but the commenter did not provide any basis for this
statement.
     One commenter (IV-F-Olh)  that manufactures varnishes as well
as stains, lacquers,  and wood preservatives,  stated that
reformulation would result in flow problems during spray
application.  The commenter explained that it sells coatings to
furniture makers and cabinet shops.
     On the other hand,  one manufacturer  (IV-D-185)  maintained
that the proposed VOC content limit  of 450 g/1 for varnishes was
technologically and economically feasible to achieve.  In
addition, several manufacturers (IV-D-69, IV-D-85,  IV-D-185,
IV-D-207) have argued that the 450 g/1 VOC content limit for
varnishes is achievable.
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     Response:   The architectural coating rule does not apply to
the coating of non-stationary structures such as boats or to
coatings recommended solely for shop application.  The definition
of "architectural coating" has been revised to exclude more
explicitly shop-applied coatings and coatings applied to non-
stationary structures,  such as airplanes,  ships, boats, and
railcars, because they were not intended to be covered.  The EPA
has evaluated these comments and decided to retain the VOC
content limit of 450 g/1 for varnishes based on a review of State
architectural coating regulations,  available survey data,  and
other comments that argue that the proposed limit is achievable.
Several existing State architectural coating rules (Kentucky,
Massachusetts,. New Jersey, New York, and Rhode Island) have a VOC
content limit cf 45j g'l for varnishes,  other rules (Arizona and
California,  except '- county) have a rrore stringent limit of
350 g-'1;  and one ru^e (Texas1  has a higher limit of 540 g/1.
This review indicates that ccrrpiiant varnishes meeting
performance needs are currently being sold in many areas of the
country.   Also,  the 1990 VOC Emission Inventory Survey showed
that 30 percent of the sales for varnishes had VOC contents at or
be1ow 450 g/1.
     Floor coatincs.
     One comrr.enter \IV-D-S3) re-quested clarification of whether
the floor coating category included clear floor finishes or paint
(opaque)  or both.  The commenter argued that only paints could
comply with the proposed VOC content limit of 400 g/1.
     Another commenter (IV-D-180)  suggested that floor coatings
either be classified under industrial maintenance coatings
(450 g/1) or have their VOC content limit raised to 450 g/1.  The
commenter manufactures coatings used exclusively on concrete or
wood floors and believes that these high performance floor
coatings are better covered by the 450 g/1 VOC content limit
proposed for industrial maintenance coatings,  rather than the
lower-VOC content limit of 400 g/1 proposed for floor coatings.
The commenter stated that the company has developed coatings in
the 400 to 450 g/1 range to replace most of their very high VOC
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industrial floor coatings.  Although they have lower performing
systems that meet the 400 g/1 level, like industrial maintenance
coatings, they are not always acceptable for all applications.
The commenter provided several examples where it claimed that  low
VOC products cannot be successfully applied. The commenter
concluded that there are still applications that require coatings
in the 400 to 450 g/1 range and for some very high chemical
resistant applications the systems are above 500 g/1, regardless
of the advances made in low VOC coatings.
     One commenter  (IV-D-169) recommended that opaque floor paint
be regulated at a VOC limit of 400 g/1.
     Response:   The EPA has retained the floor coating category
and VOC concent lirr.it of 400 g/1.  The floor coatings category is
intended to include coatings that have a high degree of abrasion
resistance that are formulated for application to flooring
including,  but net limited to,  decks,  porches,  and steps in a
residential situation.  Industrial maintenance coatings
recommended for use as floor coatings in industrial,  commercial,
or institutional settings are subject to the industrial
maintenance coat-ngs category and its VOC content limit of
450 g/1.   Tne classification of opaque floor coatings would be
included in the ficor coatings category and subject to the
400 g/1 iirr.it,  wn-ch two oorrir.er.ters agreed is achievable.  For
clarification,  the word '"opaque" has been added to the floor
coating definition and has been defined in the final rule.
However,  varnishes or industrial maintenance coatings that are
recommended for use as floor coatings outside of a residential
setting are subject to the VOC content limit of 450 g/1 for
varnishes or industrial maintenance coatings (see discussion
under Overlap Issues,  in section 2.2.3.14 of this document).
     Lacouers.
     Comment:   Two commenters (IV-D-32,  IV-D-191)  provided
comments on the lacquers category.  One commenter (IV-D-32)
maintained that the lacquers category has a relatively high
proposed VOC content limit of 680 g/1  which may provide incentive
for painters currently using a lower-VOC alkyd coating to switch
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to the higher-VOC lacquer category.  This commenter found
evidence of this migration in their State (Oregon),  which
included the same category in its rule.   The commenter
recommended closer investigation of this category after
promulgation of the rule.  If significant growth is seen in this
category, the commenter recommended that it  be removed from the
rule.
     Another commenter (IV-D-191) indicated  that the proposed VOC
content limit for lacquers (680 g/1)  should  be lowered (i.e.,
made more stringent)  to 275 g/1 for 1997 and 50 g/1 for the
year 2000.  The commenter explained that the proposed VOC content
limit of 680 g/1 is currently in place in Southern California and
that more stringent VOC content limits of 550 g/1 for 1998 and
275 g/1 for the year 2005 are planned.  The  commenter argued that
because there are five lacquers on the market that have VOC
contents less than 50 g/1, the EPA's  limit for lacquers is not
stringent enough.
     Response:   The EPA has considered these comments and
maintains that the lacquers VOC content  limit of 680 g/1 is
appropriate for the following reasons.  The  1990 VOC Inventory
Survey showed that 75 percent of solventborne coating sales were
in the 651 to 700 g/1 VOC content range.  All of the existing
State architectural coating regulations  currently have a VOC
content limit of 680 g/1 for lacquers, except California-South
Coast and one county in California.  According to information
received from the industry (III-B-1),  reformulation of lacquers
may adversely affect performance characteristics such as drying
time and film hardness.  The EPA recognizes  that some progress
has been made to reduce the VOC content  of these coatings and
that other types of coatings may be able to  serve the customers'
application needs.  However,  the EPA believes that a VOC content
limit of 680 g/1 is necessary to satisfy performance needs for
lacquer applications nationwide as evidenced by the State
architectural coating rules.
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     Form release compounds and high temperature coatings.
     Comment:  Three commenters (IV-D-05, IV-D-30, IV-G-01)
commented on the achievability of the proposed VOC content limit
of 450 g/1 for the form release compound category.  Two
commenters (IV-D-05, IV-D-30) argued that although technology
exists for coatings to comply with the proposed limit for this
category, it is double the cost of the conventional product.
Another commenter (IV-D-05) also expressed concerns about the
performance of coatings reformulated to meet the proposed limit.
According to the commenter, the best performing coatings have VOC
contents between 550 and 750 g/1 and provide greater coverage in
a thin coat.   Thin coat applications allow the user to get the
concrete loose from the form.  According to the commenter, lower-
VOC coatings demonstrate a higher viscosity that results in a
decrease in coverage rate.  Also,  this commenter argued that
lower VOC coatings are not able to achieve the release of the
concrete form without applying a thicker film to the form.  Both
commenters (IV-D-05, IV-D-30) argued that coatings under the
450 g/1 VOC content level increase user costs due to increases in
the quantity applied and in associated cleaning costs.  In
addition, both commenters  (IV-D-5, IV-D-30)  estimate that the raw
materials for the low-VOC formulation (450 g/1)  will cost
80 cents more per gallon, which is significant in the concrete
industry.  Both commenters believe that the combination of
increased raw material cost and the decrease in coverage rate (at
the 450 g/1 limit)  will double the price for the consumer.
Commenter IV-D-30 stated that waterborne formulas perform poorly
and have a short shelf-life.  Also,  in order to cut costs, the
commenter suggested that concrete producers may thin the lower
VOC compounds in the field with diesel fuel or mineral spirits in
order to make a higher VOC content coating that works better,
thereby costing this commenter sales (about $200,000 per year)
because the commenter's company cannot make and sell the higher
VOC content coatings.
     On the other hand,  one commenter (IV-G-01),  a coating
manufacturer,  recommended that the EPA tighten the proposed limit
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of 450 g/1 for form release compounds to 250 g/1,  which the
commenter stated is California-GARB's VOC content limit for this
category.  The commenter believes it  would help prevent confusion
and lower costs if there is one VOC content limit for the whole
country.  The commenter stated that although its lower VOC
coatings sell for about twice the price per gallon of the cheaper
higher VOC content form release compounds, when the lower VOC
coatings are properly applied, the cost per square foot is about
20 percent of the cost of diesel oil-based products (870 g/1) .
According to the commenter, the cost  savings is due to using less
of the lower VOC coating when properly applied.
     One commenter (IV-D-226), representing a small business,
asserted that there was no legitimate technical or economic
reason for the proposed high-temperature coating VOC content
limit to be set above 420 g/1 (a limit of 650 g/1 was proposed).
All of the company's high temperature coatings, used in the
refining, petrochemical, cogeneration, primary metal,  pulp and
paper, and utility industries, have complied with the proposed
650 g/1 limit for the last 25 years.   The commenter noted that a
number of other recognized companies  also manufacture a wide
variety of low VOC high temperature coatings that meet a limit of
420 g/1.  The commenter asserted that reformulation costs should
not be the basis for establishing a limit higher than 420 g/1 for
this coatings category and cited his  own company as an example of
one of the smallest coating manufacturers in the country who is
successfully incurring reformulation  costs.  The commenter added
that a VOC content limit of 420 g/1 was consistent with State and
regional regulations, and the commenter supported the limit of
420 g/1 for high temperature coatings proposed by STAPPA/ALAPCO.
The commenter suggested the use of the proposed variance
procedure for any company in need of  additional compliance time
for this category in lieu of undermining the gains already made
in emission reductions at the regional and local levels for this
category.
     Response:  The EPA has retained the VOC content limit of
450 g/1 for form release compounds and 650 g/1 for high-
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temperature coatings.  As stated in the proposal preamble
 (61 FR 32739), VOC content limits for 14 low volume categories,
including form release compounds and high-temperature coatings,
are found in  existing State architectural coating rules.  The
proposed VOC  content limits for these categories are in the upper
range of the  VOC content limits found in existing State rules.
During regulatory negotiations, the industry argued that these
coatings are  used in relatively low volumes and represent unique
compositions  and specialized uses, and the imposition of lower
VOC content limits on these categories would probably result in
an adverse economic impact.   Even though lower VOC technology is
available in  some cases, the EPA believes that there is not
enough performance information and sales data to conclude that
the suggested lower VOC levels are appropriate for these coatings
on a nationwide basis.
     Bond breakers.
     Comment:  One commenter (IV-G-14) requested that the bond
breaker category VOC content limit be set at 700 g/1 (a limit of
600 g/1 was proposed) for the following reasons:  (1)  the
original specifications recognized the need to allow a higher VOC
content for bond breakers than for concrete curing and sealing;
(2) a bond breaker is actually used as a curing compound in the
first coat operation; (3)  bond breaker costs are applied at an
extended coverage rate;  and (4) a coating with a VOC content of
600 g/1 is extremely difficult to work with in cold temperatures.
     Response:  The EPA has retained the VOC content limit of
600 g/1 for the bond breakers category.   As indicated in the
previous response,  the EPA proposed 14 low volume categories,
including bond breakers.  These coatings are found in existing
State architectural coating rules, and the proposed VOC content
limits for these categories are in the upper range of the VOC
content limits found in existing State rules.   During the
regulatory negotiation,  the industry argued that these coatings
are used in relatively low volumes and represent specialized
uses.   The commenter did not provide any information to support
consideration of a higher VOC content limit for this category.
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In addition, a review of the existing State architectural coating
rules showed that none of these rules have a VOC content limit
above 600 g/1 for bond breakers.  Thus,  the EPA believes that the
600 g/1 limit for bond breakers is appropriate for this category.
     Concrete protective coating.
     Comment:  One commenter (IV-D-76)  manufactures a
concrete/seal finish that,  according to the commenter,  could be
classified as a concrete protective coating or extreme high
durability coating.  The commenter wanted to know what
category/VOC content limit this coating would be required to
meet.
     Response:   The commenter did not provide any details
regarding the concrete/seal finish being manufactured.   However,
the coating may be in the concrete protective coating category
with a VOC content limit of 400 g/1.  Also, the final rule
includes a new category for concrete curing and sealing compounds
with a VOC content limit of 700 g/1.  The commenter should review
both of these category definitions before making a determination
as to the appropriate category and VOC content limit.
     Comment:  One commenter (IV-D-30)  argued that the proposed
VOC content limit of 400 g/1 for concrete protective coatings
cannot be met by existing industry technology, and the commenter
requested that the limit for this category be raised to 850 g/1.
According to the commenter, there are waterborne alternatives to
these solventborne systems, but there are significant
disadvantages to them.  The commenter did not elaborate on the
disadvantages of waterborne alternatives.
     Response:   The EPA has retained the VOC content limit of
400 g/1 for concrete protective coatings in the final rule.  The
concrete protective coatings category was one of 14 specialty
coating categories proposed because discussions during regulatory
negotiations and/or petitions from individual companies provided
support for inclusion of these categories and an associated VOC
content limit.   These limits were separate from the broader
category and limit to which the coatings otherwise would have
been assigned.   No data were collected in the VOC Emissions
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Inventory Survey and, in this case, only a couple of State rules
(Oregon and Kentucky) have this category.  The VOC content limit
for this category is 400 g/1 in both of these State rules.  The
EPA believes that the exceedance fee option and tonnage exemption
in the final rule offer sufficient compliance flexibility to
allow the commenter to continue manufacturing and marketing this
product while continuing reformulation efforts.
     Concrete curing compounds.
     Comment:  Several commenters  (IV-D-30, IV-D-85, IV-D-152/
IV-E-17, IV-E-15, IV-E-16,  IV-D-154, IV-D-179, IV-D-187,
IV-F-le, IV-G-01) commented on the proposed VOC content limit of
350 g/1 for the concrete curing compounds category, which is used
predominantly in highway construction.  Seven commenters
(IV-D-30,  IV-D-152/IV-E-17, IV-D-154, IV-D-179, IV-E-15, IV-E-16,
IV-G-01) argued that the proposed limit is achievable.   One
commenter (IV-D-30)  argued that the proposed VOC content limit
for this category could easily be met with existing industry
technology and could even be lowered from 350 to 300 g/1.
Another commenter (IV-D-154) asserted that no new technology is
needed tc produce,  market, or apply coatings with the proposed
VOC content.   This commenter indicated that parts of the country
have beer, operating under similar rules for several years.  The
commenter added that raw material suppliers have been offering
ingredients specifically designed for use in low-VOC coatings for
several years and concluded that small businesses would find
those suppliers to be a good source for assistance in formulating
coatings to meet the VOC content limit of 350 g/1.  Another
commenter (IV-D-179)  informed the EPA of several completely VOC-
free concrete curing compounds which have pending patents.  The
commenter supported implementing the proposed rule as soon as
possible.   This commenter stated that raw material costs for the
clear and pigmented concrete curing coatings are $.65 and
$.85-per gallon,  respectively.   In addition, the raw materials
for these coatings are non-hazardous and the finished coating
does not have any detectable VOC at 280°F.  The commenter argued
that moisture loss of 0.28 kilogram per square meter is normal
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with some testing as low as 0.07 kilogram per square meter.
These coatings are manufactured to meet a number of
specifications of the American Society for Testing and Materials,
including ASTM C-309, Type 1,  ID,  and 2; Class A.
     One commenter (IV-G-01)  provided a table summarizing VOC
emissions from their waterborne concrete curing compounds which
comply with the EPA's proposed rule and meet California's
architectural coating regulations.  The commenter produces these
waterborne curing compounds in the range of 250-350 g/1.  The
commenter was disappointed that other manufacturers and States do
not promote proper curing in highway construction and, therefore,
his company does not compete for business in that area.
     Another commenter (IV-D-152/IV-E-17) stated that the
proposed 350 g/1 VOC content limit for concrete curing compounds
is technologically practical and that compliant waterbased
coatings with adequate performance are available to meet the
needs of the concrete curing industry.  This commenter explained
that the concrete curing compounds category has been used as an
umbrella for all products with the capability of performing as
curing compounds.  However, according to the commenter, these
products may be designed as curing compounds only or as curing
and sealing compounds.  The difference is that curing compounds
have the single function of providing moisture retention for
curing.  Curing and sealing compounds, however, function as
longer term sealers that provide protection, aesthetics, and
durability in addition to curing;  and, according to the
commenter, cannot meet the proposed 350 g/1 VOC content limit.
The commenter argued that these were two totally distinct
categories.
     On the other hand, one commenter  (IV-D-85) suggested a VOC
content limit of 625 g/1 for the category.  The commenter
believes the proposed limit eliminates most concrete curing
membranes from the market and stated that many companies do not
sell curing compounds in States which have the 350 g/1 limit.
This commenter is not convinced that the track record of the
waterborne systems has been proven to properly cure concrete and
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argued that improper curing sacrifices concrete strength which
may cause collapses in high-rise buildings and bridge
constructions.  Also, the 350 g/1 VOC content formulations that
the commenter has seen typically fail the ASTM C-309 moisture
retention test.
     Response:  Based upon consideration of these comments, the
EPA has concluded that the technology does exist to achieve the
VOC content limit of 350 g/1 for concrete curing compounds.  The
EPA has retained the 350 g/1 VOC content limit for this category
in the final rule.  All of the commenters, except one,  argued
that the proposed limit is achievable.  In addition, several
States, including California, Arizona, Massachusetts, New Jersey,
and New York,  have had a VOC content limit of 350 g/1 for this
category for several years.  Concrete curing compounds are most
commonly used in road construction.  Since roads are not
generally paved in the winter,  the lower VOC technology (350 g/1)
for concrete curing compounds can be used even in cold weather
States, such as Minnesota.  If specific applications necessitate
the manufacture and use of coatings with VOC contents higher than
350 g/1 for concrete curing compounds, the final rule provides a
tonnage exemption and/or exceedance fee option.  These options
could provide additional flexibility to manufacturers.
     Regarding the commenter's point about the differences
between concrete curing compounds and concrete curing and sealing
compounds,  the EPA has established a separate coating category in
the final rule for concrete curing and sealing compounds (see
discussion in section 2.2.4.2 of this document).
     Primers and undercoaters.
     Comment:   One commenter (IV-D-153/IV-D-207, same company)
recommended that all primers and undercoaters be allowed a
450 g/1 VOC content limit instead of the proposed 350 g/1 VOC
content limit in order to ensure the continuing availability of
quality coatings.  The commenter argued that the prime coat
affects the integrity of all succeeding coats.  The commenter
argued that high solids alkyd primers and undercoaters that would
be required to meet the lower level are difficult to apply and do
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not have the positive drying characteristics which are essential
for sanding and recoating quickly.  According to the commenter,  a
properly applied primer ensures a long life for a coating system
and prevents emissions resulting from excessive repainting.
Another commenter (IV-F-2)  maintained that their company cannot
meet the proposed 350 g/1 VOC content limit but offered no basis
for this statement.
     Response:   The EPA has retained the proposed VOC content
limit of 350 g/1 for primers and undercoaters based on
consideration of survey data and State architectural coating
regulations.  The 1990 VOC Emission Inventory Survey showed that
about 82 percent of solventborne and waterborne sales for primers
had VOC contents at or below 350 g/1 and about 60 percent of
solventborne and waterborne undercoaters sales were at or below
350 g/1.  All of the State architectural coating rules reviewed,
without exception,  have a 350 g/1 VOC content limit for primers
and undercoaters.  Therefore, the EPA believes this is convincing
evidence that a VOC content limit of 350 g/1 is an appropriate
level.
     Mastic texture coatings.
     Comment:  One commenter (IV-D-30)  indicated that the
proposed VOC content limit of 300 g/1 for mastic texture coatings
effectively eliminates the use of solventborne systems and argued
that waterborne systems are considered inferior.  The commenter
did not elaborate on any specific problems with waterborne
coatings.
     Response:   Based on a review of survey data and State
architectural coating rules, the EPA does not agree that the
proposed VOC content limit of 300 g/1 effectively eliminates the
use of solventborne mastic texture coatings and has not made any
change in the VOC limit for these coatings.  Mastic texture
coatings are highly viscous materials that are waterborne or
solventborne and are used for interior and exterior masonry by
homeowners and contractors.  According to the 1990 VOC Emission
Inventory Survey, 96 percent of the total sales had VOC contents
at or below 300 g/1.  In addition, all of the State rules, except
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New Jersey and New York, have a VOC content limit of 300 g/1 for
this category.  The State of New Jersey and the New York
metropolitan area have a 200 g/1 VOC content limit.  These limits
have been in effect since 1994 or earlier.  The EPA believes that
the available,information demonstrates that the proposed limit is
appropriate.
     Traffic marking coatings.
     Comment:   Several commenters (IV-D-03, IV-D-24, IV-D-40,
IV-D-41, IV-D-121, IV-D-153/IV-D-207,  IV-D-189) stated that the
use of latex and other low-VOC traffic marking coatings would be
limited by cold temperatures.
     Comments received from the Department of Defense  (DOD)  (DOD
Steering Committee representing the Navy,  Air Force, and Army as
well as several DOD components and agencies) (IV-D-03,  IV-D-121)
requested an exemption to allow emergency use of solventborne
airfield traffic markings when the ambient temperature is below
55 °F.   One of the commenters (IV-D-121)  stated that VOC
compliant waterborne coatings satisfy the needs of the Air Force
in most cases.  However, the commenter stated that until low-VOC
markings are developed that perform well at low temperatures,
solventborne markings must be used when temperatures are below
55°F.  The commenter stated that the typical VOC content of these
solventborne coatings is 350 g/1 to 400 g/1.  The commenter
argued that when airfield markings become obscured, they no
longer provide visual cues for safe operation of aircraft and
support vehicles,  and therefore, must  be re-marked immediately,
regardless of  temperature.  The commenter asserted that in
northern climates, operations could be terminated or severely
degraded if solventborne markings are  not available for use at
lower temperatures.  The commenter suggested that this exemption
could be limited to airfields that experience extended periods of
cold weather or rapid deterioration of existing markings during
cold weather.   Two other commenters (IV-D-03,  IV-D-24)  also
requested reconsideration of the provision to allow the use of
higher-VOC traffic markings if seasonal conditions dictate, as
allowed by the Federal Highway Administration.
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     One commenter from a State Department of Transportation
(DOT)  (IV-D-40) was concerned with pavement marking safety; that
is, the inability to use low-VOC coatings during cold weather.
This commenter pointed out that the use of latex or other low-VOC
coatings could shorten the fall construction season.  One
commenter (IV-D-41) from another State DOT, who expressed strong
opposition to the proposed VOC content limit, explained that the
proposed rule would have an adverse effect on their State's
pavement marking program because it will be forced to change from
solventborne coatings to other lower-VOC coatings.  The commenter
claimed that the overall performance of waterborne coatings
currently in use is not acceptable.  The commenter argued that
low-VOC coatings would result in an increase in the total cost of
the striping and traffic marking program that would adversely
affect the safety of State highways.  The commenter objected to
having the proposed rule apply to pavement marking from a cost
perspective.  According to the commenter, exclusive use of
waterborne coatings decreases the application season
dramatically, and the State funds are too low to warrant
purchases of additional equipment to address the State's pavement
needs in a restricted application season.  The commenter
suggested that the rule creates an economic obligation that
constitutes an unfunded mandate with respect to striping highway
pavement.
     One commenter (IV-D-189), a national trade association,
recommended that the traffic marking category be amended to allow
the use of higher  (250 g/1) VOC content coatings during the non-
ozone season.  The commenter explained that the proposed VOC
content limit of 150 g/1 is technically acceptable to the
majority of State DOT agencies under normal application
conditions; however,  application of traffic marking coatings at
this level is limited in cold weather.  According to the
commenter, a solution to the cold weather application problem is
a provision which would allow government agencies to use higher
VOC  (250 g/1) traffic marking coatings during the non-ozone
season in order to ensure highway safety.  The commenter stated
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that the incorporation of a seasonal exemption for the
application of higher-VOC traffic marking coatings would have no
negative impact on the environment and would have a positive
impact on public safety.
     One manufacturer  (IV-F-2) asked why the EPA proposed more
stringent requirements for the traffic marking coatings category
than for the other categories.  Another commenter (IV-F-2)  stated
that the proposed limit for traffic marking coatings is not
achievable.
     One commenter (IV-D-153/IV-D-207 (same company))  recommended
that the traffic marking coatings category with a 150 g/1 VOC
content limit be defined as coatings used only for marking
streets and highways, which is scheduled during the warm months
when latex traffic coatings can be used.
     One commenter (IV-D-173)  supported the use of alkyd-based
street marking paints because many customers paint in the fall
and winter when waterbased formulations will not work.  In these
situations,  the commenter argued that solventborne coatings that
dry quickly are the only option.
     One commenter (IV-G-18)  manufactures an acetone-based
traffic coating but it is not highly recommended due to its high
flammability.   Also,  acetone traffic coatings can cost
50-100 percent more than conventional solventborne coatings.
     Two ccmmenters  (IV-D-44,  IV-D-182)  stated that low-VOC
content traffic marking coatings will have increased drying time,
poor leveling properties and poor durability as a result of
reformulation to comply with the proposed rule.  Both commenters
stated that  they did not have documentation that could be made
public to support this statement regarding performance of low-VOC
content traffic marking coatings.
     Alternatively,  one commenter (IV-D-191)  argued that the
proposed VOC content limit of 150 g/1 for traffic marking
coatings is  not stringent enough.  The commenter referred to a
California-South Coast Air Quality Management District staff
report which showed that half of the market already complies with
the 150 g/1  VOC content limit.  The report also noted that there
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would be no cost increase necessary to meet this limit.
Therefore, the commenter reasoned that the traffic marking
coating category VOC content limit in the final rule should be
lower than the proposed 150 g/1,  and a second phase VOC content
limit should be set at 0 g/1 for the year 2000.
     Response:   The EPA has carefully evaluated the comments and
has conducted a separate assessment (IV-B-3)  of currently
available low-VOC technologies for traffic marking coatings and
has evaluated costs for new and retrofitted traffic marking
application equipment.  The assessment results indicate that low-
VOC technologies to comply with the 150 g/1 VOC content limit for
traffic marking coatings are available and include waterborne
coatings, thermoplastics, 2-part systems including epoxy and
polyesters, tapes and preformed thermoplastics, raised pavement
markers, and acetone-based coatings.  The assessment results also
show the characteristics, advantages,  and disadvantages of using
these compliant coatings.  For example, epoxy and thermoplastics
have negligible VOC contents and boast longer durability than
either waterborne or solventborne coatings, but equipment changes
and application expenses are higher than for solventborne or
waterborne coatings.  Compliant acetone-based coatings, unlike
waterborne coatings, can be applied in temperatures below 50 °F
and are compatible with solventborne application equipment.
Therefore, the use of acetone-based coatings is one alternative
to waterborne coatings for highway striping in cold weather to
ensure highway safety.  Exercise of due caution would be
necessary during application of acetone-based coatings due to
their flammability.
     In addition, according to recent information obtained on the
performance of low-VOC traffic marking coatings (IV-B-4),  acrylic
emulsion coatings can be applied under a variety of temperature
and humidity conditions with reasonable drying times and little
tracking damage.  Acrylics can be interchanged with solventborne
coatings without adhesion problems, and adhesion of reflective
hydrophillic coated beads to acrylic lines is superior to
solventborne coatings.  The 100 percent acrylic waterborne
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coatings can last twice as long as traditional solventborne
coatings; they are more durable, safer for workers and the
environment, and result in much easier cleanup of equipment.
According to two 1997 publications (IV-B-4, Ref. #14 and #15),
new technology latex traffic marking coatings dry as quickly, if
not more quickly than solventborne coatings, and provide better
durability compared to traditional fast-dry coatings.  Polyester
coatings provide unsurpassed durability, making them the most
cost-effective coating for asphalt, when compared on a life-cycle
basis with alternative coatings and marking materials.
     The EPA contacted commenters  (several State DOTs and one
county) to obtain additional information (IV-E-1, IV-E-2,
IV-E-32, IV-E-29, IV-E-31).  Two of these agencies/commenters
stated that the extended compliance date of the rule has allowed
them time to purchase new equipment;  one (IV-E-32) is currently
using compliant coatings and the other  (IV-E-41) will be by 1999.
One State DOT in a northern climate (IV-E-42)  uses 98 percent
waterborne coatings and 2 percent solventborne coatings.  This
State DOT concluded that waterborne traffic marking coatings are
more durable than solventborne coatings.  Another State DOT
(IV-E-2) has used 100 percent waterborne coatings for over a year
and uses contractors to apply thermoplastics and epoxies.  Yet
another State DOT (IV-E-29),  also in a northern climate, uses
contractors that apply 90 percent of their traffic marking
coatings, which are waterborne, and the State applies the
remaining 10 percent, which are solventborne coatings.
     In addition, the EPA contacted a Department of Defense  (DoD)
representative (IV-E-48)  regarding DoD comments on emergency cold
weather airfield markings.  As discussed in the response to
comments on zone marking coatings  (see section 2.2.4.2 of this
document),  the services typically purchase coatings in 5-gallon
containers and transfer the coatings to 1-gallon or 1-quart
containers.  Therefore, these coatings would be subject to the
zone marking coating category VOC content limit of 450 g/1
because they are sold or distributed in a container with a volume
of 5 gallons or less.
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     According to the EPA's assessment, the total sales of
traffic marking coatings have been fairly constant from 1990 to
1995.  About 65 percent of coatings used on roadways are
purchased by State highway departments, 25 percent are sold to
city and county road authorities, and about 10 percent are used
in areas such as parking lots and garages.  Of the 65 percent of
coatings purchased by State agencies,  more than 30 State DOTs use
waterborne coatings rather than solventborne,  and 10 States use a
combination of waterborne and solventborne coatings.  The use of
solventborne coatings for striping declined from 80 percent in
1991 to 55 percent in 1994,  whereas the use of waterborne
coatings and other striping materials has increased.  Based on
available information,  the assessment concludes that about
58 percent of traffic marking materials used in the United States
in 1995 comply v. itn the l.L g>l VCC content limit in the proposed
rule (assuming a-'- tecr.nclcg.es except sclventborne coatings are
compliant'.
     The EPA agrees that tne use cf waterborne coatings
exclusively could snorter, the hig.iway striping season somewhat in
very cold clirrates.  Tne EPA nctes,  however,  that neither
waterborne nor solvent::erne coatings work under extreme
conditions and thai the "seasons" are, therefore,  not markedly
shorter in many places.   In addition,  as discussed previously,
there are other Ic'-.-VGC compliant technologies currently in use
that could be applied ^nder normal application conditions or in
cold weather, including emergency situations,  thus ensuring
public highway safety.   The EPA does not agree with the
suggestion that the traffic marking coating VOC content limit
should be lower than 150 g/1.   All of the information available
to the EPA,  including information submitted by other commenters,
indicates that a VOC content limit of 150 g/1  provides
formulation flexibility for manufacturers to supply traffic
marking coatings for nationwide applications.   Therefore,  the EPA
has concluded that performance requirements can be met with a VOC
content limit of 150 g/1 for traffic marking coatings,  and it has
retained this limit in the final rule.
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     In response to concerns about the cost of equipment
potentially necessary to apply non-solventbased coatings, the EPA
investigated the relevant equipment.  Several companies
manufacture and sell traffic striping equipment.  The cost of the
equipment varies by size and type of equipment.  For various
types of solventborne and waterborne equipment, the cost ranges
from a minimum of $1,000 for a handheld striper to $280,000 for a
Tandem Axel Truck (500 to 800 gallon capacity).  For
thermoplastic marking equipment, the cost ranges from $1,000 to
$225,000.  The cost of epoxy equipment ranges from $2,000 to
$200,000.  For tape application equipment, the cost starts at
$5,000; some small jobs do not require any special equipment.
Estimates of equipment lifetimes were provided by equipment
vendors and State agencies  (IV-B-3).  State DOTs generally
estimate 20-year lifetimes for large traffic striping trucks.  In
comparison, manufacturers estimate a 5- to 10-year shorter
lifetime for the average truck.  According to equipment vendors
(IV-B-3), before 1990, most stripers applied solventborne
coatings.  From 1988 to 1998, there has been a pronounced shift
from solventborne stripers to waterborne stripers and other
stripers (i.e.,  thermoplastics, epoxies, etc.).  One equipment
vendor's (IV-B-3)  domestic sales have been for only
waterborne-compatible equipment since 1990, and one vendor
(IV-B-3) has exported only solventborne-compatible equipment
since 1993 (i.e.,  has had no domestic sales of this equipment).
According to another vendor  (IV-B-3), after 1996, it appears that
the government sector began to move away from doing its own
striping and toward hiring contractors to stripe roads.
     Based on available information  (IV-B-3),  it is estimated
that the national population of traffic stripers is comprised of
38 percent solventborne,  42 percent waterborne, 17 percent
thermoplastic, and 3 percent epoxy.   All equipment sales reported
in 1996-1997 are compatible with low-VOC technologies.
     In summary, the EPA's assessment shows that the rule may
impact the cost incurred by traffic marking coating users,
including material costs,  equipment costs, and operational costs.
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Based on the assessment in the "Control Techniques Guidelines on
Traffic Markings," the use of waterborne,  polyester, and epoxy
traffic marking coatings results in cost savings compared to use
of solventborne coatings when accounting for expected lifetimes.
The EPA's assessment estimates that waterborne coatings are the
least expensive choice because equipment may be retrofitted (at a
lower cost compared to purchasing completely new equipment) and
the increases in material cost (i.e.,  cost difference between
waterborne and solventborne coatings)  is minimal.  Durability
estimates factor into cost comparisons on an annual basis instead
of an initial purchase and application cost.  Shifting
technologies away from solventborne coatings requires equipment
changes in addition to any increase or decrease in coating costs.
The EPA has estimated tne total annualized. national cost of
switching from solventoorne stripers to waterborne compatible
stripers tc be $5."/ millicn.   In terms of operational costs,  the
use of waterbcrne coatings exclusively could shorten striping
seasons in cole climates cecajse of tne temperature restriction
for curing waterccrne coatings.  However,  as stated previously,
other iow-VOC tecnr.2_ogles are available for use during these
periods.
     In addition to the reasons stated above for retaining the
150 g/1 VOC content limit for traffic  marking coatings,  the EPA
believes that tne final r^le provides  the flexibility needed for
coating manufacturers to continue to provide their customers
(e.g., State EOTs and military airfields)  with higher-VOC content
coatings to tne extent tney are needed.  The exceedance fee and
VOC tonnage exemption provisions of the rule provide a mechanism
for such instances.
     gpmment:  One commenter (IV-D-53)  argued that the proposed
traffic marking coating VOC content limit would be a tremendous
financial burden on its rural county.   This commenter has only
one striper which would have to be replaced to apply the lower-
VOC coating, and there are not sufficient funds available for a
new strioer.
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     Another commenter  (IV-D-I16), a State DOT, argued that the
proposed traffic marking coating limit would effectively ban the
manufacture of conventional traffic marking coatings currently in
use and expressed concern about their ability to continue to
provide cost-effective pavement markings, the resultant fiscal
impacts of the proposed rule, and the implications to their
overall transportation safety program.  According to the
commenter, implementation of the rule would result in an
increased cost of a minimum of $2 million the first year
(equipment and coating costs).   Each succeeding year would result
in a minimum additional $1.5 million cost for low-VOC coatings.
The commenter added that no source of additional State funds is
presently available, but they will need to provide continued
necessary pavement markings.   The commenter requested that the
EPA consider the fiscal impacts of the rule on State DOTs.
     Response:     The  Agency  received a number  of  comments  from
State and local governments concerned that EPA had overlooked
potential impacts of the proposed rule upon small governments.
Specifically, these commenters claimed that the proposed rule
imposed a VOC content limit on the traffic marking coatings
category that would force coatings manufacturers to cease
producticn of solventborne traffic marking coatings and that
State and local governments would therefore be forced to change
their current traffic marking equipment.   The commenters
explained that older traffic marking equipment is not compatible
with non-solventborne coatings and that replacement of this
equipment to utilize new types of coatings could be a significant
cost to all affected entities which include small governments.
     The comment letters suggest that the impacts of the proposed
rule could trigger the requirements of UMRA section 203.   As
stated in the preamble to the proposed rule,  UMRA section 203
provides that before EPA establishes any regulatory requirements
that may significantly or uniquely affect small governments,
including tribal governments, the Agency must have developed a
small government agency plan.  The plan must provide for
notifying potentially affected small governments,  enabling
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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.  See 61 F.R. 32745.
     Prior to proposal,  a few representatives of State
Departments of Transportation  raised the issue of the potential
need to replace older traffic marking equipment as one possible
impact of a rule that restricted the VOC content of traffic
marking coatings.  The Agency concluded, however, that the
proposed rule would only regulate manufacturers and importers of
architectural coatings,  and as such contained "no Federal
mandates  (under the regulatory provisions of Title II of UMRA)
for State, local, or tribal governments."  61 F.R. 32745.
     The commenters on the proposal have reiterated concern about
the issue of the potential need to replace traffic marking
equipment as a result of the VOC content limit imposed by the
rule.  In essence,  the commenters are concerned that the lower
VOC content limit of the rule will require them to replace older
existing equipment used for the application of conventional
higher VOC solventborne coatings more quickly than they otherwise
would have.  EPA has considered these comments carefully to
reexamine whether the rule will have any significant or unique
impacts upon small governments as contemplated by UMRA
section 203.  At the outset, EPA notes that because the rule only
regulates manufacturers and importers of coatings, the impacts
noted by the commenters are indirect effects.  It is unclear
whether the Agency is required to assess such indirect effects in
connection with UMRA section 203.  Nevertheless, whether or not
the Agency should consider indirect impacts for this analysis,
the Agency believes that those impacts are neither significant
nor unique in this instance.
     EPA has investigated to determine the significance of the
impacts of the rule upon small governments by, inter alia,
following up with the commenters, by making inquiries regarding
existing inventory of traffic marking equipment across the
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country,  by assessing the availability and cost of replacing or
retrofitting traffic marking equipment, and by estimating the
potential cost to replace traffic marking equipment as a result
of changes in the VOC content of traffic marking coatings.  EPA
conducted the analysis based on data reasonably available to the
Agency on the coatings and traffic marking equipment in use in
the United States by all applicators.  Based upon this analysis,
EPA estimates that the total aggregate annual impact of the rule
on all governmental entities, including small governmental
entities, should be no more than $3.7 million (in 1996 dollars).
Small governments would bear some portion of these costs.   See
Docket Item IV-B-3.  EPA believes that this amount of aggregate
impact for governments across the Nation is not significant for
purposes of UMRA section 203.  In addition, the Agency notes that
this number may overestimate the total impact based upon the
information provided by governments that many of them have
already replaced their equipment in recent years and that new
equipment is compatible with both waterborne and solventborne
coatings.
     Similarly,  the Agency believes that the architectural
coatings rule will not have a "unique" effect upon small
governments as contemplated by UMRA section 203.  The term
"unique" is not defined in the statute, but the Agency believes
that by all reasonable applications of this measure, the rule
will not have a unique affect upon small governments.  The rule
applies not to government entities as government entities, but
rather to manufacturers and importers of coatings.  To the extent
that small governments are directly regulated entities as
manufacturers or importers of coatings, they are not uniquely
affected in the sense that they are not the sole regulated
entities.  The indirect effects of the rule likewise fall not
uniquely upon small governments as users of coatings, but upon
all users of coatings and thus small governments are not uniquely
affected in the sense that they are not the sole affected users.
Within the category of traffic marking coatings alone,  the
impacts of the rule fall not uniquely upon small governments as
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users of the coatings, but upon governments of all sizes that
engage in traffic marking activities,  including States and other
large governmental entities.  Thus,  the Agency has concluded that
the rule will not have a unique effect upon small governments for
purposes of UMRA section 203.
     Even though the Agency believes that the rule will not have
significant and unique impacts upon small governments, EPA is
planning to perform outreach to those affected by the rule to
insure that they are apprised of the impacts of the rule on
traffic marking coatings.  Specifically,  EPA plans to devote a
section of the small business compliance guide to this education
and outreach effort.  Finally, EPA notes that the rule is
unlikely to eliminate the availability of conventional
solventborne traffic markings.  The Agency anticipates that
manufacturers will continue to produce solventborne coatings,
either by developing compliant products or by exercising the
tonnage exemption or exceedence fee provisions.  So long as there
is sustained demand for such coatings, the Agency believes that
such coatings will continue to be available.  This suggests that
small governments should generally be able to obtain higher VOC
products for a reasonable period of time, albeit at a moderately
higher cost,  that will allow them to phase out their older
equipment and shift to equipment compatible with waterborne
coatings.
     2.2.4.4   Recycled Coatings
     Comment:   One commenter  (IV-D-120) suggested that credit for
recycled coatings should be considered if and as long as the EPA
determines that such credit does not significantly reduce the
rule's effectiveness.  The commenter requested that the EPA
consider allowing credit not only for recycled coatings, but also
for recycled VOC.
     Response:  The EPA believes that the recycled coating
provision will not reduce the effectiveness of the rule, but
instead will encourage recycling by providing incentives to
manufacturers who recycle coatings.  Recycling these coatings
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eliminates the need for disposal of unused coatings and reduces
the amount of new coating that must be manufactured.
     The EPA has not expanded the recycled coating provision to
include recycled VOC.  The flexibility in VOC content allowed for
recycled coatings is based on comments received by manufacturers.
No such flexibility was requested by manufacturers for recycled
VOC.  Moreover, the additional recordkeeping and reporting that
would be required for recycled VOC would probably negate any
benefit obtained from such a provision.
     Comment:   One commenter  (IV-D-161) supported the option
EPA provided in the proposed rule for calculation of the VOC
content for recycled coatings, because it achieves the goal of
reducing VOC without providing a disincentive for companies to
develop coatings using post-consumer coatings.
     Response:   The EPA has retained the recycled coating
provision in the final rule to encourage recycling by providing
flexibility to manufacturers who recycle coatings.
     Comment:   Two commenters (IV-D-18S and IV-F-2gen)  stated
that the EPA should clarify that the recycled coating credit does
not apply to the reprocessing of coatings sent to distributors or
the in-plant reprocessing of coatings.
     Response:   The EPA did not intend for the recycled coating
provision to be extended to the reprocessing of coatings sent to
distributors or to the in-house reprocessing of coatings.  The
EPA has clarified the intent of the recycled coating provision by
adding the statement "by a consumer" to the definition of "post-
consumer coating."  Also, the words "community-based household"
have been deleted because post-consumer coatings collected are
not limited to these hazardous waste collection programs.
     "Post-consumer coating means an architectural coating that
     has been previously purchased by a consumer or distributed
     to a consumer but not applied,  and reenters the marketplace
     to be purchased by or distributed to a consumer.
     Post-consumer coatings include, but are not limited to,
     coatings collected during hazardous waste collection
     programs for repackaging or blending with virgin coating
     materials."
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     Comment:   One commenter (IV-F-lb)  stated that the
recordkeeping requirements of the recycled coating provision will
inhibit recycling.  The commenter requested that the EPA hold
recordkeeping and reporting requirements for the manufacture of
paint with post-consumer content to gross IRS type reports with
records being kept by manufacturers and supplied on request.
     Response:   The EPA has determined that the recordkeeping and
reporting requirements for the recycled coating provision are
necessary for enforcement purposes.  The information required to
be maintained and reported is information that the manufacturer
will have already generated to determine the recycled coating
credit, and therefore, the EPA contends that the recordkeeping
requirements will not inhibit or reduce the amount of recycling.
     Comment:   One commenter (IV-F-le)  expressed concern
regarding disposal of unused coatings because they do not have
post-consumer recycling.   The commenter manufactures urethane
products, which are susceptible to moisture.  The commenter
cannot take back a product once it is opened.  The commenter is
concerned about needing a treatment,  storage, and disposal  (TSD)
permit and becoming a hazardous waste storage facility if they
accept post-consumer coatings.
     Response:   The architectural coating rule does not require
manufacturers to recycle coatings, it provides incentive for
manufacturers to do so.  It is expected that some types of
coatings may be more conducive to recycling than others.
2.2.5   Compliance Time Requirements
     2.2.5.1   General
     Comment:   In the proposal preamble (61 FR 32732),  the EPA
requested comment on the adequacy of the compliance lead time for
all regulated entities.  The proposed compliance date of
April 1, 1997,  would have allowed manufacturers of architectural
coatings approximately 3 months from publication of the final
rule to achieve compliance (assuming promulgation occurred on
January 1, 1997).  Thirty-three commenters
(IV-D-02/IV-D-77/IV-F-01(1),  IV-D-08, IV-D-21, IV-D-28, IV-D-44,
IV-D-73, IV-D-85/IV-F-02C, IV-D-86/IV-F-Ole, IV-D-93, IV-D-114,
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IV-D-117, IV-D-120,  IV-D-129, IV-D-158, IV-D-161/IV-F-01j,
IV-D-162, IV-D-163,  IV-D-169/IV-F-02n/
IV-D-170/IV-F-02p/IV-F-02p,  IV-D-171, IV-D-180, IV-D-182,
IV-D-184, IV-D-185,  IV-D-189/IV-F-Olo, IV-F-Olb,
IV-D-186/IV-F-Ole, IV-F-Olk, IV-F-Ols, IV-F-02gen, IV-F-02e,
IV-F-02J, IV-F-02r)  commented on the proposed compliance  date.
Of these 33 commenters, 28 commenters stated that the 3-month
compliance period provided inadequate time to achieve compliance
and 5 commenters supported a rapid enactment of the rule.
Commenters supported compliance periods ranging from 6 months
compliance time  (IV-D-28) to 5.5 years (IV-D-02/IV-D-77/
IV-F-01(1)).
     Unspecified compliance time.  Five commenters (IV-D-73,
IV-D-180, IV-F-02gen, IV-F-02J,  IV-F-02r)  supported more  time for
compliance but did not recommend a specific compliance time.  Two
commenters (IV-F-02gen and IV-D-02r)  stated that the
April 1, 1997 date (3 months compliance time) would not allow
enough time to develop compliant coatings and one commenter
(IV-F-G2J)  requested more time for product testing.  One
commenter (IV-D-180)  stated that adequate warning of the
compliance date is necessary for manufacturers to change  labels,
products, and containers.  Another commenter (IV-D-73)  explained
chat developing quality formulas that will withstand cold and
humid weather in areas like New York would demand more time
(unspecified compliance time; for reformulation.
     One year or less compliance time.  Ten commenters requested
a year or less compliance time;  seven commenters (IV-D-93,
IV-D-161/IV-F-Olj, IV-D-169/IV-F-02n, IV-D-171, IV-D-185,
IV-D-189/IV-F-Olo, IV-D-85/IV-F-02c)  requested a year,  and three
commenters (IV-D-21,  IV-D-28, IV-D-129)  requested less than a
year.   Two commenters (IV-D-185,  IV-D-189/IV-F-Olo) stated that
industry needed a full year to comply in order to complete
laboratory work,  adjust production formulations, reprint  labels,
adjust inventories, budget expenses,  and otherwise modify their
operations.   One commenter (IV-D-185) pointed out that lead time
was especially important for small businesses who have limited
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resources and believed that a l year compliance period would
reduce the need for individual variances.   One commenter
(IV-D-93), who had 91 products to reformulate, asked that the
time to comply be extended to January 1998 (1 year compliance
time) to allow for reformulation and use of existing label
inventories.  One commenter (IV-D-171)  stated the April 1, 1997
date (3 months compliance time)  would preclude adequate time for
research and development needed to achieve required VOC
reductions and for labeling reformatting.   One commenter
(IV-D-169/IV-F-02n)  requested that the rule be promulgated as
soon as possible with implementation 1 year after publication to
accommodate orderly transition in the marketplace.  According to
the commenter, decisions in the retail marketplace are made
around September 1,  so a commitment to prompt publication of the
rule would allow all parties to plan necessary product changes at
the retail level.  At the public hearing the commenter explained
that the decision process regarding products is especially
complicated for products with FIFRA requirements.  One commenter
(IV-D-85)  requested a 1 year compliance time at the public
hearing but requested a compliance date of September 1999
(33 months compliance time)  in their written comment letter to
allow time for reformulation,  safety and toxicological testing,
recoatability and remove ability evaluation,  production, and
education of the public sector.   Another commenter
(IV-D-161/IV-F-02n)  supported a 1 year compliance period that
would apply to all companies and all aspects of the rule
including labeling provisions, reporting provisions, and VOC
standards.  One commenter (IV-D-28) recommended that all
manufacturers and importers, including small businesses, be held
to a July 1, 1997 (6 month compliance time) compliance date.  Two
commenters  (IV-D-21, IV-D-129) requested 8 months.  One of the
commenters  (IV-D-21) explained that an 8 month compliance time
would allow them to avoid excessive administrative, travel, and
reprinting expenses.
     More than 1 year compliance time.   Eleven commenters
(IV-D-08,  IV-D-44, IV-D-114, IV-D-120,  IV-D-158,
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IV-D-170/IV-F-02p, IV-D-182, IV-D-186/IV-F-Ole, IV-F-Ol(l),
IV-F-Olm, IV-F-02e) requested more than 1 year of compliance
time:  three commenters  (IV-D-112, IV-D-114, IV-D-158) requested
1 to 2 years; two commenters (IV-D-44, and IV-D-182) requested 2
to 3 years; four commenters  (IV-D-08, IV-D-186/IV-F-Ole,
IV-F-Olm, IV-F-02e) requested 3 to 5 years; one commenter
(IV-F-Ol(D) requested 1.5 to 5.5 years; and one commenter
(IV-D-120) supported a phased compliance approach and extended
compliance date.  One commenter  (IV-D-114) explained that his
company required 6 to 12 months to develop a new roof coating and
a minimum of 12 additional months for performance testing;
therefore, the commenter requested 18 to 24 months compliance
time.  One commenter (IV-F-02e) recommended 3 to 4 years of
voluntary compliance to allow companies to adjust to the
requirements of the rule.  According to the commenter, 3 to
5 years was the lead time most commonly advocated throughout the
August 13, 1996 public meeting.
     Three commenters (IV-D-170/IV-F-02p,  IV-D-186/IV-F-Ole,
IV-F-Ol(D) implied that 3 months' reformulation time was
unreasonable by referencing a presentation made during the
July 28-30, 1993 Regulatory Negotiation meeting and discussed in
the Economic Impact Analysis and Regulatory Flexibility Analysis
of the Proposed Architectural Coating Rule  (A-92-18, ll-A-5).
The presentation,  given by a representative of a large coatings
manufacturer, suggested that 2 to 3 scientist years or an elapsed
time of 1.5 to 5.5 years was necessary to develop a new product.
This included time for formulating a white paint,  formulating the
colors, formulating the tinting base paint, labeling, developing
material safety data sheets, technical data sheets,  and color
cards,  merchandising,  scaling up to production volume,
introducing the paint to stores and distributing it.
Additionally, one of the commenters  (IV-D-186/IV-F-Ole)
recommended that compliance be postponed until an appropriate
compliance time can be determined.  Two commenters
(IV-D-120/IV-D-85), including one commenter (IV-D-85) who
specified a 1 year compliance time,  pointed out that the proposed
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rule allows manufacturers to sell non-compliant products
manufactured prior to the effective date after the rule takes
effect.  Therefore, manufacturers could theoretically stockpile
non-compliant products for sale after the rule takes effect.  In
practice, however, the commenter (IV-D-120)  stated that creating
an inventory of non-compliant products is a poor option because
inventory is expensive,  quality deteriorates with age,  and demand
for products fluctuates.  One commenter (IV-D-08)  stated that
complying with State architectural  coating rules has taken it as
long as 6 years, however, compliance with such rules typically
require a 3 year time frame.  The commenter stated that a
variance procedure could be used to extend compliance time and
would allow manufacturers reasonable flexibility for
implementation of the rule.
     Two commenters  (IV-D-158,  IV-F-Olm)  claimed that at least
3 years would be necessary to reformulate, test, and market new
products.  Although one commenter (IV-F-158) stated 3 to 5 years
would be necessary to reformulate and indicated that a third of
their products would need reformulation,  they suggested a
compliance date of July 1, 1998 (18 months compliance time).  The
other commenter (IV-F-Olm) referenced the Allied Local and
Regional Manufacturers  (ALARM)  proposal in which the initial
standards would take effect 3 years from the date of final
promulgation of the rule.  Another  commenter  (IV-D-182)
recommended a compliance date of April 2000 (39 months compliance
time) because more time is needed for testing.  The commenter
explained that new products must be tested before they are
marketed and testing time varies by product line and by specific
product.  For example, the commenter stated that testing interior
products can take months while exterior products can take years
to test.  Another commenter  (IV-D-44)  recommended a compliance
date of April 2000  (39 months compliance time), or April 1999
 (27 months compliance time) at the  earliest.  The commenter
specified that testing exterior products requires 2 to 3 years
and stated that the proposed deadline was unrealistic because of
reformulating, testing,  marketing,  and personnel requirements.
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Four commenters  (IV-D-02, IV-D-08, IV-D-120, and
IV-D-189/IV-F-Olo),  including one  (IV-D-189/IV-F-01(o))  who
requested 1 year compliance time and one  (IV-D-02) who supported
a small business compliance extension, implied that it is
unreasonable to require industry to begin compliance activities
before the rule is promulgated.  One commenter (IV-D-120) pointed
out that industry will have wasted time and money if they
reformulate their products and promulgation does not occur.  The
commenter continued by explaining that architectural and
industrial maintenance coatings are typically formulated for
specific application and performance requirements so
reformulation is not simple.  The commenter explained that
research and development takes longer if technological means are
unavailable,  and contracts and work plans specifying coatings are
difficult to modify.  Furthermore, the industry potentially faces
loss of marketability of some categories and liability costs
associated with introducing alternative products.  The commenter
preferred that the rule specify the time from promulgation
(2 years) rather than a date to insure adequate compliance time
in case of promulgation delays.
     Compliance extension for labeling.  Five commenters
(IV-D-93, IV-D-171,  IV-D-189/IV-F-Olo, IV-F-Olb,  IV-F-Ols)
requested more time  to comply with the proposed labeling
guidelines.   One commenter  (IV-D-93)  asked for 1 year to comply
with labeling so that existing label inventories could be used.
Another commenter (IV-D-189/IV-F-01(o)) asked for at least 1 year
to comply with any new labeling requirements. Two commenters
(IV-F-Olb,  IV-F-Ols) suggested allowing the use of old labels on
compliant products until the existing label inventories are
depleted.  The commenters stated that it is typical for large
quantities of containers and labels to be produced in advance;
therefore,  such a provision would eliminate the need to destroy
large quantities of  existing labels.   According to one commenter
(IV-F-Olb),  the label inventory is composed of 10 to 20 million
existing labels that would have to be destroyed.   Plus,  the
commenter claimed that it takes longer than 1 year to design and
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print new labels.  The commenter mentioned stickering as another
option but warned that the process is costly and ineffective.
One commenter (IV-D-171)  recommended a January 1,  1998 compliance
date  (1 year from promulgation) for requirements found at
paragraph (a) of §59.402 (VOC standards),  paragraphs  (a) and  (b)
of § 59.403  (labeling requirements),  paragraph (b)  of § 59.406
(initial report), and paragraph (d)  of § 59.406 (date code
explanation).  The commenter spent over $300,000 in 1996 on
labels required by amended Department of Transportation
regulations and expects labels for the architectural coating rule
to be more expensive.
     Oppose compliance extension.   Five commenters  (IV-D-117,
IV-D-162, IV-D-163,  IV-D-184, IV-F-Olk) opposed extending the
compliance time beyond the proposed time (3 month compliance
time).  One commenter (IV-D-117)  pointed out that prompt
implementation was critical to air quality and that
section 183 (e)  is intended to obtain VOC emission reductions in a
timely fashion.   One commenter (IV-D-162)  stated that any
extension was unwarranted because the industry has already proved
its ability to produce compliant products,  implying that
additional time for reformulating and testing product is not
necessary given the VOC content limits of the proposed rule.  One
commenter (IV-D-163) explicitly stated that a compliance
extension to January 1998  (1 year) was unnecessary and that any
delay in emissions reduction would impact other programs that
rely upon national control measures including States with ozone
NAAQS nonattainment areas and possibly the Ozone Transport
Assessment Group (OTAG).   Another commenter (IV-D-184) urged the
EPA to promulgate effective rules in a timely manner and
explained that the proposed January 1, 1997 date would diminish
the effectiveness of the rule by leaving State and local agencies
with a greater shortfall in VOC emission reductions to offset.
Another commenter (IV-F-Olk) believed that the proposed 3 month
compliance time was reasonable, assuming no further modifications
to the VOC content limits or the category definitions making the
rule more stringent than the current draft.  The commenter stated
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that it was necessary to implement the architectural coating VOC
rule with a 3 months compliance time so that States and
localities would not need to implement local regulations that
would be a burden on industry.  The commenter thus alluded to the
fact that many States are intending to rely on the architectural
coatings rule for VOC emission reductions and that any delay
might force them to enact their own differing standards, thereby
imposing burdens upon regulated entities.
     Response.-  The proposed architectural coating rule had a
compliance date of April 1,  1997.  At proposal,  the EPA expected
to publish the rule on January I, 1997.  This schedule would have
allowed regulated entities approximately 3 months to comply with
the rule.  After fully evaluating the comments received, the EPA
has decided to extend the compliance period for the final rule to
12 months.
     Of the comments received where a compliance date was
specified,  about one-third of the commenters supported a
compliance period between 3  months and 12 months.  These
commenters stated that the additional compliance time would be
necessary to adjust formulations, reprint labels, adjust
inventories,  use existing label stock,  and conduct research and
development.   The EPA agrees that this additional time is needed
and based on reported experience believes that a 12-month period
is adequate to accommodate this need.
     Another third of the commenters stated that the compliance
period should be greater than 1 year to allow more time for
developing,  performance testing,  and marketing new products.   In
particular,  commenters stated that performance testing of
exterior products requires 2 to 3 years.   The EPA has addressed
these comments in several ways.  First, the compliance period in
the final rule was extended from 3 months to 12  months.  Second,
the EPA believes that the primary concerns for many of these
commenters have been addressed through the creation of new
categories,  clarification of definitions, or some other change to
the rule.  For example,   the primary concern of  three of the
commenters was addressed through the creation of the concrete
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curing and sealing category with a VOC limit that will obviate
the need for a lengthy reformulation and testing process. Third,
the EPA has included a tonnage exemption in the final rule that
allows manufacturers to exempt low volumes of coatings from the
rule.  Finally, the EPA has included the exceedance fee option in
the final rule that allows manufacturers who pay the fee to
continue to market non-compliant products.
     The last third of the commenters stated that a compliance
extension was not necessary.  The commenters provided the
following reasons:  it would result in an adverse impact on the
environment; it would lead to additional State regulations; and
it is unnecessary given the current state of technology.  The EPA
generally concurs with these sentiments, especially the concern
that a lengthy compliance extension could result in unnecessary
adverse environmental impacts.  For this reason the EPA has
concluded that it is inappropriate to extend the compliance
period longer than is reasonably necessary based upon the
comments.  The EPA supports enacting the architectural coating
rule as quickly as possible, but the EPA must, balance the
environmental benefits with the impacts on regulated entities.
The EPA has determined that the 12-month compliance period best
achieves this balance.
     2.2.5.2   Small Business Compliance Time Extension
     Comment:  The EPA requested comments on an extended
compliance date for small businesses and importers in the
proposal preamble (61 FR 32732) .   Thirteen commenters
(IV-D-02/IV-D-77/IV-F-01e/IV-D-08/IV-D-28, IV-D-34, IV-D-43,
IV-D-120, IV-D-161/IV-F-Olj, IV-D-184,  IV-D-189/IV-F-Olo,
IV-D-226, IV-F-Olk,  IV-F-02gen)  commented on the inclusion of a
compliance extension for small businesses.  Of these thirteen
commenters, one-third of the commenters supported such an
extension while two-thirds of the commenters opposed an
extension.
     Four commenters  (IV-D-02, IV-D-08, IV-D-120, IV-F-02gen)
supported a compliance extension for small business.  One
commenter  (IV-D-08)  suggested that the EPA grant a compliance
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extension for all small businesses because of the economic
hardship that an unreasonable implementation period would impose
on small businesses.  Another commenter  (IV-D-08) explained that
the cost to change products may force small companies to
implement changes over a longer period of time.  One commenter
(IV-F-02gen) requested a 1-year phase-in of the rule for small
businesses and supported the small business compliance extension
from the draft rule.  The commenters indicated that the
compliance date extension addressed small business hardship
simply and more effectively than the variance provision.
     Two of these commenters (IV-D-120,  IV-F-02gen)  implied that
large manufacturers have a competitive advantage and that extra
compliance time would allow small businesses to come into
compliance with the regulation gradually.  One of the commenters
(IV-D-120)  pointed out that several large companies were involved
with the negotiations of the proposed rule and, therefore,  had a
longer time to prepare for compliance than small companies who
were unaware of the proposed rule.
     One commenter  (IV-D-02) stated that it would be impossible
for a small business with multiple product lines to reformulate
by the proposed date for compliance.  The commenter (IV-D-02)
referred to the presentation made to the Regulatory Negotiation
Committee (also referenced by commenters IV-D-170/IV-F-02p,
IV-F-02e, IV-F-Ol(D)  that suggested that 2 to 3 scientist years
or an elapsed time of 1.5 to 5.5 years was necessary to develop a
new product.  The commenter (IV-D-02)  also referenced his
Regulatory Negotiation presentation that discussed the
reformulation costs to small companies.   The commenter  (IV-D-02}
explained that small businesses produce more niche,  high VOC
content paints because they cannot compete on water-based
formulas with the big companies which have greater purchasing
power and larger production capabilities.  The commenter
(IV-D-02) stated that small businesses face the same
reformulation time requirements as large companies but large
companies have a competitive advantage because they typically
have fewer products to reformulate and more staff.  Given the
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time and staff limitations,  small businesses must choose which
products to reformulate and let competitors reformulate remaining
products.  The commenter concluded that a small company with
marginal finances that loses several products might close.
     Nine commenters  (IV-D-28,  IV-D-34, IV-D-43,
IV-D-161/IV-F-Olj,  IV-D-184, IV-D-189/IV-F-01(o),  IV-D-226,
IV-F-Olk, IV-F-02gen)  opposed a compliance extension for small
businesses.  Two of the nine commenters (IV-D-189/IV-F-Olo,
IV-D-226) explained that a small business extension is
unnecessary because of the proposed coating categories, small
volume exemption, and the variance provision,  The commenter thus
suggested that these mechanisms already provided small businesses
with ample flexibility that negated any concerns about the
compliance period.   One commenter (IV-D-189/IV-F-Olo)  supported
the variance provision if small businesses required longer to
comply with the VOC content limits for specific categories and
stated that the promulgation delay renders the small business
compliance extension unnecessary.
     Another commenter (IV-D-28), who supported 6 months
compliance time for all businesses,  explained that granting a
compliance extension to small businesses would make compliant
products non-competitive, plus  the targeted VOC reductions for
State Implementation Plans  (SIPs) would not be accomplished.  The
commenter also pointed out that small businesses should already
be in the market if the limits  represent best; available controls
products and technologies, thus,  the compliance extension is
unnecessary.  Another commenter  (IV-D-161)  stated that there was
no basis to provide additional  time to small businesses and
supported the exceedance fee as a mechanism to extend compliance
to all businesses.   One commenter (IV-D-43)  disagreed with a
small business exemption because joint ventures,  subsidiaries,
etc., blur the lines between small and large companies.
     One commenter  (IV-D-28) contended that the EPA would be
contradicting itself to say the rule was based on best available
control while extending compliance for one group if the
technology is already available.  Two commenters (IV-F-02gen,
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IV-F-Olk) agreed that if the rule contained reasonable
requirements there would be no need for special treatment of
small businesses.  Two commenters (IV-D-28, IV-D-184) stated that
the compliance extension would lessen emission reductions.  Two
commenters  (IV-D-34, IV-D-28) contended that a compliance
extension for small businesses would give them an unfair
competitive advantage.  Three commenters (IV-D-161, IV-D-28,
IV-D-43) agreed that small companies have had adequate time to
reformulate and raw material suppliers often help small
businesses reformulate.  Two commenters (IV-D-34, IV-D-161)
pointed out that many small businesses who requested a compliance
extension for small businesses have already complied with State
and county regulations that gave less lead time and contained no
small business extension or variance provision.  Another
commenter (IV-F-Olj) stated it is more appropriate to have one
rule effective date rather than stagger the effective date based
on the size of the business.
     Response:  At proposal the EPA requested comment on whether
the final rule should include a small business compliance
extension (61 FR 32732).  In effect, this extension would have
allowed small businesses 12 months to comply.   Two-thirds of the
commenters providing comments on this provision were against
special treatment for small businesses.  The primary concerns
were that such a provision would result in unnecessary adverse
environmental impacts, would potentially hurt sale of compliant
products, thereby,  discouraging their development, and would
provide small businesses with an unfair advantage in the
marketplace.  The EPA generally agrees with these concerns and
therefore believes that it is inappropriate to provide small
businesses with a different compliance period,  in light of other
mechanisms in the rule that assist them in achieving compliance.
Nevertheless,  the comments have indicated that a longer
compliance period is appropriate for all businesses.  After
careful evaluation of the comments the EPA has decided not to
include a compliance extension specific to small businesses, but
has instead lengthened the compliance period for all regulated
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entities to 12 months.  This time period was selected to balance
the needs of the regulated entities, both large and small
businesses, against the need for rapid implementation of the rule
to achieve the required reductions of VOC.
2.2.6   Labeling. Recordkeeping and Reporting
     2.2.6.1   Labeling
     General.
     Comment:   Several commenters (IV-D-30,  IV-D-43,  IV-D-121,
IV-D-129, IV-D-153, IV-D-161, IV-D-181, IV-D-189,  IV-F-2gen)
provided general comments on the labeling requirements in
§ 59.403 of the proposed rule and on the potential labeling
requirements discussed in section II.E. of the proposed preamble.
One commenter  (IV-D-181) generally supported the proposed
labeling requirements.  One commenter  (IV-D-161) stated that
labeling requirements that are well established in State and
local regulations should not be difficult for manufacturers to
follow.  The commenter stated that new labeling requirements
would require several years of lead time to implement.
Therefore,  the commenter requested that the EPA limit labeling
requirements to those found in State and local regulations.  One
commenter  (IV-F-2gen) indicated that the labeling requirements
would force them to develop new labels, therefore adding expense
to their operating costs.  Another commenter (IV-D-121)
representing the Department of Defense (DoD)  argued that if
internal DoD repackaging, distribution, and hazardous material
exchange centers are not excluded from the definitions of
manufacturer and importer  (see comment 2.2.1.1), additional
unnecessary labeling would result.
     Two commenters  (IV-D-43, IV-D-153) stated that current
labeling requirements already fill the lids of most coatings, and
any additional labeling would damage proper labeling and
marketing.   One commenter  (IV-D-129) stated that the rule's
on-can labeling requirements are too inflexible, and that
manufacturers should have the flexibility to display the
information on the can or on an accompanying product use
instruction pamphlet.  One commenter  (IV-D-189) stated that the
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labeling requirements of the rule are potentially the most costly
and burdensome features of the rule.  Specifically, the commenter
stated that if consumer education and coverage labeling are
required, manufacturers of architectural coatings products will
be forced to redesign and reprint labels for the coatings.  The
commenter stressed that even the requirements in § 59.403(a) (1)
to (3) will severely affect those companies that do not have
prior experience with regulations.  The commenter stated that the
longer time the industry is allowed to implement label changes
the more cost-effectively the changes can be made.  The commenter
stated that at a minimum the industry will need 1 year from the
promulgation of the rule to convert their labels.
     Several commenters (IV-F-2gen) asked how the labeling
requirements in the proposed rule would affect their labeling
requirements under FIFRA.   One commenter  (IV-D-28) recommended
that label requirements mandate metric (g/1) and non-metric
standard  (Ibs/gal)  sc that consumers can easily understand the
measurements.   Another commenter  (IV-F-Ols) inquired how to label
products for a designated use.   The commenter specifically asked
about labeling products for application to wood furniture instead
of application to architectural surfaces.
     Response:   The EPA acknowledges that the rule may require
manufacturers to develop new labels to comply.  To minimize this
impact,  the labeling requirements in the final rule are based on
requirements found in existing State and local regulations.  The
EPA has elected not to require consumer education and coverage
information in the final rule.   As requested by commenters, the
EPA has selected labeling requirements that require limited label
space.  Labeling information is required on product labels
instead of product literature in order to effectively communicate
the information with consumers and to provide for effective
compliance checks.   Manufacturers cannot always ensure that their
associated product literature is distributed to consumers.  In
order to minimize the impact of the labeling requirements, the
EPA has not adopted the suggestion that labels present both
metric and English units.   The manufacturer or importer is only
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required to provide the VOC content in metric units.  A
manufacturer or importer may also provide information on the VOC
content in English units if they choose to do so.   The EPA has
not specified how products should be labeled for a designated
use.  However, any coating represented by the manufacturer or
importer as an architectural coating must comply with the
architectural coating rule.  Also,  architectural coatings that
are registered with the EPA under FIFRA must comply with FIFRA.
The EPA has provided an 18-month compliance period for regulated
entities to accommodate the FIFRA re-registration process.
Consumers who repackage coatings by transferring it to another
container without altering the coating VOC content  (e.g.,DoD in-
house repackaging, distribution, and hazardous materials exchange
centers) are excluded from the definitions of manufacturer and
importer and, thus, are not subject to the labeling requirements
of this rule provided they do not sell or distribute the coating
to another party.
     Date of manufacture or code.
     Comment.  Six commenters (IV-D-28, IV-D-161,  IV-D-171,
IV-D-181, IV-D-189, IV-F-02gen)  provided comments on the proposed
date code labeling requirement.   Three commenters (IV-D-28,
IV-D-161/IV-F-02J, IV-D-171)  requested that the date code in
locations on the can other than the lid.  One commenter  (IV-D-2S)
proposed that the EPA require manufacturers to provide
manufacturing codes on the bottom of coating cans instead of
exclusively on lids,  because end-users tend to discard the lids,
making it difficult to reconstruct a product's history.  One
commenter  (IV-D-161/IV-F-02j)  supported allowing the date code on
the label, as required in several existing State regulations.
     One commenter (IV-D-189)  mentioned that the manufacture date
is already carried on a majority of architectural coating labels
or containers.  One commenter (IV-F-2) inquired as to who must
understand the code on the product that indicates the date of
manufacture.  The commenter indicated that they use sequential
batch numbers and would have to indicate that batches above  "X"
are after the compliance date.
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     Response:  In order to provide greater compliance
flexibility and reduce labeling compliance costs, the EPA has
modified the labeling requirement to allow manufacturers and
importers to place the date the coating was manufactured or a
code representing the date on the bottom of the can in addition
to allowing placement on the label or lid.  The rule requires
manufacturers and importers to describe the date code in their
initial report to the EPA and update the descriptions within
30 days of modification.  Thus, manufacturers and importers may
continue to use their own chosen method of denoting the date of
manufacture, but they must inform the EPA of the method to
interpret such information.  The date code description will be
used by the EPA enforcement personnel to determine the compliance
status of coatings.
     VOC content limit.
     Comment:   Fifteen commenters (IV-D-02, IV-D-30, IV-D-28,
IV-D-33, IV-D-129,  IV-D-134,  IV-D-137, IV-D-158, IV-D-161,
IV-D-162,  IV-D-181, IV-D-183,  IV-F-Olk,  IV-F-Oln, IV-F-Oli)
provided comments on the maximum VOC content labeling requirement
in §59.403(a)(3) of the proposed rule.  Two of the 14 commenters
(IV-D-28,  IV-D-33)  requested clarification on language and
interpretation,  two commenters (IV-D-02,  IV-D-134)  favored
requiring the actual VOC content on labels, and two commenters
(IV-D-161,  IV-D-181)  supported labeling the maximum VOC content
instead of the actual or measured VOC content.   Three commenters
(IV-D-137,  IV-D-158,  IV-D-162)  suggested including a general VOC
labeling statement and three commenters (IV-D-183,  IV-F-Olk,
IV-F-Oln)  opposed any VOC labeling requirement.  In addition,
three commenters (IV-D-28,  IV-D-30,  IV-F-li)  requested
clarification for labeling units with an overpack and
multi-component systems.
     Two commenters (IV-D-28,  IV-D-33) asked the EPA to clarify
the meaning of maximum VOC content.   One commenter  (IV-D-33)
explained that the proposed regulatory language for the labeling
requirement could be interpreted to refer to either the actual
VOC content or the regulatory limit for the coatings.
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     Two commenters  (IV-D-02, IV-D-134)  supported an actual VOC
content labeling requirement instead of the maximum VOC content
labeling required in the proposed rule.   One of the commenters
(IV-D-134)  explained that many stationary source coating users
and industrial facilities are required to report emissions for
emission inventories.  The commenter stated that if labels only
provide the maximum VOC content,  emissions inventories would be
overestimated and result in increased emission fees.  The other
commenter  (IV-D-02) supported an actual VOC content labeling
requirement without regard to thinning recommendations.  The
commenter explained that the maximum VOC content varies with
applicators, application method,  and seasonality.
     Two commenters  (IV-D-161,  IV-D-181)  supported maximum VOC
content labeling and opposed actual VOC content labeling.  One
commenter  (IV-D-161) supported the requirement of a maximum VOC
content labeling to avoid the cost for new labels.  The commenter
explained that because VOC measurements would vary by lab,
including actual VOC content as measured would increase labeling
costs.  The other commenter  (IV-D-181)  stated that it would be
impossible to comply with an actual VOC content labeling
requirement because labels printed in advance would not account
for the variability in production runs.   One of the commenters
(IV-D-183)  explained that this labeling requirement serves little
purpose because the general public does not understand the VOC
content terminology.  Another commenter (IV-F-Olk) also
questioned the need for VOC labeling because it is expensive and
provides little information to consumers.   If the provision is
included, the commenter requested clarification that maximum VOC
content is required rather than actual VOC content.  The other
commenter  (IV-F-Oln) claimed that the labeling would be
untruthful because Method 24 overestimates the VOC content of
waterborne coatings.
     Three commenters  (IV-D-137,  IV-D-158, IV-D-162) suggested
that the EPA allow general VOC content labeling statements rather
than the specific, maximum VOC content of coatings in the
container.  One commenter  (IV-D-158) suggested that labels read
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 "contains no more  than  X  g/1 VOC" because  the  requirement  for
 specifying  the VOC  content  of  the coating  in the  container,  or
 the  actual  VOC content, presents a hardship to manufacturers.
 The  commenter explained that existing State regulations  allow
 this type of generic VOC  content labeling.  One commenter
 (IV-D-162)  suggested a  general statement that  the product  meets
 Federal and State  regulations.  One commenter  (IV-D-137)
 suggested the following statement "this product complies with VOC
 content limits for  the  area in which it is sold."
      In addition,  two commenters (IV-D-28, IV-F-li) requested
 clarification for VOC content  labeling of multi-component
 systems.  One commenter (IV-F-li) discussed coatings provided in
 two  separate packages that must be mixed before application.
 According to the commenter, these coatings commonly have
 different VOC contents  and one coating is compliant and  the  other
 one  is not.  The commenter indicated that these coatings cannot
 be prerr.ixed at the  factory and retain their performance
 characteristics.   Another commenter (IV-D-30)   asked for
 clarification of the labeling requirements for multiple  small
 units contained within  a  larger "overpack" carton.
     Response:   The EPA has carefully considered  these comments
 and  has decided to modify the labeling requirements.  To provide
 flexibility, in § 59.405(a)(3)  of the final rule,  the EPA  allows
 either of the following to be included on the  label of the
 coating container:   (1)  the VOC content of the coating in  the
 container; or (2) the VOC content limit in table  I of the  rule
with which the coating  is required to comply and does comply.
 Regarding the request for more general VOC labeling statements,
 the  EPA maintains that  labels specifying the VOC content or  the
 required VOC content limit with which the coating complies are
 essential for compliance enforcement.   The EPA agrees that
compliance with an actual VOC content labeling requirement may be
difficult due to  variability of VOC contents resulting from
production fluctuations.  Therefore,  § 59.405(a)(3)  of the final
rule permits manufacturers to comply by labeling the coating with
either the VOC  content of the coating including thinning
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recommendations, except thinning with water, and considering
production fluctuations or the applicable VOC content limit for
the coating as listed in table 1 of the rule, provided that the
VOC content of the coating does not exceed the VOC content limit.
Any coating for which the exceedance fee or tonnage exemption
provision is being used must be labeled with its actual VOC
content rather than the VOC content limit in the rule because it
would not be in compliance with the limit.  With regard to
multi-component products,  two or more component systems must be
labeled with either the VOC content of the coating as mixed per
the manufacturer's instructions or the applicable VOC content
limit to comply as directed with mixing instructions.  For
multiple units packaged together that are not mixed,  the smallest
unit sold individually must meet labeling requirements.
     Coverage.
     Comment:  In the proposal preamble (61 FR 32733),  the EPA
requested comment on the feasibility of a coating coverage
labeling requirement.  Eight commenters (IV-D-43, IV-D-120,
IV-D-161, IV-D-162, IV-D-181, IV-D-207, IV-F-lg, IV-F-lk)  opposed
requiring coverage information on container labels.  The
commenters stated that there is no standard method for
determining coating coverage and that coating coverage is highly
variable depending on the following factors:
     •     Application technique:  spray, roller, brush, etc.
     •     Nature of the substrate:   absorbency,  color,
          temperature, fineness of sanding, presence  of existing
          coatings (if any), etc.
     •     Nature of the coating:  hiding power,  color,  rheology,
          etc.
     •     Environmental conditions during application:
          temperature, humidity, etc.
     •     Coating requirements:  film thickness required (depends
          on long-term exposure requirements), etc.
One commenter  (IV-D-207) stated that coating coverage can vary by
a factor of 2 to 3 times depending on these variables.   The EPA
agrees that coating coverage information may be useful for
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        s, but otner  corrir.enters  have clearly indicated that it is
an inappropriate  factor  for  assessment  of  VOC emissions limits.
     In contrast,  one commenter  (IV-F-li)  stated that its label
already includes  maximum VOC content,  thinning instructions,
warnings, coverage  information,  and a manufacturing date code on
its label.  Eight  comir.encers (IV-D-28,  IV-D-153,  IV-D-161,
IV-D-162, IV-D-181, IV-D-207,  IV-F-li,  IV-F-lk)  explained that
the coverage race  depends  on the substrate and other variable
conditions.  Commenters  mentioned many  variables that affect
coverage, including application  surface, humidity,  temperature,
and other exposure  conditions.   Commenters agreed that specifying
coverage races would  net be  useful because the actual coverage
rate varies with  application technique  and product use.
     One commenter  .. lY-D-2'j7.i  explained that  a coverage statement
offers little cenefit  c^.~  cc^ld  result  in  considerable cost to
industry and tne  £-.-..  Acctrding to the commenter,  testing  to
generate coverage  rates  : cr  each product would be costly for
small companies.   One  ctrr.mer.cer  (IV-D-181)  pointed out that
   sumers v;culd r.rt ma.-:5 p_rcnasing decisions  based on coverage
            ccm-~ enters   IY-r-lS,  IV-D-153)  stated that coverage
            v,ould  ccnf-se  ccnsumers.  Three commenters (IV-D-181,
           -F-C_k   stated  chac coverage information would require
coc much label stace.  Anccner commenter  (IV-D-162)  suggested
that coverage infcrm.atitn  sncold not  be required for industrial
maintenance ccg.cir.cs .
     Four cornrenters  <:v-D-42, IV-D-120, IV-D-207,  IV-F-Olk)
pointed out that  tne  regulation  must  establish how  coverage is to
be measured tc ensure  that coverage information  is  meaningful.
Another comm.encer  (IV-D-I2G)  stated that regulating coverage  rate
without specifying  a  standard method  creates an  "uneven  playing
field" because tne  test  method selected affects  results.
Specifically,  one commenter  (IV-F-Olk)  suggested  specifying the
opacity level.   Another  commenter  (IV-D-43) stated  that
specifying a coating thickness would be difficult to  understand.
     Response:   Tne EPA  acknowledges  that  coverage  rates  vary
according to substrate surface,  coating formulation,
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environmental conditions and application technique.  The EPA also
agrees that standardized test methods would be necessary to
ensure comparable results.  Although coating coverage rates would
provide valuable information to consumers,  the information is not
necessary to determine compliance.  Thus, a coating coverage
labeling requirement has not been included in the final rule.
     Industrial maintenance coatings.
     Comment:   Thirteen comments were received on the "not
intended for residential use" labeling requirement for industrial
maintenance coatings in §59.403(b) of the proposed rule.  Four
commenters  (IV-D-158, IV-D-183, IV-F-Olk, IV-F-02b) suggested
removing the proposed labeling requirement for industrial
maintenance coatings from the rule.   One commenter (IV-D-Olk)
contended that the words would confuse consumers.  According to
one commenter (IV-F-Glk),  the requirement is of little value
because many companies already have similar phrases on labels and
the commenter stated that the proposed rule allowed for the
availability of quality products for residential use.
     Four commenters (IV-D-101, IV-D-161, IV-D-183, IV-D-189/
IV-F-Olo)  pointed out that there may be instances where an
industrial maintenance coating is appropriate in a residential
setting rendering the label statement incorrect.  One commenter
(IV-D-189/IV-F-Olo)  explained that the "not intended for
residential use" labeling requirement would mislead consumers and
result in decreased product use in legitimate settings.
     Seven commenters (IV-D-21, IV-D-129, IV-D-161, IV-D-162,
IV-F-02gen,  IV-F-02b, IV-F-02c) requested more flexibility for
the language used to meet this labeling requirement.   Several
commenters  (IV-D-129, IV-D-162, IV-F-02gen,  IV-F-02c) suggested
that the EPA allow alternate language such as "for industrial use
only," which is standard industry practice.   One commenter
(IV-D-129) pointed out that changing the language they already
have on their labels would require unnecessary expense.   One
commenter (IV-F-02b) noted that the requirement is not in the
California rule 1113 and suggested that the labeling statement,
if required, list performance criteria rather than location of
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use.  Some commenters  (IV-F-02gen) offered the following
suggestion:  "this product is intended for use under the
following conditions (list conditions)" and "for professional use
only."  One commenter  (IV-D-21) also suggested "for professional
use only" because industrial products are used in residential
homes.  One commenter  (IV-D-161) who originally opposed the
requirement later suggested that manufacturers be allowed to
choose between the language in the California regulations and the
language required by the proposed rule.  The commenter explained
that the California Air Resources Board adopted a suggested
control measure for architectural coatings that requires labels
to include the statements "not for residential use" or "not for
residential use in California."
     Response:   The EPA has retained in the final rule a special
proposed labeling requirement for industrial maintenance
coatings.  The EPA believes that this requirement will reduce the
use of higher VOC content coatings in inappropriate
circumstances.   Hov.'ever,  as requested by commenters,  the EPA has
allowed greater flexibility in the language of the labeling
requirement in order to reduce the burden on industry while still
accomplishing the goal  of discouraging use of coatings in
inappropriate locations.   The final rule allows any of the
following phrases:
     1.    For industrial  use only;
     2.    For professional use only;
     3.    Not for residential use;
     4.    Not intended  for residential use;  and/or
     5.    This product  is intended for use under the  following
          conditions (list those that are applicable):
          A.    Immersion  in water,  wastewater,  or chemical
               solutions  (aqueous and nonagueous solutions),  or
               chronic  exposure of interior surfaces  to moisture
               condensation;
          B.    Acute or chronic exposure to corrosive,  caustic,
               or acid  agents,  or to  chemicals,  chemical  fumes,
               or chemical mixtures or solutions;
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          C.   Repeated exposure to temperatures above 120oc
               (250 OF) ;
          D.   Repeated (frequent)  heavy abrasion,  including
               mechanical wear and repeated (frequent) scrubbing
               with industrial solvents, cleaners,  or scouring
               agents; or
          E.   Exterior exposure of metal structures and
               structural components.
     The EPA believes that the conditions under which industrial
maintenance coatings are used are found infrequently in
residential settings.  However, the EPA does not intend to
prohibit industrial maintenance coating use in residential
settings, as indicated by the wording of the labeling statement
described above.
     Educational statement.
     Comment:   In the proposal preamble (61 FR 32733), the EPA
requested comment on the use of an educational statement rather
than an educational outreach program.  Fourteen comments were
received in regard to the EPA's request for comments in the
proposal preamble (61 FR 32733 1st column)  on the potential
impact of labels intended to inform consumers about VOC and their
emissions from coatings.  Eleven (IV-D-28,  IV-D-43, IV-D-129,
IV-D-151, IV-D-153,  IV-D-161, IV-D-162, IV-D-181, IV-D-207,
IV-D-213, IV-F-Oli)  of the 14 comments received opposed an
educational statement.  Two comment letters (IV-D-33, IV-D-120)
supported an educational statement, and two comment letters
(IV-D-151, IV-D-189) recommended an educational outreach program.
     Of the eleven commenters who opposed the educational
labeling statement,  two commenters believed an educational
statement would influence consumer decisions and four commenters
believed the statement would have little effect.  Two of the
eleven commenters (IV-D-213, IV-F-Olf) stated that an educational
statement or an outreach effort would encourage the use of
coatings based on VOC content instead of product quality.
     One commenter  (IV-D-213) representing 3,000 painting
contractors contended that consumers would select poor quality
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coatings and apply them more frequently if low VOC content was
their sole purchasing criterion.  According to the commenter,
this undermines the basic market incentive of making the best
product for specific purposes and selling it at a competitive
price.  The commenter added that an accurate information piece
would describe the potential link between VOC emissions and
possible ozone formation, and that issues such as temperature,
humidity, and reactivity would need to be discussed.
     Four commenters  (IV-D-28, IV-D-129, IV-D-153, IV-D-207)
opposed the EPA's proposal to add an educational statement on the
coating's label, because they claimed that it would produce
little or no effect upon the end user's actions.  One commenter
(IV-D-207) explained that professional painting contractors would
choose coatings based on the product's performance and its
cost-benefit relationship.  The commenter believed that
do-it-yourself users would either ignore the statement or delay
maintenance to avoid feeling guilty for harming the environment.
     One commenter (IV-D-181)  stated that it would be difficult
to find space on the label because the containers have a limited
surface area and must contain required safety warnings
(flammability,  risk to infants), application instructions, and
other commercial information.   Second, the commenter did not
believe the proposed messages should be included because the
statute supposedly does not contemplate such labeling and a
statement could not convey the complicated nature of ozone
formation.
     Two other commenters (IV-D-151,  IV-F-li)  opposed an
educational statement because they believe it would be a
fruitless and costly effort.  One commenter (IV-D-43)  advised
against additional labeling aimed at educating the public,
because the public either already understands the environmental
impacts associated with VOC, or will be safeguarded by upcoming
VOC legislation that will control the products available to the
consumer.  One commenter  (IV-D-129)  recommended that an
alternative to the proposed educational labeling requirement
might be to require the following label:  "Volatile Organic
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Compounds in this product may contribute to ground-level smog.
Call 1-800 	-	 for additional information."  The commenter
suggested that the EPA could reference a hotline dedicated to
clean air education.  One commenter (V-D-161)  opposed an
educational statement regarding VOC impact to the environment
because it would be too costly,  too large for the container,
would not result in a significantly better educated consumer, and
could cause the consumer additional confusion.  Another commenter
(IV-D-162) opposed requiring an educational label because the
company already provides information to facility owners,
specifiers and applicators,  and expects to increase efforts when
the rule is finalized and implemented.
     Of the two commenters (IV-D-33,  IV-D-120) who supported an
educational labeling requirement,  one commenter (IV-D-33)
recommended the following less technical and simplified
description:  "This coating contains solvents that will be
emitted to the air during use, and may contribute to the
formation of summertime smog that  is harmful to people's lungs."
The other commenter (IV-D-120) preferred a succinct labeling
statement because an outreach program based exclusively on
architectural coatings, as opposed to the entire VOC-emitting and
ozone-forming community, would create a bias against the coatings
industry, and leave the public misinformed as to the larger
picture of other contributing emission sources.  In comparison,
two commenters (IV-D-151,  IV-D-189)  supported an outreach program
instead of an educational labeling requirement.
     Response:  After careful consideration of the comments, the
EPA has not included an educational labeling requirement in the
final rule.  The EPA acknowledges  that an educational labeling
statement would need to be lengthy to address all the relevant
information and may not adequately educate consumers on the
relationship between VOC and ozone.   As discussed in section 2.8,
the EPA will instead consider an educational outreach program.
     2.2.6.2   Recordkeeping and Reporting
     Comment:  Nine commenters (IV-D-28, IV-D-33,  IV-D-101,
IV-D-161, IV-F-01, IV-F-Ola,  IV-F-Ol(l), IV-F-Olb, IV-F-02)
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offered feedback on recordkeeping and reporting requirements in
the proposed rule.  Three commenters  (IV-D-28, IV-D-33, IV-F-Ola)
suggested expanded reporting requirements and two commenters
(IV-F-Olb, IV-F-02) requested reduced reporting.  Two commenters
(IV-D-161, IV-F-01) reminded the EPA to correct dates and one
commenter  (IV-F-01(1)) stated that it was impossible to list
products by category  (a proposal requirement for the initial
notification report).
     Of the three commenters requesting increased reporting
requirements, one commenter  (IV-D-28) suggested requiring yearly
reporting and certification requirements but did not elaborate on
the specifics of such reports.  The commenter (IV-D-28) also
requested that the EPA provide an address to which manufacturers
would send descriptions of their manufacturing code.  The other
two commenters supporting increased reporting (IV-D-33, IV-F-Ola)
recommended that the EPA revise the reporting requirements so
manufacturers would submit VCC content and coating thinning
information on their products a one-time initial basis.  This
would allow the EPA to detect any regulatory misinterpretations
by the manufacturer regarding the proper categorization of the
coatings,  etc.
     Two commenters  (IV-F-Olb, IV-F-02)  requested minimal
reporting requirements.  One  (IV-F-Olb)  of the commenters
suggested that recordkeeping and reporting requirements be held
to gross IRS type reports, with records being kept by
manufacturers and supplied on request.  The commenter stated that
this is especially appropriate for the exceedance fee option,
low-volume exemption, and the recycled coatings provision.  The
other commenter  (IV-F-2)  stated that his company does not have
the staff or financial resources to do reporting and
recordkeeping.  The commenter claimed that it would cost his
company more to meet the reporting and recordkeeping requirements
than it would to reformulate coatings.
     Two commenters  (IV-D-161, IV-F-01)  commented on the required
reporting dates.  One commenter (IV-D-161) stated that the
reporting requirements must reflect the new effective date for
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the rule.  One commenter (IV-F-01)  pointed out that the preamble
requires an initial report "by April 1,  1997 or within 180 days
after becoming subject to the requirements of the proposed
standard, whichever is later."  The commenter noted that no one
becomes subject to the proposed standard before April 1, 1997 so,
in effect, it says 180 days later.
     One commenter (IV-F-01(1))  asserted that it is difficult or
impossible to report by product category because the actual end
use of a coating is not known by the regulated entity.  The
commenter stated that the same coating may be marketed for
several categories, including categories other than architectural
coatings.  The end-use category is  often not known until sold to
the end user.  Another commenter (IV-F-2)  inquired whether
manufacturers must notify the EPA if they begin making a coating
in a different category after submitting the initial report.
     One commenter (IV-D-101)  requested that the EPA answer the
following questions with regard to  reporting:
     1.   Why are manufacturers being required to report a list
          of categories that are manufactured?

