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Proposed Parts 205 and 200 Regulatory Flexibility Analysis for Small Businesses and Local Governments

The Department of Environmental Conservation (DEC) proposes to adopt revisions to 6 NYCRR Part 205, "Architectural and Industrial Maintenance (AIM) Coatings," and Part 200, "General Provisions" (collectively, Part 205). AIM coatings, such as paint, are applied to stationary structures or their appurtenances at the site of installation, portable buildings at the site of installation, pavements, or curbs. The purpose of this rulemaking is to reduce emissions from AIM coatings by reducing the volatile organic compound (VOC) content limits for some coating categories.

Effect of the Rule

Local governments are not expected to be directly affected by the proposed revisions to Part 205. The revisions to Part 205 may require small businesses to reformulate coatings to bring them into compliance with the new VOC limits as well as label accordingly. Small businesses may not have the level of research and development staff available as larger businesses, so this rulemaking may have a greater impact on small businesses. Since 2010 DEC staff have communicated with small businesses as well as coatings associations to prepare businesses for the proposed changes. According to the U.S. Census Bureau, County Business Patterns Report for 2015 show that New York State had 88 paint manufacturing facilities, of which, at least two were small businesses or manufacturers.

Compliance Requirements

Local governments are not expected to be directly affected by the proposed revisions to Part 205. Small businesses that manufacture AIM coatings will need to comply with the proposed VOC content limits of Part 205. In addition, these small businesses will need to comply with the labeling requirements of Part 205 which requires manufactures to display specific information on the coating container or label. The label information required include:

  • the date the coating was manufactured or the date code representing the date of manufacture
  • the manufacturer's recommendations for thinning of the coating
  • the maximum or actual VOC content of the coating

There are additional labeling requirements or specific instructions for:

  • industrial maintenance coatings
  • clear brushing lacquers
  • faux finishing coatings
  • rust preventive coatings
  • quick dry enamels
  • non flat high gloss coatings
  • specialty primers, sealers, and undercoaters
  • quick dry enamels
  • reactive penetrating sealers
  • reactive penetrating carbonate stone sealers
  • stone consolidants
  • wood coatings
  • zinc rich primers

Small businesses which manufacture AIM coatings will be expected to comply with the reporting requirements of Part 205. The proposed changes to Part 205 broaden the scope of the DEC's authority to collect information. Specifically, Part 205.5 requires that manufacturers keep the following data on file for three years:

(1) name and mailing address of the manufacturer;

(2) name, address and telephone number of a contact person;

(3) name of the coating product as it appears on the label and the application coating category;

(4) whether the product is marketed for interior or exterior use or both;

(5) number of gallons sold in New York State in containers greater than one liter (1.057 quart) and equal to or less than one liter (1.057 quart);

(6) VOC Actual content and the VOC Regulatory content in grams per liter;

(7) names and chemical abstract service (CAS) numbers of the VOC constituents of the product;

(8) names and CAS numbers of any compound in the product specifically exempted from the VOC definition, as listed in subsections 205.2 (cg) and (ch);

(9) whether the product is marketed as solventborne, waterborne, or 100 percent solids;

(10) description of resin or binder in the product;

(11) whether the coating is a single-component or multi-component product;

(12) density of the product in pounds per gallon;

(13) percent of weight of solids, all volatile materials, water, and any compounds in the product specifically exempted from the VOC definition, as listed in subsections 205.2 (cg) and (ch); and

(14) percent by volume of solids, water and any compounds in the product specifically exempted from the VOC definition, as listed in subsection 205.2 (cg) and (ch).

If requested, the manufacturer would be required to provide this information to the DEC within 180 days.

Professional Services

It is not anticipated that small businesses that manufacture AIM coatings will need professional services to comply with the proposed revisions to Part 205. However, if a business does not want to reformulate in-house, they may choose to purchase a formulation outside of their business.

