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OAR Box 1477 

Prepped by Ollie Stewart 

Document Number: 

31) ll-J-22 

Docket Number: 

A-94-52 

Printed 7/31/2008 11:40:24 AM Sheet 31 of 36 
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

m*SL ^i^oot) 

iT-l-'X^. 

OFFICE OF 

POLICY 

Donald R. Arbuckle, Deputy Administrator 

Office of Information and Regulatory Affairs 

Office of Management and Budget 

725 17th Street, NW 

Washington, DC 20503 

Dear Mr. Arbuckle: 

M'C' ' < fj».y c 

FPr- f. 

On behalf of the U.S. Environmental Protection Agency and in accordance with section 

609(b) of the Regulatory Flexibility Act as amended by the Small Business Regulatory 

Enforcement Fairness Act of 1996,1 hereby announce the convening of the Small Business 

Advocacy Review (SBAR) Panel for the forthcoming regulatory proposal of the Reinforced 

Plastics Composites MACT Standard. 

I have arranged a meeting to officially convene this SBAR Panel on Thursday, 

April 6, 2000 from 1:30 - 3:30 pm in room 1013 West Tower of EPA's Waterside Mall complex 

(401 M Street SW). I enclose with this letter a convening document containing sections of a 

draft report, a summary of our outreach to affected small entity representatives and other 

background information, which will provide a starting point for our Panel discussions. In the 

meantime, if you have any questions please contact me (260-4001). 

Sincerely yours, 

Thomas E. Kelly 

Small Business Advocacy Chair 

Enclosure 

cc w/o enclosure: 

Maryann Froehlich, OA 

Leslye Fraser, OGC 

Karen Brown, SBO 

Tom Eagles, OAR 
P.3 

^V* % UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

•>im^ 

\ 

a 

WASHINGTON, D.C. 20460 

OFFICE OF 

POLICY 

Mr. Jere W. Glover 

Chief Counsel for Advocacy 

U.S. Small Business Administration 

409 Third Street, S.W. 

Washington, D.C. 20416 

Dear Mr. Glover: 

On behalf of the U.S. Environmental Protection Agency and in accordance with section 

609(b) of the Regulatory Flexibility Act as amended by the Small Business Regulatory 

Enforcement Fairness Act of 1996,1 hereby announce the convening of the Small Business 

Advocacy Review (SBAR) Panel for the forthcoming regulatory proposal of the Reinforced 

Plastics Composites MACT Standard. 

I have arranged a meeting to officially convene this SBAR Panel on Thursday, 

April 6, 2000 from 1:30 - 3:30 pm in room 1013 West Tower of EPA's Waterside Mall complex 

(401 M Street SW). I enclose with this letter a convening document containing sections of a 

draft report, a summary of our outreach to affected small entity representatives and other 

background information, which will provide a starting point for our Panel discussions. In the 

meantime, if you have any questions please contact me (260-4001). 

Sincerely yours, 

Thomas E. Kelly 

Small Business Advocacy Chair 

Enclosure 

cc w/o enclosure: 

Maryann Froehlich, OA 

Leslye Fraser, OGC 

Karen Brown, SBO 

Tom Eagles, OAR 
P.4 

Convening Document for the Small Business Advocacy Review Panel 

on EPA's Planned Proposal of the Reinforced Plastics Composites MACT Standard 

1. Introduction 

This report is presented by the Small Business Advocacy Review Panel convened for the 

proposed rulemaking on the Reinforced Plastics Composites MACT Standard that the 

Environmental Protection Agency (EPA) is currently developing. On [insert date], EPA's Small 

Business Advocacy Chairperson convened this Panel under section 609(b) of the Regulatory 

Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act 

of 1996 (SBREFA). In addition to its chairperson, the Panel consists of the Director of the 

Emission Standards Division (ESD) within EPA's Office of Air Quality Planning and Standards, 

the Deputy Administrator of the Office of Information and Regulatory Affairs within the Office 

of Management and Budget, and the Chief Counsel for Advocacy of the Small Business 

Administration. 

This report provides background information on the proposed Reinforced Plastics 

Composites MACT standard being developed and the types of small entities that would be 

subject to the proposed rule; a summary of ESD's outreach activities; and the comments and 

recommendations of the small entity representatives (SERs). In addition, Section 609(b) of the 

RFA directs the review panel to report on the comments of SERs and make findings as to issues 

related to identified elements of an initial regulatory flexibility analysis (IRFA) under section 603 

of the RFA. Those elements of an IRFA are: 

• A description of, and where feasible, an estimate of the number of small entities to 

which the proposed rule will apply; 

• A description of projected reporting, record keeping, and other compliance 

requirements of the proposed rule, including an estimate of the classes of small 

entities which will be subject to the requirements and the type of professional 

skills necessary for preparation of the report or record; 

• An identification, to the extent practicable, of all relevant Federal rules which may 

duplicate, overlap, or conflict with the proposed rule; and 

• A description of any significant alternatives to the proposed rule which 

accomplish the stated objectives of applicable statutes and which minimize any 

significant economic impact of the proposed rule on small entities. 

