GOVERNMENT AFFAIRS COMMITTEE UPDATE. Greg Johnson, Sherwin Williams

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1 GOVERNMENT AFFAIRS COMMITTEE UPDATE Greg Johnson, Sherwin Williams

2 OXIDIZED ASPHALT LABELING, IDENTIFICATION, AND COMMUNICATION

3 Oxidized Asphalt Labeling, Identification, and Communications - In July, the RCMA Board of Directors voted to collectively investigate agreed upon labeling, hazardous identification, and communication recommendations for oxidized asphalt. - The goal is to present a consolidated recommended position for the RCMA membership. - Discussion tabled until after IARC monograph is published.

4 CALIFORNIA PAINTCARE

5 California PaintCareProgram - In September 2010, the Governor signed a law creating the California Architectural Paint Stewardship Program. - Requires architectural paint (including coatings) manufacturers to develop and implement a program to recycle and properly manage postconsumer architectural paint in the State. - The law takes effect on October 19, 2012.

6 California PaintCareProgram - There is a special stewardship assessment fee which has to be added to the cost of architectural paint sold to California retailers and distributors. - Assessment fee: Half pint or less = $0.00 Half pint to 1 gallon = $ gallon = $ gallon to 5 gallons = $1.60

7 California PaintCareProgram - Asphalt based roof coatings are excluded from the program. However, white coatings are included. - But, industrial maintenance roof coatings with any of the below container labels are excluded: - For Professional Use Only - For Industrial Use Only - Not for Residential Use - Not Intended for Residential Use

8 California PaintCareProgram - PaintCareis operating under assumption that these determinations are being made in good faith and manufacturers are not changing labels to avoid fees. - They have not seen abuses in Oregon. - The PaintCareprogram will be implemented in Connecticut in 2013 and Rhode Island in 2014.

9 EPAAREA SOURCE RULES

10 EPA Area Source Rules - In 2009, EPA issued two so-called Area Source rules, one for paints and allied products, and one for chemicals. - The two rules may impact coatings, ink, adhesives, and resin manufacturing operations by requiring pollution controls and work-practice standards to reduce HAPs.

11 EPA Area Source Rules Paint and Allied Products Area Source Rule - Affected sources are those facilities that use, generate, or produce HAPs above the relevant OSHA thresholds. - Applies to benzene, methylene chloride, compounds of cadmium, chromium, lead or nickel. - Compliance date is December 3, 2012.

12 EPA Area Source Rules Chemical Manufacturing Area Source Rule - Affects facilities that generate or produce the following HAPs above the OSHA thresholds: - 1,3-butadiene, 1,3-dichloropropene, acetaldehyde, chloroform, ethylene dichloride, methylene chloride, hexachlorobenzene, quinoline, hydrazine and compounds of arsenic, cadmium, chromium, lead, manganese, and nickel.

13 OEHHAACTIVITY ON XYLENE

14 OEHHA Activity on Xylene - Public review of hazard identification document on Xylene which provides developmental and reproductive toxicity concerns. - Xylene is used in paints, inks, and glues. - Exposures caused via inhalation, drinking water, and dermal absorption of Xylene containing products. - Public comment period closes 11/27/2012.

15 VOC UPDATES

16 VOC Updates ACA Lawsuit in California - The American Coatings Association (ACA) lost their years-old challenge to the SCAQMD AIM Coatings Rule. - The court declared that the SCAQMD may set pollution standards based on technologies that do not currently exist but are reasonably anticipated to exist by the compliance deadline.

17 VOC Updates ACA Lawsuit in California - ACA accused SCAQMD of mandating unachievable limits through the use of technologies that were not even available. - ACA says that the ruling will increase regulatory uncertainty for any company wishing to do business in the unstable market.

18 VOC Update South Coast 2012 Air Quality Management Plan (AQMP) - SCAQMD published a revised draft of their 2012 Air Quality Management Plan (AQMP) in September. - The AQMP calls for further reduction of VOC emissions from AIM Coatings, specifically by: - Small container exemption -eliminate certain categories, set limits, increase fees - Spray equipment requirements to increase transfer efficiency and reduce paint usage

19 VOC Update South Coast 2012 Air Quality Management Plan (AQMP) - RCMA submitted comments on the draft discouraging the South Coast from further reducing VOC emissions through Rule The ACA has formed a Small Container Exemption Working Group to challenge the proposed discontinuation of the small container exemption

20 VOC Update South Coast Rule 314 South Coast Rule 314, the Fee Schedule for Architectural Coatings, was amended for the fourth consecutive year. The fee schedule has progressed as follows: April 1, $0.018 per gallon and $123 per ton VOC April 1, $0.027 per gallon and $185 per ton VOC April 1, $0.036 per gallon and $246 per ton VOC Amended July 1, 2012 $0.038 per gallon and $ per ton VOC