     2.   If a new coating in a new category is introduced after
          adoption of the rule,  would a report be due for the
          product, and if so,  what  would be the report's content?

     3.   Does the EPA plan to require annual reporting?  If so,
          discuss the reasons for the requirement.

     Response:  The EPA understands the concerns of regulated
entities regarding the potential burden of extensive
recordkeeping, especially for those regulated entities that will
act in good faith to comply with the final rule.  Nevertheless,
the EPA must have mechanisms to allow proper determination of
compliance to insure that the final rule achieves the intended
VOC reductions.  The EPA believes that the final rule
requirements for an initial report  and container labeling
represent the appropriate balance between burden and information
needed for enforcement.  The EPA did not adopt the suggestion
that the EPA require yearly reporting and certification due to

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the burden associated with such a requirement, particularly for
small businesses.  The EPA believes that the recordkeeping and
reporting requirements in the final rule are the minimum that can
still meet the needs for adequate determination of compliance
and, if necessary, enforcement.
     Manufacturers and importers are required to submit in their
initial notification report a list of the coating categories they
produce to provide the EPA with an initial overview of all
manufacturers and importers subject to the standards.  For this
report, manufacturers and importers must associate coatings with
the categories and VOC content limits with which they must
comply.  To determine which category a coating is in, the rule's
definition of the category should be compared to the
manufacturer's or importer's representation of its intended use.
Manufacturers and importers who begin to sell or distribute new
coatings after the rule takes effect and who have already
submitted an initial notification report do not have any
additional notification requirements.  However, a manufacturer or
importer who begins to sell or distribute a coating subject to
the rule and who has not previously submitted an initial
notification report must submit one within 180 days after the
coating is manufactured or imported or by the compliance date of
the rule,  whichever is later.
     Regarding the commenters'  request to clarify the date the
initial report must be submitted,  manufacturers that currently
produce coatings subject to the rule are required to submit the
initial report by the compliance date of the final rule.
Manufacturers of new coatings must submit the initial report
within 180 days after becoming subject to the rule or by the
compliance date, whichever is later.  Manufacturers that have
already submitted an initial report are not required to report
new coatings.  The final rule has been revised to clarify the
appropriate compliance dates and report submittal dates.  With
regard to the request that the EPA provide an address for
submitting information such as the manufacturing code,  § 59.409
of the final rule provides addresses of the Regional Offices of
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the EPA.  Submitrais of all reports required by the rule as well
as exceedance fee payments should be sent to the EPA Regional
Office which serves the State or territory in which the corporate
headquarters of the manufacturer or importer resides.
2.2.7   Determination of Volatile Organic Compound Content
     Comment:   One commenter (IV-D-02)  stated that the EPA failed
to use a method to relate emissions to area covered such as one
that was proposed during the architectural coatings regulatory
negotiation.
     Response:   As discussed in section 2.2.6.1 of this document
the EPA agrees with corr_menters that it is very difficult to
relate coating emissions to the area covered due to the great
amount of variability associated with the coverage of coatings.
An attempt at such an exercise would not be productive for
architectural coatings due cc the large variety of coatings and
conditions under wnich tney are applied.
     Comment :   Four ccmrenters (IY-D-2G, IV-D-73,  IV-F-lb,
IV-F-2) opposed calculating VGC content levels for waterbased
formulations on a "less water" basis.   One commenter (IV-F-2)
questioned whether using tne less water basis had any positive
impact because it negates the desirable practice of adding water
to the coating.   Two commer.ters (IV-D-20,  IV-D-73)  noted that
using a "less water" basis dramatically increases the gram per
liter VOC content.  One of these commenters (IV-D-20) explained
that many formulations depend on water as part of their
formulation (e.g., increased coating transparency with faux
finishing and glazing compounds).   The commenter expressed
concern that deriving VOC calculations that ignore water content
would reduce the incentive to use waterbased formulas and thus,
increase the incentive to use solventborne formulas.   The
commenter specifically requested that  VOC content for the "faux
finishing/glazing" category be assigned on a formula basis
including water.  Another commenter (IV-F-lb)  stated that
architectural coating manufacturers were being treated unfairly
compared to consumer product manufacturers because architectural
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coating manufacturers must subtract water from their formulations
before determining VOC content.
     Response:  The architectural coating rule's requirement to
measure VOC on a less water basis is consistent with other EPA
rules and guidance documents for determining VOC content of
coatings.  This approach relates the mass of VOC emitted to the
volume of VOC and solids in the coating.  The EPA believes that
calculating VOC on a less water basis does not make water-based
coatings less attractive nor does it promote using solventborne
coatings.  It does, however, provide a fair means of comparing
the VOC content of coatings in relation to their solids content,
and thus, their coverage and emissions potential.
     Comment:   One commenter (IV-F-2) stated that coatings need
solvent to float the resins, but solvent is not required for
pigments and extenders.  The commenter expressed concern that
manufacturers may overload coatings with pigments and extenders
to meet the VOC content limits.
     Response:  The EPA does not agree that coating manufacturers
will overload coatings with pigments and extenders simply to meet
VOC content limits.  First,  the addition of pigments and
extenders to the coating will increase the cost of the coating
without adding value and could possibly even degrade the quality
of the coating.   Second,  the addition of pigments and extenders
would reduce the coverage of the paint.   The EPA believes that
manufacturers will not want to risk alienating consumers by
offering them inferior products at higher prices.  Therefore,  the
EPA believes it is unlikely that this situation will occur.
     Comment:   Four commenters (IV-D-28, IV-D-71, IV-D-134,
IV-D-189) raised issues with the validity of Method 24 for
certain coatings and/or requested that the EPA allow alternatives
to the EPA Method 24 to determine compliance with the VOC content
limits.  Three of the commenters (IV-D-28,IV-D-134,  IV-D-189)
requested that the EPA allow alternative methods for
determination of VOC content of coatings containing acetone or
for waterborne coatings.   Two of these commenters requested that
the EPA allow use of formulation data.   The fourth commenter
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 (IV-D-71),  a State regulatory agency, requested approval of two
modifications to Method 24 for use with a traffic marking paint.
     Requests for alternative to Method 24.  Two commenters
 (IV-D-28, IV-D-189) requested that the EPA add an alternative to
Method 24 to test acetone content and that the EPA accept
compliance demonstrations based on theoretical formula
calculations or formula batch card loading information. One
commenter (IV-D-189)  was concerned that a product containing
acetone could erroneously appear out of compliance because a
reliable test method to isolate and subtract acetone as a VOC
does not exist.   The other commenter (IV-D-28) also requested
that the EPA add an alternative to Method 24 to test acid
content.
     Another commenter  (IV-D-134) requested an alternative to
Method 24 for determining VOC content of waterborne coatings in
the rule, because according to the commenter,  it tends to produce
unreliable results, leading to erroneous findings of
non-compliance in some tests.  The commenter cited documentation
of erroneous test results in the aerospace industry that have
been submitted to the EPA previously.
     Request for modification of Method 24 for use on a type of
traffic marking coating.  One commenter (IV-D-71), a State
regulatory agency, received a request from a manufacturer to
modify Method 24, as it would be inappropriate for use with
methacrylate multicomponent traffic marking coatings.  The letter
attached to the comment described the traffic marking coating,
and then requested permission to vary Method 24 in two ways.
First, the commenter claimed that the dispersion solvent required
by Method 24 prevents chemical reactions that would normally
consume much of the coating's VOC.  Therefore, the letter
requested that the solvent be replaced with a procedure whereby a
paper clip is weighed within a metal dish, the coating is added
to the dish, and the paper clip is used to disperse the coating.
Second, according to the commenter, testing the coating at the
specified 3 millimeter thickness hinders VOC consumption and is
uncharacteristic of the coating's actual use.   Therefore, the
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letter requested that the sample size be increased to 3.0 grams

to enable the reaction to take place and reduce the margin for

error.  The letter included the following revision for testing

for the particular product:

     3.7.2.1  Weigh and record the weight of an aluminum foil
     weighing dish and a metal spreading device.  Using a syringe
     as specified in ASTM D2369-81, weigh to 1 mg, by difference,
     a sample of coating into the weighing dish.  For [the
     requester's coating], a suitable size is 3.0 + 0.1 g.  For
     other coatings believed to have a volatile content less than
     40 weight percent, a suitable size is 0.3 ± 0.10 g, but for
     coatings believed to have a volatile content greater than
     40 weight percent, a suitable size is 0.5 ± 0.10 g.

     NOTE:  If the volatile content determined pursuant to
     section 5 is not in the range corresponding to the sample
     size chosen repeat the test with the appropriate sample
     size.  Add the specimen and use the metal spreading device
     to disperse the specimen over the surface of the weighing
     dish.  If the material forms a lump that cannot be
     dispersed,  discard the specimen and prepare a new one.
     Similarly,  prepare a duplicate.  The sample shall stand for
     a minimum of 1 hour,  but no more than 24 hours prior to
     being oven dried at 110 CC ± 5 °C for 1  hour.