Once completed, the Panel report is provided to the agency issuing the proposed rule and 

included in the rulemaking record. In light of the Panel report, the agency is to make changes, 

where appropriate, to the draft proposed rule, the IRFA for the proposed rule, or the decision on 

whether an IRFA is required. 

Convening Document - Plastics MACT SBAR Panel Page 1 
P.5 

The Panel's findings and discussion are based on the information available at the time this 

report was drafted. EPA is continuing to conduct analyses relevant to the proposed rule. The 

Agency expects additional information will be developed or obtained during the remainder of the 

rule development process. It is important to note that the Panel makes its report at an early stage 

in the rule development process and should be considered in that light. At the same time, 

however, the report provides both the Panel and the Agency with an opportunity to identify and 

explore potential ways of shaping the proposed rule to minimize the burden of the rule on small 

entities while achieving the rule's statutory purposes. 

Any options the Panel identifies for reducing the rule's regulatory impact on small entities 

may require further analyses and/or data collection to ensure that the options are practicable, 

enforceable, environmentally sound, protective of public health, and consistent with the Clean 

Air Act. 

2. Background 

Under the Clean Air Act (CAA), as amended in 1990, EPA is required to regulate major 

sources of hazardous air pollutants (HAP). These pollutants are listed in the statute. On July 16, 

1992, EPA published a list of industry groups (known as source categories) that emit one or more 

of these air toxics. Reinforced plastic composites production was on this list as a category of 

major sources. Major sources are those that emit or have the potential to emit 10 tons per year 

(TPY) or more of a HAP or 25 TPY or more of a combination of HAP. For listed categories of 

"major" sources the Clean Air Act (Section 112) directs EPA to develop National Emission 

Standards for Hazardous Air Pollutants (NESHAP) that are based on the application of air 

pollution reduction measures known as maximum achievable control technology (MACT). The 

CAA requires EPA to complete all MACT standards by November 15, 2000. Therefore, there is 

a statutory deadline for the reinforced plastic composites (RPC) MACT standard. Proposal is 

expected in June 2000.The law requires that MACT not be less stringent than: 

• the emission control that is achieved in practice by the best controlled 

similar source, for new sources; and 

• the average emission limitation achieved by the best performing 12 

percent of the sources in the source category, for existing sources. 

This level of control is referred to as "the MACT floor." 

Prior to this rulemaking, there were no Federal air emissions regulations that covered this 

industry except for new source review (NSR) under the prevention of significant deterioration 

program. However, NSR generally only applies to sources with emissions of volatile organic 

compounds (VOC) of 250 TPY or more. Some facilities have been regulated by State air 

emission regulations. 

There are 440 facilities identified in this source category that are believed to be major 

Convening Document - Plastics MACT SBAR Panel Page 2 
P.6 

sources. These facilities emit over 21,000 TPY of HAP. The majority of the HAP emissions are 

styrene (20,000 TPY). The remainder is methylene chloride and methyl methacrylate. 

3. Overview of Proposal Under Consideration 

EPA is developing MACT floors for new and existing RPC facilities. For small existing 

facilities the MACT floor requirements mainly include pollution-prevention measures. For new 

facilities the MACT floor is likely to mainly require add-on controls. 

EPA has identified three methods that reduce HAP emissions through pollution 

prevention. These are: 

•reducing the HAP contents of the resins and gel coats, 

• switching from atomized application methods to non-atomized methods, and 

• enclosing open resin baths and containers to reduce HAP evaporation. 

EPA is also evaluating an above-the-floor option for both new and existing sources. This 

option requires 95 percent overall control of HAP emissions using an add-on control device. 

Emissions from reinforced plastic composites manufacture typically are generated in an open 

laminating area, or in a spray booth. These areas can be enclosed and the emissions captured and 

routed to a control device. The control devices used in this industry are typically thermal or 

catalytic oxidizers, or an adsorption system to concentrate the HAP in the air stream followed by 

thermal or catalytic oxidation. The 95 percent control option assumes 100 percent capture of 

emissions and routing the emissions to a 95 percent efficient control device. 

The EPA is planning to require that facilities with 100 TPY or more of HAP emissions 

meet the above-the-floor option. Some facilities that emit over 100 TPY of HAP are also small 

businesses. 