Compliance Costs

The proposed revisions to Part 205 closely match the California Air Resources Board (CARB) 2007 Suggested Control Measure (SCM) for AIM coatings. CARB performed a cost analysis as part of the development of its SCM AIM report in 2007. Because the proposed revisions match so closely with CARB's measures, DEC utilized CARB's cost analysis for the purpose of estimating compliance costs for this rule making.

CARB conducted a thorough study of affected businesses to determine control costs that would be incurred. CARB estimated a per-limit cost-effectiveness ranging from a net savings to $13.90 per pound of VOC reduced, with an overall cost-effectiveness of $1.12 per pound of VOC reduced (in 2007 dollars). These values were based upon the assumption that companies will absorb all costs (i.e. none were passed down to consumers) and may therefore be slightly inflated. CARB computed an average 2.1 percent decline in return on owner's return on equity (ROE - calculated by dividing net profit by net worth), and used this to gauge economic impact. In its analysis, CARB concluded that the lower VOC limits should not significantly impact the profitability of most businesses, although it may have an impact on the smallest operations. Overall, business profitability and job opportunities would not be significantly affected. DEC staff note that these costs were estimated in 2007 and that formulations and research have improved. Staff have concluded that compliance costs should be lower as a result of these improvements. While the 2007 CARB report stated that there may be an impact on the smallest operations research and formulations experience since then should minimize this impact.

Economic and Technical Feasibility

Local governments are not expected to be directly affected by the proposed revisions to Part 205. The limits and requirements proposed in the revisions to Part 205 are technically feasible as they have been in effect in California since 2008. In addition, the coating categories which are not listed under the CARB rule were requested by industry stakeholders who also offered technically feasible limits associated with each category. DEC staff did not conduct independent cost analysis, rather depended on the CARB 2007 analysis to assess the economic feasibility. The CARB cost information does include information supplied by manufacturers who market AIM coatings nationally and therefore extend to New York State. In their 2007 SCM, CARB determined that most manufacturers or marketers of AIM coatings would absorb the cost of the proposed changes with no significant impacts on profitability. Nevertheless, to help minimize the potential impact on small businesses, the proposed changes to Part 205 include a two year sell through provision. This provision allows manufacturers to sell products compliant with the current standard (and manufactured prior to the effective date of the proposed revisions) for two years after the new standard takes effect.

Minimizing Adverse Impact

Local governments are not expected to be directly affected by the proposed revisions to Part 205. In recognition of the potential for adverse impacts on small businesses, DEC staff led a stakeholder process with manufacturers and coatings associations, including a stakeholder process with national and local manufacturers and coatings associations on May 12, 2010 in association with the Ozone Transport Commission. DEC staff also attended several coatings conferences and meetings with manufacturers, including the American Coatings Association (ACA) on May 14, 2013 and, the Metropolitan New York Coatings Association (MNYCA) on June 12, 2014. Outreach with individual manufacturers and interested parties was also conducted.

The proposed VOC limits have been in effect in California since 2007 and products with these lower limits have already been available and sold in the marketplace. All manufacturers, including small businesses, have had ample time to research, prepare and implement re-formulation strategies.

Small Business and Local Government Participation

As stated above, local governments are not expected to be directly affected by the proposed revisions to Part 205. In recognition of the potential adverse impacts on small businesses, DEC staff met with many stakeholders, including national and local associations and manufacturers, and have given stakeholders several opportunities to participate in the development of the proposed rule. DEC staff also gave presentations at ACA and MNYCA meetings and provided educational outreach on the proposed rule. These outreach efforts, including meetings and communications with DEC staff, have been ongoing since 2012. Additionally, the public, including those involved in small businesses and local governments, will have the opportunity to review and comment on the proposed rule in accordance with State rulemaking procedures and requirements.

Cure Period or Ameliorative Action

No additional cure period or other opportunity for ameliorative action is included in the revisions to Part 205. This proposal will not result in immediate violations or impositions of penalties for existing facilities. To help reduce impacts on affected sources, Part 205 will not become effective immediately after promulgation and offers a sell-through of two years.

Initial Review

The initial review of this rule shall occur no later than in the third calendar year after the year in which the rule is adopted.


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    Proposed Part 205
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