     Response:   The proposed rule specified that Method 24 would

be used to determine compliance with the VOC content limits.  In

response to these comments, the EPA has revised the rule to

consolidate and clarify the calculation procedures and methods
for determining VOC content of coatings.  Section 59.406 of the

final rule specifies that  manufacturers or importers may use

either Method 24 results,  formulation data,  or any other

reasonable means to determine the VOC content of a coating for

their own internal purposes.  Section 59.406(b)  also clarifies,
however,  that the EPA may require a manufacturer or importer to

conduct a Method 24 analysis and that Method 24  results will take

precedence if there are inconsistencies between Method 24 results
and any other means of determining VOC content.   This change was

made to clarify that manufacturers or importers do not have to

perform a Method 24 analysis for every coating unless they choose

to do so.   If they rely on formulation data or other means,

however,  they do run the risk that the EPA in enforcement

actions,  who may use Method 24 to confirm the VOC content,  will

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find a coating to be non-compliant,  even though it may appear to
be compliant based on formulation data or other means.  The EPA
believes that regulated entities will have incentive to use
reasonable and accurate methods to determine VOC content without
having to perform Method 24 tests on each batch of every product.
     The EPA has determined that Method 24 should take precedence
in enforcement action if Method 24 results are not consistent
with other means of determining VOC content.  The EPA believes
that use of Method 24 provides consistent, reliable results when
determining the VOC content of primers,  topcoats,  varnishes,
lacquers, air-dried coatings,  air-dried oxidizing coatings, heat-
cured baking systems, multi-component paint systems (water-
reducible and solvent-based),  water-reducible paints
(styrene-butadiene, poly(vinylacetate)-acrylic,  acrylic),  and
solvent-based paints.  In addition,  Method 24 provides a means of
ensuring that the reported VOC content based on formulation data
or other means of determining VOC content is correct.   This
approach is consistent with other coating rules established by
the EPA in the past.
     With regard to the comment that Method 24 is unreliable for
determining the VOC content of waterborne coatings, the EPA
contends that Method 24 is the best currently available
analytical method for determining VOC content in low solvent
content  (high water content or waterborne) coatings.  For
waterborne coatings,  the VOC content is determined indirectly
using methods that determine nonvolatile matter content and water
content.  The VOC content is assumed to be what is unaccounted
for by these two fractions.  The EPA acknowledges that the
inherent imprecision of indirectly determining the VOC content of
such coatings by this method necessitates an adjustment of the
analytical results.  Such adjustments must be based on confidence
limits calculated from the precision statement established for
Method 24.  The precision adjustment procedure is incorporated in
Method 24.  Therefore, the final rule specifies that Method 24 is
to be used for determining the VOC content of coatings subject to
the rule.
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     The EPA acknowledges that Method 24 does not currently
recommend a procedure for measuring the acetone level of a
coating.  When a method for determining the acetone level of a
coating is developed and adopted by ASTM, the EPA will modify
Method 24 to incorporate this method for acetone.
     In addition, §59.406 (c) provides the option for the
Administrator to approve, on a case-by-case basis, alternative
methods of determining the VOC content of coatings if they are
demonstrated to the Administrator's satisfaction to provide
results acceptable for determining compliance with the rule.
Such alternative methods could include procedures for testing for
acetone and acid content, procedures for testing for water
content, and procedures for coatings that are chemically-cured.
     Regarding the modification to Method 24 requested by the
commenter to accommodate the unique chemistry of a traffic
marking coating,  the final rule includes a provision specifying
the use of this modification for traffic marking coatings.
     Comment:   One commenter (IV-D-120)  requested that the EPA
follow South Coast Air Quality Management District (SCAQMD)  and
provide a 10 percent test margin of error to account for errors
in the Method 24 calculation.  As applied,  the commenter noted
that a coating with a VOC content of 400 g/1 could produce a test
result of 430 g/1 and still remain compliant.
     Response:   The EPA has not revised the rule to include
consideration of the variation of Method 24 when determining
compliance as requested by the commenter.  The VOC content limits
in table 1 of the rule are established as limits,  not
approximated limits.  Thus, it would not be appropriate to adopt
the commenter's suggestion to increase the standard by the
variation of the method.  Manufacturers and importers should
consider the variation of the method when labeling their coatings
and assessing compliance with the rule.   A study performed by
SCAQMD  (IV-J-18)  shows that manufacturers typically consider the
variation in determinations of compliance with a rule.
Specifically,  the SCAQMD performed a field study where they
purchased and analyzed over 30 coating samples consisting of
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various coating categories from retail outlets.  The SCAQMD found
all of the analyzed coatings to be in compliance with the
applicable rule limit.  Laboratory tests indicated that the
reported VOC content on the container was generally 5 to
40 percent higher than the VOC content of the coating as tested.
Thus, the EPA believes that the 10 percent allowance requested by
the commenter is unnecessary.
     Comment:   One commenter (IV-D-32) urged the EPA to remove
the exemption for VOC in colorants in determining a coating's VOC
content, because the exemption eliminates any incentive to reduce
VOC emissions from colorants and fails to reward companies that
have invested effort in developing low- and zero-VOC colorants.
Another commenter (IV-D-34) advised the EPA to consider including
colorant in the calculation of VOC content and enforcing the
limits on base colors only, which would increase enforceability.
The commenter noted that some manufacturers have developed low-
and zero-VOC colorant systems,  which are currently more
expensive.  The commenter discussed data that indicate that
including colorants in the VOC calculation could result in a
20 to 300 percent increase in calculated VOC content, depending
on color coating VOC content, and colorant VOC content.
     Response:  The EPA would like to clarify that the proposed
rule as well as the final rule excludes only the colorants added
to tint bases at the paint store or on-site to produce the
desired color.  The final rule specifies in §59.406(a) that the
VOC content of tint bases shall be determined without colorant
that is added after the tint base is manufactured or imported.
If a colorant is included in the tint base as manufactured, it  is
not excluded from the calculation of the VOC content.  Because
the rule only applies to manufacturers and importers, the EPA
believes that the rule does what one commenter  (IV-D-34)
suggested, i.e., include colorants in the calculation of VOC
content for base colors.  The EPA did not revise the rule to
apply the limit to colorants added to tint bases because
colorants are typically added by the retailer at the retail
outlet.  Because these colorants are not within the control of
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the manufacturer or importer this change would have no impact on
the VOC content of paints supplied by the manufacturer or
importer.
2.2.8   Variance Provisions
     Comment:  Nine commenters  (IV-D-28, IV-D-32, IV-D-34,
IV-D-58, IV-D-114, IV-D-120, IV-D-185, IV-F-lg, IV-F-ln)
supported the proposed variance provisions.  Four of these
commenters  (IV-D-28, IV-D-32, IV-D-185, IV-F-ln) supported
variance options for manufacturers to receive the extra
compliance time needed based on economic or technological
justification.  One commenter (IV-D-58) supported the
strengthening of the variance for permanent relief in cases of
economic or technological hardship.  One commenter (V-D-34)
recommended that the EPA adopt more restrictive variance
findings,  and suggested incorporating findings set out in the
California Health & Safety Code, Section 42352  (attached to
comment).   Another commenter (IV-D-114) supported the use of the
variance provisions because manufacturers forced to withdraw from
a market during the period of product reformulation and testing
will face additional costly and uncertain challenges of the
market.
     On the other hand, 14 commenters  (IV-D-16, IV-D-22, IV-D-30,
IV-D-33/IV-F-la, IV-D-96, IV-D-118, IV-D-119, IV-D-120, IV-D-161,
IV-D-163,  IV-F-le, IV-F-li,  IV-F-lm,  IV-F-2), including some
small businesses, did not support the proposed variance
provisions.  One commenter  (IV-D-33/IV-F-la) based its opposition
on the opinion that the rule fails to represent technology-
forcing levels of VOC control and supported a limited variance
provision for manufacturers to comply with a more stringent
second phase.  Two commenters (IV-D-118, IV-D-119)  stated that
granting variances without the appropriate compensation for
adverse impacts on the environment would provide no air quality
benefit and reduce the effectiveness of an already weak proposed
standard.   Another commenter (IV-D-96) maintained that variance
provisions based on simply economic hardship would reduce the
effectiveness of the architectural coating rule.
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     One commenter  (IV-D-16)  stated that the variance procedure
did not present a reasonable option because it would impose such
a heavy administrative burden that business would choose to shut
down rather than use the variance.  Another commenter (IV-F-2)
stated that the variance procedure, and the proposed public
hearing process in particular,  would be very burdensome for a
small business.  Another commenter (IV-D-120)  stated that the
variance requirements as proposed are unduly difficult to
achieve.  Instead, the commenter asserted that the variance
applicant should only need to establish that compliance would
result in economic hardship,  and that the company will make a
good faith effort to come into compliance within a reasonable
time period.
     One commenter  (IV-D-120)  stated that the variance provision
as written is not effective,  in that it requires significant
expense with little or no guarantee of approval.  The commenter
recommended an extended compliance period as a more effective
option to alleviate the heavy burden upon small businesses.
     One commenter  (IV-D-30)  opposed using a variance because it
would create an uneven playing field based upon the resources of
the company seeking the variance, implying that the variance
provides no advantage to small businesses.  Another commenter
(IV-F-li) stated that applying for a variance would be a very
difficult process for most small companies because they do not
have a legal staff or a specialist staff for such a process.  In
addition, according to the commenter, a variance could commit the
company to a program to achieve compliance in an area where they
do not know how to do it and if they knew how to do it,  they
would not need a variance.  The commenter maintained that small
businesses will avoid applying for a variance.
     One commenter  (IV-F-lm)  estimated a total of 4,770 products
will need to be reformulated (8.8 products per company multiplied
by 411 companies plus the amount estimated for the
1990 Architectural and Industrial Maintenance Coatings survey
population).  The commenter asserted that a variance would not
provide relief because of the large number of products that will
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need to be reformulated in a short period of time.  The commenter
asked how many people the EPA has on staff to handle variance
applications and if they will be able to process 2,000 variance
applications between now and the compliance date.  Two other
industry commenters (IV-F-le, IV-F-2) also expressed concern
about how the EPA would handle a large volume of product
variances.
     One commenter  (IV-D-161) opposed the proposed use of a
variance in the rule for several reasons:  the lack of required
progress reports; the lack of provisions requiring compliance
with the schedule associated with the variance application; and
the lack of any provision to require exceedance fees for excess
emissions.   The commenter proposed that the exceedance fee
concept be used in place of the variance proposal.
     One commenter  (IV-D-1G3) supported the use of market-based
mechanisms to provide flexibility to manufacturers that are
unable to reformulate their coatings before the April 1, 1997
compliance date.  The commenter claimed that the use of
exceedance fees and purchase of emission reduction credits (ERC)
are options that the EPA should include in the rule, rather than
a variance.
     Several industry representatives (IV-F-2)  asked what type of
testimony would be required at the compliance variance hearing
and how a manufacturer could demonstrate public benefit.  One
industry representative (IV-F-2)  asked whether there would be a
fee for the variance,  how the location of the hearing would be
determined, and whether the variance would be granted on a
company basis or on a coating basis.  Another commenter (IV-F-2)
asked whether both the variance provision and exceedance fee
option would be included in the rule and, if so, why.
     Response:   The EPA has concluded that the proposed variance
procedure would be unworkable and ineffective to accomplish the
goals intended by the EPA.   The proposed variance provision would
have allowed manufacturers and importers of architectural
coatings to submit a written application to the Administrator
requesting a variance if,  for reasons beyond their reasonable
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control, they could not comply with the requirements of the
proposed rule.  In particular, the proposed variance provision
allowed additional compliance time and was developed especially
for small businesses.  In the proposal preamble (61 FR 32743),
the EPA requested comments from small businesses on their
expected use of the proposed variance provision, as well as other
proposed provisions.
     Based upon the comments received, it is evident that the
variance provision may not provide the intended compliance
flexibility, especially for small businesses.   Even though the
proposed variance requirements were intended to be the minimum
necessary to approve a coating variance,  the EPA recognizes that
the requirements may be burdensome, particularly for small
businesses with limited or no regulatory compliance staff.  The
EPA agrees that it is also possible that the variance provision
could create an uneven playing field because small businesses
would not have the resources needed to pursue this option,
thereby putting smaller businesses at a disadvantage compared to
larger businesses.  Also,  as one commenter pointed out, even with
the investment of time and money, the EPA cannot guarantee
approval of the variance application.  In addition, review and
approval of several thousand variance applications would place a
heavy burden on the EPA's staff and the potential delays in
processing variances would be disadvantageous to the regulated
entities.  Therefore, the EPA has decided not to include the
variance provision in the final rule.
     Nevertheless, the EPA believes that there is a need for
additional compliance flexibility and, therefore,  has
incorporated other provisions, more suitable for this industry
than variances, into the final rule.  The EPA has included a
tonnage exemption that phases down over time and an exceedance
fee option, in part, to help provide the flexibility that the EPA
wanted to implement through the proposed variance procedure.  The
EPA reasons that these provisions provide even greater
flexibility for regulated entities than the variance provision
but are less burdensome.  Both of these compliance options are
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automatically available to all regulated entities, and do not
involve complex application and approval processes.
     The tonnage exemption will allow each regulated entity to
exempt from the VOC content limit a certain amount of coatings
each year  (the actual amount exempted depends on the VOC content
of the coating(s)).   Therefore, the EPA believes that this
exemption is appropriate for low-volume coatings that would be
difficult or not cost-effective to reformulate in the near
future.  The tonnage exemption will thus reduce the need for any
sort of variance procedure.
       The exceedance fee option is designed, in part, to give
manufacturers and importers additional time to develop lower-VOC
technologies, while at the same time providing an economic
incentive to reduce the VOC content of coatings.  This option
allows regulated entities to continue to sell coatings that
exceed the VOC content limits, provided that they pay an
exceedance fee.   The amount of the fee is based on the volume of
the coating sold, the VOC content of the coating, the VOC content
limit applicable to the coating,  and the fee rate.  The
exceedance fee provision will reduce the need for any sort of
variance procedure.
     In addition to these provisions,  the compliance time, which
concerned some commenters,  has been extended to 12 months and the
EPA added several new specialty coatings categories  (zone
markings,  concrete curing and sealing,  conversion varnishes,
etc.) to the final rule.  The EPA believes that the lengthening
of the compliance period will reduce the need for regulated
entities to have some sort of variance from the rule.  Finally,
the EPA notes that the elimination of the variance procedure will
help to eliminate erosion of the air quality benefits of the rule
that might have occurred under the proposal.   The tonnage
exemption and exceedance fee mechanism are more narrowly targeted
to provide flexibility where needed rather than the broader
exclusions that might have occurred under the variance process.
     The purchase and use of emission reduction credits
recommended by one commenter as a compliance option is not
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allowed in the final rule.  As stated in section 2.2.4.1 of this
document, several alternative market-based approaches were
considered and rejected as inappropriate for this industry.
     Need for Long-term. Universal Variance Procedure.
     Comment:   Seven commenters (IV-D-28,  IV-D-122,  IV-D-185,
IV-D-189, IV-F-lg, IV-F-lm, IV-Fo, IV-Fp.)  suggested an amendment
to the variance provision that would provide a procedure for
addressing circumstances where new products that do not fit
within a specialized category are developed after publication of
the rule.  According to one commenter (IV-D-28), the changing
nature of the industry  (e.g., materials, new processing
structures)  justifies the use of a more permanent modification
procedure, whereby a company could petition the EPA, which would,
based on the technical merit, provide a public hearing within 60
to 90 days and grant/reject a proposed modification to the rule.
In some of these circumstances, according to another commenter
(IV-D-122),  a compliance date and increments of progress cannot
be specified on the basis of legitimate unique technological and
economic feasibility considerations.  The amendment proposed by
the commenter would establish a time not to exceed 5 years after
which the EPA would review the variance to ensure that
circumstances have not changed to allow for the specification of
a compliance date and increments of progress.  According to the
commenter, this would allow manufacturers to develop and
commercialize innovative coating technologies without requiring a
complete rule amendment.  The industry's major trade association
(IV-D-189) also made the same suggestion,  primarily to protect
manufacturers who operate mainly in unique or niche markets and
whose access to newer technology is limited.  They suggested that
the variance procedure be easy to apply, balanced, and targeted.
Another commenter  (IV-F-lg) also maintained that there is a need
for a variance procedure so that companies can continue to
develop and market unique products.
     Two commenters  (IV-D-185, IV-Fo) stated that it would be
inappropriate to assign default VOC content limits to these
highly specialized coatings and innovative technologies and that
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the indiscriminate application of default limits could stifle
such innovation and leave future consumer needs unmet.  The
commenters also requested that the EPA permit manufacturers of
new products to apply for a long-term variance that would allow
the new product to be marketed without specifying a compliance
date.   The commenter suggested that the variance should be
available to any manufacturer, regardless of size, and it could
be reviewed by the EPA at specified intervals, not to exceed
5 years, in order to determine whether changes in circumstances
or technology permit application of a particular VOC content
limit and compliance date.
     According to another commenter (IV-F-Olp), a permanent
variance provision would provide the EPA with the flexibility to
decide on a case-by-case basis whether a product should be
allowed to stay on the market in its current formulation or be
brought to the market even if it does not meet the standard.
     Response:   For the reasons described in the response above,
the EPA has determined that variance provisions are inappropriate
for the final rule.   As discussed above,  the EPA has included
alternative compliance mechanisms that it believes will better
target the necessary flexibility without providing potentially
unlimited exemptions from the VOC standards in the rule.
     The EPA notes that if a regulated entity in fact develops a
truly new type of coating that does not fall within any of the
rule categories,  the regulated entity may contact the EPA and
petition the EPA to revise the rule to include such new category.
     Comment:   One commenter  (IV-D-22)  was concerned that the
proposed rule included inappropriate loopholes in the form of
variances and possible exceedance fees.
     Response:   The EPA agrees that the variance procedure had
the potential to result in abuse and erosion of the VOC
reductions from the rule.   For this and other reasons, the
variance provisions have not been included in the final rule.
Contrary to the commenter's statement,  the EPA does not consider
the exceedance fee to be a loophole,  but a rather necessary
compliance alternative for some companies.  The EPA's rationale
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for including these provisions is included in the section on
"Exceedance Fee," section 2.4 of this document.
2.2.9   Clarifications
     Comment:  One commenter  (IV-D-162) noted inconsistencies
between the VOC content limits for coatings in the architectural
coating rule and VOC content limits for the marine coatings in
the NESHAP and CTG for shipbuilding and ship repair  (surface
coating operations).  The commenter suggested that the acceptance
of the shipbuilding VOC content limits suggests that lower VOC
technology to protect structures in severe service environments
is available for several categories of architectural coatings.
The commenter compared the VOC content limits set out in both
proposed regulations for categories in the following table:
                                      Architectural
                                         Coating     Shipbuilding
           Coating category            levels (g/1)   levels  (g/1)
General use/Industrial Maintenance         450           340
Antifoulant                                400           400
High temperature                           650           500
Inorganic/organic zinc                     500         340/360
Nuclear                                    420           420
Pretreatment wash primer                   780           780
Repair & maintenance thermoplastic         650           550
Weld-through preconstruction primer        500           650
     The commenter concluded that other industry segments, such
as chemical processing, petroleum refining, bridges and highways,
etc., which use architectural and industrial maintenance coatings
should also be capable of eventually adopting similar, more
advanced materials such as those being utilized by the shipyards.
       Response:  The VOC content limits established for
Shipbuilding and Ship Repair  (Surface Coating) Operations were
based on the VOC content of coatings used  in that industry and

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achievable for that source category.  Although lower VOC
technology may be available for some shipbuilding coatings as the
limits in the above table seem to indicate, the architectural
coating rule is broader and covers many more manufacturers and
types of coatings.  In addition, architectural coatings are
applied on-site in a field environment under varying conditions,
whereas shipbuilding coatings are applied at surface coating
operations at shipyards under more controlled conditions.  For
example, industrial maintenance coatings are used in industrial,
commercial or institutional settings that include extreme
environmental conditions such as immersion in water, wastewater,
or chemical solutions, or chronic exposure of interior surfaces
to moisture condensation; acute or chronic exposure to corrosive,
caustic, or acidic agents, or to chemicals, chemical fumes, or
chemical mixtures or solutions; repeated heavy abrasion,  etc.
Considering the timing for implementing requirements (i.e.,
1 year), the number of manufacturers, and the variety of products
nationwide,  the EPA set the VOC content limit for industrial
maintenance coatings at 450 g/1.  Based on comments received, the
VOC content limit in the final rule for the antifouling and
nuclear categories was raised to 450 g/1, consistent with
industrial maintenance coatings.  Also, the metallic pigmented
coating limit (500 g/1) in the architectural coating rule is not
limited to zinc as it is in the shipbuilding and repair rule
(under weld-through preconstruction primer).   In comparing the
categories in the table above, the EPA agrees that lower VOC
technology may be available for some coatings under some
circumstances.  However, the architectural coating VOC content
limits are based on VOC content levels designed to be achievable
nationwide under widely varying conditions and performance
requirements, whereas the shipbuilding coating requirements are
limited to a specific type of application and use and,  therefore,
can be reflective of a more limited set of performance
requirements.
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     Comment:   Several manufacturers (IV-F-2)  asked about the
number of States getting State implementation plan "credit" for
the rule and asked for clarification about the meaning of the
term "credit."  This industry representative (IV-F-2)  asked
whether States were getting State Implementation Plan credits for
the consumer products regulation and whether the States were
happy with the level of stringency of those standards.  Another
industry representative (IV-F-2)  asked if a CTG would provide the
same credit to the States as would a national rule.
     Response:  The term "credit" referred to by the commenters
is related to State implementation plans (SIPs)  for reducing
ozone precursor emissions.   States may take "credit" in their
SIPs for the VOC emission reduction estimated to result from the
architectural  coating rule  in the geographic area.  Based upon
guidance provided by the EPA, as of July 1998,  fourteen State and
local air pollution control agencies have taken credit in their
SIPs for a 20  percent reduction in VOC emissions from the
architectural  coating rule.  If the rule fails to result in a
20 percent reduction on a timely basis,  State and local agencies
will need to make up the "shortfall" from other VOC source
categories.  Therefore, some States have submitted comments
requesting that the EPA pursue the full  extent of emission
reduction benefits achievable from the architectural coating
rule.  Some States have complained that  the VOC content limits in
the proposed rule are not as stringent as some State VOC content
limits.
     The architectural coating rule is only one of several for
which States are able to claim emission  reduction credits in
their SIPs.  The consumer products rule  is another national rule
being issued under section 183 (e) of the Act,  as is the
automobile refinish coating rule.  States may claim credits
associated with those rules as well.  To review comments from
States on the stringency of the consumer products rule and
documents supporting the final rule, please refer to the consumer
products rule docket  (A-95-40).
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     A CTG would also provide VOC emission reductions.  However,
CTG limits could differ from those of a national rule and the
credits available to States would differ accordingly.  The EPA
notes that the determination whether to do a rule versus a CTG is
dependent, in part, upon which method will best obtain reductions
and that other factors are thus relevant.
2.3  IMPACTS
2.3.1   Environmental and Energy
     2.3.1.1   HAP Implications
     Comment:  Three commenters (IV-D-02, IV-D-178, IV-F-lk)
stated that the EPA should consider the hazardous air pollutant
(HAP) implications of this rule.  Two commenters (IV-D-178,
IV-F-lk)  claimed that HAPs are often used when formulating lower
VOC coatings because they have greater solvency.  One of these
commenters (IV-D-178)  expressed concern that the increased use of
HAPs in coating formulations would result in increased HAP
emissions.  Three commenters (IV-D-02, IV-F-lk, IV-F-l(l))
expressed concern if companies that reformulate using HAPs.  The
commenters were concerned that alternative low-VOC formulations
encouraged by the EPA that contain HAPs could later become
regulated when the NESHAP standards are developed to control
HAPs.  According to two of these commenters (IV-D-02, IV-F-l(l))
any such HAP regulations could then impose unrecoverea
reformulation investments and lost sales on industry.
     Response:   The EPA disagrees with the commenter's assertion
that to meet the proposed VOC content limits,  manufacturers would
necessarily have to use more HAPs in their lower VOC
formulations.  Data on speciated VOC content from the VOC
Emissions Inventory Survey show no pattern of higher HAP
concentrations in lower VOC formulations.  Also, an article
entitled "Clean  Air Act Amendments" which appeared in the
October 1995 edition of the Painting and Coatings Industry
Magazine.  indicates that current HAP solvents such as ethylene
glycol ethers or ethylene glycol ether acetates will be replaced
with non-HAP solvents  such as propylene glycol ethers or
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propylene glycol ether acetates in response to Clean Air Act
requirements.  In addition,  information obtained from a
December 1995 report entitled "Improvement  of  Speciation Profiles
for Architectural and Industrial Coating Operations" prepared by
Dr. Albert C. Censullo for the California Air Resources Board
(CARE)  indicates that a majority of current water-based
formulations (flats and nonflats)  contain non-HAP solvents.  It
appears from this information that the use of non-HAP solvents,
such as Texanol and propylene glycol in water-based formulations
is prevalent today and should continue in the future.  The only
NESHAP that might impact architectural coatings is the
Miscellaneous Organic NESHAP, commonly referred to as the MON.
The MON is currently under development and will limit HAP
emissions from the paint and coating manufacturing processes.
Naturally, the EPA does not condone the expanded use of HAPs in
architectural coatings and does not believe that companies would
choose to expose the public to additional HAP emissions when
there are other available and reasonable reformulation options.
     2.3.1.2   Emission Reduction Estimate
     Comment:  Four commenters  (IV-D-118, IV-D-126, IV-D-191,
IV-D-22/IV-F-la) stated that the EPA's emission reduction
calculation on a solids basis overestimates the emission
reduction actually achieved.  One commenter (IV-D-118) stated
that the solids approach is inconsistent with calculation methods
commonly used by States with similar rules.  Another commenter
(IV-D-126) complained that the solids approach is inconsistent
with the volume approach agreed upon by the regulatory
negotiation participants.  A third commenter  (IV-D-22/IV-F-la)
explained that calculating emission reductions on a solids basis
assumes coatings are reformulated by replacing photochemically
reactive solvent with coating solids, resulting in a greater
coverage per can of coating.  According to the commenter,
participants in the regulatory negotiations agreed that the
calculation of emission reductions should be on a volume basis,
which is a more conservative estimate.  This commenter also
disagreed with the EPA's assumption that traffic coatings
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manufactured by State and local governments increase by three-
fold the total volume of such coatings to be figured into an
emission reduction calculation.  For these two reasons, the
commenter contended that the EPA's 20 percent emission reduction
claim is an inflated estimate of the proposal's effectiveness and
calculated the emission reductions attributable to the proposed
architectural coating rule to be no more than 12 percent.
     Response:   The EPA disagrees that its method of calculating
the emissions reductions is inaccurate.  The amount of coating
required for a specific architectural coating job ultimately
depends on the solids content of the coating.  The constant
solids approach for determining VOC emissions is based on
accepted methods of calculation and is consistent with past
practice and methods used by industry, the California Air
Resources Board (CARB),  and the South Coast Air Quality
Management District (SCAQMD).   Thus, the EPA contends that this
approach makes the most sense for determining emissions
reductions and is the approach used by the EPA for all of its
coating rules.
     In calculating the emission reductions for traffic coatings,
the EPA used a factor of 2.6 at the time of proposal to account
for the traffic coatings not included in the industry survey.
The non-reported volume included both coatings manufactured by
State and local governments and those manufactured by
manufacturers that did not respond to the survey.  In the EPA's
final emission reduction analysis, a factor of 2.5 was used based
on information provided by NPCA in June 1997 that indicated that
the market for traffic markings has been fairly constant from
1990 to 1995 and that the 1995 sales volume reported for traffic
markings in the Bureau of Census report is close to the actual
sales (IV-E-11).
     Comment:   Five commenters on seven occasions (IV-D-177,
IV-D-184,  IV-D-212/IV-F-lc, IV-D-214b, IV-D-214C, IV-F-lj)
asserted that regulating the VOC content of architectural
coatings would result in increased VOC emissions rather than the
emission reductions claimed by the EPA.  Three commenters
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(IV-D-177, IV-D-189,  IV-D-212)  expressed concern that coating
reformulation could result in the manufacture of inferior
performing products.   Another commenter (IV-F-lj)  contended that
reformulation would cause unspecified problems with the coatings.
These commenters contended that with low-VOC coatings consumers
would use more undercoats and apply more topcoats (IV-D-214c);
repaint more frequently (IV-D-177, IV-D-189, IV-D-212,
IV-D-214c);  thin illegally (IV-D-189, IV-D-214c, IV-F-lj); be
forced to use a stripper and re-do the coating  (IV-F-lj); and do
more touch-up painting (IV-D-212).  The commenters asserted that
these activities will result in increased aggregate emissions.
One commenter (IV-D-214c)  claimed that 19 years of regulating the
VOC content  of architectural coatings in California has suggested
that these counterproductive effects occur.  One commenter
(IV-D-177)claimed that although the VOC content of paint in
California was reduced in the 1980s, costs escalated, VOC output
regained nearly constant on a per population basis,  raw material
consumption  increased,  and the population dramatically increased
causing much more use and more need for VOC reduction.
     One commenter on two occasions  (IV-D-214b, IV-D-214c) stated
that the proposal preamble purported to address the environmental
question of  the "increase  or  decrease in air pollution ...  that
would result from implementing the proposed standards."
According tc the commenter, small and regional manufacturers have
submitted substantial evidence of activities that would increase
air pollution.  The commenter claimed that possible increases in
VOC emissions or the reactivity of emission due to reformulation
required by stringent emissions standards were recognized and
delineated in Dunn-Edwards Corp. v. Bay Area AOMD. 9 Cal.App.4th
644, 657-058  (1992).   The commenter  (IV-D-214b, IV-D-214c)
referred to the court decision in Portland Cement Assn. v.
Ruckelshaus,  486 F.2d at 385, for the proposition that the EPA is
required tc  take into account "counter-productive  environmental
effects" of  the  proposed standard.  Also,  in Corrosion Proof
Fittings v.  EPA, 947 F.2d 1201, 1221  (5th Cir. 1991), the
commenter claimed that the court held that the EPA could not
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validly ban certain products "when  it  refuses  to  evaluate  the
harm that will result from the increased use of substitute
products."
     The commenter (IV-D-214C, IV-D-214b)  claimed that the EPA
has ignored the fact that the architectural coatings rule might
actually increase air pollution by concluding simply that the
rule would reduce VOC emissions and assuming that no counter-
productive effects would occur.
     Response:  The EPA disagrees with the conclusions of the
commenters on this issue.  The commenters are implying that the
proposed architectural coating VOC rule will result in higher,
not lower,  ozone concentrations because more people will use more
coating to coat the same amount of surface and more reactive
solvents will be used in the compliant products.   The commenters
evidently believe that no controls on VOC emissions from coatings
are a more effective means to reduce VOC emissions.
     First, the commenters provided no evidence or documentation
to support their claims of increased thinning, more priming, more
topcoating, and more frequent painting.  The evidence available
to the EPA indicates that the commenters'  assertions are
incorrect.   Specifically, the SCAQKD conducted and reported on
studies that addressed the issue of thinning paints in the field.
Field investigations of actual painting sites in the South Coast
District and other areas of California with rules that limit the
VOC content of coatings indicate that thinning of specialty
coatings exists but rarely beyond the manufacturer's recommended
levels  (IV-J-18).  Where thinning occurred, therefore, paints
were rarely thinned to levels exceeding applicable VOC content
limits.  Thus, widespread thinning does not occur often; when it
does occur, it is unlikely to occur at a level that would lead to
a substantial emissions increase when compared with emissions
from higher VOC content coatings.
     The EPA also has no reason to concur with the commenter's
contention that lower VOC content coatings will result in the use
of more undercoats.  The SCAQMD evaluated the assertion that the
use of substitutes or water-based topcoats would result in
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increased VOC emissions by comparing the VOC content of
substitute coating systems to traditional coating systems and
determined that the use of substitute coatings will actually
result in significantly lower emissions than using traditional
coating systems (IV-J-18).  Their study concluded that the low
VOC substitutes did not require additional undercoats and that
the lower VOC contents of substitute coatings result in lower
emissions.
     The commenter's claim that users would apply more topcoats
is based on their assumption that compliant coatings have a
higher solids content that is applied in a thicker coat.   The
commenter thus asserts that compliant coatings cover less area
compared to a high VOC content coating.  As a result, the
commenter believes a higher volume of compliant coating is needed
to get the same coverage, negating any VOC emissions reductions.
The EPA expects that low VOC content coatings will have the same
or better coverage area as high VOC coatings so it is not
expected that a larger quantity of coating will be necessary to
cover the same area.
     In addition,  contrary to the commenters' claim, the EPA did
assess available information about the possibility that a low-VOC
coating system might paradoxically result in greater VOC
emissions because the system might require additional coatings.
The EPA has evaluated the VOC emissions from four low-VOC
industrial maintenance coating systems suitable for coating steel
substrates compared to the VOC emissions from a conventional
coating system  (IV-B-4).   All five coating systems were
formulated to be used for the same purposes and all of the
coating systems meet the VOC content limit for industrial
maintenance coatings in the final rule  (i.e. 450 g/1).  The
conventional coating system consisted of a solventborne alkyd
primer containing 394 grams per liter VOC and a solventborne
alkyd enamel topcoat containing 424 grams per liter VOC.  The
low-VOC alternate systems were:
     •    A three-coat system consisting of a solventborne,
          moisture-cured polyurethane primer  (VOC content of

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          360 grams per liter),  a solventborne, zinc-rich,
          moisture-cured polyurethane middle coat (VOC content of
          360 grams per liter),  and a solventborne polyurethane
          topcoat (VOC content of 372 grams per liter) ;

     •    A two-coat system consisting of a solventborne alkyd
          primer  (VOC content of 394 grams per liter) and a
          waterborne acrylic topcoat (VOC content of 190 grams
          per liter);

     •    A single coat system consisting of a two-component
          polysiloxane epoxy topcoat (VOC content of 84  grams per
          liter); and

     •    A two-coat system consisting of a water-reducible alkyd
          primer  (VOC content of 237 grams per liter) and a
          waterborne acrylic topcoat (VOC content of 284 grams
          per liter).

     The comparison of these coatings with varying VOC content
indicates that lower VOC content typically results in lower
overall VOC emissions.  The average VOC emissions of the two-coat
and single-coat alternate systems were lower than those  of the
conventional coating system.  In fact,  the VOC emissions from the
two-component polysiloxane epoxy topcoat system were
approximately 25 percent of the emissions from the conventional
coating system.  However, the three - component,  solventborne
polyurethane coating system had higher VOC emissions than the
conventional coating system.  In this case, the information in
the study indicates that the number of coatings required and the
additional film thickness played a major role in producing such
high emissions.  Thus, a low VOC content for a coating does not
necessarily mean lower emissions for the system as applied if the
system requires additional layers.  As a result, the study
indicates that users would not need to apply more low-VOC
topcoats to achieve the same results.
     This study also calculated the transfer efficiency for each
of the coating systems using the amount of coating used  and the
total amount of solids deposited on the test surface.  The
reported transfer efficiency for the conventional coatings was
between 30 and 35 percent.   The study reported that the  transfer
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efficiency was best for the three-coat system (greater than
35 percent),  comparable for the two-coat solvent borne alkyd
primer/waterborne acrylic topcoat system and the conventional
system (30 to 35 percent), and poorest for the single coat system
(less than 15 percent).   Thus, there are low-VOC and higher
solids coatings available that are able to be applied with
relatively good transfer efficiency.
     The commenter also contended that using compliant coatings
will require more topcoats because of the purportedly poorer
performance of lower VOC coatings.  The Ventura County Air
Pollution Control District (VCAPCD)  conducted performance tests
on a range of low-VOC content coatings from 1991 to 1992  (Cowan,
1992, IV-J-4).  The VCAPCD tested 49 different coatings
representing compliant clear wood finishes, quick-dry enamels,
quick-dry primers, and industrial maintenance coatings using both
brush and spray applications.  The performance test evaluated
ease of application, appearance,  adhesion, hardness of topcoat,
ability to cover extreme surface conditions  (rusty metal, charred
wood), and appearance after six months.  The VCAPCD found that
these coatings performed well and that additional topcoats were
not required.  The EPA notes that the commenter itself produces a
full line of products that meet more stringent VOC content limits
in California, that the commenter's products were among those
tested in the VCAPCD study, and that the commenters'  products  are
reputed to be of high quality and performance.
     With regard to more touch-up and repair work, the EPA
expects that low VOC coatings will reduce, not increase the
amount of touch-up and repair work resulting from surface
contamination.  By the commenter's own admission  (IV-D-212),
these coatings dry more rapidly than high VOC content coatings.
As a result of their more rapid drying, the opportunity for
surface contamination will be decreased.
     Although the commenter asserted that lower VOC content
coatings are less durable than higher VOC coatings, information
available to the EPA indicates that when applied correctly,
compliant coatings are as durable, or in some cases,  more durable
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than traditional coatings.  The durability of a coating is
dependent on many factors, including:  surface preparation,
application technique, substrate coated,  and exposure conditions.
The EPA has reviewed numerous performance studies comparing low-
VOC content coatings with conventional coatings (IV-B-4).  The
results of these studies indicate that although no one low-VOC
content coating may outperform or perform equivalently to the
conventional coatings on all substrates under all circumstances,
at least one or more low-VOC content coatings do outperform or
perform equivalently to the conventional coatings on any given
substrate under any given circumstance.  Thus, for optimum
performance when using low-VOC content coatings, the user must
properly select the low-VOC content coating based on the
substrate, the desired performance requirements, and the expected
en\Tironmental conditions to which the coating will be exposed.
     Second, the commenter's contention that more reactive
solvents will be used instead of traditional less reactive
solvents in the compliant products is misleading.   This is
because (1) the rule does not require such major shifts in
existing resin and solvent technology and (2) the benefit from
the total mass of VOC emissions reduced is expected to outweigh
any differences in relative reactivities of different chemicals.
While different chemical species may have different relative
reactivities, both the amount of VOC emitted and the reactivity
of the VOC  (which is dependent on ambient conditions that vary at
different times and places),  affect the amount of ozone formed.
Chemical species with lower reactivities than other chemicals car.
still be significant ozone producers if they occur at high
concentrations and under favorable conditions (Docket A-94-65,
Item IV-J-ll).
     Chemicals in solventborne coatings contain VOC which are
reactive  (i.e., under most conditions, they have higher
reactivity than ethane,  which is the EPA's yardstick for
determining whether a compound should be declared "negligibly
reactive"  and,  thus,  not  considered a VOC  for regulatory
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purposes).   The most common solvents used in house paints and
other "do-it-yourself" paints are petroleum hydrocarbon solvents,
such as "mineral  spirits" and VM&P naphtha  (which contain large
amounts of alkanes), hexane,  etc.  The most common solvents used
in coatings typically applied by professional contractors,  such
as industrial maintenance and traffic marking coatings, are
toluene and xylene.   Toluene and xylene rank relatively high on a
reactivity scale that measures the potential to form ozone during
the first solar day after emission under certain conditions  (see
Carter, 19S4; Docket A-94-65 Item IV-J-5)).  Thus, it is
misleading to represent traditional solventborne coatings as
being of low reactivity or as something that can be ignored when
considering the need to control VOC to reduce ozone levels.
     Furthermore, the EPA believes that the commenter is not
considering the uncertainties associated with relative reactivity
scales and the ability to use these scales at this time to make
or the current state of knowledge about atmospheric chemistry of
organic compounds.   Dr. William Carter, University of Riverside,
Center for Environmental Research and Technology, College of
Engineering, who has established several different reactivity
scales, cautions the use cf these scales due to the uncertainties
involved. For example,  Dr. Carter stated that:
     Deriving such numbers is not a straightforward matter and
     there are a number of uncertainties involved.  One source of
     uncertainty in ozone reactivity scales comes from the fact
     that the ozone impacts of VOC depend on the environment
     where the VOC is emitted.  A second source of uncertainty is
     variability in the chemical composition cf the VOC source
     being considered.   Complex mixtures such as "mineral
     spirits' may be more difficult to characterize and may vary
     from manufacturer to manufacturer though in principal the
     composition of a given lot can be determined and reasonably
     assumed to be constant regardless of how the product is
     used.  A third source of uncertainty comes from the
     complexity and uncertainties in the atmospheric processes by
     which emitted VOC react to form ozone  (Carter, 1995)
      (IV-J-18).
     According to Dr. Carter, reliable reactivity numbers do not
currently exist from which accurate air quality policy can be
derived based on reactivity and not total VOC emissions.  Ketones

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are the most important class of consumer emissions for which
there are no environmental chamber reactivity data suitable for
evaluating reactivity predictions.  Also, he finds no
experimental reactivity data for glycols or alcohols suitable for
mechanism evaluation  (Carter,  1995)  (IV-J-18).
     Another factor to be considered is an accurate speciation
profile of water-based and solvent-based coatings.  Dr. Albert C.
Censullo, Professor of Chemistry,  California Polytechnic State
University, San Luis Obispo, conducted a comprehensive assessment
of species profiles for a number of sources within the general
categories of industrial and architectural coatings operations
(Censullo, 1995) (IV-J-7).   As part of the Censullo study, 52
water-based coating samples were analyzed and species profiles
were determined by using an average of at least two analyses.
The four most common solvents identified in water-based coatings
were Texanol (found in 37 out of 52),  propylene glycol  (found in
31 out of 52),  diethylene glycol butyl ether (found in 23 out of
52;,  and ethylene glycol (found in 14  out of 52),  all of which
were identified by Dr. Carter as needing further reactivity
assessment.
     Additionally,  from the Censullo study, emission profiles
were obtained for 54 solvent-based coating samples.  The results
were significantly more complex as compared to the species
profiles for the water-based samples,  primarily due to the
various petroleum fractions used in solvent-based coatings.  Some
of the species profiles resulted in several hundred components
from one sample.  Dr. Carter has compiled reactivity data on
several of the species identified, but has also indicated the
need to further assess the reactivity of MEK, isopropyl alcohol,
other alcohols, and esters found in solvent-based coatings.
     In the absence of actual reactivity numbers for the
compounds in "traditional"  formulations and compliant, low-VOC
content coatings, emissions must be calculated in the standard
manner of total VOC per unit of coating applied.  Based on the
current state of knowledge regarding VOC reactivity,  there is
nothing to suggest  that the architectural coating VOC rule will
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result in adverse air quality impacts due to increased reactivity
of solvents used to comply with the rule.
     Finally, because of the flexibility of tonnage exemptions
and exceedance fees, the EPA does not expect the architectural
coating rule to result in the substantial banning of any
products.  The maximum amount of coating estimated to be
withdrawn from the market due to the rule is approximately
700,000  liters of architectural coating products, accounting for
less than 0.03 percent of industry product volume.
     Comment:  One commenter (IV-D-214c) claimed that the EPA had
not demonstrated that the mineral spirits in solvent-based
coatings were sufficiently reactive to contribute to ozone
nonattainment or that the glycol compounds in waterborne coatings
were sufficiently volatile to contribute to ozone nonattainment.
     Response:  In the 1977 policy statement "Recommended Policy
on Control of Volatile Organic Compounds"  (42 FR 35314,
July 8, 1977), the EPA recognized a class of organic compounds
that has been determined to have negligible photochemical
reactivity and is not required to be controlled under SIPs.
Ethane was one of the four compounds on the negligibly reactive
list in the  1977 policy statement.  Over the years, several other
compounds have been recognized as being negligibly reactive and
have been added to the list.  This list of negligibly reactive
compounds was incorporated into the EPA's definition of volatile
organic compounds that appears in 40 CFR 51.100 (s) .  This VOC
definition in part 51 of chapter I of title 40 of the Code of
Federal Regulations does not include mineral spirits on the list
of compounds considered to be exempt.  Therefore, by definition,
mineral spirits are considered to be VOCs and to contribute to
ozone  formation.  Periodically, compounds are excluded from the
VOC definition after petitioners satisfactorily demonstrate that
the compound has less propensity to'contribute to ozone formation
than ethane.  For example, acetone was excluded from the list on
June 15, 1995.
     Although glycol compounds are relatively nonvolatile and may
not be immediately emitted into the air, the EPA has conducted
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studies that indicate that glycol will be emitted gradually over
time (see Docket A-94-65,  Items IV-J-12 and I-J-13).
     Finally,  because of the flexibility of the tonnage exemption
and exceedance fee,  the EPA does not expect the architectural
coating rule to result in the substantial banning of  any
products.  The maximum amount of coating estimated to be
withdrawn from the market due to the rule is approximately
700,000 liters of architectural coating products, accounting for
less than 0.03 percent of industry product volume.
     Comment:   One commenter (IV-D-128) provided a rough-cut
analysis of the impact of the rule on his company.  The current
weighted average (first eight months of 1996)  VOC content for
products manufactured by the company with a proposed  VOC content
limit of 3.75  pounds per gallon is 2.118 pounds per gallon.
Ignoring the question of product quality and practicality, full
compliance with the proposed rule would reduce the average VOC
content of the company's products to 2.091 pounds per gallon, a
reduction of 1 percent or approximately 3 tons per year.
Therefore, the commenter contended that any increase  in painting
frequency or required film thickness resulting from using the
compliant coatings would more than offset the VOC emission
reductions from reformulating the non-compliant coatings.
     Response:   The amount of VOC reduced from any given
manufacturer's product line depends on the sales volume and the
difference between the VOC content of the products and the VOC
content limit  applicable to the product.  Naturally,  1 gallon of
a product that is very close to the VOC content limit will
contribute less to overall VOC reduction than one gallon of paint
that is far from the VOC content limit.  However, even products
that are close to the VOC content limit can contribute
significantly  to the overall emission reduction if they are sold
in large quantities.
     As stated in a previous response, the EPA contends that
compliant coatings will not result in more frequent painting or
reduced coverage because of thicker films.  The EPA believes that
the available  evidence suggests that lower VOC products have
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acceptable durability and performance characteristics.  The EPA
believes that VOC content reductions will not cause the alleged
need for more frequent repainting,  and that to the extent such an
effect were to occur it is still preferable to obtain the large
amounts of VOC reduction that will  result from the rule
notwithstanding such effect.   The EPA expects that after the rule
is promulgated the same amount or less of compliant coating will
be used compared to non-compliant coating use before the rule was
promulgated.  With respect to the commenters statement that it
would be unwilling to do the minor reformulation necessary to
achieve the modest VOC reductions necessary in its products, the
EPA notes that the flexibility of the tonnage exemption and
exceedance fee provides manufacturers with alternatives to
reformulating essential coatings that are manufactured in low
volumes or that are impractical to reformulate by the compliance
date.
     2.3.1.3   Wastewater/Solid Waste Impacts
     Comment:  Three commenters  (IV-D-189, IV-F-le, IV-F-ls)
questioned the EPA's conclusion that no significant adverse water
impacts would result from the rule.  For example, the commenters
noted that hazardous waste production which is associated with
the manufacture of waterborne coatings could increase.  One
commenter  (IV-F-ls) explained that high-performance resin systems
used at their plants have been very difficult to remove from
clean-up water using what they know about wastewater treatment
technology.  The commenter estimated that the current cost to
treat this water may be two to three times higher than the costs
for solvent  system cleanups.  The commenter's plants use in-plant
solvent distillation systems where the solvent is continually
recycled with a small amount of sludge going off site for
disposal.  The commenter reportedly has a plant that has gone
4 years without making any solvent waste because they
sequentially batched materials and recycled the solvent.  The
commenter claimed that internal recycling of water is more
difficult because of bacterial contamination and surfactant
addition.  The commenter explained that the moment air hits the
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resin,  the resin is on the tub used to mix the product because
the resin forms a tough film very quickly.  This can result in
manufacturers inappropriately trying to use solvents to wash the
resin off and creating a solvent and water mixture.  The
commenter uses surfactants to clean the resin off of the
equipment, which prevents them from recycling the water.  A
second commenter (IV-F-le) concurred that the amount of waste
generated is more difficult to remove from the mixers unless
solvents are used.   The commenter asserted that this waste is
more difficult to treat.  The treatment systems are reportedly
expensive to purchase.  The chemicals used to treat or flocculate
the drills are likewise reportedly expensive.  Compared to
solvent systems that are easy to use, the commenter claimed that
waterborne systems can result in a very tedious process.  One
commenter (IV-F-ls) also pointed out that obtaining a permit to
connect an industrial discharge of wastewater to a publicly owned
treatment works  (POTW) may cost several hundred thousand dollars
in some metropolitan areas.  Their facilities sealed their floor
drains to prevent solvent from going to the POTW and never had an
industrial permit to connect to the POTW.
     Response:   The EPA acknowledges that in cases where
manufacturers achieve compliance by converting from solventborne
to waterborne coatings, an increase in wastewater discharge may
occur if waste from the manufacture of waterborne coatings is
discharged by manufacturers to publicly owned treatment works.
Discharges from these facilities or from POTWs would be subject
to applicable effluent guideline standards.   These discharges
would receive appropriate treatment before the water is released
into the environment.  Thus, these discharges would have small
environmental impacts.  However, the EPA expects that the
majority of the VOC content limits in the rule will not force
manufacturers to convert to waterborne coatings.  For the vast
majority of categories, the VOC content limits are high enough to
allow manufacturers to continue to offer solventborne coatings.
Therefore, the EPA has concluded that the adverse water impacts
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would not be significant in comparison to the air emission
benefits resulting from the rule.
     2.3.1.4   Energy Impacts
     Comment:   One commenter (IV-F-lj) believes that for
production lines, the slower dry times resulting from higher
solid formulations or substitution of waterborne products is
going to slow the production schedules, which can increase energy
costs associated for forced curing, resulting in higher energy
usage.
     Response:   The architectural coatings VOC rule applies only
to coatings applied to architectural structures and does not
apply to shop-applied coatings or coatings used for original
equipment manufacturing.  Thus, the commenter's concern regarding
production schedules, forced curing, and higher energy use are
not applicable to this rulemaking.
2.3.2   Cost/Economic
     2.3.2.1   Reformulation Cost Estimate
     Comment:   Twenty-seven commenters submitted information in
response to the EPA's request for information on the cost to
reformulate a product to comply with the regulation.  Comment
letters received and reviewed for this purpose include:
                                                  IV-D-192
                                                  IV-D-212aa
                                                  IV-D-212cc
                                                  IV-D-217
                                                  IV-D-222
                                                  IV-F-le
     Response:  The EPA appreciates the input from the above
commenters.  Upon review of these comments, 11 of the responses
 (IV-D-36,  38, 93, 108, 110, 128, 130, 152, 182, 217  [two
estimates], and IV-F-le) appeared to provide comparable
information for gauging lump-sum reformulation costs per product.
These estimates are summarized  in Appendix A of this BID and  in
Appendix B of the EIA.  Other comments presented costs for all of
the company's products, but did not provide information on the

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IV-D-02
IV-D-G8
IV-D-27
IV-D-36
IV-D-38
IV-D-39
IV-D-44
IV-B-S3
IV-D-1C8
IV-D-11C
IV-D-115
IV-D-128
IV-D-130
IV-D-146
IV-D-152
IV-D-157
IV-D-159
IV-D-167
IV-D-170
IV-D-173
IV-D-182