21 VOC Update South Coast Rule 1113 SCAQMD Rule 1113 Architectural & Industrial Maintenance (AIM) Coatings has several provisions with a January 1, 2014 compliance date: - Metallic Pigmented Coatings 150 g/l - Reminder: as of 7/1/12, metallic pigmented coating definition was revised to be defined as a decorative coatings, excluding industrial maintenance and roof coatings - Labeling requirements: - Noticeable, separated from other text, and in clear legible English - Conspicuous as compared to other statements or designs in the label -On 1/1/2014, most small containers are exempt from the VOC limits of the rule; however, all other provisions apply, i.e., labelling provisions and reporting under Rule 314

22 VOC Update CARB Districts - Antelope Valley will likely be the next district to adopt the CARB 2007 SCM for AIM Coatings, according to their 2012 Rule Development Calendar. - Sacramento will likely follow after Antelope Valley adopts. - Current list of CARB AQMDs with AIM Coatings Rules based on the CARB 2007 SCM: Bay Area Ventura San Joaquin Imperial Kern Placer Mojave Desert

23 VOC Update OTC Phase II Model Rule Adoption New York - Likely will be first OTC state to adopt updated AIM Coatings Rule based on the OTC 2010 Model Rule, Phase II - Stakeholder comment opportunity expected in 3-4 months - Once approved by Commissioner and Governor s Office, 6 NYCRR Part 205 will go out for public comment - They are still targeting a January 1, 2014 effective date Connecticut - Adoption of OTC Phase II is currently in internal review. - Their office expects it will be 18 to 24 months until it is promulgated.

24 VOC Update OTC Phase II Model Rule Adoption New Hampshire - Listed on OTC website as Under Review but their office reports that they have no specific plans at this time to initiate an AIM rulemaking. - Current rule Env-A 4200 is set to expire in 2014 and they will consider whether to update to Phase II at that time. New Jersey - Looking to adopt the Phase II Model Rule but are currently stalled while working on higher-priority items - Proposal is still in the works and not out for stakeholder comments

25 VOC Update OTC Phase II Model Rule Adoption Delaware - Tentatively plan to start rule making procedure before yearend 2013 and have the rule be effective by mid-year The compliance date most likely will be 1/1/14 - Plan to mirror the OTC Model Rule with minor variances, such as no sell through date Listed on OTC Website as Under Review - Maryland

26 National AIM Rule - EPA has been receiving letters from OTC, various states to amend the National AIM rule - Once several court-ordered deadline projects are completed later this year, EPA will possibly start working on the AIM rule - Beginning of rulemaking process possible for 2013

27 National Ozone Standard - Revisions to the National Ozone Standard could increase pressure for further VOC reductions - January 7th, 2010 EPA proposed to lower the ozone standard, currently.075 ppm, down to ppm ppm - On September 2, 2011, the Obama administration sent out a press release withdrawing the draft NAAQS for Ozone - EPA released the proposed rule that was not approved, which had set ppm - EPA will once again revisit the standard in 2013

28 US EPA Ozone Advance Ozone Advance is a collaborative effort between EPA, states, tribes, and local governments. The program encourages expeditious emission reductions in ozone attainment areas to help these areas continue to meet the National Ambient Air Quality Standards (NAAQS) for ground-level ozone. This program could allow state and local jurisdictions to adopt enforceable AIM VOC regulations.

29 US EPA Ozone Advance These Participants have agreed to take proactive steps towards improving air quality. EPA will assist these areas to help identify, evaluate, select and implement measures and programs tailored to the participating area.

30 WASHINGTON STATE DEPTOF ECOLOGY ROOFING STUDY

31 Washington State Department of Ecology Roofing Task Force Puget Sound Study - September 14, the WA State Deptof Ecology convened a Roofing Task Force meeting to discuss the issue of toxic chemicals in the Puget Sound attributed to roofing - Of chemicals present, their study attributed the following percentages to roofing: Zinc 88% Cadmium 60% Copper 11% Arsenic - 19%

32 2013 GOVERNMENT AFFAIRS PRIORITIES

33 2013 Government Affairs Priorities IARC Ruling on Asphalt and the Effect on Bituminous Coatings VOC Regulations PaintCare Programs Banning of Raw Materials Perceived to be Toxic EPA Timetables and Rulings on Chemicals of Concern California Title 24 Monitoring Energy Calculators Reflectivity Issues Rebates for Reflective Roofing through Federal, State, and Energy Companies Managing Local Energy Incentives Changes in LEED International Construction Code Impact on Local Codes IGCC Impact on Roofing

34 QUESTIONS?