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number of products to enable computation of the cost per product.
Other comments could not be used either because of incompleteness
or lack of clarity about the information provided.  The EPA
combined these estimates with the original estimate used at
proposal to derive a revised average cost to reformulate a
product.  Cost per product estimates from these comments ranged
in value from $576 to $272,000,  with a mean value of $86,326.
This mean value was rounded to $87,000 to provide a
"representative  product" cost estimate used throughout the cost
and economic analysis for the final rule.
     Comment:   One commenter (IV-D-08) stated that the EPA's
annualized reformulation cost estimate of $17,770 per formula is
extremely low and unrealistic for two reasons.  First, the
commenter argued that it is based on averaging only the costs of
laboratory personnel.  Second,  the commenter stated that it is
based on an industry survey which excluded over 400 small paint
manufacturing companies.  Another commenter (IV-F-lm)  stated that
the true cost of reformulation should include the costs actually
expended by small businesses both to reformulate and to make all
of the other changes necessary in their products and marketing
tools in order to bring a new product to market.   One commenter
(IV-D-27)  estimated a total cost of $400,000 for each product
that could not meet the proposed VOC content limit and could be
reformulated.   The total cost includes estimated expenses for
technical training for chemists; one-time expense for
prioritizing products for reformulation; examination,  selection,
and testing of surveyed raw materials; suitable performance
packaging (which is required by another Federal regulation);
performance tests for each product; and field/market testing of
products.   Another commenter (IV-D-93) estimated that 91 of their
products will have to be reformulated at an estimated cost of
$30,000, which includes a part-time formulator for 6 months and
the cost of producing one 50-gallon test batch for each of these
91 products.   Another commenter (IV-D-108)  estimated the cost to
reformulate two products would be $50,000.   This estimate did not
include other related costs such as the cost of revised and
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redistributed Material Safety Data Sheets (MSDS)  (required by
Federal law)  at $35,000;  cost of replacement product literature
at $30,000; and loss on label conversion at $12,000.
     Response:  The EPA's annualized "reformulation" cost estimate
includes not only the costs of laboratory personnel, but also
includes costs for technical and market testing.   The EPA thus
included those costs that the EPA believes accurately reflect the
impacts of reformulation.  Table 2-1 in the EIA (Docket
Item IV-A-1)  lists the various uncertainties and potential biases
surrounding the reformulation estimate which generally could not
be quantified.
     The EPA acknowledges that the industry survey on which the
reformulation estimates were based did not include a large number
(i.e., close to 400) of small paint manufacturing companies.
The survey was designed to obtain input from as many
manufacturers of architectural coatings as possible.  Over 950
survey forms were mailed by industry representatives to companies
that were identified as possible manufacturers of architectural
coating products.  Of the 173 companies that responded to the
survey, 114 manufactured architectural coatings which were
estimated to represent 76.6 percent of the total gallons of
architectural coating products produced in 1990.   The EPA
extrapolated the survey population of coating products to account
for the volume of products not reported by manufacturers.  This
approach assumes that the feasibility issues facing the small
manufacturers that responded to the survey would be similar to
those facing the nonrespondents  (i.e., if a portion of surveyed
small manufacturers are able to formulate a coating at a given
VOC content level, a similar portion of small manufacturers who
did not respond to the survey would be able to achieve this VOC
content level as well).
     To supplement the assumptions made about the feasibility of
reformulation,  the EPA requested detailed information in the
preamble to the proposed rule on the following: (1) any specialty
niche products which do not comply with Table 1 and that cannot
be cost-effectively reformulated;  (2) the sales volume and VOC
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content of these products; (3)  detailed cost estimate for
reformulation; and (4) whether a lower VOC coating exists in the
market which can adequately substitute for the identified
product.
     EPA received some additional reformulation cost estimates
during the public comment period (these estimates included costs
beyond laboratory personnel).   As Appendix A of this document
indicates, the EPA's cost estimate used at proposal was 3 to
5 times greater than the average given in the public comments.
The EPA adjusted the reformulation estimate to reflect these
comments and believes $14,573  represents a realistic value.
     Comment:   One commenter (IV-D-08) emphasized that the rule
would not eliminate the problems and costs of multiple product
formulation in different states, as many States with more
stringent rules would maintain their programs.  As such, the
commenter expressed concern that manufacturers will experience
increased product formulation  and maintenance costs.
     Response:  The EPA believes the national regulation will
minimize the problems associated with compliance and multiple
regulations at the State level.  This is because some States are
relying on the EPA's regulation rather than developing their own
rules, some States have included "sunset" provisions in  their
regulations so that once the national rule takes effect their
rule will no longer be effective, and other States have statutes
that prohibit their own State  regulation from being more
stringent than Federal standards.  However, as the commenter
suggests, the national rule will not entirely eliminate the
problems and costs associated  with multiple State regulations
since some States may choose to impose or continue to impose
different and more stringent requirements.  The EPA notes that
section 183 (e) of the Act expressly allows for States and
localities to have more stringent rules if they so desire.
Nevertheless,  the EPA has attempted to issue a final rule that
will minimize the need for additional State rules by achieving
appropriate reductions nationwide.
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     Comment:   One commenter (IV-D-212p6o)  stated that the
economic impact on the architectural coatings industry of the
proposed rule  would be substantially in excess of $40 million
estimated by the EPA at proposal.  The commenter estimated the
minimum economic impact of the proposed controls to be
$104 million.   The commenter assumed an 18  percent reduction
(i.e.,  94,500  tons) from a baseline of 525,000 tons of VOC per
year nationwide at a cost of $1,100 per ton (as estimated by the
Office of Technology Assessment (OTA)).   The commenter argued
that the South Coast Air Quality Management District's (SCAQMD)
estimate of $16,400 per ton of VOC reduced is more accurate.
Based on the SCAQMD's cost-effectiveness estimate, the commenter
stated that an 18 percent reduction would cost the industry
$1.6 billion.   Another commenter (IV-F-2)  also pointed out that
the SCAQMD used a value of $16,400 per ton of VOC reduction for
their architectural coatings rule.
     Response:   The EPA disagrees with the  conclusions of the
commenters, but understands the source of their misunderstanding.
Upon re-examination of the cost impacts of  the rule, the EPA has
determined that the projected costs were estimated correctly.
The detailed approach taken at proposal by the EPA to estimate
cost-effectiveness was based on VOC content data from the 1990
VOC Inventory Survey conducted by the National Paint and Coatings
Association, which represents the most comprehensive VOC content
inventory of the industry's products conducted to date.  Based on
the sales and VOC content data from the survey, the costs were
extrapolated to the nation using conservative  (upper bound)
assumptions of the total number of products requiring
reformulation nationally.  The EPA's reformulation cost estimates
are based on industry input prior to proposal  (adjustments to
this estimate have been made based on comments received after
proposal). The analysis then considered influences in a
competitive market on product price and output, along with the
consideration of lower-cost compliance options such as the
tonnage exemption, exceedance fee provision or product
withdrawal.  The analysis not only measures the cost to producers
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that must comply with the regulation,  but also to all consumers
impacted by the changes in the market  resulting from the
regulation.
     The commenter cited an OTA estimate of cost-effectiveness of
$1,100 per ton and SCAQMD's estimate of cost-effectiveness of
$16,400 per ton.  These cost-effective estimates are not
meaningful for evaluating the accuracy of the EPA's cost-
effectiveness estimate since the cost-effectiveness depends on
the specific requirements in the regulation.  The OTA estimate
was not based upon the national rule as promulgated, and hence
does not reflect its costs.  All else  equal, controlling each
incremental unit of VOC emissions will be progressively more
costly as the stringency of controls increases and the
availability of control technology decreases. For example, the
SCAQMD is in need of extensive controls for an extreme ozone
problem, which results in a relatively high cost-effectiveness
measure.  The SCAQMD's estimate of $16,400 per ton of VOC
reduction represents a 75 percent reduction from 1990 levels
which must be achieved by the year 2010.  This is not comparable
to the national regulation which is expected to achieve a
20 percent VOC reduction from 1990 levels. The EPA believes the
detailed approach taken in the Economic Impact Analysis, which
for the final rule resulted in a cost-effectiveness calculation
of $250 per ton (1991 dollars), is appropriate and more
accurately estimates the costs to the  nation than either the OTA
or the SCAQMD estimate.
     Comment:  One commenter  (IV-D-120) suggested that the EPA's
estimate of the costs to manufacturers to reformulate might not
be accurate for every coating category, the commenter claims that
their company spent between $250,000 to $500,000 trying to
reformulate concrete surface retarders.  The commenter recounted
its 5-year reformulation effort that resulted in a non-user-
friendly VOC compliant product.  The commenter claims that it
lost 85 percent of its previous business in California as a
result of not being able to reformulate to meet VOC compliant
levels.
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     Response:  The EPA acknowledges that the costs to reformulate
particular products may vary from the average projected,  i.e.,
some will be higher and some will be lower.   The EPA cannot
assess whether the costs cited by the commenter are correct, but
believes that they are not typical.  As noted above,  the
information available to the EPA suggests that the costs of
reformulation,  on average, will be far lower.  The EPA has
recognized the special issues associated with reformulating
concrete surface retarders and has created a category for these
products with a VOC limit of 780 g/1.   The addition of this
category is described in detail in section 2.2.4.2 of this
document.
     Comment:   One commenter (IV-D-214c) contended there will not
be enough time or money for most manufacturers to reformulate to
meet the proposed limits.  Another commenter (IV-F-1[1])  quoted a
representative of a major manufacturer who estimated that
reformulating approximately one-fourth of the company's product
lines would require 100 to 150 man-years and cost from $10 to
15 million, only including the cost of the labor required to
reformulate.  Another commenter  (IV-F-lm)  provided a similar
example of a company that has 44 products to reformulate.  This
will COST: the company $11 million at a cost of $250,000 per
reformulation.   In addition, the commenter claimed that it will
take 110 scientist years to do the reformulation.  The commenter
also pointed out that there are not enough formulation chemists
available and there is not enough time to hire them and
accomplish the reformulations in time to comply with the rule.
     Response:  Based on these general comments and several other
public comments on the time needed to comply, costs of
reformulating individual products, and statements of the burdens
on small entities, the EPA revised the rule to include a 1-year
compliance period combined with a phased tonnage exemption
provision and an exceedance fee provision.  All of these
provisions will provide manufacturers additional time and
flexibility to comply with the standard so that it is
economically feasible for a predominant number of products
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 (excluding the less than 1 percent of products that are projected
to withdraw from the market).
     This can be exemplified by the information provided by
commenter IV-F-lm.  The estimate of $11 million in regulatory
costs represents the worst case of potential costs in that it
assumes that every reformulation will cost the full $250,000, and
that none of the noncompliant products are similar enough in
characteristics to not incur reformulation costs  (i.e., the EIA
assumes 1/3 of products requiring reformulation are similar
enough in characteristics to not incur a cost).   This estimate
will be reduced substantially if all options of the final rule
are considered by the company along with the revised estimate of
product reformulation cost  ($87,000 per product).  For each of
the 44 products, the company should consider the least cost
strategy to comply with the regulation from a combination of the
tonnage exemption, reformulation, the exceedance fee, and product
withdrawal.  For example, if the annual fee payments on a product
would be less than the annualized reformulation cost estimate,
the least cost strategy for this product would be the fee
provision.  The resulting cost across all 44 products must also
be annualized over the appropriate period of time  (the
$11 million is a lump-sum estimate rather than an annualized
value) to compare with company revenues and determine impact to
the firm.
     Comment:   One commenter  (IV-D-44) stated that reformulation
cost estimates can be very difficult to determine and vary on a
case-by-case basis.  Another commenter (IV-F-le) has been working
to reformulate products for approximately 4 years and still has
over 24 products,  excluding various colors, that are not in
compliance with the proposed regulation.   These products
represent $7.4 million in sales which is over 9 percent of the
commenter's gross sales.   The commenter believes the list will be
reduced to 15  products not in compliance by April 1, 1997.  These
products represent $6.7 million in sales.
     Response:  The EPA recognizes that each regulated entity
will have different impacts from the rule, based upon the number
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of products they offer,  the types of products they offer, and the
current VOC content of such products.  The EPA has considered
this information on the cost of compliance along with other
submittals in determining the cost of the final rule.  The
summary of the EPA's analysis of reformulation cost comments is
presented in Appendix A.   The EPA notes that the extended
compliance time and other mechanisms in the rule will provide
compliance flexibility to regulated entities, beyond that
discussed in the proposed rule.
     Comment:   One commenter (IV-F-lm)  asserted that costs for
minor reformulations are not free and that some costs should be
assigned for those minor formulations involving one-third of the
products over the standards.
     Response:   The economic analysis conservatively assumes that
all reformulations, regardless of how far the current VOC content
is above the limit will necessitate a "major" reformulation.
Thus, there are no minor reformulations that are assigned zero
costs.  The "one-third" adjustment indicated  in the analysis
reflects the assumption that, for a typical company,
approximately one-third of all over-limit products are similar
enough in characteristics to other over-limit products,  that a
separate reformulation effort will not be necessary.  So, for
example, if a firm has 15 products that are above the VOC limir,
it will, on average, have to develop 10 new formulations.  These
assumptions were derived based on information presented to the
EPA by industry during the regulatory negotiation.  Because the
EPA cannot assess the exact number of reformulations that each
regulated entity will need to perform,  and regulated entities
themselves may not know in advance,  the EPA believes that this is
a reasonable means to estimate the number of reformulations
conservatively.
     Comment:  One commenter (IV-F-lm)  stated that it is
misleading for the EPA to use the annualized value of
reformulation to represent the cost of reformulation.  For
example, the commenter compared the EPA's annualized approach to
that of a Mercedes Benz dealer taking out ads to sell cars, which
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other dealers are selling for $40,000,  and claiming that they
only cost an annualized amount of $2,800.   Instead, the commenter
suggested using actual costs expended both to formulate and to
make all of the other changes necessary to produce and market a
new product.
     Response:   The EPA believes an annualized value for
reformulation is appropriate because the costs of reformulation
and its VOC reduction benefits occur in different time periods.
The reformulation of current noncompliant  products is a "one-time
event," but the  emission  reductions  of  the  new formula  persist
over time.  It  is a well-established tenet of benefit-cost
analysis and cost-effectiveness analysis that benefits and costs
need to be placed on a time-consistent basis for direct
comparison (see OMB guidance for implementation of Executive
Order 12866,  part III.A.3).   Therefore, the costs of the action
must be computed on an annualized basis through discounting to be
time consistent with the annual stream of  emission reductions
achieved.
     To use,  as the commenter suggests, the entire lump sum
reformulation cost estimate as a measure of annual costs of the
rule is conceptually incorrect.  It would  be similar to using the
entire purchase price of a home as the cost of housing in the
year that a house is purchased.
     The commenter takes issue with the annualization formula
used in the analysis, which implicitly assumes that the VOC
reduction technology has permanent emissions reduction benefits.
The commenter likens this to suggesting that the real cost of a
$40,000 Mercedes Benz is only $2,800.  However, the analogy is
inappropriate.   A car must be replaced periodically and,
therefore, must be amortized over a finite service life.  A
technology to reduce VOC does not need to  be replaced in the
future and, thus, does not have a finite service life in the same
way that a car  or other capital equipment  does.  In that regard,
the annualization method used in the EIA is appropriate for VOC
technology, but not for cars.
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     The EPA recognizes that a case can be made for treating each
product formula as having a finite service life,  requiring
periodic reformulation.  Under this alternative assumption, it
should be pointed out that the regulation can be viewed as
accelerating each product's next round of reformulation, an event
that would have occurred anyway. This alternative assumption
(i.e., a product formula having a finite life) is addressed in
more detail and its effects are quantified in Appendix B to this
document.
     As Appendix B indicates,  the one-time cost estimate of an
accelerated reformulation schedule ranges from a small fraction
to a large fraction of the total reformulation cost estimate used
in the EIA.  In this example,  the average product's one-time cost
equivalent is less than 60 percent of the estimate used in the
EIA.  Thus, the EPA's estimate of one-time costs of roughly
$250,000 for each over-limit product overstates the true costs in
all cases and, as demonstrated in the example above, the
overstatement of costs can be substantial.   Taken together with
the fact that the $250,000 lump sum expenditure is likely an
overstatement of the costs to reformulate to achieve a lower VOC
content, the EPA's methodology for assigning costs appears to
greatly overestimate the costs per product, rather than
underestimate these costs as the commenter suggests.
     Comment:  One commenter  (IV-D-128) estimated its company's
aggregate cost to reformulate the few products affected by the
rule to amount to $85,000 over a 2/3 year period, with a
potential cost of approximately $9,000 per ton of VOC emissions
reduced. The commenter noted that these products represent a
shrinking part of their market and that the wasted reformulation
costs will impact their ability to develop very low  (or zero) VOC
coatings.
     Response:  The commenter appears to have estimated annual
costs of approximately $28,000  ($85,000/3)  and divided this
number by 3 tons per year of VOC reduction to get the $9,000 per
ton estimate.  However, as indicated in the previous response to
comment IV-F-lm, this method for annualizing costs is
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conceptually incorrect because the initial lump sum cost of
$85,000 should be matched with reductions achieved in all future
years, not just the first 3 years when the $85,000 is expended.
If the $85,000 cited here were annualized using the method from
the EIA,  the annualized cost would be approximately $85,000*.07 =
$5,950 which divided by 3 tons per year gives an annual cost per
ton of emissions reduction of roughly $2,000.  Assuming that
these numbers provided by the commenter are accurate, the
commenter has four basic choices: (1) withdraw the few products
that do not meet requirements and represent a shrinking part of
the company's market,  (2) claim some portion of these products as
exempt under the tonnage exemption,   (3)  reformulate a portion of
the products, or (4) pay the exceedance fee.  With an exceedance
fee of approximately $2,500 per ton, it would seem to be less
costly to reformulate than to pay the fee, as long as annual
profits exceed the total annual cost of reformulation  (the EIA
assumes that a product would be withdrawn if profits do not
warrant the expenditure for reformulation).
     Comment:  One commenter (IV-F-lm)  disagrees with the EPA's
first reformulation cost estimate (i.e.,  the reformulation cost
estimate presented in the June 1996 EIA)  because it is calculated
on a per-volume basis rather than on a per-product basis.  The
commenter disagrees with the EPA's second reformulation cost
estimate (i.e., the sensitivity analysis of the national
reformulation cost estimate presented in Appendix D of the EIA)
because it assumes that the average number of products needing
reformulation will increase as the company size increases.  The
commenter states that the number of products needing
reformulation will actually increase as the company size
decreases.   The commenter also did not understand why the average
number of reformulations per small business participating in the
survey is 7.8 whereas the average number of reformulations per
business for the companies not participating in the survey is
about 3 .
     Response:   The EPA recognized potential problems with the
per-volume approach of determining the number of products that
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need reformulation and,  therefore,  presented it as a lower bound
estimate of costs in the sensitivity analysis presented in
Appendix D of the June 1996 EIA for the proposed rule.   The
second approach -- presented in Appendix D - has a per-product
basis for determining the number of products requiring
reformulation and is presented as an upper bound estimate.  The
final EIA only uses the per-product approach for the estimation
of national costs.
     Although the survey data confirm that larger companies have
a greater number of products needing reformulation than smaller
companies, that is not the basis of the methodology for the per-
product basis cost estimate.  First, for each product category,
the volume of non-surveyed products is computed as the difference
between the national sales volume for that category and the
corresponding volume of surveyed products.  Then, the number of
non-surveyed products is estimated by taking the non-surveyed
volume and dividing by the average product volume size (total
nationwide volume per product category) for surveyed products
produced by small companies in that category.  The underlying
assumption is that the small companies surveyed were more
representative of the non-surveyed companies.  Then, the EPA
estimated the number of over-limit non-surveyed products by
taking the proportion of all products in that category that are
over the limit and multiplying by the number of non-surveyed
products.  This number is then subject to the "one-third"
adjustment and multiplied by the reformulation cost per product
to get the total reformulation cost for the category.  Then each
product category has a separate reformulation cost estimate for
surveyed and non-surveyed products.  The national estimate is
derived by summing the surveyed and non-surveyed totals across
all categories.
     Using the methodology just described, the EPA determined
that a large portion of the non-surveyed products are in
categories that have a low proportion of products that are over
the regulatory VOC content limit (e.g., exterior waterbornes and
interior waterbornes).  This is because these categories
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represent a large portion of the total sales volume that was
under-reported in the survey.  Therefore,  the average rate of
reformulation for non-surveyed products was calculated to be
lower than the average reformulation rate for surveyed small
company products.
     Comment:   One commenter (IV-D-178) stated that a model
$10,000,000 per year sales volume company cannot survive the cost
of reformulating its product lines.  The commenter questioned the
EPA's estimated reformulation cost of $17,772/product.   The
commenter asserted that the primary cost of reformulating is
paying a chemist to do the work at $80,000 per year.  In
addition, the commenter claimed the cost is expressed in 1991
dollars which doesn't apply to real costs today.  The commenter
also asserted that the cost estimate assumed an interest rate of
7 percent which is not a valid assumption for small businesses
and also assumes that a company is in the position to borrow
$267,908 for reformulation which may not be true of all
companies.  According to the commenter, the economic analysis also
failed to consider the impact of lost sales on the survival of a
business as it approaches its break-even point.
     Response:  The EPA cost estimate is based on an estimate of
one reformulation taking 2.5 years of a chemist's time at
$100,000 per chemist year.  At proposal, this was then
annualized,  as described in the text of the EIA and in responses
to comments above,  to derive the $17,772 estimate.  The
commenter's assertion that a chemist year costs $80,000 suggests
the EPA may have over estimated reformulation costs.
     Because the survey of architectural coating producers was
conducted in 1992  with information on products through the end of
1991,  the EPA has  set 1991 as the baseline year for the analysis.
All market  data are therefore in 1991 dollars, so for the purpose
of modeling, the costs are expressed in 1991 dollars.  The EPA
notes that  transforming these costs to 1998 dollars would not
appreciably change the impact in real terms.
     The Office of Management and Budget (OMB circular A-94)
stipulates  that the discount rate used for economic analyses of
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federal regulations is 7 percent.   This is based on an assessment
of a wide range of private and public investment returns.  OMB's
7 percent is a real discount rate (adjusting out inflation).   In
contrast, the market interest rates paid by firms are in nominal
terms  (i.e., they include a component for inflation).  If
inflation is 3 percent, then a real rate of 7 percent is
equivalent to a nominal rate of 10 percent.  All dollar values in
the economic analysis are expressed in real terms,  thus the
discount rate used is a real discount rate.
     Finally, the EIA does estimate the value of reduced output
that results from product withdrawals and price increases.  These
estimates are the total value for a market category.  The EPA
does not have sufficient information to determine the break-even
point of an individual firm or to estimate a specific firm's loss
in sales.  The EPA believes, however, that the final rule
includes a variety of mechanisms that will provide sufficient
flexibility to regulated entities yet at the same time achieve
meaningful VOC emission reductions.
     Comment:  One commenter  (IV-D-57) stated that small regional
and local companies may not be able to reformulate their products
cost-effectively.  Another commenter  (IV-D-143), a small business
manufacturing wood finishes, requested that instead of providing
a per-product exemption, the rule simply exempt all very small
businesses  (under $1 million in annual sales) so that a company
could generate enough funds to reformulate its products.  Under
the commenter's suggestion, once a company reaches the $1 million
mark, the company would have to comply before 2 years pass or an
additional $500,000 in sales accrue.  The commenter asserted that
despite  the benefit to its company, an exemption of specific
products could lead to abuse and rule circumvention by regulated
entities.
     Response: The EPA shares the concern of the commenters that
the final rule should allow companies of all sizes to meet the
requirements in a cost-effective manner.  Section 3 of the
proposal EIA identified, and to the extent possible, quantifies
potential impacts on small firms.  This analysis has been revised
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given changes to the final rule and has been augmented by a final
analysis to meet the requirements of the Regulatory Flexibility
Act as amended by the Small Business Regulatory Enforcement and
Fairness Act.  The analysis shows that because reformulation
appears to be a fixed amount no matter how much or how little
volume is produced,  small firms who generally have smaller volume
products may experience reformulation costs that are a greater
percent of their baseline cost and revenue.  Rather than
exempting a particular size company entirely from regulation, the
EPA has taken several steps to alleviate the burden on industry
including:
          •    the creation of new product categories where
               warranted,

          •    an extension of the period of compliance after
               promulgation to allow for reformulations,

          •    a scaled tonnage exemption in years 1 and 2, and
               all future years of compliance, and

          •    an exceedance fee provision.

All of these provisions were considered to address niche markets
and small business burdens, however, the provisions will be
available to all producers, regardless of size.
     Comment:  One commenter  (IV-D-147) stated particular cost
concerns regarding products requiring both reformulation and
color recalibration.   The commenter noted that any reformulation
of a tint base system requires the recalibration and
reformulation of every color in that system as well as the
additional custom color standards of customers.  Consequently,
this has a greater impact on a product line than would individual
product reformulation.   As a related issue, the commenter
requested some exemption from the rule that is commensurate with
their production volumes.  The commenter favored a small volume
exemption for all categories combined since it would lessen the
amount of recordkeeping and reporting.
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     Response:   The EPA has included a scaled tonnage exemption
in the final rule which will help respond to particular
situations where it may not be cost-effective for a manufacturer
to reformulate specific product lines --in this case products
requiring color recalibration.  In addition,  the commenter could
consider the cost of reformulation and color recalibration versus
the payment of the exceedance fee to help gain additional time to
complete reformulation efforts for some products.
     2.3.2.2   Annual Cost to Industry
     Comment:  One commenter  (IV-D-190)  stated that the EPA
failed to consider several important factors in calculating
economic impacts of the proposed rule.  The commenter claimed
that the EPA overestimated the cost of compliance because the EPA
has not completed a systematic account of new paint, coating and
resin technologies.  Also, the commenter asserted that the EPA
failed to include in its analysis other economic benefits
associated with low-VOC technologies, such as decreases in costs
for health insurance cost for workers producing low-VOC
technologies, and the fact that since most low-VOC coatings dry
more quickly, the amount of time facilities are unavailable for
use may be reduced compared to their counterparts painted with
high-VOC coatings.  The commenter also claimed that the EPA
failed to consider that American jobs may be created due to
increased coating technology demand in foreign markets as a
result of the rule.
     Response:  In calculating the number of products expected to
need reformulation, the EPA relied on data from a survey which
was conducted by the National Paint and Coatings Association
during the regulatory negotiation to gather 1990 sales and VOC
content information on the architectural coating industry.  The
results from this survey are considered to be the most
comprehensive source of information about VOC and sales
information collected on this industry to date.  Although much
progress in lower VOC technology is expected to have occurred
since the 1990 survey data were collected, the EPA does not have
the resources to continually evaluate and document such progress
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and must, therefore,  rely on information available through survey
efforts, State regulations,  and comments submitted during the
public comment period.   Based on comments submitted at proposal
about the cost to reformulate,  the EPA has revised (lowered) the
cost of reformulation to reflect this new input,  but has not
accounted for changes in coatings technology since 1990.
     The economic impact analysis (EIA) focuses on the size and
distribution of costs of the proposed regulatory action. The EIA
qualitatively discusses several effects of a product
reformulation on product performance such as drying time, and
other characteristics,  but is unable to quantify such effects on
each product's performance attributes.  If such quantification
were possible, the comment raised here regarding improvements in
drying time for low VOC products would be evaluated along with
the several public comments regarding adverse effects of
reformulation on product performance to determine whether the net
performance effects are positive or negative.  The EPA is aware
of examples of better performing lower VOC content coatings, but
because no comprehensive source of data on coating performance
exists, the EPA assumed no net benefit or harm from any changes
in coating performance as a result of regulation.
     Because all producers (foreign and domestic) must comply
with the requirements of the rule, it was assumed there would be
a minimal impact on foreign trade.  Typically, U.S. regulations
impose increased costs of production on domestic producers only,
which puts them at a disadvantage compared to foreign producers
operating in U.S. markets.  However, in this case all producers
(foreign and domestic)  will face the same level of costs for
their respective U.S. markets.   Thus, only minimal effects will
occur as a result of product withdrawals by producers (foreign
and domestic)  that do not find it efficient to continue to offer
a product to the U.S. market -  which allows other producers to
meet the demand of these product withdrawals.
     It is true, as the commenter suggests, that new technology
will result from the rule.  However, the EPA is not aware of a
current demand in foreign markets for this technology. The only
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demand that can be assumed is from potential future requirements
by other governments to reduce the VOC content of architectural
coatings.  If an analysis of trade effects were conducted, the
EPA would evaluate the impacts of its rule holding the state of
the world markets constant (at baseline conditions),  so potential
future foreign requirements would not be evaluated.  Thus, the
trade effects that result from this rule are likely to remain
minimal as was assumed at proposal.
     Comment:  One commenter  (IV-D-08) questioned the EPA's
estimated cost to society of $25 million per year as being
extremely low because, among other costs, the estimate supposedly
fails to take into consideration reporting and recordkeeping
costs and costs to the EPA.  The commenter, based in Ohio,
claimed that its company experienced costs in excess of
$1 million to convert or change over 15 percent of its products
for compliance with current State rules, and estimates that costs
to the industry have already been in the billions of dollars.
     Another commenter (IV-F-le) also maintained that the EPA's
$25 million dollar cost estimate is too low.  The commenter alone
reportedly has over $7.6 million dollars in fees and costs
($4 million dollars for products already reformulated, $100,000
for discontinued product lines, $800,000 for exceedance fees, and
$2.7 million to reformulate additional products).
     Response:  The commenters appear to be comparing the EPA's
annualized cost estimate  ($17,772) with their own estimate of the
initial, lump sum costs of reformulation.  The EPA's conservative
one-time cost estimate at proposal was $250,000 per product.
Therefore, for firms with four or more products that need
reformulation, the lump sum might be $1 million or more as the
first commenter suggests.  These costs should, however, be
considered on an annualized basis.  The EPA computed its
annualized cost estimate by first assuming that reformulation
will initially require an investment of approximately $83,000 per
year for three years, for a total of $250,000 over three years.
Because reformulation is the development of intellectual property
applicable to all future sales, rather than just sales in those
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first three years,  the initial cost needs to be capitalized over
time to appropriately match costs with the resulting annual
reduction in VOC emissions.
     Comment:   One commenter (IV-D-26)  stated that the high costs
associated with having to comply with the proposed rule for the
portion of their products that do not meet the proposed standards
(100 out of 1400 formulations)  would at least initially require
the California-based company to pay the exceedance fee surcharge
in lieu of reformulation.  Given that the company produces high-
end niche products, the commenter predicted that the resulting
increase in product price would drive customers to purchase less
of the company's products in favor of less costly alternatives.
In a related statement, the commenter supported a 5,000 gallon
per year low volume exclusion to reduce the burden of
reformulating low volume products.
     Response:   As an initial matter, the EPA notes that a
California-based company likely has to meet more stringent limits
for sales in that State and presumably already has developed the
technology to comply with the final rule.  The EPA has added a
compliance option to the final rule in addition to the exceedance
fee provision that the commenter will be able to use.
Specifically,  the EPA has included a scaled tonnage exemption of
23 megagrams (25 tons) through the end of the year 2000,
18 megagrams (20 tons) in the year 2001, and 9 megagrams
(10 tons)  in the year 2002 and all future years, which helps
respond to particular situations where it may not be cost-
effective for a manufacturer to reformulate specific low-volume
product lines.
     It should also be noted that the market model the EPA
developed for the architectural coatings rule shows that on
average, prices will not increase by a significant amount
(0.01 percent)  and consumption will not drop by a significant
amount  (0.01 percent).  Furthermore,  given these low percentage
changes in price and consumption, the level of substitution is
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expected to be low (i.e.  there are expected to be few products
which lose markets as a result of this rule).
     Comment:   One commenter (IV-D-214b)  stated that the EPA's
estimated cost understated or ignored the most significant costs
of the proposed rule, which would result in the expenditure by
the private sector of more than $100 million in 1 year.  The
commenter contended that  the EPA's estimate of manufacturers'
reformulation costs was seriously flawed and contradicted by the
EPA's own work.  The commenter calculated manufacturer
reformulation costs to be $905 million per year based on the
EPA's estimated VOC emissions reduction of 182 thousand tons per
year at a cost of $5,000  per ton.  The commenter stated that this
cost estimate was close to the $930 million per year estimate of
OTA in 1987 (taken from the EPA's 1981 draft CTG).   The commenter
continued by calculating  a cost estimate based on $20 thousand
per reformulation, 500 manufacturers, and 12.6 reformulations per
manufacturer.
     Another commenter (IV-D-55)  stated that the threshold of
section 202 (a) of the Unfunded Mandates Reform Act  (UMRA) was
easily met for the architectural coatings rule considering:   (1)
the government's own estimates of phase one manufacturer
reformulation costs;  (2)  the costs arising from the inability of
most manufacturers to reformulate most of their products;  (3) the
costs manufacturers would bear under any phase two substitution
regime;  (4) costs borne by retailers; (5) coses borne by
contractors;  (6) costs borne by workers; and  (7) costs borne by
consumers.  The commenter contended that there was an urgent need
for an UMRA cost-benefit  assessment, especially with regards to
the anti-competitive and the adverse environmental effects
associated with the proposed architectural coatings rule.
     One commenter in two letters  (IV-D-214b,  IV-D-214c) took
issue with the EPA's statement in the proposal preamble that the
proposed rule "does not contain a Federal mandate that  may result
in expenditures of $100 million or more for ... the private
sector in any 1 year." Id.  At 32745-46.   In the  first letter, the
commenter  (IV-D-2l4b) pointed out several major adverse economic
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effects to the private sector that were not addressed in the
revised draft preamble:  (1)  increased costs to retail businesses
(estimated at 40,000 paint retailers each with an annual cost of
$2,500); (2)  increased costs to painting contractors due to
product failures and increased labor;  (3)  increased costs to
consumers (estimated at 1 percent of total architectural coatings
sales of $10 billion); and (4) adverse effects on paint industry
workers  (estimated at 5,000 lost jobs paying $20,000 per year).
The commenter concluded that when the two manufacturing effects
that the EPA underestimated and the four effects the EPA refused
to evaluate are combined, the proposed architectural coatings
rule exceeded the $100 million per year threshold of UMRA.
     According to the commenter in the second letter (IV-D-214c),
the EPA failed to address not one, but 13 key cost factors in
determining that there was no possibility that its proposed rule
"may" cost the private sector  $100 million or more and the
commenter discussed those 13 factors.   The commenter also
referred to several court decisions that involved judicial review
of an administrative determination that the threshold for a.
statutory mandate had not been met.   The commenter concluded that
if the EPA had counted the following 13 relevant factors that the
UMRA surely would have been triggered:
     1.   The EPA did not count cost data from all manufacturers.
     2.   The EPA only considered reformulation costs.
     3.   The EPA's calculations omitted the costs of most
          reformulations the average manufacturer will have to
          pay.
     4.   The EPA's annualized cost estimate of $17,772 per
          reformulation is too low.
     5.   The short deadline will make many of the reformulations
          infeasible.
     6.   Reformulation may be financially infeasible due to
          capital constraints for small firms.
     7.   The commenter suggests that lacking data,  the preamble
          speculates that estimated market effects of the
          regulation are relatively slight and relatively little

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          product  volume is  projected to  be  withdrawn from the
          market.   The commenter refers to these  points as
          assumptions  and also suggests they are  affected by
          definitional manipulation of 50 product categories into
          13 markets.
     8.    The EPA  ignored a  formulation's "property value."
     9.    The EPA  failed to  measure "stigma"  changes arising from
          the threat of imposing more stringent substitution
          limits.
     10.   The EPA  did  not consider the impact on  the  42,000
          retail outlets referenced in the BID.
     11.   The EPA  did  not consider the impact on  the  29,900
          coating  applicator firms referenced in  the  BID.
     12.   The EPA  did  not consider the employment impacts for any
          group except manufacturers.
     13.   The EPA  ignored the effect of "product  bans" on reduced
          competition, fewer choices, and lower quality.
     Response:   The EPA disagrees that the UMRA threshold of
$100 million is exceeded by  the final rule.  The EPA estimates the
annual impact of the rule is $32 million  (in 1996 dollars). The
commenter's calculation of a reformulation cost of $950 million
is based on a cost of  $5,000 per ton of reduction and a reduction
of 182,000 tons.  The  commenter claims these figures  are from
EPA's own analysis. The EPA's analysis estimates the rule will
result in a cost of $250 per ton of reduction and the emission
reduction from the final rule is 113,500  tons.  Consequently, the
EPA is unsure the  source of  the commenter's  figures.  The
commenter's calculation of reformulation  cost using $20,000 per
reformulation and  12.6 reformulations per manufacturer is not
consistent with information  available to  the Agency about the
number of reformulations and the cost. The  EPA's calculation
methodology is detailed in the response to  items  2,  3, and 4 that
follows below.   The EPA understands the desire of the commenters
to expand the scope of impacts to increase  the amount of the
impacts,  but does  not  believe that this overestimation is
consistent with appropriate  evaluation of the impacts of the
rule.  The EPA used the best available data  to determine the cost
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of the regulation.  Below is a response to each of the 13 cost
factors mentioned by the commenter.
     1.  The EPA did not count cost data from all manufacturers.
     The EPA disagrees with the commenter.  Regulatory costs were
estimated based on information from the regulatory negotiation
process  (July 28, 1993, Docket# II-E-52) and from a survey of
manufacturers that represented roughly 75 percent of industry
volume.  For those manufacturers who did not respond to the
survey, the EPA conservatively estimated costs at proposal in two
ways.  First, the EPA calculated costs for manufacturers not
represented in the survey by taking the regulatory costs for
manufacturers who provided responses and multiplying these costs
by a ratio of total product volume in the industry (respondents
and non-respondents)  to surveyed product volume.  These results
were reported in the economic impact analysis and were used as a
lower bound for the cost estimate.  For the second method used to
calculate costs for manufacturers not represented in the survey,
the EPA estimated the ratio of total products in the industry to
those included in the survey per category to estimate national
reformulation costs.   The results were reported in Appendix A of
the economic impact analysis.  Because this second method
produced a larger number of products that needed reformulation,
the EPA used these costs as an upper bound.
     2.  The EPA only considered reformulation costs.
     The cost estimates provided at the regulatory negotiation
meeting  (presentation by Carl Minchew of Benjamin Moore & Co.  on
July 28, 1993,  Docket# II-E-52)  not only included costs for
reformulation,  but also costs for technical and market testing.
Table 2-1 of the EIA lists all potential costs that are not
quantified along with bias factors, positive or negative.  This
comment relates to the potential downward biases in the cost
estimate associated with non-R&D cost, but it does not recognize
the upward biases to the cost estimate presented by formulations
that are less expensive than the assumed dollar amount for a
major reformulation,  and the potential for technology

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advancements that reduce costs in the future.   The cost estimate
presented at the regulatory negotiation meeting (July 28, 1993,
Docket^ II-E-52) was based on the assumption that resources would
be needed to research and develop entirely new formulations to
meet proposed standards (rather than modifying existing
formulas).   These new formulations were expected to be based on
available resin technology that a manufacturer had not yet worked
with within their respective company for a particular product
line.  The costs presented in this presentation were based on
potential rule requirements  (including up to three phases of
control implemented in an 8-year period) that far exceed those
ultimately proposed by the EPA or ultimately included within the
final rule.  Consequently, it is expected that the estimates
presented by industry significantly overstate the costs and time
frames needed for a reformulation.  Based on public comment
received upon proposal and the regulatory negotiation
informaticn, the EFA revised its cost estimate to reflect the
average of all the cost estimates received.
     3.  The EPA's calculations omitted the costs of most
reformulations  the average manufacturer will have to pay.
     Regulatory costs at proposal were estimated based on
information from the regulatory negotiation process and from a
survey of manufacturers that represent roughly 75 percent of
industry sales volume.  Costs were then extrapolated to the
national level to provide a complete estimate of the surveyed and
ncn-surveyed population.
     It is unclear in the comment what is meant by "the costs of
most reformulations."  If  this refers to the approach for
estimating minor reformulations as opposed to major
reformulations, the EPA believes that all assumptions used in the
EIA  lead to a conservative estimate of national costs.  First,
the  EFA chose the conservative approach of basing reformulation
costs on 1990 coating VOC content data to determine the number of
products exceeding the proposed VOC standard which required
reformulation in response to the EPA's national rule. The EPA
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conservatively assumed that for all products that exceeded the
VOC content levels in 1990, 67 percent of the reformulations
would be major involving significant investment in research and
development over a 3-year period.  Thirty-three percent would be
able to rely on the significant investment in research and
development for the other reformulated products, and consequently
would require a relatively minor effort.  For purposes of the
cost and economic analysis, these "minor reformulations" were
assumed to be so similar to other formulations that the
manufacturer would not incur any costs for these modifications in
coating formulas.  In most cases, an estimate based on 1990 data
that assumes 67 percent of the coatings that did not meet the
standards in 1990 would require a major reformulation expense in
1998 provides a conservatively high estimate of the level of
effort necessary for a manufacturer to meet the VOC requirements
proposed.  This is because lower VOC technology has progressed
over the past 8 years from the 1990 survey data base year in
response to consumer demand,  State regulations, and impending
Federal requirements.  Second, in many cases, the cost of
reformulation is expected to be partially reduced through the
assistance of resin manufacturers/suppliers.  Upon request,  most
resin suppliers are willing to share information as well as
sample low VOC coating formulations with interested paint
manufacturers,  both large and small.
     Overall, the assumption that the per product reformulation
cost is $250,000 and that 67 percent of the products produced
that were over the VOC limit based on 1990 inventories will
undergo a major reformulation leads to a conservatively high
estimate of national cost.
     4.  The EPA's annualized cost estimate of $17,772 per
reformulation is too low.
     The EPA's calculation of annualized cost uses principles
that are defined by OMB Circular A-94 which provides the EPA with
guidance on rule development procedures including cost analysis.
This guidance requires all costs and benefits to be discounted to
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their present values using a period of time that corresponds to
the occurrence of benefits.   In the EIA,  the EPA computed costs
by considering that reformulation will initially require an
investment of approximately $250,000 total or $83,000 per year
over a 3 year period.  Because reformulation is the development
of intellectual property (i.e., low-VOC technology) that is
applicable to all future sales of the product,  rather than just
the sales in the first 3 years, the EPA amortizes the
reformulation cost over the service life of the product, which is
infinitely into the future.   The EPA recognizes that individual
products may be reformulated again in the future, so that the
life of an individual formulation is not infinite.  However, the
VOC reduction technology developed in response to the standards
is expected to be applicable  (i.e. be a "building block") to all
future modifications of the current formula.  Therefore, the
effective life of this investment can be interpreted as the
effective life of the manufacturing firm itself.  Since the value
of a firm is typically computed as the present value of its
perpetual earnings stream,  the initial reformulation investment
was amortized as if it were an infinite-lived annuity.
     The EPA recognizes that a reasonable case can be made that
the service life for a reformulation should be shorter than the
effective life of the firm.   If, for example the typical product:
reformulation cycle is every 8 years it could be argued that the
appropriate time period for annualizing costs and benefits is
8 years  (which does not account for the fact that the accrual of
knowledge in these formulations is carried to every future
formulation).  Under this situation, the regulation does not
actually force firms to reformulate, rather it causes them to
reformulate sooner than they would otherwise.  This does impose
some costs on the manufacturer, but the incremental costs
attributable to the regulation are then much lower than the
estimate derived using the EPA's methodology at proposal.  A
demonstration of this point is provided in Appendix B.  The
example quantifies the difference in costs under an assumption of
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an infinite life and one that would assume an 8-year life of a
product formula.  The example demonstrates that the one-time cost
of a product assumed to have an 8-year life is less than
60 percent of the $250,000 estimate used in the EIA.  Thus, the
EPA's methodology used in the EIA at proposal is likely to
overstate the costs by a substantial amount.  Taken together with
the fact that the $250,000 lump sum expenditure is likely an
overstatement of the costs to reformulate most products, the
EPA's methodology for assigning costs at proposal appears to
greatly overestimate the compliance costs per product.
     5.  The short deadline will wake many of the reformulations
infeasible.
     The regulatory negotiation process indicated that it could
take up to 3 years to develop an entirely new product.  It is
likely that less time is required to modify existing formulas to
comply with the standard since the VOC limits are similar to
requirements in place in a number of States that hundreds of
manufacturers have been meeting for years.  The EPA also received
many public comments on the compliance date which are summarized
and discussed in section 3.2.5.  Based on these comments, the
final rule allows 1 year to comply with the standard.  Companies
that need additional time can use the tonnage exemption provision
or the exceedance fee option until reformulation can be completed
for all products.
     6.  Reformulation may be financially infeasible due to
capital constraints for small firms.
     The EPA does not have the financial data from individual
(privately owned) manufacturers to analyze the issue of the
comment quantitatively.   In the EIA, the EPA uses several
assumptions to evaluate the impact on small manufacturers.  Table
3-5 of the EIA at proposal illustrates that the estimated
compliance cost for the average small business represents
3  percent of the sales for the manufacturer.  Because this burden
could be limiting to some small firms, the EPA consulted with the
Small Business Administration (SBA), which suggested two

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significant changes to the EPA's proposal.   First,  the SBA asked
that the EPA establish its proposed exceedance fee  at $2,500 per
ton.  Second,  the SBA requested that the EPA include a small
volume "exemption" for product lines below a certain size.  As a
result of these suggestions from the SBA,  the EPA has
incorporated several elements into the final rule to alleviate
the burden on small entities.  First, as discussed previously,
the final rule includes a tonnage exemption that allows
manufacturers and importers to sell or distribute limited
quantities of coatings that do not comply with the  VOC content
limits.  This exemption is described in detail in
section 2.2.1.2.   The final rule also has a provision for an
exceedance fee payment for manufacturers and importers.  This is
an economic incentive approach that allows compliance by paying a
fee in lieu of meeting the applicable VOC content limits.  The
fee payment is $2,500 per ton of excess emissions above the
limit.  The details of this provision are described in
section 2.4.  Both of these provisions essentially allow
manufacturers to gain additional time to reformulate products
(i.e., claiming the exemption or paying the fee until the
reformulation occurs).   The EIA indicates that several of the
manufacturers with low product volumes would take advantage of
the fee, and reduce the compliance costs by a substantial amoanc.
In general, smaller manufacturers tend to have smaller sales
volumes per product line and, therefore, would be more likely to
take advantage of the exceedance fee payment provision.  In
addition, the VOC limits in the final rule are similar to those
in place in New York, New Jersey, Massachusetts, and Oregon.
Over 100 manufacturers, both large and small, compete in those
markets.
     7.  The cownenter suggests that lacking data,  the preamble
speculates  that estimated market effects of  the regulation are
relatively  slight and relatively little product volume is
projected  to be withdrawn from  the market.   The commenter refers
to  these points as assumptions and also suggests that  they are

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affected by definitional manipulation of 50 product categories
into 13 markets.
     The EPA's small market quantity and withdrawal quantity
estimates are not assumptions,  rather they are projected
outcomes, based on policy simulations run through the
architectural coatings market model described in the EIA.
Withdrawals occur when product-level profits are insufficient to
cover reformulation costs.   Using this methodology, approximately
1.4 percent of all products are projected to withdraw when the
exceedance fee is included as a compliance option.   The volume
associated with these withdrawals is estimated to be less than
one-tenth of 1 percent of total market volume (p. 2-37 of the
proposal EIA).   Furthermore,  withdrawn product volumes may be
partially offset by increased production of similar non-withdrawn
products.
     The EPA divided categories into 13 market segments to mirror
the market segments used by the U.S. Census of manufacturers SIC
product codes.   This enabled the EPA to obtain quantity and price
data at the national level.   Because the Census product codes did
not match exactly with the product groupings from the VOC
emissions inventory survey,  a cross-referencing method was
devised for linking Census categories to survey categories.  This
cross-reference method is defined in appendix A of  the proposal
EIA.  Often the Census categories were defined heavily upon the
coatings use (e.g., SIC 2851163:  Interior flat solvent wall
paints and tinting bases),  while the survey categories were
defined primarily on technology (e.g., Flat, interior - solvent
borne).   Thus,  multiple Census  codes typically had  to be
aggregated to correspond with an aggregation of survey product
codes before a meaningful correspondence could be established
(e.g.,  interior solvent borne).  The EPA's objective was to
specify as many market categories as the data would allow.  Using
this method,  the largest possible number of meaningful market
categories was 13.   As a result, the aggregation process may make
it difficult to detect relatively large impacts within one

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subgroup of a market category,  if these impacts are offset by
relatively small impacts in other subgroups.  In other words, a
product may be more likely to be withdrawn from the market than
is indicated in the 13 market segments of the analysis since
multiple product niches would be lumped within the same market
segment. On the other hand, this aggregation may increase the
estimated effect on manufacturers by over-stating the degree to
which products within the market segment can substitute for
products affected by the regulation.  Notwithstanding these
limitations, the aggregation process presents an appropriate way
to analyze the cost and economic impacts and does not in any way
diminish the estimates of the absolute impact of the regulation.
     8.  The EPA ignored a formulation's "property value."
     At any one time, an asset's (property's) net present value
is based on the flow of net profits generated by that property
ever time.  Since the EPA's analysis estimates the effect of the
regulation on annual profits per product, the analysis directly
estimates the formula's property value.  The comment seems to
suggest that the EPA should also estimate annualized changes in
asset value for the product formula, which is a subset of the
measure of profits.  Because this would create a double-counting
of effects -- profits and assec value -- the EPA only measures
changes in profits.
     5.  The EPA failed to measure  "stigma"  changes arising from
the  threat of imposing more stringent substitution limits.
     The EPA interprets this comment to relate to the potential
future phase of regulation discussed in the June 25, 1996
preamble  [A61 FR 32729].  The EPA is not aware of "stigma"
damages that will result from a discussion of potential future
regulation of the architectural coating industry.  The commenter
has  not provided enough detail to allow the EPA to consider the
issue  further.
     10-12.  The EPA did not consider impact on the 42,000 retail
outlets referenced in  the BID.  The EPA did not consider impact
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on the 29,900 coating applicator firms referenced in the BID.
The EPA did not consider employment impacts for any group except
manufacturers.
     While the EPA did not directly measure impacts on the
retailing sector and other consumers,  the indirect impacts to
these entities and other users of coatings products are captured
in the market analysis by the estimated change in "consumer"
surplus, along with all other downstream effects beyond the
manufacturer.  Consumer surplus is the measure of utility (or
benefits)  consumers (retailers, contractors, home-owners, or any
other architectural coating user) receive for the supply of a
product at a certain price and quantity.  When prices increase
and output falls as a result of a regulation, this measure is
reduced to a certain extent.  The estimated change in consumer
surplus is estimated in the EIA to be a reduction of $3 million
under the proposed limits and a reduction of $6 million if the
rule includes the exceedance fee provision.  Since the impact on
consumers is less than one-third of the manufacturers' burden,
and contractors and retailers are a small subset of this effect,
the EPA saw no indication of a need for a special analysis of
secondary impacts.
     It should be recognized that retail outlets have the ability
to substitute between compliant and noncompliant coatings offered
for sale.   While the EPA projects the number of withdrawn
products to be small,  if a manufacturer does choose to
discontinue a product, retailers will presumably replace this
product with other compliant products in that category.  Thus,
although foregone profits are "lost" for the manufacturer
withdrawing a product, the retailer offsets any lost profits from
selling the withdrawn product with profits obtained by selling
substitutes within that category.  As indicated above, the number
and volume of product withdrawals is projected to be quite small,
thus suggesting retailing effects, if they exist at all, are also
likely to be quite small.
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     The job loss and other substantial economic impacts that are
referred to by the commenter are the result of assuming that
every reformulation required by the standards is not feasible,
thus the products would be taken from the market causing
manufacturers, contractors, retailers and other consumers to be
economically impacted.  According to the EIA, there are a very
limited number of products that are expected to be withdrawn from
the market.  Most products will be reformulated or produced with
current compliant formulations  (with some manufacturers using the
tonnage exemption provision or paying the exceedance fee for
emissions in excess of the standards).
     13.  The EPA ignored the effect of "product bans" on reduced
competition, fewer choices, and lower quality.
     The proposed regulatory action is not a product ban because
it is technically feasible to reformulate all product categories
to meet the standards.  The EIA indicates that only 1 percent of
the products will be removed from the market because the cost to
reformulate would exceed the profits obtained from the product.
This level of withdrawal is the aggregate of numerous varieties
of products across 13 different market segments, so it is
unlikely to eliminate (or ban) an entire product category.   At
proposal, the EPA specifically sought public comment on niche
products needing any special attention.  The EPA considered
comments received and as a result added seven categories to the
final rule.  The rule contains limits for 61 categories of
products, many of which were created,  in part, to preserve
specialty, niche market sectors within the industry; most of the
new categories added since proposal are low-volume.  Also,  no
product is "banned" since the  tonnage exemption and exceedance
fee provisions in the rule are expected to provide further
compliance flexibility which will allow manufacturers to maintain
product lines with VOC contents that exceed the VOC content
levels of the final rule.  Consequently, the resulting effect on
industry competition is also likely to be very small.  Compared
to other industries, the coatings industry is highly competitive
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due to the numerous manufacturers in the industry'.   Therefore,  a
relatively small product withdrawal effect on a very competitive
industry suggest that significant degradation of market
competition is unlikely.
     As discussed in section 2.2.4.1 of this BID, high performing
products are available in a wide range of VOC content levels in
many product categories.
     Comment:   One commenter (IV-F-lb) believed that the EPA's
cost estimates for compliant product development is too low,
especially for industrial maintenance coatings and other
specialty areas where liability and product
functionality/acceptability is more precise and requires more
detailed, time-consuming, and costly testing.  The commenter also
pointed out that there is the cost of foregone new product
development when expending scarce technical effort to reformulate
existing products.
     Response:   The EPA's cost estimate is assumed to be an
average and, therefore,  may underestimate costs in some cases and
overestimate costs in other cases.  Public comments have provided
numerous estimates suggesting that average  (one-time)
reformulation  costs per product are well below $250,000 (see
Appendix A), and the EPA has adjusted its analysis to reflect all
of the information received during the public comment period.
     For industrial maintenance coatings, the EPA's VOC limit is
consistent with existing limits ir. many State regulations and is
not as stringent as limits in some California districts.  In New
        One  method  to  evaluate  industry competitiveness  is  by
examining the concentration of firms in the industry.  An
industry consisting of very few firms would have a high
concentration measure, while a competitive industry would have
several firms and a low concentration.   The Herfindahl-Hirschman
Index (HHI)  provides a scaling of concentration from zero
(perfect competition)  to one (pure monopoly).   The HHI for the
Paints and Allied products SIC code is 0.0305,  which indicates an
industry structure close to perfect competition.
(Source: 1992 Census of Manufacturers;  report  M92-S-2,
"Concentration Ratios  in Manufacturing)
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York and New Jersey manufacturers have been meeting a similar VOC
limit for almost 10 years.
     The cost of foregone new product development is an aspect of
opportunity cost that is implicitly included in the EPA's
estimate of economic impacts.  The amortized cost of
reformulation reflects both the payment of principal and the cost
of capital.  The cost of capital directly reflects the value of
opportunities foregone by investing funds in a particular
activity, in this case, reformulation.  Thus,  if investing in
reformulation diverts funds from investing in other product
enhancements, the foregone value of those investments is captured
in the discount rate used in the analysis.  Per guidance from the
Office of Management and Budget  (57 Fed. Reg.  35613  [1992],
proposed August 10, 1992),  a real discount rate of 7 percent is
used to capture the opportunity cost of capital invested in
environmental compliance.
     Comment:  One commenter (IV-D-128) asserted that as a result
of the rule, the company would have to divert formulation
resources, which include those for high-solids or zero VOC
products, to reformulating products in a shrinking part of the
company's market.  The rule reportedly will strain the company
and may result in higher VOC emissions because of lost
opportunity to develop lower-VOC products.  The commenter
believes that lack of regulation would have actually resulted in
less VOC emissions.
     Response:  The economic impact estimate does include the
opportunity costs of funds spent on reformulation, however,  there
are no specific assumptions about what those opportunities might
be.  A firm in this situation will have many alternatives
available to them.  Instead of reformulating the products in the
shrinking market, the firm could utilize the exemption or fee
options to keep the products on the market at existing levels, or
the company could discontinue production of these products
earlier than they would otherwise.
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     2.3.2.3   Costs not Considered
     Comment:   One commenter (IV-D-16)  expressed concern that the
EPA focused on reformulation costs, but appeared to ignore costs
associated with reporting,  recordkeeping,  labeling, and
manufacturer education.  Another commenter (IV-D-115)  asserted
that costs such as research and development,  product impact and
exposure studies,  labeling, and recordkeeping cannot accurately
and fully be anticipated and budgeted.
     Response:   The EPA did include appropriate costs in the
total impacts of the rule.   Research and development are included
as part of the cost of reformulation.   Reporting and
recordkeeping costs are estimated separately and added to social
costs from the EIA to generate an estimate of total national
costs of the regulation.
     The reformulation cost included in the EIA at proposal did
not include labeling and manufacturers' education program costs.
However, the average of the cost estimates submitted in the
public comments, which did include labeling and education costs,
was substantially less than the reformulation costs used by the
EPA in the analysis at proposal (see Appendix A).   Therefore, the
EPA believes that omission of these cost components in the
proposal analysis did not cause an understatement of national
costs.  In any case, the analysis for the final rule has been
refined to reflect public comments which included labeling and
education costs (costs for retraining sales professionals on the
use and application of reformulated products and for holding
seminars and meetings for customers to ensure that they
understand the contents and applications of the reformulated
products).
     Comment:   One commenter (IV-F-le)  asked if the EPA included
litigation costs due to increased safety hazards from using
acetone formulations into the determination of the financial
impact.
     Response:   The EPA did not consider case-by-case examples of
how material substitution would alter product attributes,  safety,
or liability.   There are substitution possibilities other than
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acetone, so if safety factors in the case of this commenter
outweigh the benefits of acetone,  other raw materials should be
considered in the formulations.
     Comment:   One commenter (IV-F-1[1])  mentioned the added
costs of facility modification,  obsolete label inventories, lost
business resulting from a poor performing product and not being
able to produce a compliant product.
     Response:  The EPA has considered all comments on the cost
of complying with the regulation in its final report titled,
"Economic  Impact  and  Regulatory  Flexibility Analyses  of  the Final
Architectural Coatings VOC Rule."   The  commenter  does not provide
any description of the costs of facility modifications that would
result from the rule, and no other commenter has reported any
such costs.  Thus, the EPA is unable to verify that this would be
a cost associated with the rule and cannot include an estimate in
its analysis.   The EPA believes that due to the year lead-time a
vast majority cf existing label inventories will be utilized
prior to the effective date of the rule.   Finally, the EPA is
unable to quantify any potential changes in performance due to
lack of data,  but describes these effects qualitatively in the
EIA recognizing that  the impacts can be positive  (i.e.,  better
performance.) or negative depending on the specific product and
the specific manufacturer.  The EPA does, however, take into
account the impact of product withdrawals on the industry and
finds the impact tc be relatively slight  (i.e., less than
] percent are withdrawn nationally).
     Comment:   One commenter (IV-F-lm)  maintained that the EPA
should consider the costs for preparing product literature,
including material safety data sheets,  sales aids, color
brochures, and technical data bulletins.   Another commenter
 (IV-F-2) stated that the EPA's cost estimates should include the
costs associated with warranty claims and complaints about poor
performance cf lower VOC coatings.  Based on the experience of
one of the commenters  (IV-F-lm)  in California, newly formulated
products brought to the market with less than 3 to 5 years of
field testing suffer from higher than normal rates of product
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failure.  The commenter stated that policy adjustments and
product liability settlements are often many times the cost of
reformulation.  The commenter also noted that the consumer would
be paying higher costs per gallon and higher cost per unit of
area coated.  The commenter pointed out that the cost per unit of
time in the service life of coatings may be higher.  Higher
application costs may result from impacts on both labor and
equipment.  Special training in the use of new materials is often
required along with more surface preparation, more priming, more
finish coating, more touch-up and repair work, and more frequent
recoating overall.  New materials may require the replacement of
existing application equipment with more specialized equipment.
     Response:  Product literature costs are included in the
estimates provided in the public comments, as is discussed in
Appendix A.
     The comment implies that the new products would be
systematically inferior to existing products and, therefore,
would subject manufacturers to increased liability.  The EPA is
not aware of any widespread evidence that low VOC products
systematically incur greater product liability costs than
products above the VOC limit.
     The economic analysis does project that prices will increase
to a small extent as a result of the regulation.
     It is not clear that application costs will rise, on
average.  The EPA was unable to measure quantitatively
differences in qualities of compliant versus noncompliant
products.  Table 2-1 of the EIA qualitatively shows the possible
cost biases of the potential differences.  The commenter
qualitatively suggested what he believes would cause increases in
costs,  but did not supply supporting data.  Nevertheless,
table 2-1 shows that the change to compliant products could have
either an upward or downward cost bias.  An example of a downward
bias is possible lower application and drying time with
waterborne coatings than with solventborne coatings.
     Comment.-   One commenter (IV-F-le)  stated that alternate
solvents for low VOC coatings cost $2-4 per pound versus 10 to 20
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cents a pound for traditional solvents.   The commenter stated
that industry is not going to absorb all the cost for this
regulation and asked who is going to pay for this increase in
product cost.
     Response:   At the outset of the analysis,  the EPA was unable
to obtain verifiable information on material cost effects of
reformulation.   Anecdotally,  it was suggested that solventborne
material costs might rise in some situations (e.g.,  those
described in the comment), but might fall in others (e.g.,
substitution of water carriers for solvent).   The net effect
across all products is unknown.  Without sufficient data on the
size or direction of material cost effects,  the EPA recognized
that the effect can go in both directions, but assumed no net
material cost effects in the quantitative analysis.
     2.3.2.4   Cost-effectiveness
     Comment:   One commenter  (IV-D-96)  stated that it is
important to characterize cost-effectiveness in a consistent
manner so that various alternative control strategies can be
compared on equal footing.  The commenter asserted that
calculating cost-effectiveness based solely on nonattainment
areas unfairly biases the calculation by ignoring the benefit of
reducing the transport of ozone and its precursors.   The
commenter supported calculating the cost-effectiveness on a
national basis, which would amount to $237 per ton,  which is low
compared to VOC RACT costs which can exceed $5,000 per ton.
Another commenter  (IV-D-33) advised the EPA to maintain the
traditional measure of offering a $/ton comparison,  since it is
commonly used and will continue to provide meaningful
comparisons.  The commenter opposed more narrow measures of cost-
effectiveness, such as exclusively measuring the effect on ozone
concentrations, or the reductions in ozone nonattainment areas.
Another commenter  (IV-D-162)  considered cost-effectiveness based
on VOC content reductions solely in ozone nonattainment areas to
be impractical, because the manufacturer has little control over
where the coatings will be used.  It would thus require
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additional recordkeeping to track intended and actual locations
of use.
     Response:   In the preamble to the proposed rule
(61 FR 32735,  June 25, 1996), the EPA solicited comments on
alternative approaches to the cost-effectiveness calculation for
the proposed rule.
     Cost-effectiveness, i.e., the cost per ton of emissions
reduced, is a measure used to compare the cost efficiency of
alternative strategies for reducing pollutant emissions, or to
provide a comparison of a new strategy with historical
strategies.  The EPA's established method of calculating the
cost-effectiveness of a rule with nationwide applicability is to
divide the total cost of the rule by total emission reductions.
At proposal,  the EPA requested comment on two alternative ways of
calculating cost-effectiveness for the architectural coatings
rule:   (1)  cost-effectiveness considering total emission
reductions in ozone nonattainment areas only, and  (2) cost-
effectiveness considering emission reductions in ozone
nonattainment areas during the ozone season only.
     After considering the comments summarized above, the EPA
does not plan to adopt these alternative approaches to
calculating cost-effectiveness for rules with nationwide control
requirements, for reasons that are presented below.
     One issue raised by the comments is whether the EPA's
traditional measure creates a bias against strategies that apply
in a limited geographic area  (e.g., in nonattainment areas)
relative to nationwide strategies, or against seasonal strategies
relative to year-round strategies.  This issue would arise if the
EPA used cost-effectiveness figures to compare the desirability
of these dissimilar types of strategies.  In fact, the EPA did
not use cost-effectiveness estimates in this way in developing
the architectural coatings rule and does not plan to do so for
other rules or guidance being developed under section 183(e).   In
the case of the architectural coatings rule, the EPA considered
applying restrictions to architectural coatings only in
nonattainment areas (either by rule or through a CTG).   The EPA
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determined that such geographically targeted restrictions for
these nationally distributed architectural coatings would pose
substantial implementation difficulties for government,  would
impose substantial compliance burdens on a large number of
regulated entities,  and would be less effective at reducing
emissions than a national rule.   Given that a strategy applicable
only to nonattainment areas is not practical or desirable for
architectural coatings, the EPA did not see a need to invest
resources to pursue that strategy and calculate its cost-
effectiveness .
     The EPA considered whether use of one of the alternative
cost-effectiveness methodologies would enable the EPA to make
valid cost-effectiveness comparisons between nationwide and
targeted geographic strategies,  or year-round and seasonal
strategies, for reducing ozone pollution.   The EPA has the
following concerns about the two alternative approaches:  First,
VOC emission reductions have benefits other than reducing ozone
levels in nonattainment areas.  As a result, the EPA believes the
cost-effectiveness calculation for a nationwide, year-round rule
should not exclude VOC emission reductions in attainment areas or
outside the ozone season.  The EPA recognizes that a primary
objective of section 183 (e) of the Act is to reduce VOC emissions
in ozone nonattainment areas.  However, as previously explained,
in the development of the architectural coatings rule, the EPA
found that the best policy alternative is to implement a
nationwide rule.  Therefore, emission reductions from this rule
will not only be realized in ozone nonattainment areas,  but also
in all other parts of the country in which architectural coatings
are distributed and consumed.
     In general, the benefits of VOC reductions in ozone
attainment areas include reductions in emissions of VOC air
toxics, reductions in the contribution from VOC emissions to the
formation of fine particulate matter, and reductions in damage to
agricultural crops, forests, and ecosystems from ozone exposure.
Emission reductions in attainment areas help to maintain clean
air as the economy grows and new pollution sources come into
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existence.  Also,  ozone health benefits can result from
reductions in attainment areas.  The closure letter from the
Clean Air Science Advisory Committee (CASAC) for the recent
review of the ozone NAAQS states that there is no apparent
threshold for responses to ozone exposure  [See U.S. EPA; Review
of NAAQS for Ozone, Assessment of Scientific and Technical
Information, Office of Air Quality Planning and Standards Staff
Paper; document number:  EPA-452\R-96-007].  In other words,
reactions to ozone have been found at concentrations below the
current standard  (0.12, 1 hour), and the revised standard  (0.08,
8 hour).
     Second, under either alternative approach, emission
reductions in ozone attainment areas would not be included in the
calculation of a rule's cost-effectiveness.  The implicit
assumption is that emissions reductions in attainment areas do
not contribute to cleaner air in nonattainment areas.  In fact,
NOX emitted long distances away can affect ozone levels in
nonattainment areas.  In some circumstances, VOC sources outside
nonattainment area boundaries contribute to ozone levels in
nonattainment areas.  As a result,  a cost-effectiveness
comparison based on the alternative approaches sometimes could
create a bias against a nationwide rule relative to a strategy
that applies in nonattainment areas only.
     In light of the transport issue, it has been suggested that
the EPA apply a weighting factor to account for differences in
the extent to which emissions inside and outside nonattainnent
areas contribute to ozone formation in nonattainment areas.  The
EPA is concerned that in order to calculate cost-effectiveness
using this concept, the EPA would have to conduct extensive and
costly air quality modeling to estimate ozone reductions
resulting from each candidate control strategy and that this
would require extensive data on the location of emissions.  Such
detailed analysis is appropriate for some policy decisions, but
not for all.  As a result,  the EPA is skeptical that this
weighting approach would represent a generally useful analytical
tool for decision making.
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     The EPA,  of course,  agrees that differences in the location
and timing of emission reductions are a significant consideration
in choosing among alternative strategies.   The extent of ozone
reductions and other benefits resulting from VOC emission
reductions varies,  partly based on location and season.  In
considering nationwide vs.  geographically targeted controls, and
year-round vs. seasonal controls, the EPA considers available
information on the effectiveness of those strategies in reducing
ozone--as well as other health and environmental considerations,
economic considerations,  and other relevant factors--in making a
holistic assessment of which strategy is most desirable from an
overall public policy standpoint.
     There are instances where the EPA does provide an estimate
of cost-effectiveness of a control strategy during the ozone
season,  i.e.,  generally,  when a control strategy is feasible to
apply on a seasonal basis,  or when limits are set on a seasonal
basis.  Although these figures are useful for comparing different
seasonal strategies, the EPA does not plan to use cost-
effectiveness figures to compare seasonal and year-round
strategies for the 183 (e) program, for the reasons presented
above.  In regard to the architectural coatings rule, the EPA
notes that the nature of architectural coatings emissions does
not ailov; for control strategies that reduce emissions only
during the ozone season to be an objective for consideration.
One reason is that the shelf life and consumption rate of
architectural coatings varies greatly and one cannot predict that
a certain percentage of a product made with a specified
formulation will be consumed and, thus, result in VOC emitted
during the ozone season.   Due to the fact that reductions only
during the ozone season is not a viable control strategy for
architectural coatings, the EPA cannot endorse a seasonal
approach to measuring cost-effectiveness for the architectural
coatings rule.
     Comment:  One commenter  (IV-D-16) expressed concern that the
EPA supports the regulation of products when there is little, if
any, cost-effectiveness to doing so.
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     Response:   The EPA believes that the commenter's concerns
are misplaced.   The EPA favors controls that are cost-effective,
when it is possible to do so from a policy and legal perspective.
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.  The EPA has assessed the cost-effectiveness of the
architectural coatings rule.  Using the estimated cost of
$28 million  (in 1991 dollars) and emission reductions of
103,000 Mg (113,500 tons), the nationwide cost-effectiveness of
the architectural coatings regulation is $270 per Mg  ($250 per
ton).   This compares favorably with emission reductions from
other  183 (e)  rules, including consumer products at $256/Mg
($233/ton)  in 1991 dollars and automobile refinish coatings at
$140/Mg  ($130/ton).  The cost per ton of reductions from each of
these  rules is far more cost-effective than other sources of VOC
reductions that can range up to thousands of dollars per ton.
The EPA notes that Congress recognized consumer products
(including paints and solvents)  as a source for cost-effective
reductions of VOC emissions when in enacted section 183 fe) of the
Act.
     2.3.2.5   Disproportionate Impacts on Small Businesses
     Comment:  Using the State of California as an example, one
commenter (IV-D-02/IV-F-11)  claimed that the architectural
coatings regulation would impose a devastating impact on small
businesses.   According to the commenter, since the California
rules  have been in effect, more than half the paint manufacturers
in Northern California have closed.  The commenter proposed that
the EPA revisit a document that was presented during the Reg-Neg
process entitled "ICF Study Summary, Small Business Economic
Impact Study" final report,  released in  June 1988.   This study
examined the impact of a number of SCAQMD's rules, including its
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architectural rule,  on small businesses.   Another commenter
(IV-D-115)  remarked that the shutdown of  hundreds of paint
manufacturers is at least in part due to  the costs or physical
constraints associated with increased environmental regulations.
     One trade association (IV-F-2)  representing 30
manufacturers, of which 20 are small businesses, conducted a poll
of their members and gathered the following data on the impacts
of regulation:  (1)  10 to 50 percent of product lines were
discontinued or replaced by new formulations as a direct result
of the California regulations; (2)  64 percent of the companies
lost market share,  which resulted in a loss of revenue of
$250,000 per year;   (3) 27 percent of the  companies lost market
share, which resulted in a loss of revenue of greater than
$1 million; and (4)  80 percent of the companies said that their
product complaints had increased since the regulations took
effect, resulting in costs of $250,000 per year per company.
     The commenter also cited the results of the 1988 ICF study
of SCAQMD,  which the commenter claimed established that:
(1) National coating companies specialize in water-based
products;  (2) smaller coating companies specialize in higher
performance solvent-based products;  and (3) smaller companies
produce the coatings that are regulated and, therefore, bear the
bulk of the cost of the regulation.   In addition, the commenter
stated that even though it may appear that only a small
percentage of products require reformulation under the proposed
rule, these products may be key for a small business to maintain
viability.
     The commenter  (IV-D-214b) stated that product removal or
withdrawal costs were more substantial than the EPA estimated,
especially for those costs that would be incurred under a second
phase of regulation.  The commenter asserted that the discussion
of removal costs in the draft architectural coatings preamble was
devoid of merit.  First, the commenter stated that the EPA
treated the impacts of product removal as if they did not exist
by aggregating multiple categories in a few meaningless segments.
The commenter asserted that proposed limits of 250 or even
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350 grams per liter would effectively remove traditional glossy
alkyd enamels from the market.   The commenter cited examples of
paint companies being sold at a loss because of California rules
banning traditional glossy alkyd enamels.  The commenter stated
that as a result of California's VOC limits for traditional
glossy alkyd enamels for general purpose use, his family's
company lost sales, was forced to discharge a large percentage of
their work force, had difficulty raising debt and equity capital,
and lost fair-market value.  The commenter continued that the
EPA's projection that less than 0.1 percent of product volume
would be withdrawn from the market as a result of the proposed
rules was too low.  The commenter cited the 1988 ICF SCAQMD
commissioned study which,  according to the commenter,
demonstrated that only a few regional and local manufacturers
were expected to survive regulation of architectural coatings by
SCAQMD Rule 1113 .  The commenter estimated that there were
500 small or regional paint manufacturers with aggregate sales of
about $2.5 billion a year.  The commenter asserted that the
adoption of the proposed architectural coatings rule would reduce
the estimated aggregate profits and company value by hundreds of
millions of dollars,  largely as a result of lost sales and
profits from product removals.
     Three commenters (IV-D-44, IV-D-110, IV-D-147)  predicted
large undue burdens for many small manufacturing companies due to
reformulation,  especially those with a small chemist staff.  One
commenter (IV-F-1[1]) stated that small businesses that only
manufacture and sell in attainment areas do not contribute to
ozone non-attainment and should not have to bear the cost of
reformulating their products if the real intent of the rule is to
reduce the potential of paint emissions to contribute to ozone
levels that violate the NAAQS.
     Another commenter (IV-D-02)  stated that the proposed
regulation has  the effect  of discouraging niche market formations
which are a mainstay for small  businesses.  The commenter also
stated that the regulation places undue resource burdens on the
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small business,  and it appears that because of this the
regulation's effects favored large paint manufacturers.
     One commenter (IV-D-175)  stated that the rule will
discriminate against the small business because large companies
have greater resources and chemist staffs.   The commenter claimed
that the proposed rule threatened to put small businesses out of
business.
     Two commenters (IV-D-115, IV-D-147)  predicted that
manufacturers of products will not be able  to compete with
national manufacturers with larger resources and experience in
VOC-compliant manufacturing.
     One commenter (IV-D-130)  requested that the EPA consider the
significant financial impact of the rule on their small family-
owned business and other small businesses.   This small business
reportedly manufactures and sells one waterborne and six solvent
borne formulations of form release compounds in both attainment
and non-attainment areas.  The commenter indicated that two of
its solvent-borne compound formulations would not meet the
proposed VOC standards.  According to the commenter, at least one
of these products cannot be reformulated and will have to be
discontinued.  The commenter stated that his small business will
lose $600,000 in gross sales over the next  3 years if one product
cannot be reformulated/ $1.5 million in gross sales if both
products have to be discontinued.  The commenter also estimated
that the additional costs of testing, reformulation, technical
help, labeling,  liability, etc.,  would total $38,800.  The
commenter added that many of these items are one-time costs, but
for a small company they are significant.
     One commenter (IV-D-178)  stated that many small businesses
will be eliminated by the VOC limits in the proposed rule.  The
commenter was concerned that a number of its products could not
comply with the proposed limits.   The commenter estimated that it
will require a minimum of 10 man-years to reformulate all of
these products.   Because the commenter only has two chemists
working full time and cannot afford to hire an additional
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chemist, the commenter considered the January 1, 1997 compliance
date is unrealistic.
     One commenter  (IV-F-ll)  stated that small companies
typically have limited funds, less than $100 million in sales,
and less than 500 employees.   The commenter noted that small
companies tend toward specialties and niches, that uniformity
eliminates specialties and niches, and that large companies
desire uniformity.  The commenter noted that small companies have
limited staffing for research and development and for
administrative requirements,  have limited data processing
abilities, and are often family-owned and operated.  The
commenter believed that regulation would eliminate niche markets,
increase administrative requirements such as record keeping and
labeling requirements, and consume research and development time
to formulate complying products to replace products in order to
stay in business, therefore eliminating R&D time for formulating
new products for growth.  The commenter also asserted that
regulation consumes sales time educating customers of the rule
requirements and methods to apply compliant coatings and
increases the rate of product failures and rejects, therefore
increasing waste and inventory obsolescence.  The commenter
claimed the following effects of California's rules:  death of
several paint industry executives due to heart failure, stroke,
and suicide; daily violations of rules by many businesses; scores
of businesses driven from the State and country; and negative
impacts on air quality.
     Another commenter  (IV-F-lh) stated that the architectural
coatings rule will cost small business a lot of money so the rule
should be based on sound science, facts, and risk-cost benefit
analysis.
     One commenter  (IV-D-55)  stated that the publication of the
proposed architectural coating rule would adversely affect many
small businesses by making the industry aware that certain
products may no longer be produced in the near future.  The
commenter stated that this would affect specifiers because they
would be uncertain about the  availability and performance
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qualities of certain specialty and high-performance coatings.
The commenter stated the proposed architectural coating rule
would create hardship on companies because they would need to
consider changing raw materials,  manufacturing processes, etc.
The commenter stated that the potential for additional study and
amending of the proposed rule created uncertainty which might
cause small companies to conclude that their only recourse was to
seek out a merger or consolidation.
     Another commenter  (IV-F-2)  likewise expressed concern about
the ability of small businesses to comply with the rule.  This
manufacturer reportedly has about $6 million in annual sales,
less than half of which is architectural coatings.  The company
sells coatings in all 50 States,  but 80 to 85 percent of these
sales are in California.  The company specifically targets its
sales in the unregulated areas in California.  The commenter
indicated that all of the company's products are relatively low
volume.  This small coatings manufacturer produces coatings in
25 different coating categories.   Within the 29 categories, 3C to
40 products would have to be reformulated to meet the proposed
standards.  The commenter operates close to the break even point
and has gone from one chemist to five chemists.
     Response:  The EPA understands the concerns of small
businesses regarding compliance with the rule and has made
adjustments in the final rule to address their concerns.  The EPA
notes, however, that comparisons to the effect of California
regulations, even if they were correct, are not appropriate given
the different VOC content limits of the final rule and existing
regulations in California.  The existing rules in California
generally require lower VOC contents than the limits in this
rule.  Because the national regulation is generally not as
stringent as existing California district regulations, there
should be no incremental impact on small producers selling in
California markets.  These producers may experience impacts from
the national rule if they sell in non-California markets and have
not found a way to produce lower VOC coatings since the
California limits were put in place.  Notwithstanding the
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concerns expressed by the commenters, the existing rules in
California do not appear to have eliminated the paint industry in
that State.  Based on a 1990 survey of the manufacturers that
sell architectural coatings in the California market, there were
149 small businesses with total company sales less than
$50,000,000 that participated in that market compared to 25 large
manufacturers with total company sales greater than $50,000,000.
     Several statutes provide guidance for the EPA to consider
the impacts of its regulations on small firms.  The EIA report
for proposal identified and, to the extent possible, quantified
the impacts of a national rule on small producers in accordance
with the Regulatory Flexibility Act.  This analysis has been
revised given changes to the final rule and has been augmented by
an analysis to meet the amendments to the Regulatory Flexibility
Act by the Small Business Regulatory Enforcement and Fairness
Act. Similar to the finding of the ICF report, the EPA's analysis
confirms that because compliance costs are fixed for all levels
of production (i.e., it is not reduced if the volume produced is
low),  these costs comprise a greater share of baseline costs and
revenues for small producers.  The EPA analysis also confirms
that small producers are more heavily represented in the higher
VOC categories.   The EPA has considered these factors and the
comments received on the proposal in developing the final rule
and has included several provisions to address such concerns,
including:
          •    the creation of new product categories where
               warranted;

          •    an extended period for compliance after
               promulgation to allow for reformulations;

          •    a VOC tonnage exemption; and

          •    an exceedance fee provision.

     All of these provisions were considered, in part, to
mitigate unnecessary adverse impacts of the rule upon small
businesses.  The EPA notes that section 183 (e) of the Act
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instructs the EPA to obtain appropriate VOC emission reductions
from consumer and commercial products.   In seeking to achieve
these reductions from the architectural coatings rule,  the EPA
has adjusted the final rule in ways that it deems reasonable to
help to limit the impacts on small businesses.   The analysis of
the final rule conducted by the EPA confirms that these
mechanisms will provide the intended compliance flexibility,
while still allowing the final rule to achieve  necessary levels
of VOC reductions from this product category.
     The EPA's rationale for controlling attainment areas is
provided in section 2.1.2 of this BID.
     Comment:  Two commenters (IV-D-212, IV-D-212p6k, IV-F-ll)
pointed out that smaller companies have a higher percentage of
coatings that may require reformulation because they tend to
produce niche market coatings that have higher  solvent contents.
One commenter  (IV-F-ll) explained that smaller  companies find it
difficult to compete with the large companies on the more common
water-based paints because of their large batch sizes,  better
purchasing power and other economies of scale,  including
significantly increased sales dollars relative  to R&D expenses.
The commenter stated that a small company cannot pay $10 to
$15 million and spend 100- to 150-person years  to reformulate
their coatings when there are only six person years available.
According to the commenter, a small company can only look at a
few product lines and reformulate them and let  the rest go to the
competition.  The commenter predicted that half of the 400 to 500
companies with sales less than $10 million will be gone by the
year 2000 if the proposed rule were adopted.
     The other commenter  (IV-D-212, IV-D-212p6k) explained that
the large national and multinational paint manufacturers devoted
a high percentage of their product mix to waterborne paint
products and seldom attempted to meet the needs of local and
regional conditions.  The commenter  (IV-D-212p6k) stated that for
small regional companies, a higher percentage of special products
were made which the local market requested and required for their
particular needs.  The commenter  (IV-D-212) stated that the cost
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of reformulation  to these manufacturers would  be  substantial and
would force  some  companies out of business.
     Four commenters (IV-D-16, IV-D-26, IV-D-73,  IV-D-110)
asserted that  the rule  would destroy solventborne niche markets
generally maintained by smaller producers, and would help foster
an anti-competitive and oligarchical setting in the  architectural
coating industry.
     Response:  The EPA agrees that small  companies  do produce
many high-VOC  products.  The Regulatory Flexibility  Analysis
(RFA) chapter  of  the proposal EIA report confirms that small
firms tend to  produce niche products with  higher  VOC content.
The report indicates that products from the small company segment
of the survey  population are more heavily  represented in high VOC
categories  (specialization effect) and more heavily  represented
in the high  VOC products within categories (technology effect).
     The EIA assumes that if the cost of reformulation exceeds
the profits  of a  product, then a firm will choose the least-cost
option and will withdraw the product from  the  market.   The report
found that given  the fixed costs of reformulation (i.e.,  cost
does not vary  with volume level)  many of the smaller volume
products  (that may or may not be produced  by small firms)  would
be predicted to exit the market.   The EPA  has  included this in
its consideration to revise the rule to include the  tonnage
exemption and  the fee provisions,  which will reduce  the burden on
all firms.
     The EPA estimates  that just over 1 percent of the baseline
products will  be  removed from the market,  so the  potential effect
on industry  competition appears to be very small.  Compared to
other industries,  the coatings industry is relatively
unconcentrated',  which  implies that  it  is  highly competitive.
     'Relative  industry concentration is typically measured using a
Herfindahl-Hirschtnan Index (HHI).  HHI is represented on a scale of zero
(perfect competition) to one (pure monopoly).  The most recent HHI value for
SIC 2851:  Paints and Allied Products is  .0305, which indicates and industry
structure  close  to perfect competition (Source: 1992 Census of Manufactures
report MC92-S-2  "Concentration Ratios in Manufacturing").

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Therefore, a relatively small product withdrawal effect on a
relatively unconcentrated industry suggests that significant
degradation of market competition is unlikely.  Thus,  although
the EPA agrees with the commenters that many small companies make
higher VOC products, the EPA disagrees with the conclusion of the
commenters regarding the actual impacts of the architectural
coatings rule.  The EPA's analysis suggests that the alternative
compliance mechanisms in the final rule will mitigate the impacts
of concern to the commenters.
     Comment:   The commenter (IV-D-212) stated that in the
Regulatory Flexibility Analysis (RFA) for the architectural
coatings rule, the EPA attempted to justify cost data and its
effect on small business by analyzing only a small representative
pool of businesses  (36 paint manufacturers).  The commenter
asserted that the EPA made no attempt to supplement this
information so that the economic analysis would be based on a
more complete set of data which was available at that time.
     Response:  The EPA's analysis of small entity impacts
utilized data provided by the industry survey.  The survey
includes detailed information on nearly 5,000 architectural
coatings produced by 116 manufacturers, 36 of which claim to be
small businesses.  To preserve confidentiality, however, the data
were provided to the EPA at an aggregated level for the small
business sector.  The small business component of the survey
provided the total number of products produced by these firms,
the VOC content of the products, and total sales volume  'in
units, not dollars), but did not link any of this information to
specific firms.
     With the survey information, the EPA was able to develop
impact estimates for a model small company.  The model company
parameters were assigned by taking per company averages for the
36 surveyed small companies in the following categories:
     •    number of architectural products sold  (27.5)
     •    number of non-compliant products  (7.8)
     •    volume per product (66,400 liters)
And taken together with an average sale price of $2.52 per liter,

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     •     coating revenue ($4.6 million).

     This information was used to evaluate the impact of the
regulation on a model small entity.  Impacts were initially
estimated by computing the ratio of the cost of reformulating all
non-compliant products to total revenue.   The resulting
cost/revenue ration is 2.5 percent.  This gives an upper-bound
estimate of average impacts,  because it does not consider
compliance strategies that are less expensive than reformulation
(i.e.,  exceedance fee or product withdrawal).   When those
strategies are factored in,  the ratio drops to 2 percent.
Moreover, this estimate is still biased upward in the sense that
it implicitly assumes that the firm is unable to increase prices
for the product to recover some of the additional cost.
     The EPA also obtained a list of other small businesses in
the industry and obtained total revenues for these firms.
However, without specific information on the number of products
produced and their VOC content, there is no method to determine
the number of products that would incur reformulation costs.
Unfortunately,  assigning the model firm's costs  (based on 7.8
non-compliant products)  does not produce a meaningful evaluation
of the  distribution of small firms' impacts.  This occurs because
the calculation of cost/revenue ratios for these firms varies the
denominator  (firm revenues)  by firm, but the numerator
(compliance costs; remain fixed as those represented by the model
firm.   Using this method, the estimated impacts would, by
definition, be relatively larger for firms with small revenues.
However, it does not necessarily follow that a firm with low
revenues would have the same level of reformulation costs as a
firm with larger revenues and such an analysis would, therefore,
overstate.impacts on the smallest firms.   Therefore,  for the
final  rule, the EPA used the data from the 36 firms in the survey
to provide a representative look at model company small business
impacts, as described above.
     Comment:  One commenter (IV-F-lc)  asserted that the proposed
rule was anti-small business.  The commenter stated that the EPA

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had not taken into account the impact of the rule on small paint
retailers.  The commenter claimed that the effect of the proposed
rule on small business was not adequately addressed in the EPA's
analysis.   The commenter asserted that the EPA decided not to
have the rule subjected to the new Reg Flex amendments which were
so important to the small businesses. The commenter also stated
that for small businesses the products affected represented a
higher percentage of:   products,  sales,  profits,  and cost of
reformulation.
     Response.-  Section 3 of the proposal EIA identifies, and to
the extent possible,  quantified potential impacts on small firms.
The EPA's analysis has been revised and improved given changes in
the final rule and has been augmented to meet the requirements of
the Small Business Regulatory Enforcement and Fairness Act.  This
analysis suggests that because reformulation appears to be a
fixed amount no matter how much or how little is produced, small
firms who generally have smaller volume products may experience
reformulation costs that are a greater percent of their baseline
cost and revenues.  The EPA has taken several steps to alleviate
this burden, including:

          •     the creation of new product categories where
               warranted,
          •     an extended period of compliance after
               promulgation to allow for reformulations,
          •     a VOC tonnage exemption,  and
          •     the exceedance fee provision.
All of these provisions were considered, in part, to address
niche markets and small business burdens.
     While the EPA did not directly measure the impacts of the
rule on the retailing sector, which would include small dealers
in small towns as well as all other dealers, the indirect impacts
on these sources of price increases and lower product output is
properly reflected in the market analysis of the EIA by the
estimated change in "consumer surplus."   In general, consumer

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surplus is the measure of utility  (or benefits) consumers  (i.e.,
retailers, contractors, home-owners, and other AIM coating users)
receive for the supply of a product to the market.   When prices
increase and output falls for products in a market as the result
of a regulation, this measure is reduced to a certain extent.
The EPA estimated that consumer surplus at proposal would
potentially be reduced by approximately $3 million if
reformulation was also the only compliance option,  and by
$6 million if the fee provision is considered.  Since the impact
on consumers is less than one-third of the burden on
manufacturers, and small dealers are a small subset of this
effect, it is likely the impact on small dealers will be minimal.
Another indicator of a minimal impact on small dealers is the
fact that the analysis predicts that less than 1 percent of all
products will be withdrawn from the affected markets.   Although
some producers may decide to discontinue certain products, these
products will be produced by another manufacturer if demands
warrants it.  Thus,  retailers may see a change in the
manufacturer, but will still be able to sell such products.
     Comment:  One commenter (IV-D-52) stated that the EPA's
proposed VOC content limits would require virtually all small
paint manufacturers (except those who have long been regulated;
to cease making many of the products they desire to make.
     Response: The EPA disagrees that the rule will have the
severe impact feared by the commenter.  The EPA's analysis
suggests that the impacts will be limited.  The EIA assumes that
a manufacturer will reformulate a product if it is economically
feasible, that is, if the profits of the product exceed the costs
of complying with the regulation.  Using this criterion,  the EIA
suggests that the vast majority of reformulations are
economically feasible,  which is evident by the finding that only
I percent of the products will be removed from the market because
the cost to reformulate would exceed the profits obtained from
the product.  This level of withdrawal is the aggregate of
numerous varieties of products across 13 different market
segments, so it is unlikely to eliminate an entire product
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category.  In addition,  the final rule contains 61 categories of
products, many of which will preserve specialty, niche market
sectors within the industry.  Also,  the tonnage exemption and
exceedance fee provisions in the rule are expected to provide
further compliance flexibility which will allow manufacturers to
maintain product lines with VOC contents that exceed the VOC
content levels of the standard.
     Comment:  One commenter (IV-F-le) estimated that
reformulation will take 1 to 2 years and cost at least
$150,000 per product line.  The commenter stated that it will
need a minimum of $450,000 to reformulate.  If the commenter does
not reformulate, it estimated that its exceedance fee will exceed
$4.4 million, a cost that it will pass on to its customers.
     One commenter  (IV-D-189) emphasized the very diverse nature
of the architectural coatings industry, and the disproportionate
cost impacts the national rule will have on manufacturers.  For
many companies, the commenter asserted that compliance with the
national rule will impose tremendous economic burdens.  The
commenter noted that timing plays a key function regarding
determining cost of the rule's implementation; that is, the more
time provided for manufacturers to comply, the lower the cost for
most companies to implement the rule.  The commenter recommended
that the EPA give more weight to the impact the national rule
will have, not only on unregulated areas, but currently regulated
areas as well.  A currently regulated area with similar VOC
limits such as those in the national rule will benefit because
any end-use of out-of-State non-compliant products within the
currently regulated area would decrease.
     Response:  Based on this and other comments requesting
adequate lead time for compliance, the EPA is allowing a year for
compliance after promulgation.  In addition, the final rule
allows a 23 megagrams (25 ton) of VOC exemption per manufacturer
in the time period from the compliance date through the year
2000, 18 megagrams  (20 tons) in the year 2001, and 9 megagrams
 (10 tons) each year for the year 2002 and all future years.  If
additional flexibility is required beyond these provisions,
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producers can pay an exceedance fee on any remaining products
that exceed the limitations.  All of these measures are expected
to reduce the burden and cost to producers.  In addition, the EPA
has also modified its reformulation cost estimate, taking into
consideration the costs provided by commenters  (see
section 2.3.2.1 of this document).
     2.3.2.6   Effect of Rule on Competition
     Comment:   Two commenters (IV-D-165, IV-D-166) stated that
the proposed rule would make their company's products
economically anti-competitive.  Another commenter submitted four
letters  (IV-D-212, IV-212p6, IV-D-212p6k,  IV-D-212JJ) claiming
that a national rule provides a competitive advantage for large
national and international companies over small regional and
local companies.  The commenter stated that the larger companies
market throughout the nation so a uniform national rule
simplifies marketing, production, and compliance activities.
Also, the commenter claimed that the larger companies
predominantly produce waterborne coatings which already meet the
proposed limits so that these larger companies will not be
subjected to the costs of product reformulation and product
withdrawal.  In contrast, the commenter claimed that most smaller
companies market in local regions that are in attainment with the
ozone standard and are not subject to VOC content limits.  Thus,
in the absence of a national architectural coatings rule, these
companies would be unaffected by the problem of ozone
nonattainment.   The commenter (IV-D-212p6k, IV-D-212JJ) stated
that the larger companies have access to technology that provide
them with a competitive advantage in reformulating products.
     The commenter (IV-D-212p6k,  IV-D-212jj)  contended that the
National Paint and Coatings Association advanced a policy for a
national rule because it is composed primarily of large
manufacturers,  and large manufacturers promote a national
architectural  coatings rule because a national rule will provide
their companies with competitive advantages.   The commenter
(IV-D-212,  IV-D-212p6k,  IV-D-212JJ)  implied that the EPA was
biased in favor of larger manufacturers and against the smaller
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manufacturers.  The commenter (IV-D-212p6k)  cited "Catching Our
Breath, Next Steps for Reducing Urban Ozone"  prepared by the
Office of Technology Assessment as an example of bias for the
larger manufacturers.  The commenter noted that "Catching Our
Breath" recommended the  regulation of  architectural  coating
products on a national basis and the only apparent representative
of the paint industry on the advisory panel was a representative
from one particular large company.  The commenter asserted that
the imposition of regulations would have a very strong
competitive benefit on behalf of the large national companies
while having a severe economic impact on the many hundreds of
small paint manufacturers across the country.  The commenter
(IV-D-212, IV-D-212jj) concluded that although the Act did not
contain provisions conferring a competitive advantage to one
segment of the industry over another,  the effect of the proposed
architectural coatings rule would extend a decided competitive
advantage to the large and international companies,  which was
contrary to the express intent of Congress and the President of
the United States.  Another commenter  (IV-D-26) suggested that
the EPA has not worked closely enough with small paint
manufacturing companies, but instead worked closely with the
National Paint and Coatings Association.
     One commenter  (IV-D-212) noted that mergers in the paint
industry were being partly driven by increased regulatory
activity and threatened regulatory activity.
     One commenter  (IV-D-212jj) stated that a national trade
association observed during the Reg-Neg process that a
substitution of products would place its members at a competitive
disadvantage and drive many of them out of business.  The
commenter also stated that the small business would be most
adversely affected if prohibition-type regulations were imposed
 (most of the large national manufacturers focus almost
exclusively on water-based products).  The commenter questioned
whether most large national and international companies favored a
Federal national rule for purposes of cleaning up the air or for
marketing and competitive purposes.
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     The commenter (IV-D-212p6k,  IV-D-212JJ)  also claimed that
major national companies openly acknowledged that certain
individual companies may have favored such a policy for
competitive reasons.   The commenter cited one large firm as an
example and stated that this company had access to technology
which would give it a competitive edge if it had a national
standard to which it could formulate.
     One commenter (IV-D-212p2)  claimed that a substantial number
of companies in California were opposed to the proposed
regulations.  According to the commenter, these regulations were
being used primarily for the purpose of achieving market
uniformity on behalf of large national and international
companies while causing a severe disadvantage to many local and
regional companies,  which could have anti-trust implications.
The commenter  (IV-D-214c)  claimed the main effect of the proposed
rule would be severely anti-competitive, that the industry would
be controlled by "federal  bureaucrats" and a few corporations.
     One commenter (IV-D-212; asserted that the proposed
architectural coatings rule was anti-competitive in nature,
pitting the small, local and regional manufacturer against the
national and international manufacturer.  The commenter explained
that companies in attainment areas,  who have heretofore been
unregulated, would be required to reformulate with new products
and would find it difficult to compete against most of the other
companies who would not be compelled to reformulate.
     Response:   The EPA disagrees with these comments which
suggest that the EPA intends the rule to favor large companies
over small companies, national companies over regional companies,
or any permutation thereof.  The EPA intends the rule to achieve
necessary VOC emission reductions consistent with the provisions
of section 183(e) .  The EPA's rationale for a national regulation
compared to a CTG is provided in section 2.1.2 of this BID, and
is based on the effectiveness in achieving reductions, not on
economic efficiency.
     As the EIA indicated at proposal, estimated market effects
from the architectural coatings rule are relatively slight for
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all regulated entities under the rule.   Approximately 1 million
liters of architectural coating products,  accounting for less
than one-tenth of 1 percent of industry product volume, are
projected to withdraw from the market during the first year that
the architectural coatings rule goes into effect.  Price effects
in each market are expected to range from no effect to an
increase of less than two cents per liter,  which is still less
than a 1 percent increase of the baseline price.  Average price
and quantity effects across all market segments were each less
than one-tenth of 1 percent of baseline values.  Given the small
impacts of the rule on the industry as a whole, the EPA does not
believe that the rule will result in a significant competitive
advantage to any segment of the industry.
     The level of product withdrawal discussed above is the
aggregate of numerous varieties of products across 13 different
market segments, so it is unlikely to eliminate an entire product
category.  In addition, the rule contains 61 categories of
products, 7 of which were added into the final rule based on
public comment and many of which will preserve specialty, niche
market sectors within the industry.  Also,  the tonnage exemption
and the exceedance fee provisions in the rule are expected to
provide further compliance flexibility which will allow
manufacturers to maintain product lines with VOC contents that
exceed the VOC limits set by the standard.   The rule also exempts
products sold in containers of 1 liter or less.  Consequently,
the resulting effect on industry competition is also likely to be
minimized.  Compared to other industries,  the coatings industry
is highly competitive due to the numerous manufacturers in the
industry.  Therefore, a relatively small product withdrawal
effect on a very competitive industry suggests that significant
degradation of market competition is unlikely.  Given the low
percentage change in price and consumption, the level of
substitution to other manufacturers products is expected to be
low.
     Finally, the EPA notes that the effect of the final rule is
not anticompetitive merely because those companies with low-VOC
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products will have more limited costs of compliance.  Those
companies have already expended resources to develop lower VOC
products and the rule is intended to encourage the development of
such products in the future.
     Comment:  Two commenters in three letters (IV-D-55,
IV-D-214b, IV-D-214c) stated that the EPA was required but failed
to assess the impact of the proposed rule on painting contractors
and independent retail dealers.  One commenter (IV-D-214c)
claimed that the impact of the rule would have a profound ripple
effect in various related sectors.  For example,  instead of
choosing from many low-priced high-quality products supplied by
many manufacturers, a dealer might be forced to choose from a few
dominant manufacturers.  According to the commenter, about 29,900
painting contractors would be adversely impacted; most of the
26,100 workers in the paint manufacturing industry were employed
by those manufacturers adversely impacted by the proposed rule;
and consumers would face restricted choices, lower quality,
higher product costs, and higher labor costs as a result of the
rule .
     Response:  The EPA disagrees with the conclusions drawn by
the commenters.  The impacts on painting contractors and their
employees and the restricted choices to consumers that are
referred to by the commenter are the result of the commenter's
assumption that every reformulation required by the VOC standards
is economically infeasible, thus the products would be taken from
the market causing manufacturers, contractors, retailers and
consumers to be substantially impacted.   The analysis in the EIA
assumes that reformulation is economically feasible if the
profits of the product exceed the costs of reformulation.  Given
this assumption,  the EIA analysis suggests that only 1 percent of
the products will be removed from the market  (prior to
consideration of the tonnage exemption and exceedance fee
provisions).   This level of withdrawal is the aggregate of
numerous varieties of products across 13 different market
segments,  so it is unlikely to eliminate an entire product
category and thereby limiting product choice.  In addition, the
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rule contains 61 categories of products,  many of which were
created, in part,  to preserve specialty,  niche market sectors
within the industry.  Thus, the EPA contends that the rule simply
will not have the effects feared by the commenters.  The EPA's
analysis indicates that the VOC content limits imposed by the
rule are reasonable and that the adverse impacts of the rule will
be limited.
     While the EPA did not directly measure impacts on
contractors and other consumers, the indirect impacts to these
users of coatings products are captured in the market analysis by
the estimated change in "consumer" surplus, along with all other
downstream effects beyond the manufacturer.  In general, consumer
surplus is the measure of utility (or benefits) consumers (i.e.,
retailers, contractors, home-owners, and other paint users)
receive for the supply of a product to the market.   When prices
increase and output falls for products in a market as the result
of a regulation, this measure is reduced to a certain extent.
The change in consumer surplus is estimated in the EIA at
proposal to be $3 million under the proposed standard and
$6 million if a fee option is considered.  Since the impact on
consumers is less than one-third of the manufacturers' burden
(producer surplus),  and contractors and retailers are a small
subset of this effect, the EPA saw no indication of a need for a
special analysis of such indirect impacts.  Again,  the EPA's
analysis indicates that the overall adverse impact of the rule
will be limited.
     Comment:  One commenter  (IV-D-177) expressed concern that
the proposed architectural coatings rule would have a negative
impact on the nation's paint industry and on the nation's ability
to compete in the global market place.
     Response:  Because all producers  (foreign and domestic) must
comply with the requirements of the rule for paint sold in the
United States, it was assumed there would be a minimal impact on
foreign trade.  Regulations which impose increased costs of
production on domestic producers only may put them at a
disadvantage compared to foreign producers operating in U.S.
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markets.  However, in this case all producers  (foreign and
domestic) will face the same level of costs for their respective
U.S. markets.  Thus, only minimal effects will occur as a result
of product withdrawals by producers  (foreign and domestic) that
do not find it efficient to continue to offer a product to the
U.S. market.
     The demand U.S. manufacturers face for products abroad
should remain constant with or without the regulation on U.S.
products.  Manufacturers who already sell their products in
foreign markets will not have to adjust formulations because of
the VOC content limits of the architectural coatings rule,
because exported coatings are not subject to the rule.
     2.3.2.7   Economic Hardship
     Comment:  One commenter (IV-F-le) is a nationwide company
that supplies a number of products and is known as a one-stop
supplier.  The commenter noted that in California, when product
quality decreased on one product, sales declined on other
products.  Also, the commenter stated that his company might lose
over $3 million in compliant top coat and base coat sales because
the primer could not comply with the limit set in the proposed
rule.  Another commenter (IV-F-lh) believed the proposed
architectural coatings rule would force it to sell a lower-
quality, higher-priced product and quality is very important to
it as a small company.
     Response:   The commenters did not provide sufficient detail
for the EPA to address the commenters' points specifically.  As
noted earlier in this document, the EPA has no evidence that
products of acceptable quality cannot be manufactured at the VOC
content limits specified in the regulation. Furthermore, there
are multiple options under the final rule for the commenters,
including the option of reformulating, using the tonnage
exemption, or paying the exceedance fee.
     Comment:  One commenter (IV-D-182)  estimated that the
architectural coatings rule will cost it a total of $2,605,000
which would be a tremendous economic hardship.  The commenter
explained that reformulation costs are difficult to estimate and
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there are many "other" costs that they have no idea about how to
estimate.  Their cost estimate includes:  (1)  reformulating
costs,  (2) costs incurred due to lost business and lost new
product research, (3) costs for material storage tanks or space
for any special raw materials needed, (4) costs for collecting
and replacing labels, MSDS sheets,  and product information
sheets, and  (5) costs for training store employees and dealers.
The commenter believes considerable additional cost that they
have no way of measuring at this time could arise due to poor
quality performance or premature product failure and complaint
adjustments to customers.  According to the commenter,
implementation of the architectural coatings rule will shift its
company's major focus from producing, marketing, and selling
quality paint to meeting the architectural coating regulations.
     The commenter provided the following basis for its cost
estimate.  First, it will have to reformulate 98 different
products within 18 different lines of paint.  The products which
will need reformulating fall into ten categories:   (1) fog
coatings, (2) nonflat coatings  (exterior),  (3) nonflat coatings
(interior),   (4) primers and undercoaters, (5}  quick dry enamels,
(6) quick dry primers, (7) rust preventative coatings,  (8) stains
(clear and enamels),  (9)  traffic marking coatings, and  (10)
waterproofing sealers and treatments  (clear).   Based on past
experience,  they estimate it would take at least, six months to
reformulate properly and thoroughly and test a product for
interior application only, and it would take longer for exterior
applications.  Based on the compensation and related benefits for
the technical director and lab technicians,  the average cost
comes to $85,000 per product line for a total reformulation cost
of $1,530,000.  Because some lines have tint bases that will take
longer than 6 months, the actual cost will be even higher,
increasing the estimate to approximately $2,000,000.
     Second, the commenter estimates $285,000 of business would
be lost due to banned products and lost customers.  The commenter
lacks sufficient personnel to reformulate everything that needs
reformulating by April 1997 so they would be forced not to sell
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certain products.  Because they are in a market where their
customers expect one company to supply them with every product
they need, the inability to supply some products could cause some
customers to be lost.
     Third, the commenter estimates $365,000 would be lost in
economic opportunities for product improvement and new product
development.  Fourth,  the commenter estimates $225,000 in costs
for storage space for new materials that may be required in new
formulations and for extra storage space for slow moving raw
material inventories that may need to be maintained.  Finally,
the commenter estimates $200,000 in costs for collecting,
reproducing and redistributing new product labels and associated
paperwork.
     Response:   The average of the cost estimates submitted in
the public comments (including the commenter's costs), which
include most of the "other'' costs referenced in the comment, was
substantially less than the EPA's original estimate of one-time
costs used in the proposal analysis (see Appendix A).  Although
many of these "other" costs are now included in the final
analysis based on the public comments received, omission of these
cost components at proposal did not cause an understatement of
national costs.  The EPA used an estimate of $250,000 for
reformulation,  thereby overestimating costs for this producer
($85,000) .
     While the EPA maintains that its methodology for estimating
the number of products nationwide needing reformulation is
appropriate, it is not possible to verify that the 18 product
lines referenced in the comment were either directly  (through the
survey) or indirectly (through the methodology for estimating
non-surveyed product costs)  included in the national number.
     The final rule is not expected to "ban" any products because
reformulation is anticipated to be technically feasible without
significant product quality changes.   The financial losses are
quantified in the EIA as producer impact based on reductions in
profits  (rather than lost sales).  Using the average profit
margin presented by NPCA in the regulatory negotiation of
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18.3 percent,  the estimated losses based on the information in
this comment from product withdrawals would be approximately
$52,000 per year if the firm only considered product withdrawal
as an alternative to reformulation and did not utilize the
exemption provision, or fee option.
     The EPA cannot validate the estimate that $365,000 would be
lost in economic opportunities for product improvement without
more information.  However, the EIA analysis estimates the costs
of funds invested in reformulation, which directly reflects the
opportunity cost of capital, i.e., the economic value of foregone
opportunities.
     In regard to the $225,000 estimate for storage space for new
materials,  it is not clear from the comment why storage of
materials used in new formulations would exceed storage needs for
materials in old formulations.  Storage is needed for the new
materials,  but presumably, storage will no longer be needed for
the materials that are being replaced.
     Divided by 18 product lines, the $200,000 cost for
collecting, reproducing,  and redistributing new product labels
and paperwork would come out to approximately $11,000 per
product.  These being one-time costs, they need to be viewed in
the context of the $250,000 one-time costs that the EPA assumed
for reformulation at proposal.  The commenter has indicated that
the one-time per product reformulation cost estimate for this
company is $85,000.  Therefore, even if the $11,000 is added to
the $85,000, the total cost is well below the $250,000 per
products assumed in the EIA at proposal.  Moreover, paperwork
costs are estimated separate from the EIA and are added to the
social cost estimate from the EIA to get the national cost
estimate.  Therefore, paperwork costs are not excluded from the
national estimate.
     Comment:  One commenter  (IV-D-180) maintained that only
58 percent of its 20.5 million dollar 1995 coating sales was for
products that complied with the proposed rule, which is too low a
percentage to sustain their coating business.
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     Response:   As the rule was structured at proposal,
manufacturers only had the options of reformulating products to
comply with the limits,  or withdrawing a product from the market.
Under this situation, the commenter may have determined that it
would cost the company less to lose the profits ($20.5 MM x
profit margin of 38 percent)  from these products than to incur
the costs of reformulation.  The final rule, however, provides
two additional options for this company:  a tonnage exemption and
payment of an exceedance fee.   This commenter suggested that a
450 gram per liter limit for floor coatings would enable the
company to remain competitive in the market.  Given that the
company's products are relatively close to the limit  (i.e.,
within 50 grams per liter), the exceedance fee approach would
likely be an attractive, viable option for this manufacturer once
the company has taken advantage of exempting some of the
noncompliant flooring product sales under the tonnage exemption.
     Comment:  One commenter (IV-D-152) noted that the annual
sales of its products affected by the proposed rule is under
$10 million but represents 20 percent of its total revenue base.
Product line includes concrete curing and sealing compounds, form
releases, penetrating sealers and coatings.  The commenter points
out that even with the adoption of its recommended 700 g/1 limit
for concrete curing and sealing compounds, as discussed in
section 2.2.4.2,  the company expects a significant shrinkage of
architectural coating sales due to the rule.  The commenter noted
that a total elimination of solvent-based concrete curing and
sealing compounds would hurt its business growth because the loss
of the financial resources being generated from the sales of
those products.
     The commenter presented a breakdown of the impact of the
proposed rule on its financial resources as follows:
 Reformulation  of  12  products  @                     $864,000
 $72,000/product:
 Literature  development/alterations:                 $60,000
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 Label  changes:                                      $10,000
 Training of  sales  force/distributors                $85,000
                                                 $1,019,000
 Manufacturing/Capital  Equipment                    $450,OOP
 Total  Costs                                      $1,469,000

The commenter emphasized that the above direct cost estimates do
not include opportunity loss.  All of the costs assume a fully
implemented new architectural coating product line on the date
the regulation takes effect.   In practice,  according to the
commenter, this could not happen and the timeframe between the
effective date of regulations and introduction of new compliant
products represents potential lost revenue and profits.  This
loss is potentially the largest of all costs according to the
commenter.  Further, the above costs do not address the issue of
having the funds available for such a project or the
uncertainties of holding a market share in a rapidly changing
market.  Based on these costs, the commenter estimated the
selling prices of materials would be expected to rise 15 to
18 percent to cover costs and the resulting higher incidence of
claims due to product failure.
     Response:   Using the commenter's cost estimate of
$1,019,000, the average one-time cost per product is
approximately $85,000 per product, which is substantially below
the $250,000 cost estimate used in the EIA at proposal.  It
should be noted that, in part, in response to this commenter's
request, a category of "concrete  curing and sealing" compounds
with a VOC content limit of 700 g/1 was added to the final rule,
as discussed in section 2.2.4.2 of this document, and would be
expected to significantly reduce the cost for compliance for this
company. The EPA has also considered this compliance cost
information in the adjustment of one-time costs used in the final
analysis  (see Appendix A for a description of the review of
compliance costs).
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     It is not clear what the manufacturing/capital equipment
costs of $450,000 refer to.   If new machinery must be purchased
to reformulate (and do nothing else),  information on the service
life of that machinery is necessary to place it on a comparable
annual basis with all other costs.
     With regard to the statement about foregone profits for
products being the largest cost,  these losses should be mitigated
by the availability of the 1-year compliance period, the tonnage
exemption, and the exceedance fee option of the final rule for an
interim period until the products can be developed.
     2.3.2.8   Small Business Administration
     Comment:   One commenter (IV-D-16) expressed concern that the
Small Business Administration (SBA)  appears to support the
exceedance fee, low volume exemption and the variance provision,
despite the commenter's belief that the recordkeeping and
reporting burden of these options is too high for small
businesses to take advantage of them.   One commenter, the Small
Business Administration  (SBA)(IV-D-57/IV-D-75),  acknowledged that
the EPA consulted with SBA during the development of the proposed
rule, and the EPA incorporated several of SBA's suggestions in
the proposal and supporting regulatory analysis.  The commenter
also noted that SBA has been working with the trade associations
and some individual paint manufacturers on the rule.
     Response:  The SBA was involved in the regulatory
development process to provide suggestions on alternatives to
minimize the impacts of the rule on small businesses.  Based on
input from the Office of Management and Budget and the SBA prior
to proposal, the EPA requested comment on inclusion of an
exceedance fee provision and took comment on the need for
additional provisions to further accommodate specialized, niche
products.  After consideration of the many comments on these
provisions, the EPA has included an exceedance fee provision and
a tonnage exemption in the final rule.  As discussed in
section 2.4.1 of this BID, the exceedance fee provides long-term
flexibility, and a less costly compliance option, for both small
and large manufacturers selling very low-volume specialty
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coatings where the cost of reformulation may be prohibitive
compared to the potential profit.  The estimated cost for
reporting and recordkeeping of the fee provision at a company
with an average of eight reformulations is approximately
0.1 percent of sales revenue for a company with $5 million of
sales revenue.  Therefore, the EPA believes that the
recordkeeping associated with this compliance option does not
present a significant burden, even for small businesses. The
final rule also includes a tonnage exemption that can be used in
combination with the exceedance fee.  The final rule does not
include the proposed variance option.
     2.3.2.9   Definition of "Small  Business"
     Comment •.  One commenter  (IV-F-lm) suggested that a better
definition to use in examining the economic impacts on small
businesses is companies with less than $50 million in annual
sales and fewer than 500 employees.   Another commenter  (IV-D-44)
advised the EPA to raise its unrealistically low categorization
of small business manufacturers to about $20-30 million dollars
in annual sales.  Another commenter  (IV-D-120)  requested that the
EPA change its definition of a small business as having less than
$10 million in annual architectural coating sales and less than
$50 million in total annual sales of all products, to those
businesses with fewer than 500 employees or less than $10 million
in architectural coatings sales.
     Another commenter  (IV-D-180)  requested that the EPA
carefully consider the definition of a small business.  The
commenter stated that its complete company would not meet the SBA
definition of a small business, but its floor coatings division
would.  The commenter stated that larger companies are impacted
less by the proposed architectural coatings rule because they
have both research resources and a broad product offering that
includes many coating areas where lower performance can be
satisfied with existing low VOC technology.  Another commenter
 (IV-D-102) also expressed concern and stated than generally
small companies have less than $100 million in sales on an annual
basis and have less than 500 employees.
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     One commenter (IV-D-171)  agreed with the use of this
alternative definition to identify small entities under the
Regulatory Flexibility Act.
     Response:   The EPA believes that the definition of small
business, developed in conjunction with the SBA, for the proposed
rule is the most appropriate definition.  Because the coating
manufacturing industry is not labor-intensive, a revenue value
cut-off rather than a number of employees cut-off is a better
measure to reflect the ability of a manufacturer to devote time
and research and development resources to meet regulatory
requirements.  Based on input during the regulatory negotiation
process  (II-E-62), the EPA has defined a small business as one
having less than $10 million in annual architectural coating
sales and less than $50 million in total annual sales from all
products.  Using this definition,  between 70 and 85 percent of
the architectural coating industry would be classified as small.
This definition does not change the requirements of the RFA; it
is used for analysis purposes only.  If the definition were
changed to include more firms at sales levels greater than
10 million,  the EPA is concerned that the impacts on this sector
cf the industry may appear lower on average because the impacts
or: a company with sales around $30 million may offset impacts on
a $5 million company.  In such a case, it may have been less
appropriate to consider provisions such as the exceedance fee or
tonnage exemption designed to minimize the impacts on small
businesses.   The EPA believes that the definition of small
business adopted for this rule allows it to estimate more
accurately the impacts of the rule.
     2.3.2.10  Cost-Benefit  Perspective
     Comment.-  One commenter (IV-D-10) expressed concern that the
EPA is proceeding with this  rulemaking at a pace too fast to
consider cost-benefit issues.   Another commenter (IV-D-115)
stated that the benefit of a federal rule to set VOC limits on
all architectural coatings does not remotely outweigh the cost.
One commenter (IV-D-212)  asserted that the EPA had not
established technological and economic feasibility for the
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proposed table of standards for architectural coatings.  Another
commenter (IV-D-108)  requested that the EPA share its
documentation that shows the benefits that will be gained from
this rule.
     Response:   Concerning the allegations that the EPA is
proceeding with this rulemaking too quickly to consider cost-
benefit issues properly and that the costs of the rule outweigh
the benefits, the EPA notes that development of the rule has
taken place over 8 years and involved numerous stakeholders,
including small and large manufacturers,  suppliers, States, and
environmentalists. Based on guidance set forth by the Office of
Management and Budget for meeting the requirements of E.O. 12866
and the Unfunded Mandates Reform Act, a quantitative assessment
of benefits is not necessary for this rule.  The EPA did prepare
an economic impact analysis of the proposed and final rule
requirements.  Potential cost, price, and output effects of the
rule were examined for the proposed requirements for VOC content
limits as well as the requirements in the final rule.  The
economic analysis also evaluated the effect of the exceedance fee
and the tonnage exemption on the costs, price, and output
effects.  Although the EPA did not quantify all the benefits of
the architectural coatings rule, the reduction in emissions of
VOC is estimated to be 103,000 Mg  (113,500 tons) per year.  When
compared to the estimated cost of the rule, $28 million  (1991
dollars), the resulting cost-effectiveness value  ($270/Mg or
$250/ton) is considerably lower than for typical VOC regulations
for other types of sources.  Thus, even without a quantitative
benefit analysis, it appears that the cost-benefit ratio for this
rule would be as good as or better than that for other Federal
rules already established.
     As discussed in detail throughout section 2.2 of this BID,
the VOC content limits of the rule are based on performance of
existing technology and there are coatings in the market that
meet these limits.  In fact, 64 percent of the products included
in the 1990 industry survey meet the VOC content limits in this
rule.  Furthermore, some States have VOC content limits for
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architectural coatings that are more stringent than this rule.
Therefore, as noted earlier in this document, the data and
information available to the EPA indicate that the VOC content
limits in conjunction with the exceedance fee provision and
tonnage exemption, in the final rule reflect BAG for the
architectural coatings category.
     2.3.2.11  Executive Order 12866. Small Business Regulatory
Enforcement Fairness Act, Unfunded Mandates Reform Act
     Comment:  One commenter (IV-F-lm) maintained that a better
economic analysis and a full cost-benefit analysis is required
under Unfunded Mandates Reform Act  (UMRA) and a much greater
degree of scrutiny under the Regulatory Flexibility Act as
amended by SBREFA (RFA) is required before this rule becomes
final.  Another commenter (IV-D-214c) claimed that the EPA
unlawfully withheld a cost-benefit statement required under UMRA
for rules imposing significant mandates on the private sector.
     Response:   The EPA has complied with the requirements of
UMRA.  Implementation of this regulation is estimated to result
in national annualized costs of approximately $28 million  (1991
dollars).   This value is equivalent to approximately $32 million
(1996 dollars.) This is before the $100 million threshold under
UMRA and E.O.  12866.  Thus,  based on guidance from the Office of
Management and Budget on meeting the requirements of E.O. 12866,
and UMRA,  a quantitative analysis of benefits and a benefit-cost
comparison is not required for this regulation.  In addition, the
EPA did conduct an evaluation of small business impacts of the
proposal in accordance with the Regulatory Flexibility Act and
requested comment at proposal on several provisions that would
alleviate some burden on small entities.  For the final
regulation,  the EPA has met the requirements of the RFA.
     Comment:   One commenter (IV-F-li) maintained that the small
container exemption, the compliance variance, the exceedance fee
option,  and the low volume exemption which were included in the
proposed rule primarily to reduce small business impacts will not
primarily benefit small business.  The commenter (IV-F-li)
believed that  the cost to reformulate products to meet these
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regulations is not the real danger to small business.   The
commenter believes that small business is doomed by the existence
of the regulatory environment which requires very specialized and
expensive staff.   The commenter stated that when society decided
to regulate in the business area,  they signaled the end of small
architectural coating business and also essentially eliminated
start-up operations.
     Response:  The EPA has made every effort to consider
specific small business concerns identified during the public
comment period.  As a result of this consideration the compliance
period was extended,  seven new coating categories have been added
to the final rule, a tonnage exemption was included,  and the
exceedance fee option was included.  The EPA has discussed the
impact of the rule on small businesses in section 2.3.2.5 of this
BID and how the national rule compares to State rules in
section 2.2.4.
     2.3.2.12  Adverse Socioeconomic and Related Impacts.
     Comment:  One commenter  (IV-D-212 and IV-D-177)  stated that
the EPA failed to examine the effect of the architectural
coatings rule on low income and minority workers.  The commenter
(IV-D-212, IV-D-212p4) asserted that the architectural coatings
rule would adversely affect the sociological/psychological health
of individuals because jobs and human utility are directly tied
to self-worth.  The commenter  (IV-D-212, IV-D-2l2p4)  claimed that
the proposed architectural coatings rule would result in the loss
of jobs which would adversely affect sociological and
psychological health.
     One commenter (IV-D-212p) requested that the EPA, pursuant
to section 309 of the Act and E.O. 12898, analyze the
environmental effects of the rule on minority and low-income
communities, including human health, social, and economic
effects.  According to the commenter, any additional regulations
affecting the coatings industry would have a substantial negative
effect on residents and businesses located within the State of
California.  The commenter also contended that the rule, if
promulgated, would exacerbate the economic problems of other
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similar urban areas.  The commenter referred to a letter from the
EPA to Senator Kit Bond dated on or about June 15,  1995, which
acknowledged that the proposed regulation could result in an
adverse economic effect on small businesses.  The commenter also
referred to several documents which it believed supported its
request for analysis of the environmental effects on minority and
low-income communities.
     The commenter also stated that the rule failed to address
the concerns of the small business manufacturers, who were often
located in metropolitan areas and who would suffer the economic
effects.  The commenter contended that the implementation of the
rule would result in the loss of jobs, particularly in medium-
sized, regional, and local small businesses.  The commenter
claimed that the manufacture and sales of paint products was
concentrated in approximately 11 major metropolitan areas in the
United States and contended that the harshest effects of the rule
would occur in these metropolitan areas.
     Another commenter  (IV-D-49) stated that making the poor
poorer was harmful to the environment and our democracy.  The
commenter claimed that there is a substantial link between the
hopelessness of today's youth and the nation's 30-year history
with VOC regulations, downsized jobs, and the loss of American
manufacturing.
     Response:   The EPA believes that a national architectural
coatings rule promulgated under section 183 (e) of the Act will
not have the significant negative economic impacts claimed by the
commenter.  The EPA's position is further explained in
section 2.3.4 of the 183-BID.  Many of the economic concerns
raised by the commenter are not direct effects of the
regulations.  Because the EPA's economic  impact analysis for the
architectural coatings rule indicates that the direct economic
effects of a national architectural coatings rule will be small,
the EPA believes that indirect economic effects from this rule
will also be insignificant.  The EPA notes that the economic
impact of the rule is limited, in part, because the rule provides
compliance mechanisms other than reformulation of products and
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because the VOC content limits were established considering the
proper VOC content limit for specialty niche products. In other
words, the EPA designed the rule to limit the impacts on small
businesses, to the extent feasible and appropriate, consistent
with the goal of achieving VOC emission reductions.
     The EPA also notes that the VOC content limits in the
architectural coatings rule are less stringent than the limits in
California state rules and are equivalent to or less stringent
than limits in rules established by other States.  Thus, the EPA
notes that even if the commenters'  characterization of the
impacts of the California rule were accurate, they are not
relevant to this rule.  The EPA has concluded that it is
extremely unlikely that the Federal rule would have the severe
consequences suggested by the commenters.
     Finally, the EPA believes that the particular analyses
requested by the commenters are not required by section 309 of
the Act or E.G. 12898.  The reasoning is explained below for each
of these authorities.
     Section 309.  Section 309 of the Act requires the
Administrator to review and comment in writing on the
environmental impact of certain legislation and actions of other
Federal agencies.  When activities are found to be unsatisfactory
from the point of view of public health or welfare, the EPA is
required to refer its finding to the Council on Environmental
Quality.  The policy review provisions of section 309 do not
apply to regulations that are promulgated by the EPA.  Thus,
section 309 does not require the EPA to perform any additional
economic or impact assessments or judgments that are not already
required to promulgate a rule under section 183(e) .
     Executive Order 12898. Executive Order 12898 established the
Administration's policy for identifying and addressing
disproportionately high and adverse human health or environmental
effects of federal agency programs, policies, and activities on
minority populations and low-income populations.  While the
Executive Order was  intended for internal management of the
executive branch and does not create legal rights or provide for
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judicial review,  federal agencies are to implement its provisions
"consistent with,  and to the extent permitted by,  existing law."
59 F.R. at 7632-33.  As noted in the Presidential memorandum that
accompanied the Executive Order, it is designed to focus the
attention of federal agencies on the human health and
environmental conditions in minority communities and low-income
communities to realize the goal of achieving environmental
justice.
     The commenters suggested that their decision to eliminate
jobs of minority and low-income workers in response to regulation
creates an environmental justice concern that would necessarily
preclude the Agency from issuing the architectural coatings rule.
EPA disagrees with that view.  The Agency interprets section
183 (e)  of the Clean Air Act to be a mandate to obtain VOC
emission reductions to achieve ozone reductions to protect the
health of all persons.  Section 183 (e) does require the Agency to
take into consideration the economic feasibility of the
regulations as part of the determination of what constitutes
"best available controls" for each category.  Assuming, without
deciding the issue, that section 183 (e) thus provides the Agency
with a mechanism to evaluate the possible economic impacts of the
rule upon low income and minority communities as one factor in
the determination,  such impacts would be but one factor in the
analysis and must  be viewed in the context of a statutory
provision designed to reduce exposure to ozone pollution for all
citizens.
     Using this assumption, EPA has considered the potential
impacts of this action on the human health and environmental
conditions in minority communities and low-income communities.
The Agency believes that the architectural coatings rule will
provide public health and environmental protection to all
communities,  regardless of their socioeconomic condition and
demographic makeup.  Contrary to the assertions of the
commenters,  the Agency believes that the architectural coatings
rule will not have the significant economic impacts claimed by
the commenters.  For example, the Agency's Economic Impact
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Analysis for the final rule estimates that out of a total
employment of 51,000 in the architectural coatings manufacturing
industry, there may be a loss of ten jobs.  See EIA at 3-10, 11.
It is not possible for the Agency to determine whether these jobs
will be held by members of low income or minority communities, or
whether those individuals will obtain new employment elsewhere.
Nevertheless, EPA does not believe that these speculative limited
impacts will have a disproportionately high and adverse impact on
minority or low income communities and do not outweigh the
pollution reduction benefits of the rule as a whole.  In fact,
reduction of VOC emissions from consumer and commercial products
such as those regulated by this rule should reduce public
exposure to ozone pollution widely, and especially in urban core
areas where there are concentrations of minority or low-income
populations.  EPA has thus concluded that the rule will help to
achieve the goals of environmental justice and will not have the
disproportionately high and adverse human health or environmental
effects addressed by the Executive Order.
2.4  EXCEEDANCE FEE
2.4.1   Exceedance Fee Concept
     Comment:  Eleven commenters  (IV-D-60, IV-D-114, IV-D-120,
IV-D-161, IV-D-169, IV-D-181, IV-D-189, IV-D-190, IV-D-206,
IV-F-lb, IV-F-lj), including two national coating manufacturers
trade associations, supported the exceedance fee approach for the
following reasons.  One commenter  (IV-D-190)  maintained that the
exceedance fee and compliance variance in the proposed rule are
adequate protection for small domestic paint manufacturers that
cannot  invent or license new environmental technologies.  One
commenter  (IV-D-181) supported the exceedance fee because it
provides manufacturers flexibility for some products that might
be difficult to reformulate.  One commenter  (IV-D-189) supported
the exceedance fee under the conditions that it would not be
excessive, it would not serve as a Federal tax on coatings, and
it would not dissuade consumers from purchasing architectural
coatings subject to the fee.  The commenter concluded that the
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optional nature and the amount of the proposed fees would be
consistent with these principles.
     Another commenter (IV-D-60)  believed that an exceedance fee
provides added flexibility,  allows for the continued sale of
high-price, high-performance coatings that are kinder to the
environment due to their longer durability, and offers
market-based incentives consistent with other EPA-regulated
industries.  The commenter maintained that an exceedance fee
would be far more equitable than a low-volume exemption,
especially for smaller companies.
     One commenter (IV-D-120)  stated that the exceedance fee
would provide flexibility to both small and large businesses to
sell specialty coatings if reformulation is not technologically
or economically feasible.  One commenter (IV-D-114) from a large
company indicated that the company supports exceedance fee
provisions in situations where a variance is not available.
Three commenters (IV-D-161,  IV-F-lb, IV-F-lj) strongly
recommended an exceedance fee as a voluntary alternative to
compliance.  For example, one commenter  (IV-F-lj) discussed a
scenario where the cost of formulating one color in a line with
20 colors when all 20 colors are needed to sell the line would be
enormous compared to the return.   One commenter  (IV-D-161)
discussed a scenario where the cost of reformulating a particular
technology may be prohibitive compared to the potential profit
and cited the example of small volume specialty coatings.  Also,
the commenter added that the exceedance fee would allow companies
to introduce new technologies that may need additional
development efforts to reduce the VOC content to the proposed
level.   The commenter also emphasized the importance of providing
a flexible and cost-effective regulation while still achieving
the air quality goals.  The commenter pointed out that the
industry cannot determine if the compliance costs are excessive
compared to other industries.   According to the commenter, if the
cost of compliant coatings is more than the cost of non-compliant
coatings after payment of the fee, then compliance with the
limits becomes an excessive economic burden to that industry for
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that product.   This commenter supported the proposed variance and
the exceedance fee provisions to provide compliance relief for
all manufacturers rather than a small business compliance
extension.  The commenter stated that small businesses had ample
time to prepare and pointed out that many States had already
adopted similar limits without special provisions for small
businesses or a variance provision.
     One commenter (IV-D-169) advocated the exceedance fee as an
excellent way to offer flexibility when current technology does
not offer acceptable performance.
     A national trade association (IV-D-206) maintained that the
EPA should allow products with higher VOC content to be sold if
manufacturers pay exceedance fees.  They maintained that it may
be necessary for a few products that exceed the proposed VOC
content limits to remain on the market.   They also asserted that
the higher costs resulting from the exceedance fees will motivate
manufacturers to develop high performance products with low VOC
content and users to select complying products whenever possible.
     Two commenters made specific recommendations:
     (1)  One commenter  (IV-D-161) recommended replacing the
          variance option and low-volume exemption with the
          exceedance fee to provide long-term control of
          reformulation activities to the manufacturer.
          Additionally, the commenter stated that an exceedance
          fee would reduce the growing number of categories and
          exceptions to those categories without placing a burden
          on the industry or the environment.
     (2)  Another commenter  (IV-D-209) requested that the EPA
          combine a 5,000 gallon exemption with a reasonable
          exceedance fee option  (without excessive recordkeeping
          and reporting requirements) to provide some relief for
          small and large manufacturers who sell niche products
          that cannot be economically or are not technologically
          feasible to reformulate.  These options may allow some
          manufacturers to stay in business.
     The EPA also received comments critical of the exceedance
fee concept.  Sixteen commenters  (IV-D-02, IV-D-12, IV-D-22,
IV-D-32, IV-D-43, IV-D-126, IV-D-129, IV-D-148, IV-D-191,
IV-D-213, IV-F-la, IV-F-lf, IV-F-li,  , IV-F-lk, IV-F-ll, IV-F-lm)
opposed the exceedance fee.  One commenter  (IV-F-li) asserted
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that if the public health is in danger,  then no one should be
endangering public health for a fee.   The commenter believe that
if the public health is not in danger, then the entire regulation
is unnecessary or the limits are more stringent than necessary.
     Another commenter (IV-F-lk) urged the EPA to drop the
exceedance fee provision from the rule.   The commenter asserted
that if the VOC content limits are not reasonable, then the EPA
should raise the limits.   The commenter maintained that a fee
would disrupt the marketplace, shifting business from company to
company depending on their willingness to pay the fee.
     One commenter  (IV-D-43) believed any exceedance fee would be
complicated and confusing.  Two commenters (IV-D-12/IV-F-11,
IV-F-lm)  stated that an exceedance fee should not be an
alternative to compliance.  One of the commenters (IV-F-lm)
maintained that standards can only be made less stringent by
demonstrating technical and economic infeasibility and not by
paying a fee.  One commenter  (IV-D-02) stated that an economic
incentive in the form of fees would be a market disincentive and
that administration and compliance would be especially difficult
for small businesses.  Two commenters (IV-D-32, IV-D-126)
regarded the exceedance fees as unnecessary.   One commenter
(IV-D-32)  reported that Oregon's regulation,  for example, was
successfully implemented without such provisions.  The commenter
asserted that exceedance fees would diminish overall emission
reductions and would not protect from an uneven geographic
effect.  According to the commenter,  the exceedance fees are
appropriate if more stringent levels are adopted in the future.
If the provision is included, the commenter suggested that the
EPA require those manufacturers to show that their increased
emissions will not adversely affect attainment of the National
Ambient Air Quality Standards for Ozone in nonattainment or
maintenance areas.   The other commenter (IV-D-126) suggested that
the fee was unnecessary because the EPA's VOC content limits are
not technologically difficult to achieve.
     One commenter  (IV-D-129) calculated that the cost of
reformulated products would double or triple while exceedance
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fees would add only 20 to 25 percent to the cost of the product.
The commenter pointed out that this would force businesses to pay
the exceedance fee for non-compliant materials in order to stay
in business.  The commenter also expressed concern that an
exceedance fee was difficult to police and would cause an unfair
business climate.  The commenter mentioned that California's
architectural coating rules were difficult to enforce and alleged
that some businesses intentionally do not comply.  This commenter
and another  (IV-F-lf) questioned how the EPA would enforce this
provision on a national level.  One commenter (IV-D-129)
considered the 8 years of negotiations plenty of time for
manufacturers to prepare for the final architectural coating
rule.  The commenter maintained that the exceedance fee was a
disincentive for the companies that have used the last 8 years to
formulate compliant low VOC products.  In short, the commenter
indicated that the exceedance fee approach is fundamentally
flawed and defeats the purpose of the Clean Air Act and that his
small company does not support an exceedance fee option under any
circumstances.  The commenter (IV-F-la) only supported a limited
exceedance fee if there is a second phase of VOC content limits.
     Two commenters  (IV-D-213, IV-F-lf), one  (IV-D-213)
representing 3,000 paint contractors, were opposed to an
exceedance fee mechanism because they believe it would drive the
market towards lower-cost and possibly less-dependable products
merely because of the price sensitivity of the market.  According
to the commenter the largest amount of sales occur in the
do-it-yourself segment of the market, and the commenter
 (IV-D-213) believed that these consumers will make purchases
largely on the basis of price considerations.  The commenter
asserted that there is no substitute for VOC content limits that
reflect performance criteria and do not disturb currently used
products.
     One commenter  (IV-D-226) maintained that the proposed
approach would be ineffective for providing an incentive to
develop low VOC content products where the products are
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inherently high in unit cost and low in volume compared to other
coating categories.
     Two commenters (IV-D-129,  IV-D-191)  stated that the fee is
unacceptable because the fees are too low to motivate any
manufacturer to reduce VOC emissions.  Instead, the commenter
expressed concern that the exceedance fee provision will
encourage industry to pay rather than reformulate.
     Response:   After careful evaluation of all of the comments
and discussions with the Small Business Administration (IV-H-2),
the EPA has decided to include the exceedance fee in the final
rule.  Under this approach,  manufacturers and importers have the
option of paying a fee, based on the extent to which VOC content
limits are exceeded, instead of achieving the VOC content limits
in the rule.  The fee is calculated at a rate of $0.0028 per gram
($2,500 per ton, 1956 dollars]  of VOC in excess of the applicable
VOC content limit, multiplied by the volume of coating produced.
The EPA is including this option in the rule for several reasons.
The exceedance fee option will provide transition time for those
manufacturers that need additional time to obtain lower VOC
technologies.  The exceedar.ee fee provides long-term flexibility,
and a less costly compliance option, for both small and large
manufacturers selling very lew-volume specialty coatings where
the cost of reformulation may be prohibitive compared to the
potential profit.  These important specialty products will
continue to be available to consumers.  The exceedance fee option
is significantly less burdensome for manufacturers than the
proposed compliance variance provision, which has not been
retained in the final rule (see discussion in section 2.2.8 of
this document).   Contrary to some comments received, the EPA
contends that the costs resulting from the exceedance fees will
generally motivate manufacturers to develop innovative
technology,  such as high performance products with lower VOC
content.
     The EPA does not agree with some commenters that the
exceedance fee will disrupt the marketplace.  The EPA expects
that the regulated entities will use the fee primarily for the
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manufacture of low-volume specialty coatings,  which are driven by
demand from consumers.   It is not likely that  the demand from
these markets would be significant enough to provide any
incentive for manufacturers to shift to these  products.  The
impacts to the market are lower with the fee than they would be
if reformulation was the only option available for producers,
because the fee reduces the number of potential product
withdrawals and reduces the net social cost.  Raising the VOC
content limits in lieu of offering the fee could significantly
undermine the emissions reduction objectives of the proposed
rule.  The fee provides some flexibility to producers of low
volume products, or products that are only slightly above the VOC
content limit of the standard who may find it  prohibitive to
incur the largely fixed cost of reformulation.  Because products
for which the fee is likely to be chosen would tend to represent
a small portion of the national VOC emissions  from architectural
coatings, the EPA anticipates that the fee option itself would
not significantly undermine emission reduction objectives.
However, raising the VOC content limits in the rule would negate
reductions from all products that would no longer be subject to
the standards.  The fee also provides continued incentive for
producers to reduce VOC content until they approach the VOC
content limits in table 1 of the rule.
     Also, the EPA does not agree with the comment that the
inclusion of the exceedance fee will increase  VOC emissions,
thereby endangering public health.  The EPA believes that the fee
will be used primarily by those regulated entities manufacturing
low volume specialty coatings.  Therefore, the EPA does not
expect that the continued use of these low volume coatings will
result in significant emission increases.  In addition, the EPA
expects emissions to decline over time because new low-VOC
products will be developed to avoid the fee.  The EIA for the
final rule evaluated the magnitude of lost emission reductions in
considering the fee provision and found that the fee would result
in a relatively minor adjustment in emission reductions, while
providing considerable flexibility in the marketplace, thus
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reducing the number of products that withdraw from the market.
The emission reductions that are not achieved as a result of the
fee are spread across 13 market segments throughout the country.
Therefore, it is highly unlikely that the fee will result in the
concentration of additional VOC emissions in a small geographic
area that could harm the public health.
     With regard to concerns about enforcement of the exceedance
fee, the recordkeeping and reporting requirements are designed to
ensure compliance with this option.  Any violations of the
recordkeeping and reporting or any other requirements could
result in enforcement actions and the possibility of additional
penalties.
     Assuming $5 million of sales revenue as a midpoint estimate
for small companies in the $0-10 million range,  fee recordkeeping
costs would be approximately 0.1 percent of sales revenue, which
is not a significant burden.
     As indicated in the economic analysis, the EPA was unable to
obtain data on the effects of reformulation on product costs.
Anecdotal evidence revealed some cases where costs would
presumably rise (e.g., higher solids content)  and some cases
where costs would presumably fall  (e.g., higher water content).
As a result,  it is not possible for the EPA to verify or refute
the commenter's claim that product costs would double or triple
for reformulated products, or,  if it is true in the experience of
the commenter, whether that experience is representative of the
majority of other products.  The EPA agrees, however,  that the
costs of the exceedance fee may be less for source products and,
therefore, that some manufacturers will wish to utilize the
exceedance fee where the costs of reformulation may be less
economically attractive.
     The EPA acknowledges that price increases on fee-paying
products may cause some substitution to non-fee-paying (lower
VOC) products.  For some products, it may not be profitable to
reformulate or pay the fee, so firms may consider withdrawing the
product from the market.  These phenomena are explicitly modeled
in the economic analysis.  However, the premise of the fee is
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that it internalizes the (public)  environmental cost of VOC
emissions into the private cost of the good.  Therefore, if some
consumers substitute away from the now higher priced fee-paying
product, it reflects the fact that they are not willing to pay
the "full" cost of consuming the higher VOC products.  This is
the fundamental purpose of market-based incentives for
environmental protection.  The EPA notes that section 183(e)
explicitly authorizes the EPA to utilize "economic incentives" as
part of the regulatory approach to obtaining VOC emission
reductions from consumer and commercial products.
     As discussed in section 2.2.4 of this BID, the VOC content
limits in the rule are based on the EPA's determination of best
available controls.  As discussed in section 2.2.8 of this BID,
the EPA decided not to include the variance provision in the
final rule because the EPA determined that the variance provision
may not provide additional compliance flexibility, especially for
small businesses, as intended.
2.4.2   Exceedance Fee Levels
     Comment:  Several commenters  (IV-F-2) asked how the fee
level was developed.  One commenter  (IV-D-189) voiced concern
that the fee level was chosen as an initial rate and opposed any
unspecified increases in the future.  Also, the commenter
expressed concern that States might develop a fee system that
would piggyback on the Federal system thereby increasing the fees
on manufacturers.  In the opinion of the commenter, any such
State effort would have to be reviewed and approved by the EPA
Administrator.
     One commenter  (IV-D-120) indicated that the current
exceedance fee was too high, but did not suggest an alternative
fee rate.  Another commenter  (IV-F-lb) requested that the fee be
set lower  (possibly at $1,000 per ton) to offset the excess
recordkeeping requirements for these products.  Other commenters
 (IV-D-22, IV-D-79, IV-D-33, IV-D-34) also expressed the opinion
that the proposed level of the fee was too low.
     Three commenters  (IV-D-22, IV-D-79, IV-F-la) thought that
the primary path to reduce VOC emissions from architectural
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coatings is through reformulation, but paying the exceedance fee
is less expensive than reformulating.  They also stated that a
limited exceedance fee could play a role only if set at a level
that is high enough to ensure that economics would drive
development of compliant coatings.  Two commenters  (IV-D-34,
IV-D-96) agreed that the fees were too low and that manufacturers
would not reformulate as a result of the availability of the
exceedance fee.
     Two commenters (IV-D-33, IV-F-la) recommended an exceedance
fee that adds 10 to 20 percent to the retail cost of the
non-compliant coating to encourage manufacturers to reformulate.
The commenter explained that the proposed incentive fee, a
60 cent per gallon cost increase, would easily be absorbed into
the price of home paints,  which cost $10.00 to $20.00 per gallon.
In short, the commenter (IV-D-33) supported an exceedance fee
that is high enough to encourage development of compliant
coatings.
     One commenter (IV-D-S3) stated that an exceedance fee was an
excellent alternative for products with high consumer acceptance
that cannot be reformulated immediately.  The commenter suggested
a $.50 per gallon fee for products that are less than 100 g/1 in
excess of the VOC content limit prescribed by the rule and a
$1.00 per gallon fee for the higher-polluting products.  The
commenter supported a phase-out of the availability of the
exceedance fee mechanism as technology progresses.
     One commenter (IV-D-181) believed the EPA should reevaluate
the exceedance fee structure.  Rather than basing the exceedance
fee on the volume of VOC in the product, the commenter
recommended that the exceedance fee be based on some other
parameter,  such as the retail price of the product.  The
commenter requested this reevaluation because the $0.0028 per
gram (per liter) approach has a larger impact on lower cost
products, such as bituminous coatings and mastics compared to
higher cost products.   For example,  the exceedance fee for a
product with an exceedance of 50 g/1 would be $0.53 per gallon,
which results in only a 3  percent cost increase for a $15 per
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gallon product,  but a greater than 25 percent increase for a
$2 per gallon product.  Another commenter (IV-D-226) also
suggested that the fee be based on a percentage of the price,
especially for high cost, low volume categories.
     One manufacturer (IV-F-2)  stated that the exceedance fee
does not take into account the competitiveness in the
marketplace.  A $1.00 per gallon fee is a significant price to
pay for coatings that only cost a few dollars.  One industry
representative  (IV-F-2)  believed that the exceedance fees would
level the playing field between small and large companies.  One
small business  (IV-F-2)  stated it will cost $2.50 more per can
for a compliant coating if exceedance fees are paid.  Another
small business  (IV-F-2)  stated that the exceedance fee was too
high relative to the price of his products.
     One manufacturer (IV-F-2)  suggested that the exceedance fee
be phased in gradually  (i.e., increase over time) and be
available only for a limited time.
     Another commenter  (IV-D-169) suggested a phased-in fee of
$500 per ton the first year that escalates $5CO per ton for each
year up to $2500 per ton in the fifth year.  The commenter also
suggested that excess VOC be calculated on an actual VOC basis.
If the "less water" method is used for waterborne coatings, the
excess VOC would often be 2-3 times larger than on a per gallon
of coating basis.  Also, the commenter stated that the exceedance
fee is more appropriate than the small volume exemption.
     Response:  The EPA considered several factors in choosing
the exceedance fee level, including the benefit per ton value
historically used in analyses under the Clean Air Act, the
historical range of acceptable cost-effectiveness values for VOC,
the magnitude of the loss in emission reductions, and the effect
on the market model  (price and output adjustments, changes in
consumer and producer surplus,  and changes in net social cost).
     More specifically,  the value chosen for analysis at proposal
is slightly higher than the benefit transfer value  (i.e., the
benefit value per ton of VOC reduced) historically used in the
EPA analyses, and is also slightly higher than historical
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cost-effectiveness values for VOC.   This was done to provide
incentive for manufacturers to continue to strive to find low
cost methods of reducing the VOC in their products.  Therefore,
manufacturers that find the fee the lowest cost option of
compliance with the regulation (in comparison to reformulation or
losing profits from product withdrawal) would pay the fee, but be
encouraged to find an even lower cost solution to reduce total
production costs in the long run.
     Another consideration by the EPA was the amount of emission
reductions lost at the selected fee level.  This level also
proved to provide only minor adjustments in market price and
quantity in comparison to reformulation by itself, while
providing substantial flexibility to manufacturers of small
volume products or products that exceed the standards by a small
amount.   The EPA also evaluated a higher fee rate prior to
proposal and found that net social cost increased with a
relatively small change in lost emission reductions  (as compared
to the lower fee rate).   The EPA concluded that because the fee
was set  high enough to make reformulation attractive for the
majority of producers, but low enough to allow a small sector of
products to remain on the market in lieu of withdrawal, and
because  the lost emission reductions were minimal and the impact
on the markets was minor,  the chosen level of $2500 per ton was
deemed acceptable.
     Eased on the EPA's economic analysis, the fee does not
appear to be set too low.   The economic mode]  compares the cost
of paying the fee to the cost of reformulation for surveyed
products.  While the analysis suggests that many regulated
entities will opt for the fee for certain products, these
products are uniformly small in volume; thus,  their contribution
to total market output (and emissions reduction)  is relatively
small.  The EPA's analysis suggests that it will rarely be
advantageous for manufacturers of large volume products,  which
generate a disproportionately large share of emissions, to opt
for the  fee over reformulation.  Furthermore,  the existence of
the exceedance fee provides continued incentive for fee-paying
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firms to reduce VOC contents on the margin,  as this will reduce
the amount of fee they must pay.
     Some commenters suggested that the exceedance fee should be
based on product price,  rather than the quantity of VOC emitted
by the product.  The premise of the commenters is that only a
large proportional price effect will induce  large changes in
behavior.  The objective of a pollution fee,  however,  is to
"charge" for the pollution generated.   The only consistent way to
accomplish this is to have the fee payment depend on the amount
of pollution generated.   It is not clear how a price-based fee
would be tied to the amount of VOC emitted.   For instance, a
low-priced high VOC product could have a fee per unit that is
much lower than a high-priced lower VOC product.  In this case,
the fee mechanism is not working to ensure enough incentive for
the higher VOC product to reduce VOC content.   In other words, a
ton of extra emissions from one product is being charged less
than a ton of extra emissions from the other.  Alternatively,
having one ton of exceeded emissions face the same fee,
regardless of source is more efficient, and seemingly more fair.
     The phasing of the tonnage exemption (see section 2.2.1.2 of
this document) in combination with the exceedance fee provision
is essentially doing what the commenters suggest for the
industry.  In the time period from the compliance deadline
through the year 2000, manufacturers may exempt from regulation
23 megagrams  (25 tons) of VOC, so total fee  payments would be
lower than in the second year.  The following year, 2001, has a
lower exemption level of 18 megagrams  (20 tons) of VOC, so fee
payments would be slightly greater.  In the  next year and any
subsequent year of compliance, the fee rate  would become level
because the exemption level remains the same at 9 megagrams
 (10 tons) per year.  The fee payments would also provide
incentive for manufacturers to find lower cost VOC technology to
meet the standard and eliminate or reduce their fee payments.
     In the future, the Agency may consider revising the rule to
adjust the fee rate.  Considerations in deciding to make an
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adjustment may include, but are not limited to, inflation rates,
usage of the fee, and related emission impacts.
2.4.3   Use of Collected Exceedance Fees
     Comment:   One commenter (IV-F-2)  asked where the money
collected from the exceedance fees would be deposited.  One
commenter  (IV-D-189)  concurred that any decisions relating to
spending the exceedance fees must be made through the annual
appropriations by Congress and that the EPA should consult with
industry when developing a recommendation.  The commenter
disagreed with the EPA's suggestion to award grants to private
firms and other entities to promote the development of lower VOC
coatings because the industry already supports substantial
research efforts.  Alternatively, the commenter recommended
awarding grants to universities to help in the education of paint
chemists.
     One commenter (IV-D-162)  recommended that revenues from
exceedance fees be used to study the performance capabilities of
advanced technology coating material.   Another commenter
(IV-D-206)  strongly recommended that the funds be used for study
or other research to evaluate the availability and performance of
products with reduced VOC content in order to evaluate the
effectiveness  of the regulation in reducing ozone levels.
However, the commenter recommended that exceedance fee funds not
be used for administration and enforcement purposes.
     One commenter (IV-D-151)  supported the allocation of a
portion of the fees for public outreach programs.
     One commenter (IV-D-120)  stated that the EPA should split
exceedance fee revenues, using half to cover enforcement and
administration and reserve the other half to conduct a future
study to assure that the reductions are achieved in a reasonable
timeframe and in a cost-effective manner and without disastrous
economic effects to the industry.
     Response:   As discussed in the preamble to the proposed
rule, section  183(e)  specifies that fees "...  shall  be deposited
in a special fund in the United States Treasury for licensing and
other services,  which thereafter shall be available until
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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."   Through the
annual appropriations process,  Congress will determine whether
and how to spend any fee revenues collected.  The EPA will take
into consideration the commenter's recommendations when
communicating with Congress regarding how the fees would be used.
2.4.4   Exceedance Fee Recordkeeping and Reporting
     Comment:   One commenter (IV-F-ll) noted that small
businesses commonly sell the same product for use as
architectural coatings, miscellaneous metal parts coatings, or
wood products coatings, and so on.  Because the difference in use
generally occurs after the point of sale, the commenter asked how
a manufacturer would predict which containers would be subject to
an exceedance fee.
     One commenter  (IV-F-2) agreed that the suggested reporting
schedule for fee payments was reasonable.  However, another
commenter (IV-D-169) requested that the reporting schedule be cut
to once or twice a year.  One commenter  (IV-D-120) stated that
the recordkeeping and reporting were too intensive, but did not
offer any alternatives.
     Response:  The decision of which containers of architectural
coatings would be subject to an exceedance fee is not made at the
point of sale.  If the coating is intended for architectural use,
even if it is suitable for other uses as well, then it is subject
to the rule, and the manufacturer or importer is required to meet
the applicable VOC content limit or use alternative compliance
provisions,  such as the exceedance fee option.  Except for
specific exemptions listed in the rule, the most restrictive VOC
content limit applies for coatings that meet the definition of
more than one of the coating categories listed in table 1.  Thus,
the manufacturer would pay the appropriate exceedance fee on all
containers of a coating product that is in a given category with
a  limit the coating does not meet, even if some of the containers
may eventually be sold for another purpose for which the product
meets the applicable limit in the rule or for which the rule is
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not even applicable.  Manufacturers and importers are required to
keep records and submit reports detailing the following
information for all architectural coatings for which fees are
paid:  VOC content, excess VOC content above the limit, volume of
coating manufactured or imported, annual fee for each coating,
and the total annual fee for all coatings.  The EPA considered
the comments on frequency of reporting and determined that annual
reporting and fee payment is an appropriate interval for
compliance assurance and enforcement purposes.  Therefore, the
rule requires that the exceedance fee be paid annually to the
Administrator and is due no later than March 1 each year for the
previous year in which the coating is manufactured or imported.
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2.5  REGULATORY NEGOTIATION
2.5.1  Section 183 (e)  Requirements and the Architectural Coatings
Regulatory Negotiations
     Comment:   Two commenters (IV-D-212; IV-D-214d)  stated that
the EPA did not have the statutory authority to establish the
architectural coatings regulatory negotiations (hereafter called
"the  reg-neg") prior to the completion of the consumer and
commercial products study and report to Congress that was
mandated by Section 183(e)  of the Act.  One of the commenters
 (IV-D-214d) cited an August 14,  1992 letter from EL RAP that
stated, "Section 183 expressly provides  that  the  required
Consumer and Commercial Products Study must precede any
regulation."
     Two commenters (IV-D-212;  IV-D-214d)  stated that, by
proceeding with reg-neg prior to the completion of the study, EPA
assumed that paint products would be subject to regulation and
that they would be regulated in the first group.  According to
the commenters, EPA made the determination that architectural
coatings were subject to regulation before an objective study had
been commenced or completed.  The commenters stated that factors
key to this determination,  such as reactivity, cost/benefit, and
uses and benefits of paint products, were unknown at the time the
reg-neg proceedings were commenced in early 1992.  Furthermore,
one commenter  (IV-D-212) expressed concern that the fact that EPA
began the  reg-neg activities biased the eventual ranking of
architectural coatings in the first group.
     One commenter  (IV-D-212) stated that the reg-neg process was
contrary to the requirements of section 183 (e) of the Act and the
intent of  Congress.  The following examples were provided:
     1.    The proposals were based on percent reduction targets
           assigned by the EPA,  rather than a determination of
           BAC.
     2.    The proposals contained tables of standards that would
           take effect in the future.
     3.    The proposals were national rules that included ozone
           attainment areas.
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     4.   VOC calculations were based on mass tonnage, rather
          than on a reactivity adjusted basis.
     5.   Performance was not properly addressed.
     6.   The five factors listed in the Act were not followed.

     One commenter (IV-D-214d) cited a July 15,  1994 Petition For
Redress Of Grievances made by Smiland Paint Company and Dunn-
Edwards Corporation that stated that during the reg-neg process
EPA openly focused on percentage of VOC reduction targets, which
are neither mandated nor authorized by Section 183 (e) .  The
commenter stated that the VOC reduction targets were a result-
oriented approach with no factual basis.
     Response:  The EPA disagrees with the commenter's views  (1)
that EPA did not have the statutory authority to establish the
architectural coatings regulatory negotiation and (2) that the
timing of this regulatory negotiation biased the study and Report
to Congress toward regulation of paints.  The EPA also disagrees
with the commenters'  opinions that the regulatory negotiation was
contrary to the requirements of section 183 (e) of the Act and the
intent of Congress.
     At the outset,  the EPA notes that section 183 (e) does not
address the issue of whether or when the EPA may initiate a
regulatory negotiation fcr an anticipated rule.   Section 183 (e)
directs the EPA to conduct the study, to develop criteria, to
submit the report to Congress, and to list products for
regulation.  The provision does not limit the EPA's ability to
begin a regulatory negotiation process.  The EPA's use of the
regulatory negotiation process is permitted in accordance with
the provisions of the Negotiated Rulemaking Act, 5 U.S.C. §§581
et seq.,  which likewise did not preclude the EPA from initiating
a regulatory negotiation in this instance.
     The EPA initiated the regulatory negotiation for
architectural coatings prior to completion of the section 183(e)
study and Report to Congress because it was widely recognized
that architectural coatings are a major source of VOC emissions
and it was highly likely that architectural coatings would be
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among the products listed for regulation under section 183 (e) .  It
was known that architectural coatings were one of the largest
identifiable unregulated sources of VOC in many states' emissions
inventories, and one of the largest sources of VOC emissions
among categories of consumer and commercial products.  Because of
information such as this, Congress explicitly identified paints,
coatings, and solvents, as products for EPA to regulate as
consumer and commercial products under section 183 (e) of the Act.
Contrary to the assertions of the commenters,  preliminary
information was available for architectural coatings on the
factors to be considered in the section 183 (e) study.  Past EPA
studies of paints and other coatings for CTGs and from State
regulatory efforts provided information on the availability of
alternatives, estimates of VOC emissions from the category,
general information on formulation of paints,  and uses and
benefits of the products.  At the time the regulatory negotiation
was initiated, EPA estimated that architectural and  industrial
maintenance coatings represented 20 percent of the VOC emissions
from consumer and commercial products  (57 FR 31473) .   Based on
this estimated contribution and other preliminary information,
EPA initiated regulatory development concurrently with
information gathering for the section 183 (e)  study and report to
Congress.
       The EPA does not believe that concurrent development of
the regulation and section 183(e) study biased the eventual
ranking of architectural coatings in the first group.  The
information developed in the regulatory negotiation  and other
information available on architectural coatings was  considered in
the same manner as information on other categories of consumer
and commercial products.  See the section 183(e) BID, section
2.1.1.6 for a description of the ranking process and the
consideration of statutory criteria; and section 2.1.1.7
concerning the ranking and consideration of criteria for
architectural coatings.  As explained in those sections of the
section 183(e) BID, architectural coatings were judged using the
same ranking criteria and procedures as the other product
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categories.   If during the regulatory negotiation, it had been
determined that emission estimates were inaccurate, or that
cost-effective controls were not available, or if any other new
information was received which affected the ranking, EPA would
have altered the priority given to the product category.  Had the
study and Report to Congress indicated that architectural
coatings should not be regulated under section 183 (e),  the EPA
would not have proceeded to regulate them and the result of the
regulatory negotiation, if any, would have been moot.   However,
to date, EPA has had no basis for making such a finding for
architectural coatings products.  On the contrary, the regulatory
analysis for architectural coatings has confirmed that
architectural coatings are an emission source that warrants
regulation under section 183(e) of the Act.
     The EPA believes that concurrent development of the
architectural coatings rule and the study and Report to Congress
represented prudent planning and management of resources.  This
approach is reasonable considering (1) the 3 to 4 years typically
required to study an industry and develop a proposed rule and  (2)
the requirement in section 183 (e) to issue the first group of
rules within 2 years of completion of the study and the Report to
Congress.  Because EPA estimated that architectural and
industrial maintenance coatings were a major contributor to
emissions from consumer and commercial products,  it was
considered highly likely that they would be regulated in the
first group of products to be regulated under section 183(e).
     The EPA believes that the commenters'  allegations that the
regulatory negotiation was contrary to the requirements of
section 183 (e) ,  that there was no factual basis for the VOC
reduction target,  and that there was no focus on determining BAC
are unfounded and irrelevant to the final rule.  The proposed
rule and the final rule are based on EPA's evaluation of the
degree of emission reduction that is achievable for architectural
coatings.  The EPA used information developed in the regulatory
negotiation (e.g., types of coatings,  definitions of common terms
used in the industry)  along with other information developed by
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EPA in the determination of BAG for different categories of
architectural coatings.   It is important to note,  however, that
the reg neg committee did not reach consensus and thus did not
produce a proposal that  the EPA used as the basis for the
proposed rule.  Thus, even, if there had been any error in
beginning the reg neg prior to completion of the study, that
error was moot with respect to the final architectural coatings
rule.
     The specific points raised by commenter IV-D-212 are
addressed in section 2.2.4, section 2.6, section 2.1.2, and
section 2.1.1 of this BID and section 2.1.1 of the section 183(e)
BID.
2.5.2  Regulatory Negotiations Committee Was Not Properly
Constituted
     Comment:  Two commenters  (AIM-IV-D-212, AIM-IV-D-214d,
AIM-IV-D-212jj)  claimed that the reg-neg committee did not
adequately represent all of the interested and affected parties.
     Both commenters (AIM-IV-D-212,  AIM-IV-D-212jj,  AIM-IV-D-
2l4d)  asserted in three letters that the Reg-neg Committee was
dominated by representatives of large business, by governmental
officials, and by representatives of environmental organizations.
One commenter (AIM-IV-D-212, AIM-IV-D-212jj) claimed that large
national and international companies had a far superior
representation on the committee even though small manufacturers,
compose 90 percent of the paint industry.  The commenter asserted
that the constitution of the reg-neg committee was such that a
high percentage of reg-neg members  (including the industry
caucus) strongly favored a national rule over other alternatives.
     One commenter  (AIM-IV-D-214d) stated that the reg-neg
committee was dominated by members who supported substitution
regulations and therefore was unbalanced on the basis of
viewpoint.  The commenter cited a December 6, 1991 letter from
Smiland Paint Company that stated that one-half of the committee
members should have been persons who, through past words and
deeds, showed not only a mastery of the subject matter but also a
conviction that the rules at issue were both economically and
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environmentally counterproductive and that the products in
question should be preserved.
     The commenter (AIM-IV-D-214d)  claimed that EPA either
ignored requests to add or delete committee members in an effort
to obtain balance or acted in a way that insured that imbalance
was maintained.
     One commenter (AIM-IV-D-212jj}  implied that the EPA
intentionally skewed the membership of the reg-neg committee to
be unrepresentative of the industry.  The commenter asserted that
EPA, in addition to its official Federal Register notice,
informed selected parties (implying those that EPA wanted on the
committee)  in time for them to seek participation.
     One commenter (AIM-IV-D-214d)  stated that because it was
unbalanced,  the reg-neg Committee had acted outside the bounds of
FACA.  The commenter cited cases ostensibly supporting its
contentions that the committee was  unbalanced and thus in
violation of FACA.
     Response:   On February 4, March 20, and April 15-16, 1992
the Agency held three public meetings to explore the feasibility
of conducting a regulatory negotiation for the development of a
national architectural coatings rule (57 FR 1443, 57 FR 8286).  A
primary goal of the meetings was to identify the interests that
would be significantly affected by the rule and to identify
individuals who might represent those interests on an advisory
committee,  if a regulatory negotiation approach was chosen by the
Agency.
     On July 16, 1992 (57 FR 31474), the EPA published notice of
its intent to form an advisory committee to negotiate a proposed
regulation for architectural coatings under the Federal Advisory
Committee Act  (FACA)  and the Negotiated Rulemaking Act of 1990
(NRA).   In this notice,  the Agency published a proposed list of
advisory committee members that was generated using the
information from the three public meetings,  Agency expertise, and
information obtained by the Agency's conveners.  The proposed
list of advisory committee members  represented all of the
identified interests that would be  significantly affected by the
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rule.   The list included seventeen industry representatives,  one
consumer organization,  five representatives of federal agencies,
five State and local representatives of air pollution control
agencies, three representatives of environmental groups,  and one
labor organization.   In the notice,  the Agency requested comments
on whether the persons  proposed for the advisory committee would
adequately represent all the interests that would be
significantly affected  by an architectural coatings rule.  The
notice also explained that
     any person who may be significantly affected by the proposed
     rule discussed in  this notice,  and who believes that their
     interests will not be adequately represented by the persons
     or entities listed in Section III of this notice, may apply
     for membership on  the advisory committee.  Or as an
     alternative,  such  person may nominate another person for
     membership on the  advisory committee.
The publication of the  notice marked the beginning of a 30-day
comment period during which the public could submit comments and
applications for membership on the advisory committee.
     A final scoping meeting was held on July 28 and 29,  1992 to
discuss further the feasibility of conducting a regulatory
negotiation for the architectural coatings rule and the make-up
of the advisory committee.  Based on the interest of the
potentially affected parties and other considerations, the EPA
decided to proceed with the regulatory negotiation process for
the development of the  AIM coatings rule.  Therefore, on October
2, 1992, the Agency published its decision to establish a
negotiated rulemaking advisory committee for the architectural
coatings rule  (57 FR 45597).
     Based on the information provided at the final scoping
meeting, the comments and applications received on the proposed
advisory committee membership list,  agency expertise, and
information obtained by the Agency's convener, two more industry
representatives were added to the regulatory negotiation
committee, bringing the total to 34 committee members.
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     The regulatory negotiation procedures allowed the addition
of new committee members during the regulatory negotiations
provided there was committee consensus.  This provision was
exercised to add new committee members as was deemed necessary by
the committee.   The EPA did not ignore requests to change the
committee composition  (add members) to obtain or maintain
balance.  The EPA initiated the appropriate procedures for
consideration of new members.   The Agency believes that the
process above resulted in a balanced committee that adequately
represented all of the significantly affected interests.
     With respect to the cases cited by the commenters in support
of claims that the reg-neg committee violated the provisions of
FACA,  the EPA notes that the cases are clearly distinquishable on
their facts.  Even without these distinctions, however, EPA
believes that the commenters cannot demonstrate a violation of
FACA regarding the "fair balance" of the committee.  See
Fertilizer Institute v. EFA, 938 F.Supp.  52  (D.D.C. 1996)
(composition of committee is not justiciable and plaintiffs could
not establish standing).  The EPA notes that the reg neg
committee did not reach consensus and thus that it did not
produce a proposal to forr. the basis for the EPA's proposed rule.
Thus,  ever, if there had been any unbalance on the committee, it
did net affect the commenters.
2.5.3   Regulatory Negotiations Procedure
     Comment:  One commenter (AIM-IV-D-214b/CP-IV-D-07b) stated
that the early convening, the lack of balance in the committee
membership,  and the procedural improprieties were deliberately
designed by the EPA to support a predetermined outcome.
According to this commenter, the predetermined outcome was early
promulgation of a VOC content-limiting regulation similar to but
with lower limits than existing rules in California.  Another
commenter (AIM-IV-D-212j) also alleged that the outcome of the
reg-neg was predetermined by the EPA.
     Concerning the allegation of a predetermined outcome, one
commenter (AIM-IV-D-214d) stated that EPA appeared to have
unilaterally abandoned its obligation to "negotiate" to reach a
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"unanimous" agreement on a rule.   The commenter cited an August
10,  1993 letter from the facilitator to committee members that
stated that there may have been "enough" support for a framework
for use "as the basis for EPA's draft rule language" and for
forwarding to EPA for its "use in developing a draft proposed
rule."  The commenter expressed confusion regarding whether EPA
was still one among equals attempting to negotiate a rule to
which all committee members would unanimously agree or had
unilaterally scuttled reg-neg and started its own notice and
comment rulemaking.
     One commenter (AIM-IV-D-212jj)  alleged that there were
contacts between NPCA and EPA during the assessment of whether to
establish the reg-neg.   The commenter (AIM-IV-D-212jj) speculated
that these contacts appeared to extend beyond what was
appropriate.  The commenter (AIM-IV-D-212jj)  implied that EPA
colluded with NPCA to heavily weight the Reg Neg committee with
members who favored a national rule.  This commenter
(AIM-IV-D-212Jj)  alleged that the range of acceptable emission
limitations and corresponding categories were among the issues
that were taken up, and agreed to by EPA, before negotiations
began.
     A commenter (AIM-IV-D-214d)  contended the EPA facilitator
acted in ways that were not impartial.   According to the
commenter:
     1.   In the Spring of 1993 the facilitator asked three
          caucuses,  excluding the ALARM caucus, to  designate
          representatives to several important new workgroups and
          denied workgroup membership to one ALARM member who
          requested it.  The commenter admitted that on May 12,
          1993 EPA reversed its decision and allowed ALARM Caucus
          members to participate in workgroups.
     2.   The facilitator elected not to hear the ALARM proposal
          during the reg-neg session held at the end of July,
          1993,  even though the commenter believed it was the
          most carefully prepared and defended of all the
          proposals.
     3.   On July 29,  1993, promptly after circulation of the
          ALARM proposal, the facilitator caused to be
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          circulated, discussed, and partially supported at a
          meeting of selected persons from three of the four
          caucuses a competing conceptual framework for a rule
          based on substitution.

     4.    The facilitator failed to honor the ALARM Caucus
          members' request not to present the competing
          conceptual framework until after the ALARM Caucus
          proposal had been given full and fair consideration.

     5.    In an August 11, 1993, letter,  the facilitator
          questioned whether the ALARM Caucus' participation in
          the regulatory negotiation continued to be in good
          faith.

     The commenter  (AIM-IV-214d) stated that the requirement of

openness was violated in at least four main respects:


     1.    On April 27, 1993,  the facilitator ruled that the new
          workgroups it had created would meet in private.  The
          commenter admitted that on May 11, 1993,  EPA and
          Keystone reversed the decision for secrecy.

     2.    After May 1993, open plenary sessions of all committee
          members and observers became the exception rather than
          the rule and substantive discussions were conducted on
          a caucus-to-caucus basis.

     3.    On July 29, 1993, EPA and the facilitator, without
          notice to the public or to the ALARM Caucus, held a
          secret meeting late into the night miles away from the
          site of the reg-neg session with selected
          representatives of three of the four caucuses.

     4.    On March 2, 1994, members of the same small group which
          had met privately in Washington in July 1993 again met
          jn Washington and again no member of the ALARM caucus
          was invited to attend or was represented at the
          meeting.


     Response -.   Prior to the establishment of the regulatory

negotiation to negotiate a rule for architectural coatings, the

EPA convened a series of open workshops to discuss the scope of a

possible negotiation, review existing and planned data collecting

efforts, and determine the additional information that would be

required to support a rule.  These meetings were a necessary part

of the EPA's assessment of whether a regulatory negotiation or

other consensus building approach would be appropriate for this

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rule.  Contrary to the allegations by the commenters,  the EPA did
not have a predetermined outcome for the negotiation or a pre-
established position.  This fact is demonstrated by the numerous
alternative proposals that were discussed in the committee
meetings.  Specifically, during the negotiations, most of the
caucuses submitted proposed architectural coatings regulations
for review and discussion by the rest of the committee.  In
addition, several regulatory frameworks, based on elements from
the individual caucus proposals and discussions, were prepared by
the EPA and the facilitator.  The EPA also believes that the VOC
limits, as well as other aspects, of the final rule demonstrates
that the EPA did not have a predetermined position on the rule at
the time of the regulatory negotiation.
     The regulatory negotiation for the  architectural coatings
rule was conducted according to EPA's procedures for advisory
committees and EPA disagrees with the commenters allegations that
the meetings were conducted improperly.   The EPA's advisory
committees operate under the Federal Advisory Committee Act
(FACA), as amended,  (5 U.S.C.  App.  2); the Negotiated Rulemaking
Act of 1990 (NRA),   (5 U.S.C. Sec. 581 et seq.); the General
Services Administration Rule on Federal  Advisory Committee
Management  (GSA Rule), as amended,   (41 C.F.R. Part 101-6) and
Executive Order 123838 "Termination and  Limitation of  Federal
Advisory Committees."  The  EPA's policies,  procedures,  and
responsibilities relating to the establishment, renewal,
termination, operation, management, and  public accessibility of
EPA's  Federal advisory committees are contained in EPA's
Committee Management Manual.  The Architectural and Industrial
Maintenance Coatings Negotiated Rulemaking Advisory Committee,
was established and operated in full accordance with all of the
above  provisions.
     As required by FACA, all of the architectural coatings reg-
neg meetings were open meetings that were announced in the
Federal Register and all interested persons had an opportunity to
file comments before or after meetings,  or to make statements to
the extent that time permitted.
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     As allowed by the NRA, the architectural coating advisory
committee developed an organizational protocol that outlined the
procedures and guidelines that were followed in the negotiations
(Docket Number A-92-18,  Docket Item II-E-34).   Among other
things, the organization protocol clearly outlined:
          the committee members responsibilities regarding
          representation and attendance;
          the process for adding new committee members;
          the decision making process that was followed,
          including, a definition of consensus and guidelines for
          the formation of workgroups;
          the definition and terms of agreement on the product of
          negotiations;
          the role of the facilitator;
          the process for conducting, announcing, and summarizing
          meetings;
          the process for forming caucuses;
          the committee member's legal rights; and
          the schedule.
The procedures and guidelines in the organizational protocol were
followed throughout the regulatory negotiations by both the
committee and the facilitator.  As outlined in the protocol, all
decisions or agreements made during the course of the
negotiations required unanimous consensus of all the committee
members.
     The protocol allowed for the formation of caucus meetings,
which were defined as "meeting breaks usually  called for specific
parties to confer."   During the negotiation process it  became
evident to the committee that certain groups of committee members
shared similar views and interests.  Because these groups
frequently held caucus meetings during the negotiations, they
were called "caucuses."  The following caucuses were formed:
Users Caucus, State/Environmental Caucus, ALARM Caucus, and
Industry Caucus.   During the negotiations, most of the caucuses
submitted proposed architectural coatings regulations for review
by the rest of the committee.   In addition, several regulatory
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frameworks, based on elements from the individual caucus
proposals and discussions,  were prepared by the EPA and the
facilitator.  Despite these efforts,  the committee could not
reach consensus on an architectural coatings regulatory
framework.  Therefore,  on September 23,  1994,  EPA announced the
conclusion of the architectural coatings regulatory negotiations
without consensus.
     Given that the reg neg committee was unable to reach a
consensus, the EPA contends that even if there had been any error
in the procedures,  such an error has no bearing on this final
rule.  Because the reg neg committee reached no consensus, it
produced no proposal for consideration by the EPA in developing
the proposed rule.
     The commenter's points concerning the representation on the
regulatory negotiation committee are addressed in section 2.5.2
of this BID.
2.5.4  Miscellaneous
     Comment:  One commenter (IV-D-212)  implied that EPA went
forward with the Architectural Coatings rule because of the
momentum created by the reg-neg and to justify the time and money
spent on it.  The commenter estimated that EPA spent between $500
to $900 thousand dollars on the reg-neg.
     Response:  The EPA proceeded with development of a rule for
architectural coatings because the category of architectural
coatings is one of the largest sources of VOC emissions among the
categories of consumer and commercial products and it was
expected that significant emission reductions could be achieved
at much lower cost than from reductions of other stationary
sources of VOC emissions.  Emissions of VOC from architectural
coatings in 1990 were approximately 560,000 tons per year.  The
final rule is expected to reduce these emissions by approximately
113,500 tons per year,  a 20 percent reduction.  The estimated
total annualized cost of the rule is approximately $28 million
 (1991 dollars) .   The average cost per ton of VOC emissions
reduced is $250 per ton for architectural coatings compared to
over $2,000 per ton for recent emission controls on new cars and
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$2,000 to $10,000 per ton for controls on other industrial
sources.
     Comment:   One commenter (IV-D-214d) stated that EPA and its
facilitator declined a request to establish a workgroup on
environmental and economic impacts.  The commenter stated that
the adverse environmental and economic impacts of substitution
was not taken into consideration during the negotiations.
     Response:   In development of the rule for architectural
coatings, EPA took into consideration potential adverse
environmental and economic impacts from the rule.  See section
2.3 of this BID for responses to comments on this topic.  Since
the regulatory negotiation closed without consensus on a draft
rule, the commenter's specific concerns with procedures are not
relevant to the final rule.
     Comment:   One commenter (CP-IV-D-07a) stated that consensus
was not reached because several of the caucuses were willing or
eager to ban glossy enamels.
     Response:  The EPA believe that there were many factors that
caused the reg neg committee to fail to reach consensus.  With
respect to the particular concern of the commenter, the EPA does
not believe that the architectural coatings rule will result in a
bar. of any category of paints given the VOC content limits set in
the standard as well as the alternative compliance options of the
exceedance fee and tonnage exemption.  Based on the 1990 survey
data, which contained information on over 40 million gallons of
exterior "nonflats" (includes oil-based exterior house paints),
the VOC content limit in the final rule is at a level that would
allow over 80 percent of these exterior nonflat products to
continue to be marketed.  The rule establishes VOC content limits
at levels that would still allow glossy enamels to be produced.
The EPA also notes that the positions of caucuses in the
regulatory negotiation are not relevant to the BAG determinations
in the architectural  coatings rule since the rule is not based on
the regulatory negotiation.
     Comment:   After conclusion of the regulatory negotiations
without reaching consensus, one commenter (IV-D-212JJ)  presented
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a series of arguments against EPA proceeding with development of
a national rule for architectural coatings.   In these arguments,
the commenter (IV-D-212JJ)  stated that there was not a broad base
of support for a federal rule within the architectural and
industrial maintenance coatings industry.   As part of the
statement of this position,  the commenter (IV-D-212Jj)  claimed
that the industry caucus group from the regulatory negotiation
was dominated by large national and international manufacturers.
The commenter (AIM-IV-D-212jj)  continued that the ALARM caucus
did not support the rule and that a straw-poll of small and
regional architectural coating manufacturers were unfavorable to
the EPA proposal.  The commenter concluded that support for the
EPA proposal came mainly from the large national and
international manufacturers  and that the proposal generally did
not have strong support among regional and local manufacturers.
     Response:  The EPA notes that the commenter's concern was
with the draft regulation that was developed in the regulatory
negotiation and that the positions of various caucuses on that
rule are not relevant to the proposed or final architectural
coating rule.  Based on information available to EPA, many
members of the affected industry do strongly support the
architectural coating regulation.  The EPA has worked closely
over many years with members of the industry  (including small
manufacturers)  in order to develop a regulation that is effective
yet not overly burdensome to manufacturers.   In addition, the EPA
has worked closely with small manufacturers and with the Small
Business Administration to ensure that the rule does not impose
unnecessary impacts upon small businesses.  The main trade
association for the architectural coating industry, the National
Paint and Coatings Association, supports our efforts to issue a
rule limiting VOC emissions from architectural coatings.
2.6  FUTURE STUDY
     The EPA maintains that further reductions in VOC content
limits beyond those in table 1 of the architectural coating rule
may be technologically and economically feasible.  However, much
controversy surrounds the proposal of more stringent VOC content
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limits in a future phase of regulation.  To address the
controversy, the EPA announced in the preamble of the proposed
rule  (61 FR 32743) that it would (1)  investigate the cost and
performance characteristics of coatings with VOC contents lower
than the promulgated limits and assess the environmental and
economic impacts of requiring lower VOC contents; and  (2)
continue to meet with other stakeholders regarding the potential
for a future phase of regulations for the architectural coating
rule.
     At proposal, the EPA requested comment regarding a future
joint EPA and industry study particularly with respect to any
performance, cost, or reactivity considerations that should be
included in the study.  The EPA also requested 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.  In addition,  the EPA requested cost
information and comments on the ability of coatings with VOC
content levels lower than the proposed limits to meet the
performance needs within the various coating categories.  The EPA
reiterates, that this second study would address whether more
stringent VOC content limits might be appropriate in the future.
The study and Report to Congress performed by the EPA pursuant to
section 183(e) already demonstrated that consumer and commercial
products have the potential to contribute to ozone nonattainment
and that architectural coatings should be regulated and should be
regulated in the first group of product categories for
regulation.
     Comment:   A total of 29 commenters in 23 letters and 6
presentations (IV-D-28, IV-D-32,  IV-D-33,  IV-D-34, IV-D-82,
IV-D-96, IV-D-117, IV-D-118, IV-D-120, IV-D-126, IV-D-148,
IV-D-158, IV-D-162, IV-D-180, IV-D-181, IV-D-185, IV-D-188,
IV-D-189, IV-D-206, IV-D-211, IV-D-213/IV-F-If,  IV-D-214C,
IV-D-215, IV-D-217, IV-D-22/IV-F-la,  IV-F-lb, IV-F-li, IV-F-lm,
IV-F-2)  responded to the EPA's request for comments on a study
and future phase of VOC content limits.  One commenter  (IV-D-206)
supported a study and expressed interest in participating in it.
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Four commenters (IV-D-126, IV-D-158, IV-F-lb, IV-F-lf) opposed a
study.  Five commenters (IV-D-162,  IV-D-185, IV-D-189, IV-D-211,
IV-D-213)  neither supported nor opposed the study and future
phase of regulations but expressed an interest in being involved
in the study if the EPA decides to pursue it.  Two commenters,
one supporting  (IV-D-32) and one opposing (IV-D-189),  discussed
the concept of continuous ongoing review and revision of
section 183 (e) rules as best available control evolves.  Two
commenters  (IV-D-181, IV-F-li)  encouraged the EPA to set future
limits that were feasible and practical.  One commenter
(IV-D-120) recommended that any future EPA/industry study include
all groups affected, both large and small businesses.
     Five commenters (IV-D-158, IV-D-181, IV-D-206, IV-F-lb,
IV-F-lf) supported the EPA's decision to include only a single
table of standards for the proposed standards, while one
commenter  (IV-D-180) recommended that the EPA promulgate at least
two tables of VOC emission standards phased in on two separate
dates.  Eleven additional commenters  (IV-D-33, IV-D-34, IV-D-96,
IV-D-117,  IV-D-118, IV-D-126, IV-D-148, IV-D-188, IV-D-191,
IV-D-215,  IV-D-22/IV-F-la) supported a future phase with more
stringent VOC emission reductions.   Eight of these commenters
(IV-D-33,  IV-D-34, IV-D-96, IV-D-117, IV-D-118, IV-D-126,
IV-D-215,  IV-D-22/IV-F-la) supported the future phase table of
VOC content limits recommended by STAPPA/ALAPCO that would
achieve a 40 percent emission reduction by 2002.  The commenter
(IV-D-22/IV-F-la)  maintained that States would welcome a second
phase of standards even if the rule is delayed, provided that
State Implementation Plan  (SIP) credits were able to carry over.
Two commenters  (IV-D-148, IV-D-22/IV-F-la) suggested the phased
reduction should be set to achieve a 45 percent reduction in
overall VOC emissions within the industry as was agreed on during
the regulatory negotiation.  One commenter  (IV-D-188)  requested
that the EPA work closely with California to help develop a
second phase to the proposed rule such that it will address areas
with the State's unique air quality challenges.
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     According to some commenters, there are advantages to having
a second table of emission standards or a future phase with more
stringent VOC emission reductions:
     •    Providing greater certainty to industry by not
          submitting them to unknown future VOC content limits
          imposed by States and providing them with adequate
          warning about when the new emission standards will be
          effective (IV-D-126, IV-D-180, IV-F-la);
     •    Requiring that emission standards reflect BAG  (IV-D-96,
          IV-D-126, IV-F-la);
     •    Obtaining additional emission reductions  (IV-D-34); and
     •    Allowing additional time for the industry to develop
          coatings that are significantly less polluting and that
          maintain the qualities demanded by customers  (IV-D-96,
          IV-D-126, IV-D-148, IV-D-180, IV-F-la).
One commenter (IV-D-148) asserted that a phased reduction could
be accomplished in a relatively cost-effective manner compared to
VOC reductions in other areas.  Another commenter  (IV-D-126)
warned that the failure of the EPA to implement future reductions
in its rule effectively forces States to develop subsequent
coating regulations independently, increasing the hardship on
manufacturers.  This commenter also asserted that a future phase
reduction that lowered VOC contents in 12 major coating
categories would give States additional reductions while also
addressing reformulation concerns of low-volume specialty coating
manufacturers.
     Eight commenters  (IV-D-28,  IV-D-158,  IV-D-214c, IV-D-217,
IV-F-lb, IV-F-lf, IV-F-lm, IV-F-2) opposed a future phase of
regulations.  Two commenters  (IV-D-158, IV-D-214c) stated that
section 183 (e) of the Act does not authorize the EPA to impose
future VOC content limits on the architectural coating industry.
One commenter (IV-D-214c)  expressed concern that neither the
preamble nor the proposed rule says anything substantive about
the possibility of the EPA imposing more stringent substitution
limits in a second round of regulation.  Two commenters
(IV-D-158,  IV-F-lb) asserted that any future phase reductions
would be technologically infeasible.

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     One commenter (IV-F-lf)  asserted that further reductions
would force products to market that would not be appropriately
tested and could result in contractors and customers spending
large sums for coatings that do not perform.  Thus, according to
the commenter, any environmental benefits that might be achieved
through accelerating reduction of VOC at the risk of performance
would be hollow gains and would ultimately result in more
emissions from coatings having to be reapplied.  One commenter
(IV-F-lm) expressed concern that a future standard in as little
as 4 or 5 years will effectively negate the value of the earlier
reformulation and more than double the burden on businesses that
must reformulate to meet the first standard.  One commenter
(IV-F-2) claimed that regulation will lead to accelerated
consolidation in the industry that will increase competitive
pressures on the remaining manufacturers.  Therefore, the
commenter asserted that the contemplated second phase would be
the last straw for many companies.
     One commenter (IV-D-217) addressed the financial and
technical burdens upon his company that would result from the
"year 2000"  potential  regulation of VOC emissions from
architectural coatings, using suggested values as published in
current trade journals.  The commenter also presented the
assumptions made for analyzing the effects of the "year 2000"
potential VOC regulations.   (The commenter is apparently
referring to VOC content limits that were discussed in the
regulatory negotiation as potential requirements for a second
phase that would have been effective in the year 2000.)  For the
year 2000, his company will manufacture and offer for sale 255
individual formulas,  both solventborne and waterborne.   Of the
255 formulas, 52 of these formulas will not meet the potential
VOC content limits for the year 2000.  Of the 52 affected
formulas, 35 of these formulas cannot be reformulated to meet the
VOC content limits and will have to be discontinued.  The
remaining 17 affected formulas probably can be reformulated to
meet potential VOC content limits for the year 2000, but at great
cost to the company.  At this time, the company cannot predict
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which of the 17 formulas will not be successfully reformulated.
The commenter estimated a total cost of 6.4 million (rounded)
dollars to comply for the year 2000.  The commenter requested
that the EPA consider the financial damage that will result from
potential future VOC regulations for small, regional paint
manufacturers such as the commenter's company.
     One commenter (IV-D-32) encouraged the EPA to conduct future
review and revision of the proposed rules as new best available
controls emerge.  According to the commenter, such a review and
revision will serve to reduce demand for future local rules to
control VOC emissions.  The commenter noted that section 183 (e)
of the Act requires the EPA to use best available control to
limit consumer and commercial product VOC emissions.  The
commenter asserted that a standard based on best available
control must inevitably evolve with the development of new
technologies or the introduction of newly exempted VOC.
     In contrast,  another commenter  (IV-D-189) contended that
because of the vast array of coating systems and the diverse and
distinct demands for various coatings,  attempting continuously to
capture technological advances in regulatory mandates for this
complicated, diverse industry would be costly for the industry as
a whole, as well as being potentially anti-competitive and
difficult for the EPA to administer.  The commenter noted that
Congress never stated any clear intention in section 183(e) of
che Act that the EPA is required or authorized to act to capture
or prod technology changes on a continuing basis.  The commenter
noted that the EPA is explicitly required or authorized under
other provisions of the Act to revise guidance and other national
regulations and standards, e.g.,  automotive emission standards,
but claimed that there is no such explicit requirement or
authorization under section 183(e)  of the Act.
     One commenter (IV-D-181)  supported the EPA's decision to
make future rules contingent on a study of the feasibility and
practicability of such changes.  Another commenter  (IV-F-li)
urged the EPA to avoid setting extremely stringent VOC content
limits requirements at some future date and then raising the
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levels to what most products achieve.   The commenter noted that
when leading edge products are designed to meet a regulation,
cost and performance may be compromised.  When less stringent
regulations are set, the market for those products disappears and
the manufacturers lose money.
     One commenter  (IV-D-206) supported the concept of a joint
future study to determine whether additional reductions in VOC
content levels are feasible.  The commenter stated that a joint
study is a rational way of proceeding with consideration of more
stringent levels.  Another commenter (IV-D-211),  a principal
supplier of coatings to the installers and refinishers of sports
floors, agreed with the EPA that further VOC reductions "may be
technologically and economically feasible" in the sports floor
category.
     According to one commenter  (IV-D-28), the EPA and industry
lack the budgets to make the contemplated cost sharing study of
such a magnitude that it will be total, definitive, and/or
complete to justify additional regulation.  The commenter
suggested that the EPA point out these limitations so as not to
raise expectations of the various stakeholders and requested that
all parties agree to a protocol with a tolerable cost level that
also ensures the likelihood of some reactivity results that will
have utility for the regulator and the regulated community.
Another commenter  (IV-F-lf) stated that feasibility must include
evaluation of a coating's ability to perform and urged the EPA to
consider performance issues as paramount in any future study.
     Four commenters  (IV-D-126, IV-D-158, IV-F-lb, IV-F-lf)
opposed a future study.  Two commenters  (IV-D-158, IV-D-189)
asserted that section 183 (e) of the Act may not authorize the EPA
to conduct a future study to determine the technological
feasibility to impose additional controls in the future.  One
commenter  (IV-D-126) stated that the focus of a national
regulation is to achieve actual VOC reductions that are known to
be technologically feasible.  Based on the lower VOC content
limits currently established by many states that are being met by
manufacturers, the commenter believed that lower limits are
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clearly viable and should be pursued in a regulatory format
rather than after a future study.  Therefore, the commenter
asserted that it is unreasonable to waste precious resources
conducting further analyses with no promise of further
reductions.  Another commenter  (IV-F-lb) contended that a future
study would be time consuming, costly and unlikely to find clear,
unambiguous evidence of appropriate VOC levels relative to
quality paint products.  The commenter asserted that the EPA
presented the study in a particularly one-sided way, giving
little chance of favorable industry hearing on the subject.
Another commenter  (IV-F-lf) contended a study would be done
unfairly as an attempt to rationalize further reductions.
     Seven commenters  (IV-D-82, IV-D-162, IV-D-185, IV-D-189,
IV-D-206, IV-D-211, IV-D-213)  expressed interest in participating
in any future study conducted to determine whether it is
technologically and economically feasible for the architectural
coating industry to develop products that are lower in VOC
content than the limits promulgated in the national rule.  One
commenter  (IV-D-189)  will participate to ensure that the EPA has
sound information and that any decisions concerning technological
and economic feasibility of reformulating architectural coatings
are made at the national and not the State and local levels.
Another commenter  (IV-D-162)  expressed interest in providing
evidence of coating performance, and will furnish studies of low
VOO industrial maintenance coatings as they become available.
One commenter (IV-D-82) requested that the Solvents Council of
the Chemical Manufacturers Association be included along with
other stakeholders during the early stages of future rulemakings
for consumer and commercial products.
     One commenter (IV-F-2) requested that the EPA clarify the
process for the future phase study, and another commenter
(IV-D-189)  requested that the EPA clarify the technological and
economic considerations that will determine its potential
conclusions in the study.  Three commenters  (IV-D-185,  IV-D-189,
IV-D-213) provided input on how the EPA should conduct the study.
Two of these commenters  (IV-D-189,  IV-D-213)  stated that for any
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such study to have credibility and integrity,  it must be
conducted under the proper conditions.   The other commenter
(IV-D-213)  stated that any future EPA study with members of the
industry to determine whether further reductions are
technologically and economically feasible must incorporate the
impact on contractors as well as manufacturers.   The commenter
stated that if the EPA pursues further reductions,  it must focus
on the impact of such reductions on the performance of the
products affected.  The commenter agreed that the study should
examine cost and economic impact of lower VOC as well as
performance issues.  The commenter also approved of looking at
reactivity considerations because reactivity factors could yield
a more sensitive and narrowly tailored regulation if the EPA can
find a way to work reactivity into a regulatory structure.  Two
commenters  (IV-D-185, IV-D-189)  urged the EPA to approach the
subject of future regulation without preconceptions.  They stated
that the study should not guarantee further regulation  (i.e., the
possibility of no further regulation should be one possible
outcome).   One commenter  (IV-D-185) stated that such a study
should consider all significant business and scientific factors
including product performance, compliance costs, and the
incremental environmental benefit of further VOC restrictions.
The commenter stated that the study should be fair and net
unfairly burden the paint and coating industry compared to other
regulated industries.
     Response:  The fina] architectural coating rule contains
only one phase of VOC content requirements.  The EPA has
determined that the rule's requirements, considering the
compliance lead time and alternative compliance options
(exceedance fee and tonnage exemption),  represent BAC for these
products at this time.  For a more detailed discussion of BAC
determination, see section 2.2.4 of this document.
     In addition, the EPA has concluded that additional study of
this category may be warranted to determine the feasibility of
additional reductions in VOC content in the future.  However,
contrary to some commenters1 assertions, the EPA would not
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necessarily impose additional VOC reduction requirements as a
result of any study.  The future study could indicate that
further regulation of architectural coatings is unwarranted.  The
EPA notes that contrary to the assertions of some commenters, the
EPA's initial study and Report to Congress provided ample support
for the conclusion that consumer and commercial products have the
potential to contribute to ozone nonattainment and that
architectural coatings should be regulated.  The purpose of the
contemplated second study would be to determine if additional VOC
reductions might be appropriate given recent technological
advances.
     The EPA appreciates the willingness of manufacturers and
trade associations to participate in a joint study of future
reductions from architectural coatings.  The effectiveness of any
such study is highly dependent on a spirit of openness and
cooperation between all affected parties.  In order to determine
the potential for useful results from this second study, the EPA
will solicit input from industry representatives and other
interested parties on the timing, scope, and content of the
study.  Decisions concerning the second study will be made on the
basis of this input.
     Some commenters questioned the EPA's authority to engage in
any future regulatory initiatives involving architectural
coatings.   These commenters did not identify any statutory
language in section 183 (e)  of the Act that supports this
position.   Moreover, there is nothing in the statutory language
that prohibits the EPA from amending or revising the rule, should
that be appropriate in the future.  The EPA believes that
section 183(e)  explicitly authorizes the EPA to use "any system
or systems of regulation" appropriate to achieve the goals of the
statute, and the EPA's explicit directive is to require BAC.  The
EPA has striven to promulgate appropriate regulations given the
current state of technology.  Nevertheless, the EPA acknowledges
that in the future there may be advances that would justify the
EPA's reexamination of the question of BAC and what level of VOC
content would be appropriate.  As pointed out by some commenters,
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as technology evolves, it may be appropriate for the EPA to
reexamine whether the rule should be revised.
2.7  LEGAL ISSUES
2.7.1   Publication requirements of the Clean Air Act and the
Administrative Procedure Act
     Comment:   Two commenters (IV-D-212, IV-D-214C pp. 22-25)
expressed concern because the EPA published the architectural
coating preamble on June 25, 1996  (61 FR 32729) and the proposed
rule on September 3, 1996 (61 FR 46410).  The commenters claimed
that because the EPA published the architectural coatings rule
preamble without the proposed rule text, the EPA failed to comply
with the law.   One commenter (IV-D-214c) specifically stated that
the EPA failed to meet the publication requirements of Act
section 307(d)(3) and Administrative Procedure Act  (APA)
section 553 (b) (3) .   The commenter claimed that because the
preamble did not include the definition of each of the categories
of architectural coatings, a manufacturer could not know to what
limit a product would be subject.  Therefore, the commenter
claimed that the EPA had not issued the proposed rule in
accordance with either Act section 307(d)(3) or APA
section 553(b)(3).
     Two commenters  (IV-D-04, IV-D-11) also took exception to the
use of electronic bulletin boards as the method of providing
complete "regulatory text" to the public, as  it tends  to favor
larger business with an understanding of the electronic format
over smaller businesses.  The commenters expressed concern that
use of the electronic format would result in fewer comments from
small businesses.
     Response:  Contrary to the commenters' claim, the EPA did
comply with the rulemaking requirements of both the Act
section 307(d)(3) and APA section 553(b)(3) when it published the
architectural coating rule's preamble in the Federal Register on
June 25, 1996 (61 FR 32729)  and the text of the proposed rule on
September 3, 1996  (61 FR 46410).  Section 307(d)(3) of the Act
requires that:
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          In the case of any rule to which this subsection
     applies,  notice of proposed rulemaking shall be published in
     the Federal Register, as provided under section 553(b) of
     Title 5,  shall be accompanied by a statement of its basis
     and purpose and shall specify the period available for
     public comment (hereinafter referred to as the "comment
     period1') .   The notice of proposed rulemaking shall also
     state the docket number, the location or locations of the
     docket, and the times it will be open to public inspection.
     The statement of basis and purpose shall include a summary
     of--
          (A)  the factual data on which the proposed rule is
     based;
          (B)  the methodology used in obtaining the data and in
     analyzing the data; and
          (C)  the major legal interpretations and policy
     considerations underlying the proposed rule. ...

Section 553(b)  of the Administrative Procedure Act requires that:

          (b)  General notice of proposed rulemaking shall be
     published in the Federal Register, unless persons subject
     thereto are named and either personally served or otherwise
     have actual notice thereof in accordance with law.  The
     notice shall include--
          (1)  a statement of the time, place, and nature of
     public rulemaking proceedings ,-
          (2)  reference to the legal authority under which the
     rule is proposed;
          (3)  either the terms or substance of the proposed rule
     cr a description of the subjects and issues involved.  ...

     Thus, as provided above, the EPA is under no obligation to

publish the text of a proposed rule in the Federal Register.  The

EPA frequently does publish proposed regulatory text, however,  as
a means of eliciting more specific comments from commenters.  In
this instance,  the EPA believes that most parties, including the

commenters,  had participated in the regulatory negotiation

process and, accordingly, had sufficient notice of the coating

categories under consideration for regulation.  In addition, the

proposed regulatory text for the architectural coatings rule was

available on the EPA's electronic bulletin board, and was

available from the docket for the rulemaking, which was open to

the general  public on the date that the proposed rulemaking was

published in the Federal Register.  In a special effort to reach

small coating manufacturers in particular,  the EPA also mailed
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the text of the proposed rule to over 600 small and medium-sized
businesses, announced the public hearing and small business
meeting, and requested comment on specific areas of the proposed
rule.  Moreover, when the EPA received a request to publish the
proposed regulatory text, it did so on September 3, 1996 and
extended the comment period to insure that all interested parties
had time to review and comment upon the proposed regulatory text.
Thus, the EPA believes that it has complied with the requirements
of section 307 (d)  of the Act and the APA, and that there was no
prejudice to the commenters.
     With regard to the use of electronic bulletin boards, this
is only one method of providing the complete regulatory text to
the public.  The regulatory text for a rulemaking can be obtained
from the particular rulemaking docket when the proposed (or
final)  rule is published in the Federal Register.  The EPA is
cognizant of the need to make materials available to interested
parties by different methods to insure that lack of access by one
method does not preclude access to information.
     For these reasons, the EPA maintains that it is in
compliance with the procedural and publication requirements of
the Act section 307(d)(3) and Administrative Procedure Act
section 553(b)(3).
2.7.2   Compliance With the Regulatory Flexibility Act  (RFA) and
the Small Business Regulatory Enforcement Fairness Act  (SBREFA)
     Comment:   Two commenters (IV-D-62, IV-D-214c) maintained
that the EPA failed to prepare an initial regulatory flexibility
analysis or publish a "summary" as required under  §603(a)  of the
Regulatory Flexibility Act  (RFA)  for the AIM rule.  One commenter
 (IV-D-214c) stated that the Economic Impact Analysis  (EIA) found
in the EPA's docket included the EPA's initial regulatory
flexibility analysis, but in at least the following areas it
failed to meet the mandates of §603: (1) there was no
consideration of 13 types of economic costs by small businesses
 [603 (a), 603 (c)];   (2) the EPA failed to discuss any "differing
compliance  ... timetables" for phase one;  instead a prohibitively
short deadline is discussed  [603(c)];  (3) omission of various
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other "alternatives" to "minimize"  the  impact  of  those limits;  (4)
no statement of the "legal basis"  of imposing limits  to  apply  to
attainment areas, as required by  §603(b)(2);  (5) the failure  to
state the "legal basis" for any potential  second phase of  limits,
as mandated by  §603(b)(2); and (6) failure to include a
description of  the "reasons why" imposing  such limits  is being
considered by the EPA, or the "objectives" thereof  as  required in
§603(b)(1) and  (2).   The commenter stated that  instead of
completing the  required summary,   the proposal preamble contained
only four brief paragraphs, which discuss an  incomplete set of
certain points.  The commenter stated that in a two-page  summary
of the EIA in the docket, the EPA conceded that "products made by
small producers, on average, have higher  VOC  content than the
industry average."  The  commenter  concluded  that this suggests
that small businesses receive disproportionate  impacts.
     Response:   The EPA prepared  an initial  regulatory
flexibility analysis for the proposed rule and  summarized that
analysis in the notice of the proposed rule  in  accordance with
the RFA [5 U.S.C. 609(b)].  The EPA published the  summary of  the
initial regulatory flexibility analysis in the  notice of  the
proposed rule on June 25, 1996 (61 FR 32745).   The initial
regulatory flexibility analysis addressed all the  requirements of
the RFA.  The analysis is contained in the draft EIA and
describes affected entities, analyzes market presence, discusses
the potential for disproportionate impacts based on the product
specialization  of small businesses, estimates the  costs
associated with regulatory compliance, and assesses regulatory
impacts, such as the cost to sales ratio  for  small businesses and
the estimated change in small business producer surplus.  The EIA
was summarized  in the proposal preamble,  and was available for
review in the public docket.
     Comment:   Four commenters (IV-D-214b/CP-IV-D-07b;
CP-IV-D-07a; IV-D-212; IV-D-214c)  stated  that the  EPA looked  only
at impacts on manufacturers with  less than $10 million of annual
revenue from the sale of AIM coatings, whereas Small Business
Administration  (SBA) rules regard a small paint manufacturer  as
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one with 500 or fewer employees.   As a result,  the commenters
stated that the EPA erroneously excluded from its analysis many
small companies.  One commenter (IV-D-212)  stated that the EPA
allowed the NPCA to redefine small business as one with sales of
$10 million per year.  The commenter stated that there was no
authority for any such redefinition of what constitutes as small
business and that the EPA performed this redefinition in order to
alter the analysis in the RFA.   The commenter cited a letter it
wrote to Mr. Lader, SBA administrator,  which referenced the Rauch
Guide and reiterated its contentions that the EPA marginalized
small business.  The commenter contended that the EPA showed a
strong and continuing bias against small business which was
contrary to the express intent of Congress as well as the
President of the United States.
     Response:   The EPA did not include manufacturers having
annual sales above $10 million but fewer than 500 employees in
the initial regulatory flexibility analysis.  The EPA established
an alternative definition of small businesses for the
architectural coating industry based on input from stakeholders
during the regulatory negotiation process.   Since the
architectural coating industry is not labor-intensive, the EPA
determined that a dollar value cut-off rather than an employee
number cut-off would be a better measure to reflect the ability
of a given manufacturer to devote time as well as research and
development resources to meet regulation requirements.  Using
this alternative definition (less than $10 million in annual
sales of architectural coatings and less than $50 million in
total annual sales), the EPA determined that between 70 and
85 percent of the industry should be classified as small. The EPA
believes that this definition of small companies is more
appropriate for the impact analysis under the RFA.  If the
definition were changed to include more firms with sales greater
than $10 million but fewer employees, the impacts on this sector
of the industry would likely appear lower on average because the
impacts on a company with sales around $30 million may offset
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impacts on a $5 million company.  Using such a definition, there
may have been less justification to consider special provisions
such as the exceedance fee or tonnage exemption to assist small
businesses.
     The RFA allows agencies the flexibility to define small
entities using the criteria prescribed in the RFA or some other
criteria defined by the EPA.  The SBA's general size standard
definitions for Standard Industrial Classification  (SIC) codes is
one way to define small business.  The EPA can, however, modify
the definition where appropriate with the cooperation of the SBA,
the EPA did follow the proper procedures to choose the
appropriate definition of small business in this regulation.  As
explained above,  the EPA believes that the definition of small
business used in the RFA is more appropriate and puts greater
emphasis on potential impacts on small businesses than would the
SIC code definition alternative.
     Comment:   Four commenters  (IV-D-05, IV-D-52, IV-D-55,
IV-D-62, IV-D-67,  IV-D-70,  IV-D-212,  IV-D-214C, IV-F-lc)
expressed concern regarding the EPA's conclusion that the
proposed rule was not subject to SBREFA requirements because the
rule was published before SBREFA regulations became effective.
Two commenters (IV-D-212, IV-D-52)  stated that the fact that the
EPA published the rule 3 days before the effective date of SBREFA
showed that the EPA rushed publication to beat the deadline.  One
commenter (IV-F-lc)  stated that the fact that the EPA only
published the preamble in the June 26,  1996 notice, was further
evidence that the EPA rushed publication of the rule.  The other
commenter (IV-D-55)  contended that despite the period between the
proposal of the AIM rule and the effective date of SBREFA, the
AIM rule ought to be subject to the SBREFA requirements.  The
same commenter (IV-D-214c)  asserted that as a matter of law, the
EPA's contention that it was not obligated to comply with §609(b)
because it published the preamble 3 days before §609(b)  became
"effective," was erroneous.
     Response:   The  EPA disagrees with the assertions of the
commenters that the  AIM rule was rushed to avoid the statutory
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requirements of SBREFA.   The EPA published the summary of the
initial regulatory flexibility analysis in the notice of the
proposed rule on June 25,  1996 (61 FR 32745),  while RFA §609(b)
took effect on June 28,  1996.   However, the architectural coating
regulation was under development for many years prior to
publication.  The proposed rule was the culmination of rulemaking
efforts that began in 1990.   More than 2 years of formal
regulatory negotiation,  involving representatives of both large
and small businesses, ended without consensus in September 1994.
Stakeholders expected proposal of a national rule in early 1995.
However, the schedule was delayed as the EPA responded to
concerns raised by both large and small businesses over VOC
requirements.  The EPA dramatically changed the rule in response
to these concerns.   The proposal included VOC limits that are
very similar to VOC content levels petitioned for by both large
and small businesses during 1995, and a second, more stringent
phase of VOC limits was removed from the proposal.  The EPA
completed work on the proposed rule and submitted it for OMB
review on March 1,  1996.  SBREFA was not enacted until
March 29, 1996.  The proposed rule package underwent the maximum
90-day OMB review allowed by the Executive Order, and then was
signed by the Administrator on June 18, 1996.   Thus, the close
proximity in time between the issuance of the proposal and the
effective date of SBREFA is not significant.  The significant
fact is that the EPA developed the proposal over several years
preceding the existence of the statute.
     The EPA specifically disagrees with the commenters'
assertions that there was inadequate consultation with small
businesses prior to the proposal.  The EPA has coordinated
extensively with small business representatives during rule
development.  Small businesses were represented in the 2-year
regulatory negotiation process.  During that process, two
meetings were held specifically to solicit additional small
business input.  The EPA worked with the SBA,  the trade
association representing many small businesses, and individual
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small businesses to insure that the EPA adequately took small
business concerns into account.
     Following proposal,  the SBA (IV-D-65)  concluded that the new
SBREFA requirements did not apply to the proposed architectural
coatings rulemaking,  because the rule was issued before SBREFA
became effective, and that in any case, the final rule and final
regulatory flexibility analysis would be subject to SBREFA and
judicial review.  The SBA expressed satisfaction with the changes
the EPA made to the rule and the related regulatory analyses
prior to proposal IV-D-65.
     After proposal,  the EPA undertook an extensive effort to
solicit comment and information from small businesses in the
architectural coatings.  As discussed in section 2.8 of this BID,
the EPA held a public hearing and two meetings with industry to
provided additional opportunity for discussion of concerns.  The
EPA also mailed over 600 letters to small and medium-sized
businesses announcing the publication of the rule, announcing the
public hearing and small business meeting,  and requesting comment
on specific aspects of the rule.  The EPA notes that the final
rule is subject to the RFA as amended by SBREFA and, accordingly,
the EPA has complied with the statutory requirements for the
final rule.
     Comment:   Two commenters (IV-D-55, IV-D-70, IV-D-214c)
claimed that the EPA did not take actions mandated by § 609(b) of
the RFA as amended by SBREFA for the proposed rule.  Such actions
included:  notifying the SBA and providing information on the
potential impacts of the proposed rule on small businesses;
convening a review panel for such rule consisting of employees of
the EPA, SBA,  and Office of Management and Budget; and reporting
on the representatives' findings.  Three commenters (IV-D-52,
IV-D-62, IV-D-214c)  alleged that the EPA was required to
designate a small business advocacy chairperson to be responsible
for implementing new § 609(b).   One commenter (IV-D-52)  asked
whether the EPA complied with this mandate and requested the
chairperson's name,  address, telephone number, and activities
with regard to implementing § 609(b).   One commenter (IV-D-214c)
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specifically claimed that the EPA did not designate the small
business advocacy chairperson until June 11, 1996, which was
after the April 28, 1996, date mentioned in SBREFA.  Also, the
commenter contended the chairperson failed to perform his
statutory responsibility to implement the review process mandated
by § 609(b) of the RFA for the proposed rule.
     One commenter (IV-D-70)  supported an in-depth review of the
rule by a panel of knowledgeable small business operators to
identify the extent of the economic impact on the small business
community of the architectural coatings industry.
     Response;  The EPA disagrees with the comments because they
presume that the proposed rule was subject to the RFA as amended
by SBREFA.  As discussed above, the proposed architectural
coatings rule predated the effective date of SBREFA.  Since the
initial regulatory flexibility analysis for the proposed rule was
completed and published in summary form prior to the effective
date of § 609(b) of the RFA,  it cannot be subject to the
requirements of that section, which directs the EPA to convene a
panel for rules "prior to publication of an initial regulatory
flexibility analysis."  Although a delay did occur in the
appointment of the EPA's small business advocacy chairperson, it
did not adversely affect the EPA's consideration of small
businesses concerns or the EPA's coordination with small business
representatives.  The RFA, as amended by SBREFA, does not require
a review panel for rules published prior to June 28, 1996.  Given
that the architectural coating proposal was not expected to go
through the panel review process, the EPA's small business
advocacy chairperson would have had no duties with respect to the
proposal prior to his appointment on June 11, 1996.
Additionally, even though the architectural coatings regulation
was not subject to SBREFA's small-entity provision, extensive
coordination with small businesses and their representatives
occurred throughout the rule development process.  There is a
strong record of coordination with small business representatives
beginning in 1992 during the regulatory negotiation.  Although
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consensus was not reached, the negotiation sessions/public
meetings provided a forum for small businesses to make their
concerns known.  Based on small business concerns, the EPA has
included a 1-year compliance period in the final rule.  In
addition, the EPA has increased the compliance flexibility of the
rule through the addition of the tonnage exemption and the
exceedance fee option.
2.7.3   Unfunded Mandate Reform Act (UMRA)
     Comment:  One commenter  (IV-D-214b/CP-IV-D-07b - page 12)
stated that the EPA failed to perform mandatory duties under
UMRA.  The commenter claimed that the EPA failed to comply with
the following sections of UMRA:
     •    Section 201 - which provides that each agency shall
          assess the effects of Federal regulatory actions on the
          private sector.

     •    Section 205(a)(2) - which provides that the EPA shall
          identify and consider a reasonable number of regulatory
          alternatives and, from those alternatives, select the
          least costly, most cost-effective, or least burdensome
          alternative that achieves the objectives of the rule
          for the private sector.

     •    Section 202(a)  - which provides that 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 in any one year.

A second commenter  (IV-D-52) likewise expressed concern that the
EPA had not  complied with the cost-benefit assessment provisions
of section 202(a) of the UMRA of 1995.
     One commenter  (IV-D-214b/CP-IV-D-07b) also stated that the
EPA incorrectly concluded in the preamble to the proposed rule
that the architectural coatings rule contained no Federal
mandates and was not, therefore, subject to the requirements of
section 202  and 205 of the UMRA.  The commenter stated that
§ 59.402(a)  of the proposed rule mandated that manufacturers
shall limit  the VOC content of each coating manufactured to
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certain VOC levels,  which was a Federal mandate for the private
sector.
     The commenter (IV-D-214b/CP-IV-D-07b,  CP-IV-D-07a) asserted
that conducting an UMRA analysis would force the EPA to consider
more adequately the economic and environmental impacts of the
rule.  The commenter (IV-D-214b/CP-IV-D-07b, CP-IV-D-07a) stated
that the written statement required by section 202(a)  of UMRA
should include an assessment of the effect  of the proposed rule
on the natural environment.  The commenter  claimed that the EPA
has totally ignored the possibility that the architectural
coatings rule may actually increase air pollution rather than
reduce it.
     Response:  The EPA believes that the commenters base their
comments regarding the EPA1s compliance with UMRA upon mistaken
premises.  As noted by the commenters, UMRA section 202 generally
instructs the EPA to prepare a cost benefit analysis for proposed
or final actions that will impose a Federal mandate upon State,
local, or tribal governments, or upon the private sector, in
excess of $100 million in any one year.  As explained in
section 2.3.2 of this document, the EPA has performed appropriate
analyses which indicate that the economic impact of this rule
will be approximately $28 million per year.  This level  is
obviously far below that which would necessitate the specific
type of analysis required under UMRA section 202.  The EPA
recognizes that the commenters dispute the amount of the total
impacts of the rule, and would expand those impacts to assure
that they exceeded $100 million per year.  As discussed  in
section 2.3 of this document, the EPA believes that it has
conducted the proper analysis and has included the appropriate
impacts in calculating the total impacts of the rule.
     Given the foregoing analysis, it is also apparent that UMRA
section 205 does not apply to the architectural coatings rule.
As  the commenters noted, UMRA section 205 generally requires the
EPA to identify and consider regulatory alternatives and to, adopt
the  least costly, most cost-effective or least burdensome
alternative that achieves  the objectives of the rule,  with
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certain exceptions.  The specific analysis of UMRA section 205 is
not required unless the economic impacts of the rule exceed the
$100 million threshold.  A criterion that the architectural
coatings rule does not meet.  However,  the architectural coatings
rule was developed in the spirit of UMRA, being proposed after
years of development during which many regulatory alternatives
were considered.  Some of these were explored during the failed
regulatory negotiation, and others closer to the proposal date.
Even though this rule does not meet the section 205 criterion the
EPA developed the rule by evaluating many alternatives and
choosing cost-effectiveness alternatives that minimize economic
impacts on regulated entities.
     In short,  the EPA disagrees with the commenters1 claim that
the EPA has ignored the requirements of UMRA.  To the contrary,
the EPA has assessed the potential impacts of the rule and has
concluded that the rule will not impose a Federal mandate with
impacts in excess of $100 million in any one year.  As such, the
EPA did not prepare the specific types of analyses demanded by
the commenters.  The EPA notes, however, that it has nevertheless
attempted to promulgate a final rule that minimizes the potential
impacts upon the private sector as explained throughout this
document.
2.7.4   Environmental Justice                 .  ,,
     Comment:  One commenter  (IV-D-177) expressed concern that
the EPA has not complied with E.G. 12898 in connection with the
architectural coatings rule.  The commenter implied that the rule
would force manufacturers to terminate the employment of
employees who are members of low income or minority communities,
thereby contravening the principles of environmental justice.
     Response: Executive Order 12898 established the   - -   	
Administration's policy for identifying and, addressing. .            :
disproportionately high and adverse human health or environmental" n
effects of federal agency programs, policies, and activities on
minority populations and low-income-populations...  While the, *
Executive Order was intended for internal management of the
executive branch and does .not create legal-rights or provide- for .' -,'•'
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judicial review,  federal agencies are to implement its provisions
"consistent with,  and to the extent permitted by,  existing law."
59 F.R.  at 7632-33.   As noted in the Presidential  memorandum that
accompanied the Executive Order, it is designed to focus the
attention of federal agencies on the human health  and
environmental conditions in minority communities and low-income
communities to realize the goal of achieving environmental
justice.
     The commenters suggested that their decision  to eliminate
jobs of minority and low-income workers in response to regulation
creates an environmental justice concern that would necessarily
preclude the Agency from issuing the architectural coatings rule.
EPA disagrees with that view.  The Agency interprets section
183(e) of the Clean Air Act to be a mandate to obtain VOC
emission reductions to achieve ozone reductions to protect the
health of all persons.  Section 183 (e) does require the Agency to
take into consideration the economic feasibility of the
regulations as part of the determination of what constitutes
"best available controls" for each category.  Assuming, without
deciding the issue, that section 183 (e) thus provides the Agency
with a mechanism to evaluate the possible economic impacts of the
rule upon low income and minority communities as one factor in
the determination, such impacts would be but one factor in the
analysis and must be viewed in  the context of a statutory
provision designed to reduce exposure to ozone pollution for all
citizens.
     Using this assumption, EPA has considered the potential
impacts of this action on the human health and environmental
conditions in minority communities and low-income communities.
The Agency believes that the architectural coatings rule will
provide public health and environmental protection to all
communities, regardless of their socioeconomic condition and
demographic makeup.  Contrary to the  assertions of  the
commenters, the Agency believes that  the architectural coatings
rule will not have the significant  economic  impacts claimed by
the commenters.   For example, the Agency's Economic Impact
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Analysis for the final rule estimates that out of a total
employment of 51,000 in the architectural coatings manufacturing
industry, there may be a loss of ten jobs.  See EIA at 3-10, 11.
It is not possible for the Agency to determine whether these jobs
will be held by members of low income or minority communities, or
whether those individuals will obtain new employment elsewhere.
Nevertheless, EPA does not believe that these speculative limited
impacts will have a disproportionately high and adverse impact on
minority or low income communities and do not outweigh the
pollution reduction benefits of the rule as a whole.  In fact,
reduction of VOC emissions from consumer and commercial products
such as those regulated by this rule should reduce public
exposure to ozone pollution widely, and especially in urban core
areas where there are concentrations of minority or low-income
populations.  EPA has thus concluded that the rule will help to
achieve the goals of environmental justice and will not have the
disproportionately high and adverse human health or environmental
effects addressed by the Executive Order.
2.7.5   Executive Order 12866
     Comment:  Two commenters  (IV-D-55, IV-D-214b) argued that
the EPA did not properly apply E. 0. 12866 to the proposed
architectural coatings rule.  According to the commenters, the
EPA failed to provide the required economic analysis to OMB.  One
of the commenters  (IV-D-2l4b) argued that the EPA had ignored the
fact that the rule would constitute a significant regulatory
action under section 3 (f)(1) of the Order  (i.e., a rule with
impacts over $100 million per year) which necessitates
preparation of additional analyses under section 6(a)(3)(C) of
the Order. The other commenter  (IV-D-55) also stated that a full
cost-benefit assessment of each alternative method of regulation
 (exemption, reformulation, or substitution) was required under
the Executive Order  [section 6(a) (3) (C) ] for each of the 50
categories of coatings in the proposed rule.
     Response:  The EPA does not agree with the commenters that
this rule is a significant regulatory action under
section 3(f)(1) of the Order.  At the time of proposal, the EPA
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performed an economic impact analysis of the proposed rule and
placed this analysis in the docket (II-E-5).   This analysis
indicated that the impacts of the rule were approximately
$25 million, with an upper bound estimate of $40 million per
year, and that the impacts would probably be less than either
figure.  This amount is far below the $100 million per year level
of impacts that triggers the obligation to do further analysis
under the Order.  The EPA did not ignore the requirements of
E.G. 12866.
     Although the impacts of the rule fell far beneath the
$100 million threshold explicitly noted in section 3(f)(1) of the
Order, the EPA did submit the rule to OMB for consideration
because the rule potentially posed "novel  legal  or policy issues
arising out of legal mandates."  The  EPA determined that  this
rule is a "significant regulatory action" based on the novel use
of economic incentives  (exceedance fee provisions) (61 FR 32744) .
The proposed rule was submitted to OMB for review.  Contrary to
the commenters' assertions, submission of the rule to OMB on the
basis of novel legal or policy issues does not trigger the
obligation under section 6 of the Order to conduct additional
economic analysis.  Such additional analysis is only necessary
when and if a regulation has impacts in excess of $100 million
per year and meets the other requirements of section 3(f) (1) .
The Guidance from OMB regarding implementation of Executive Order
12866 indicates that such additional economic analysis is only
applicable  in the event a rule is economically significant  (i.e.,
has  impacts of $100 million or more per year).  The EPA
nonetheless provided additional analysis in both the preamble and
the  BID for the proposed rule that addressed the benefits and
impacts of  the rule in qualitative terms.
     One commenter  (IV-D-214b) implied that the EPA did not take
into account all of the costs of the rule in calculating the
aggregated  economic impact  for the purposes of the Order.  The
EPA  notes  that it conducted the economic analysis appropriately,
taking into account all relevant factors and issues.  The EPA
considered  net social cost, distribution of costs to consumers
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and producers,  employment impacts,  and small entity effects. .(See
Economic Impact Analysis).   The EPA believes that this analysis
reflects an accurate and appropriate assessment of the impacts of
the rule.  Furthermore, the EPA has concluded that to expand the
analysis in the fashion suggested by the commenter would
misrepresent the true impacts of the rule rather than insuring
the accuracy of the analysis.
     Finally, the EPA notes that the Economic Impact Analysis for
the final rule indicates that the impacts of the final rule will
be approximately the same as the impacts for the proposed rule
(IV-A-1).  The estimated cost for the final rule reflects several
adjustments to the cost estimates used at proposal.  These
adjustments include a decrease in the reformulation cost based on
information submitted in public comments and decreases in
compliance costs due to the EPA's decision to provide compliance
alternatives in the form of exceedance fees and the tonnage
exemption.  These compliance alternatives provide long-term
flexibility and less costly compliance options for low volume
specialty coatings where the cost of reformulation may be
prohibitive compared to potential profits.  Because of these
adjustments to the rule to further mitigate potential impacts,
the EPA  has confirmed that the rule will not have impacts of over
$100 million per year and therefore that the types of analyses
requested by the commenters are neither required nor necessary.
2.7.6    The U.S. Constitution
     2.7.6.1   Interstate Commerce Clause
     Comment:  One commenter  (AIM-IV-D-214c) asserted that the
EPA's regulation of architectural coatings under section 183(e)
of the Act violates the Commerce Clause of the U.S. Constitution.
The commenter stated that the regulation of products by the EPA
is impermissible based upon U.S. v. Lopez. 115 S. Ct. 1624
(1995)(Congress lacked power under the Commerce Clause to
criminalize possession of a firearm within 1000 feet of a
school).
     Response:  The EPA disagrees with these comments.  The
Constitution gives Congress the power "[t]o regulate commerce ...
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among the several States."  U.S.  Const.,  Art.  I,  section 8,  cl.3.
Under the Commerce Clause, Congress may "regulate those
activities having a substantial relationship to interstate
commerce, i.e.,  those activities that substantially affect
interstate commerce."  Lopez,  115 S.  Ct.  at  1629-30 (citations
omitted).  The courts have consistently held that Congress acted
within its powers under the Commerce Clause when it enacts
statutes to control pollution such as the Clean Air Act. See,
e.g., Hodel v. Virginia Surface Mining & Reclamation Ass'n.,  452
U.S. 264, 289 (1981) .  Regulation of air pollution and of
emission sources that contribute to air pollution is a legitimate
exercise of the EPA's authority under the Act and is thus within
the scope of Congress1 power under the Commerce Clause.
     The Supreme Court's  opinion in Lopez confirms this analysis.
The Court noted that " [t]he possession of a gun in a local school
zone is  in no sense an economic activity that might, through
repetition elsewhere, substantially affect any sort of interstate
commerce."  Lopez,  115 S.  Ct.  at 1634; see also,  Id.  at 1640
 (Kennedy, J., concurring) ("here neither the purposes nor the
design of the statute have an evident commercial nexus") .   The
Lopez decision thus  indicates that one test of the validity of  a
statute  under the Commerce Clause is whether the statute does
govern economic activity  which through many repetitions can have
a cumulative effect  upon  interstate commerce.
     Unlike the statute at  issue in Lopez, section 183(e) of  the
Act and  the architectural .coatings rule  affect conduct and
products that are unquestionably commercial.  The  limitation  of
VOC content and related requirements  directly affect entities
 (manufacturers and  importers), conduct  (marketing  and  selling),
and a subject matter (products for sale  both locally and
nationwide) that are involved  in interstate commerce.   The
Supreme  Court has consistently held that  Congress  may  regulate
products or services that substantially  affect interstate
commerce.  See Hodel v. Virginia Surface  Mining  &  Reclamation
Assn.,  Inc.,  452 U.S.  264,  276-80  (1981)(interstate coal mining);
Perez v. U.S.. 402  U.S.  146,  155-56  (1971)(intrastate
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extortionate credit practices); Katzenbach y. McClung.  379 U.S.
294,  299-301 (1964) (restaurants utilizing substantial interstate
supplies); Heart of Atlanta Motel. Inc. v. U.S.. 379 U.S. 241,
252-53 (1964)(hotels catering to interstate guests); Wickard v.
Filburn,  317 U.S. Ill (1942)(intrastate production and
consumption of homegrown wheat).   In particular, the Supreme
Court has recognized that Congress has authority under the
Commerce Clause to regulate those intrastate activities "that
arise out of or are connected with a commercial transaction,
which viewed in the aggregate, substantially affects interstate
commerce."  Lopez,  115  S.  Ct.  at  1631.
     The products covered by the architectural coatings rule
substantially affect interstate commerce.  Data from 1990
indicate that architectural, industrial maintenance, and traffic
marking coatings constituted 52 percent of the volume and
46 percent of the value of all paint and related products shipped
in the United States in that year (III-B-1 pg.  3-8).  These
percentages translated into 1,219 million gallons of product with
a value of approximately $12.4 billion (III-B-1 pg.  3-9).  The
industry includes hundreds of companies,  each manufacturing in
excess of $100,000 worth of product per year (III-B-1 pg. 3-9 and
3-11).  Regulated entities actually sell and ship a significant
portion of this product on an interstate basis.  The trade
association representing the paint industry estimated that only
between 5 and 7 percent of the architectural coating
manufacturers limit the marketing of their architectural coatings
to an intrastate  (single State) area (IV-J-19).  With regard to
architectural coatings alone, the NPCA estimates that there are
approximately 42,000 retail outlets for the product throughout
the United States.  It should also be noted that the products
covered by the architectural coatings rule are comprised of
numerous components such as resins,  pigments, solvents, and other
additives that are themselves significant items in interstate
commerce  (III-B-1 pg. 3-2).  In 1991, manufacturers used a total
of approximately 4,396 million pounds of resins, pigments,
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solvents,  and additives as raw materials in their products
(III-B-1 pg.  3-2).
     The EPA believes that the data regarding the size and
composition of the industry affected by the architectural
coatings rule demonstrates that Congress and the EPA are seeking
to regulate products that, in the aggregate,  have a substantial
impact on interstate commerce.  The EPA, thus,  concludes that the
regulation of architectural coatings is within Congress' power
under the Commerce Clause, in accordance with the Supreme Court's
recent opinion in kopez.   For this reason,  the EPA believes that
the other judicial opinions cited by the commenter are not
controlling and should not alter the EPA's analysis.
     2.7.6.2   Coating Manufacturers' First Amendment Rights
(Freedom of Speech, Association)
     Comment:  Two commenters  (AIM-IV-D-55, AIM-IV-D-214c) have
alleged that the EPA's promulgation of a rule regulating the VOC
content of architectural coatings is the result of retaliatory
action against the commenter  in violation of its rights under the
First Amendment to the U.S. Constitution.  The commenters alleged
that certain public statements by an EPA official made in the
course of his duties in connection with the regulatory
negotiation process evidenced an animosity toward the commenter
and other members of the regulated community.  The commenters
implied that this animosity prompted the EPA to regulate
architectural coatings in such a way as to retaliate against the
commenter for having engaged  in constitutionally protected
speech, with the intent to chill such expression in the future.
     Response -.  The EPA disagrees that  the determination to
regulate architectural coatings, or any aspect of the
regulations, constitutes  retaliation against any person for any
reason.  The EPA has determined to regulate architectural
coatings in  accordance with the mandate from Congress'in Act
section 183(e) which explicitly directs the EPA to regulate
consumer and commercial products that emit VOCs, and explicitly
refers to paints and coatings in section 183(e)(1)(B).  As
discussed elsewhere in this BID, the decision to regulate
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architectural coatings and to place the product in the first
group of regulated products was the direct result of the EPA's
analysis of VOC emissions in the Report to Congress.
     Far from retaliating against the commenter,  or the
architectural coatings industry in general, the EPA has striven
to address concerns of the commenter and the industry and to
accommodate their reasonable concerns.   In addition to
solicitation of written comments, the EPA invited participation
by the commenter in other forums, including the regulatory
negotiation process, public hearings, and direct meetings with
representatives of the EPA.  As detailed in an August 9, 1996,
letter from the Assistant Administrator for Air and Radiation to
the commenter placed in the docket for this final rule, the EPA,
in fact, considered and made many changes in its regulatory
approach that were responsive to the commenter and the industry
in general, when such changes were appropriate and consistent
with the EPA's statutory mandate.  Specifically,  the EPA has
established VOC content limits that are generally similar to the
limits petitioned for by many large and small businesses during
development of the rule.  In addition,  the EPA has provided
compliance flexibility through a tonnage exemption and an
exceedance fee compliance provision.  Furthermore, throughout the
development of this rule, the EPA made numerous changes to the
approach and requirements based on small business and other
stakeholder involvement.  To suggest that the architectural
coating regulations reflect any retaliation against the commenter
or the industry is misguided.  The EPA believes that to suggest
further that the EPA designed these regulations to chill future
expression by anyone strains credulity.
     The precedents concerning retaliatory governmental action
cited by the commenter further demonstrate the error of the
commenter's allegations.  For example,  the EPA believes that U.S.
v Steele, 461 F.2d 1148  (9th Cir. 1972), is simply inapposite.
That case pertained to criminal prosecution for failure to •
complete census forms and the government's actions to prosecute
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certain individuals who were vocal opponents of the census.   The
Steele defendant argued that the government had chosen him for
prosecution because of his vocal opposition to the census simply
because the government had failed to show that its selection for
prosecution either rested upon a valid ground or was merely
random.  Jd. At 1152.  The EPA's promulgation of regulations to
regulate the architectural coatings industry, or even segments of
that industry, do not constitute singling out of individuals for
selective prosecution.  Any differentiation made between the VOC
content of particular types of products does not demonstrate the
equivalent of "discriminatory prosecution."  The determination to
regulate the products and the VOC content limits set in the
regulations reflect the results of an extensive, open, and
inclusive regulatory process amply demonstrated by the items in
the docket.  Thus, any supposed improper differentiation or
selection in fact has a valid and permissible ground of the type
discussed by the Steele court.
     The EPA also believes that the commenter mistakenly cited
cases with allegations of particularly egregious alleged behavior
by governmental officials, above and beyond anything that the
commenter alleged in connection with the architectural coatings
rulemaking.  For example, in Gibson v. U.S., 781 F. 2d 1334  (9th
Cir. 1986), the plaintiffs fired a battery of allegations against
various law enforcement officials to support claims under
42 U.S.C. §§1983 and 1985, the Federal Tort Claims Act, and the
judicial rule under Bivens v Six Unknown Agents. 403 U.S. "388
 (1971).  Solely in the context of determining whether the trial
court properly dismissed  the plaintiff's action for failure to
state a claim, the Gibson court enumerated a litany of
allegations that included, inter alia:  frequent low level
helicopter  flights over the plaintiff's house,  transmission of
defamatory  information to the plaintiff's employer, illegal
wiretaps of the plaintiff's home for 9 years, and a "campaign of
intimidation, burglary, and petty arson."  Id.  at 1342.   Without
assessing the truth of any of these allegations, the Gibson court
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merely determined that summary judgment against the plaintiff-had
been improper.  Id.  at 1345.
     In contrast, the commenter here merely alleged that a
representative of the EPA made statements in public during the
regulatory negotiation process that the commenter characterized
as "arrogant"  and "threatening."  Examination of the summaries of
the meetings  in the docket dispels the shadow of bias that the
commenter sought to create.  The statements in question do not
establish bias; they merely constituted a common sense
observation that it was in the best interest of the industry to
participate in the regulatory negotiation process to develop a
satisfactory  approach that the EPA could use as a basis for the
proposed rule in accordance with the Negotiated Rulemaking Act.
The commenter evidently mistakenly believes that a representative
of the EPA is not permitted to advocate the position of the EPA
in the regulatory negotiation process, or indeed, to advocate any
position.
     The EPA  believes that the controlling case law supports the
EPA's position that such vague and unsubstantiated allegations
are insufficient to establish the existence of a supposed bias.
Courts apply  a presumption that policy makers with decision
making power  exercise their authority with honesty and integrity.
See Schweiker v. McCluref 456 U.S. 188, 195 (1982).  To overcome
the presumption, a party must make a strong showing of bad faith
or bias.  Citizens to Preserve Overton Park. Inc. v. Volpe. 401
U.S. 402,  420  (1971).  A mere unsupported allegation is
insufficient  to show bias.  Louisiana Ass'n of Indep. Producers
v. FERC. 958  F.2d 1101, 1119  (D.C. Cir. 1992).  Further, it is
well established that in a rulemaking context  (as opposed to an
adjudicatory  process), EPA officials are not to be disqualified
for bias or prejudgment of an issue merely because of statements
made in the rulemaking process.  See Ass'n. of Nat'1 Advertisers
v. FTC. Inc.. 627 F.2d 1151, 1168-70  (D.C. Cir. 1979), cert.
denied. 447 U.S. 921  (1980)("[i]f an agency official is to be
effective, he must engage in debate and discussion about the
policy matters before him") .
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     The commenter relied most heavily upon Soranno's Gasco, Inc.
v. Morgan, 874 F.2d 1310 (9th Cir. 1989),  which the commenter
identified as the leading case concerning improper governmental
action in retaliation for exercise of First Amendment rights.
That case addressed a dispute between a seller/distributor of
petroleum products and a California Air Pollution Control
District  (APCD).  The APCD temporarily suspended the plaintiff's
license to sell gasoline for failure to supply legally required
information and the plaintiff alleged that the suspension was
actually in retaliation for its public opposition to, and pending
litigation against, regulations developed by the APCD.
     The EPA believes that the Soranno case confirms that the
EPA's regulations cannot constitute governmental retaliation.
First, following Mt. Healthy City School Dist.  Bd. of Educ. v.
Doyle, 429 U.S. 274, 287 (1977), the Sorrano court noted that a
plaintiff alleging "retaliation for the exercise of
constitutionally protected rights must initially show that the
protected conduct was a 'substantial'  or 'motivating'  factor in
the defendant's decision."  Sorrano,  874  F.2d at 1314.   Assuming
that a plaintiff can make that showing, the Sorrano decision
indicates that the defendant then has a burden of proof to show
not that  it could have taken the action in question regardless of
the plaintiff's constitutionally protected conduct, but that it
would have.   Id.  In accordance with the latter point, the mere
fact  that a governmental entity has the legal authority to take
an action against the plaintiff under certain circumstances  is
not,  in itself, dispositive of whether it would have taken that
action absent  the plaintiff's exercise of protected rights.  Id.
At 1315.
      The  EPA  believes that the commenter cannot even make  the
initial showing under the S_prrano decision that any alleged
retaliation was a "substantial"  or "motivating"  factor in the
EPA's issuance of regulations, because it was not  a  factor  at
all.  The EPA's promulgation of regulations was the  result  of  an
express statutory mandate from Congress in Act  section 183(e).
The particulars of  the  regulations are the result  of an
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extensive,  open,  and inclusive regulatory process in which the
commenter and many others participated.  In accordance with the
second prong of the analysis in Sorrano, the EPA believes that
the extensive and comprehensive docket supporting the
architectural coating regulations demonstrates that the EPA
"would" have issued such regulations, and "would"  have  issued them
in the same-form, regardless of the commenter's exercise of its
rights under the First Amendment.  Moreover, the docket further
illustrates that the EPA in fact made numerous accommodations for
the commenter, within the constraints of the requirements of the
statute and when otherwise appropriate.  The EPA welcomes,
encourages, and appreciates the exercise of First Amendment
rights by all persons, but does not concur that this includes the
right to dictate to the EPA exactly when and how to regulate.
Finally, the EPA believes that the commenter is not entitled to
"chill" the  legitimate exercise of First Amendment rights by
representatives of the EPA via unfounded and unsubstantiated
allegations of bias or retaliatory motivation.
     2.7.6.3   Taking Under the Fifth Amendment
     Comment:  Two commenters  (AIM-IV-F-lc; AIM-IV-D-214c) argued
that the regulation of the VOC content of architectural coatings
will effect a taking compensable under the Taking Clause of the
Fifth Amendment to the U.S. Constitution which provides that
"private property [shall not]  be  taken for public use,  without
just compensation."  U.S.  Const.,  Amdt. 5.   The commenters stated
that the regulations would impair or destroy the value of" its
formulas, good will, and other unspecified "intangible property
rights" in  connection with its production and sale of
architectural coatings.
     Response:  The EPA disagrees that these regulations effect  a
taking in violation of the Taking Clause.  The EPA's conclusion
is based on the following standard taking analysis.
     The Taking Analysis.  The determination of when a
compensable taking occurs is "a problem of considerable
difficulty" for which the Supreme Court has not developed any
"set formula."  Penn Central Transp. Co. V.  City  of New York.  438
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U.S. 104,  123-24 (1978).  Contrary to the assertion of the
commenter,  mere diminution in value of the property,  without
more, does not establish a taking.  Id. at 131.   The Supreme
Court has developed three factors for courts to weigh in
assessing whether a regulation effects a compensable taking:
(1) the character of the governmental action; (2) the economic
impact of the action; and (3) the action's interference with
reasonable investment-backed expectations.  Ruckleshaus v.
Monsanto Co.  , 467 U.S. 986, 1005  (1984).  Any one of these
factors may be decisive if it is "so overwhelming . . .  that it
disposes of the taking question."  Id.   The EPA  believes that
analysis of the architectural coatings rule in accordance with
these three factors establishes that there is no compensable
taking under  the Taking Clause.
     The character of the government action.  Under the first
factor, courts are more likely to find a taking when the
interference  with property may be characterized as a physical
invasion by the government or as a commandeering of property for
the government's own use, than when the interference is merely
the result of a regulatory program that "adjust[s]  the benefits
and burdens of economic life to promote the common good."  Penn
Central. 438  U.S. at 124.  Courts accord particular deference to
governmental  actions designed to protect public health, safety,
and welfare.  See. e.g.. Keystone Bituminous Coal Ass'n v.
DeBenedictis. 480 U.S.  470, 488  (1987); Penn Central. 438 U.S.  at
125-26.
     First, the regulations do not cause any physical invasion  of
the property  of the regulated community.   In addition, the  effect
of the regulations may  be to limit the utility of certain types
of property to the regulated community, but the regulations do
not  constitute a taking of that  formula for use by the government
itself.  The  government, thus, "has taken  nothing for 'its own
use."  Connolly v. Pension Benefit Guar. Corp.. 475 U.S.  211, 224
 (1986) .
     Second,  with the enactment  of section 183(e) of  the  Act by
Congress and  the promulgation of  these  regulations by the EPA at
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Congress'  behest,  the government is seeking to protect public
health,  safety,  and welfare.  Congress determined that the
prevalence of groundlevel ozone pollution poses a serious threat
to the populace of the nation and explicitly instructed the EPA
to develop regulations that would reduce the emission of VOC
ozone precursors from consumer and commercial products in order
to lessen this threat (See 42 U.S.C. § 7511b).  Congress
expressly included "paints,  coatings,  and solvents" in the
definition of consumer products.  42 U.S.C. § 7511b  (e)(3)(A).
By setting appropriate VOC limits for architectural coatings, the
EPA has formulated regulations that substantially advance, and
are rationally related to, the EPA's legitimate interest in
protecting public health, safety, and welfare.  By effecting a
partial reduction of VOC emissions from architectural coatings as
instructed by Congress,  the regulations will help alleviate
tropospheric ozone pollution in conjunction with other reductions
from other products and other sources.  See Keystone, 480 U.S. at
485.  Indeed, the government's regulation of VOC emissions
arguably constitutes action to address a condition that does, or
could, constitute a common law nuisance, and it is axiomatic that
no compensation is required for governmental actions to address
such a condition.  Lucas v. Carolina Coastal Council, 505 U.S.
1003, 1029-30 (1992) .
     For the foregoing reasons, the EPA believes that this factor
of the taking analysis demonstrates that there is no compensable
taking as a result of the architectural coating regulations.
     The economic impact of the government action.  The second
factor in the taking analysis is the economic impact of the
regulation.  Courts have indicated that there is "no fixed
formula to determine how much diminution in value is allowable
without the fifth amendment coming into play."  Florida  Rock
Indus.. Inc. v. U.S.. 791 F.2d 893, 901  (Fed. Cir. 1986), cert.
denied, 479 U.S. 1053 (1987).  Nevertheless, past decisions
clearly hold that mere diminution in value, without more, is not
enough to establish a taking, and that a regulation may have
significant economic impact without constituting a taking.  See.
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e_.g. ,  Concrete Pipe and Products of California.  Inc.  v.
Construction Laborers Pension Trust for Southern California,  508
U.S. 602 (1993)(citing cases finding no taking despite diminution
of up to 92.5 percent).  Mere denial of the most profitable or
beneficial use of property does not require a finding that a
taking has occurred.  Andrus v. Allard, 444 U.S. 51,  66 (1979).
     In light of this backdrop, the EPA believes that the
architectural coatings rule will not constitute a compensable
taking.  First, the regulations will not operate as a total
taking of any property of the regulated entities.  With respect
to paint formulas, nothing in the regulations will prevent the
use of a particular formula completely.  The architectural
coatings rule provides a "tonnage exemption" which will allow
manufacturers and importers to sell or distribute limited
quantities of architectural coatings that do not comply with the
VOC content limits and for which no exceedance fee is paid4.  [See
Final Rule, section 40 CFR 59.408].  This approach continues to
accommodate small businesses, niche markets, and specialty
products and the EPA has provided this exemption as one means of
allowing manufacturers and importers to continue to market
reasonable amounts of products that could not comply by
reformulation, while limiting the VOC  emissions that would result
from the exemption.  Second, the regulations provide an
exceedance fee mechanism which will allow manufacturers or
importers to continue to market noncomplying products  in amounts
above the limits of the tonnage exemption if they pay  an '
exceedance fee.   [See Final Rule section 40 CFR 59.403].  The EPA
believes that  the exceedance fee will  cause regulated  entities
and consumers  to  internalize some of the costs of the  pollution
caused by the  excess VOC content of the products and
      4Under the tonnage exemption provisions,  each manufacturer
 can  exempt  a  quantity  of  coatings  that contains no more  than
 23 megagrams  (25  tons)  of VOC  during the  first 15 months,
 18 megagrams  (20  tons)  of VOC  in the year 2001, and  9 megagrams
 (10  tons) of  VOC  per year in the year 2002 and each  year
 thereafter.
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simultaneously will encourage manufacturers and importers to •
develop and market complying products.  The EPA recognizes that
the process of reformulation and testing of new products will
require time and investment by the regulated entities and
anticipates that the exceedance fee mechanism will allow
regulated entities flexibility to develop complying products.  In
addition, paint manufacturers will still have the ability to
manufacture paint without modification of their formulas for the
foreign market.  FSee Final Rule section 40 CFR 59.400].   The EPA
thus believes that the architectural coating rule will not
constitute a complete taking of any property of the regulated
entities in the form of formulas.
     Although compliance with the architectural coatings
regulations will require expenditures and may mean that regulated
entities have to make changes in their products, the regulated
entities will not be denied the economic value of their property.
The VOC content limits may require some regulated entities to
reformulate or modify some of their products that will not
otherwise meet the limits or fall into regulatory exemptions.
Information obtained during the regulatory process from other
sources and commenters establishes that reformulation is feasible
and, in fact, has already occurred with success in States that
currently have regulations governing the VOC emissions from this
type of product III-B-1 pg. 2-9).  Reformulation may be costly,
as argued by the commenter, but the imposition of regulations
that cause a regulated entity to expend money to comply i*s not
the type of economic impact that results in a compensable taking.
See Concrete Pipe, 508 U.S. at 644-45  (claimant's property cannot
be divided into what was taken and what was left in order to show
that the taking of the former is complete); Atlas Corp. v. U.S.,
895 F.2d 745, 756  (Fed. Cir. 1990)  (regulatory requirement that
mining corporations expend money to reclaim mill tailings and
decommission contaminated mills does not constitute a taking).
     Examination of the economic impact factor of the taking
analysis indicates that the regulations will not constitute a
taking of the property of the regulated entities.
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     Interference with reasonable investment-backed expectations.
The final factor of the taking analysis is whether a regulated
entity has a reasonable investment-backed expectation in
continuing to use the property at issue, whether it be formulas,
goodwill, or other forms of property, exactly as it has used the
property in the past.  To be reasonable, expectations must take
into account the power of the Government to regulate in the
public interest.  Pace Resources v. Shrewsbury Township, 808 F.2d
1023, 1033  (3rd Cir. 1987).  Reasonable expectations must also
take into account the regulatory environment, including the
foreseeability of changes in the regulatory scheme.  Concrete
Pipe. 508 U.S. at 645  (those who do business in the regulated
field cannot object if the legislative scheme is buttressed by
subsequent amendments to achieve the legislative end); California
Hous. Sec.. Inc. v. U.S.. 959 F. 2d 955, 959 (Fed. Cir.), cert.
denied, 506 U.S. 916  (1992)(members of a regulated community are
"on notice that [they]  might be subjected to different  regulatory
burdens over time")  .
     Some state and local governments have regulated
architectural  coatings as sources of VOC for years  (III-B-1
pg.  2-9).  For example, the California Air Resources Board  (CARB)
established a  model rule for use by that state's air pollution
control and air quality management districts in 1977.  Of the 34
California local air districts, 16 have already adopted
architectural  coating  rules.  The CARB model rule includes VOC
content limits  for numerous categories of architectural coatings
also covered by the EPA's architectural coatings rule.  In some
instances, the  CARB rule standards are in fact more stringent
than those  in  the EPA's final architectural coatings rule.
 [Compare,, e.g. , Final  Rule  section 59.402 with South Coast Air
Quality Management District Rule 1113].
     The  EPA believes  that  the manufacturers and importers in
general,  and the commenter  in particular, are on notice that
their products are potentially subject to governmental regulation
and have  had reasonable notice that  the regulatory  scheme to
limit  the VOC  content  of  their products might change.  See
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Dunn-Edwards Corp.  v. South Coast Air Quality
District,  19 Cal .  App .  4th 519 (1993) (rejecting claims by
regulated entities that SCAQMD failed to respond to certain
industry concerns prior to amending state VOC content
regulations) .   The EPA, likewise, believes that regulated
entities are on notice that they must comply with regulations
governing the VOC content of their products.  See U.S. v. Vista
Paint Corp. . 976 F.2d 139  (9th Cir. 1992), cert, denied. 510 U.S.
826  (1993) .  A number of manufacturers and importers have already
modified their products to comply with existing State regulations
and have begun to market lower VOC content products throughout
the nation. [See,  e.g., items IV-D-26,  IV-D-114, IV-D-161,
IV-G-04 in the Docket.]
     Finally,  the EPA notes that the Supreme Court has stated
that investment-backed expectations in personal property, are by
their nature,  limited:
     [I]n the case of personal property, by reason of the State's
     traditionally high degree of control over commercial
     dealings,  [the property owner] ought to be aware of the
     possibility that new regulation might even render his
     property economically worthless (at least if the property's
     only economically productive use is sale or manufacture for
     sale) .
Lucas.  505 U.S. at 1027-1028.  Since the property noted by the
commenter  (formulas, goodwill and unspecified intangible
property)  is personal property, there can be no reasonable
investment -backed expectation of absolute protection from
regulation that renders them economically less valuable or even
economically worthless.
     Application of this final factor confirms that the
architectural coatings rule will effect no taking of the
regulated entities' property as contemplated by the Fifth
Amendment .
     2.7.6.4   The Tenth Amendment  (Delegation Powers)
     Comment :   One commenter  (AIM-IV-D-214c) suggested that the
architectural coatings rule is suspect under the Tenth Amendment
to the U.S. Constitution.  The commenter argued that Congress
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improperly enacted Act sections 110, 172, and 182,  because they
purportedly allow the EPA to force states to regulate in
compliance with the standards of the Act.  The commenter cited
the Supreme Court decision in New York v. U.S..  505 U.S. 144
(1992),  in support of the proposition that Congress cannot usurp
powers not expressly delegated to it under the Constitution and
cannot "conscript" state and local governments to enforce Federal
laws.  Because these provisions of the Act are allegedly
unconstitutional, the commenter also questioned the EPA's
reasoning that a national architectural coatings rule would
provide an attractive alternative to numerous State regulations
with potentially inconsistent standards.  Apparently, the
commenter argues that if the Act is unconstitutional, States will
not feel compelled to regulate architectural coatings in any
fashion.
     Response:  The EPA disagrees with these comments.  The EPA
believes that the provisions of the Act, and hence the
architectural coatings rule, do not violate the Tenth Amendment.
The Tenth Amendment provides that M[t]he powers  not delegated to
the United States by the Constitution, nor prohibited by it to
the States, are reserved to the States respectively, or to the
people."  It follows that " [i]f a power  is delegated  to  Congress
in the Constitution, the Tenth Amendment expressly disclaims any
reservation of that power to the States."  New York v.  U.S..  505
U.S.  at 156.  Because the EPA is acting  in accordance with the
Act,  which Congress enacted under its Commerce Clause authority,
the architectural coatings rule does not violate the Tenth
Amendment.
      The EPA  further disagrees that the  cases cited by  the
commenter render the enumerated provisions of the Act suspect as
improper impositions of Federal authority upon States.  The Act
encompasses,  inter  alia, the  concept of  "cooperative federalism"
in the  form of national emission standards which States may meet
through State regulation and  State  implementation plans.  I.f a
State chooses not to regulate, the  Federal Government will do so
through the mechanism of a Federal  implementation plan.   If a
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State chooses to regulate in lieu of the Federal Government, -it
must meet Federal requirements set forth in the Act and related
regulations.  The Supreme Court has held that Congress may offer
States the choice of regulating an activity according to Federal
standards or having State law preempted by Federal regulation.
New York v. U.S., 505 U.S. at 167; accord. Hodel v. Virginia
Surface Mining & Reclamation Assn_. .  452 U.S. 264, 290 (1981);
FERC v. Mississippi. 456 U.S. 742, 746  (1982).   Where States have
a choice of implementing Federal standards through State law, or
having the Federal Government implement Federal law, there is no
unconstitutional imposition upon State sovereignty.
     The commenter specifically criticized the sanctions
provisions of the Act as violative of the Tenth Amendment.   The
EPA notes that the U.S. Court of Appeals for the Fourth Circuit
has explicitly upheld the constitutionality of the sanctions
provisions of the Act against a direct Tenth Amendment challenge
by a State.  See Virginia v. Browner, 80 F.3d 869  (4th Cir.
1996), cert, denied. 117 S.Ct. 764  (1997)  (sanctions
constitutional because they "amount  to inducement rather than
'outright  coercion'") (citing New York v. U.S.,  505 U.S.  at
165-67) .  Congress is permitted to induce States to adopt Federal
standards.
     Finally, the EPA believes that the commenter misconstrues
the nature of the architectural coatings rule as a usurpation of
State authority.  First, the rule does not require State or local
governments to implement or enforce the regulations.  Thus, the
architectural coatings rule does not constitute a "conscription"
of State or local governments to enforce Federal law.  Second,
the final rule merely sets a Federal "floor"  for  v"OC content
regulations, i.e., the minimum level of regulation of the
products in all States, whether implemented by the States or the
Federal Government.  Nothing in the architectural coatings rule
prevents a State, as a separate sovereign, from implementing
different VOC emission control limits within its borders.  Unlike
other provisions of the Act, section 183 (e) does not contain an
express preemption of State and local regulations.  Thus, the
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Federal rule applies whether or not there are applicable State
rules.  The EPA continues to believe that a uniform national rule
with consistent VOC emission limits for architectural coatings
for all States is preferable, but the EPA will not prevent States
from regulating if they so elect.
2.8  OUTREACH
     Comment:   Two commenters  (IV-D-117,  IV-D-148) recommended an
outreach program to better educate consumers about coating
selection choices, the importance of scheduling coating projects
when the environmental impact is minimized (i.e.,  not on summer
days when the ozone standard is expected to be exceeded),  and a
better understanding of available options to complete a coatings
project.  Both commenters encouraged the use of private-public
outreach to maximize the benefits of the architectural coating
rule.  One commenter  (IV-D-148) suggested an outreach program be
developed through a partnership with the coating manufacturers
and National Paint and Coatings Association  (NPCA) and
implemented through the States.
     Another commenter  (IV-D-120) stated that an outreach program
based exclusively on architectural coating, as opposed to the
entire VOC-emitting and ozone-forming community, would create a
bias against the coatings industry, and leave the public
misinformed as to the larger picture of other contributing
emission sources.
     Response:  Outreach is targeted for the regulated community
and others affected by a rule.  Outreach opportunities include
using literature to disseminate information about an industry;
participation  in training courses, trade shows, or meetings; and
coordinating with the Small Business Assistance Program.
Literature may include fact  sheets the EPA prepared during rule
development or pamphlets produced by the EPA Regional Office or a
State or local entity to address specific needs of a geographic
area.   The EPA also considers  preparing plain-English guides  (or
other languages)  for the regulations, especially  those affecting
small businesses.  Education efforts such as training courses
often provide  outreach opportunities.  At times,  the EPA provides
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technical assistance to these seminars through expert speakers
and literation.  Other training opportunities include satellite
downlink courses.  These courses are usually presented by the EPA
through a university grant and often have trade associations as
joint sponsors.  These courses involve the EPA, State, and
industry representatives, and the resulting videotapes can be
distributed to an even wider audience.
     The EPA will consider which outreach tools will be most
appropriate for the architectural coating rule.  The Agency will
consider the input of coating manufacturers, distributors, and
retailers in developing and implementing the program in order to
maximize its effectiveness.
     Comment:   One commenter  (IV-D-10), who believed the EPA
rushed publication of the proposed rule, requested that the EPA
cancel the public hearing and enter into meaningful discussions
with industry.  One commenter  (IV-D-ll, IV-F-lc) expressed
concern that the short comment period provided insufficient
notice for the large body of industry and other interested
parties to comment on the proposal.  The same commenter  (IV-D-16)
expressed concern in another letter that the EPA Headquarters
finds it difficult to communicate with the industry when it is so
easy for the commenter to communicate with the EPA regional
staff.  Another commenter  (IV-D-30) stated that their company
shared other companies' concerns that the EPA appeared to display
a genuine lack of effort in communicating the rule and notice to
companies outside the NPCA.  Another commenter  (IV-F-2f)
maintained that all of the affected manufacturers are not finding
out about the proposed rule and suggested that the EPA and the
Small Business Association evaluate their method of
communication.  This small business  ($8 to $9 million per year)
of concrete curing compound materials stated that curing
compounds are a major part of the industry, and their company
only recently became aware of the proposed regulation.
     Response:  The proposed rule for architectural coatings was
published in the Federal Register on June 25, 1996.  The public
comment period was initially 60 days, but was later extended and
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reopened to provide a 120-day comment period.   After proposal of
the rule, a public bearing and a public meeting were held by the
EPA on July 30,  1996 and August 13,  1996 for the specific purpose
of giving small businesses added opportunity to discuss their
concerns with the EPA.   Small businesses attended these meetings
and presented comments on various issues related to the proposed
rule; responses to those comments are included in this document.
     The EPA met with concrete curing compound manufacturers in
September 1996 and has addressed their concerns in
section 2.2.4.3 of this document.  On July 18, 1996 the EPA
mailed over 600 letters to small and medium-size coating
manufacturers announcing publication of the rule; requesting
comments on specific aspects of the proposed rule; and announcing
the public hearing, comment period,  and small business meeting.
The July 18, 1996 mail-out included a Fact Sheet and a copy of
the proposed rule.
     After the final rule is published in the Federal Register,
the EPA plans to take the following steps:  (1) notify the
industry, including trade associations and other groups, of
publication of the final rule and send copies of the final rule;
and  (2) prepare and distribute materials and,  if resources are
available, hold workshops to aid manufacturers in complying with
the rule.  The EPA will discuss implementation plans with the
SBA, the EPA Regional Offices, and State and local agencies in an
effort to reach all coating manufacturers affected by the rule.
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TECHNICAL REPORT DATA
(Please read Instructions on reverse before completing)
1. REPORT NO.
EPA-453/R-98-006b
2.
4. TITLE AND SUBTITLE
National Volatile Organic Compound Emission
Standards for
Architectural Coatings - Background for Promulgated Standards
7. AUTHOR(S)
9. PERFORMING ORGANIZATION NAME AND ADDRESS
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Emission Standards Division (MD-13)
Coatings and Consumer Products Group
Research Triangle Park, NC 27711
12. SPONSORING AGENCY NAME AND ADDRESS
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Emission Standards Division (MD-13)
Coatings and Consumer Products Group
Research Triangle Park, NC 27711
3. RECIPIENT'S ACCESSION NO.
5. REPORT DATE
August 1998
6. PERFORMING ORGANIZATION CODE
8. PERFORMING ORGANIZATION REPORT NO.
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
13. TYPE OF REPORT AND PERIOD COVERED
Final
14. SPONSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
16. ABSTRACT
A final rule for the regulation of volatile organic compounds (VOC) from architectural coatings is being
promulgated under the authority of Section 183(e) of the Clean Air Act. This document contains comments
received from the public, and the EPA's responses to these comments.
17.
KEY WORDS AND DOCUMENT ANALYSIS
a. DESCRIPTORS
Air Pollution
Volatile Organic Compounds
Consumer Products
Consumer and Commercial Products
18. DISTRIBUTION STATEMENT
Release Unlimited
b. IDENTIFIERS/OPEN ENDED TERMS c. COS ATI Field/Group

19. SECURITY CLASS (Report) 21. NO. OF PAGES
Unclassified 469
20. SECURITY CLASS (Page) 22. PRICE
Unclassified
EPA Form 2220-1 (Rev. 4-77)    PREVIOUS EDITION IS OBSOLETE

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