4. Applicable Small Entity Definition 

There are 356 different companies identified in this source category. These companies 

operate 440 separate facilities. Of these companies, 278 are classified as small businesses 

according to the SBA definition. These small businesses operate 302 of the 440 facilities. Small 

businesses within the plastics industry are defined by SBA as any company with a total 

employment of 500 or less. 

5. Small Entities That May Be Subject to this Regulation 

The Reinforced Plastic Composites source category includes a wide variety of processes 

that use thermosetting resins containing styrene and/or methyl methacrylate to make plastics with 

either glass reinforcement or no reinforcement. Processes include gel coating, resin spray up, 

resin hand lay up, polymer casting, filament winding, centrifugal casting, pultrusion, 

Convening Document - Plastics MACT SBAR Panel Page 3 
P.7 

compression molding, injection molding, resin transfer molding, continuous lamination/casting, 

manufacture of sheet molding compound, and manufacture of bulk molding compound. 

The 302 facilities we identified as owned by small businesses represent 78 percent of the 

total industry. Some of these small-business-owned facilities have as few as 10 employees. 

Some facilities also paint the plastics after the molding process. Painting operations will not be 

covered by this rule, but may be subject to a different NESHAP currently under development. 

The small business screening analysis indicates that 79 of the small companies will be impacted 

at a level of 1 percent of sales or more. Of this group, 21 will be impacted at 3 percent or more 

of sales. 

For several types of operations, all new sources, regardless of size, will be required to use 

add-on controls. This may significantly increase the capital cost required to start a new business 

of this type. Again, for most processes, the level of stringency chosen for the proposed rule 

represents the minimum level of stringency allowed under the law. 

6. Summary of Small Entity Outreach 

To facilitate regulation development, EPA has actively involved industry stakeholders in 

the development of this rule. An outreach meeting with small business representatives for 

facilities with open molding operations was held on September 11, 1998 in Research Triangle 

Park, North Carolina. Open molding operations make up the largest group of operations (in 

terms of both emissions and number of facilities) in the Reinforced Plastic Composites source 

category. Meeting materials such as a detailed agenda and briefing package as well as 

background information on the development of the regulation for reinforced plastic composites 

production are available at the following website address: 

www .epa.gov/ttn/uatw/coat/rein/rein_plas .html 

OAQPS has been providing information to the Composite Fabricators Association and 

the Society of Plastics Industry/Composites Institute on the development of the regulation since 

1993. These are the two main trade associations for the reinforced plastic composites industry. 

These associations helped to identify small business participants for the 1998 outreach meeting. 

Currently, the Composites Fabricators Association has taken the lead role in representing 

businesses directly affected by this rulemaking. 

In addition, EPA presented information on the planned rulemaking at the 1998 annual 

meeting of the Composite Fabricators Association and presented an update on the rulemaking at 

the October 1999 meeting. 

Prior to convening this panel, EPA met again with small business owners/operators on 

December 14,1999. During this meeting, the planned requirements of the proposed rule were 

presented. This presentation is included as Attachment 1. EPA solicited comments at that time 

from the small business representatives at that meeting. Copies of these initial comments are 

Convening Document - Plastics MACT SBAR Panel Page 4 
P.8 

attached to this document as Attachment 2. 

7. List of Small Entity Representatives 

Table 1 presents the list of small entity representatives solicited to advise the Small 

Business Advocacy Review Panel convened for this rule. This list was developed in consultation 

with SBA and was based on recommendations from the Composites Fabricators Association and 

a list of persons who attended the small business open molding outreach meeting held in October 

1998. 

The companies on this list sell their products to a range of industries including 

automotive, other transportation, building supplies, chemical and pharmaceutical, and 

government agencies. They are located in all regions of the country. The companies represented 

range in size from 15 to 175 employees. All of these facilities have open molding processes, 

which are the processes that will be most significantly affected by the rule. 

8. Summary of Input from Small Entity Representatives 

The Agency received 14 sets of comments from the small business owners/operators 

present at the December 14, 1999 outreach meeting. The following is a brief summary of those 

comments. 

Reporting and Recordkeepng 

Commentors perceived the requirements of reporting and recordkeeping for this rule as 

extensive. This will be especially true, they indicated, for custom molding shops that use a large 

number of resins. They believe that this will place a significant burden on small businesses. 

MACT Floors Based on Pollution-Prevention 

Commentors stated it will be difficult for all affected facilities to meet the resin and gel 

coat HAP contents specified in the MACT floors. This will especially be a problem, they 

indicated, for facilities producing corrosion-resistant products. They explained that in many 

cases in the corrosion-resistant industry, the customer specifies the resin that must be used. Any 

changes in resins will require products to be recertified. Makers of products such as recreational 

vehicle parts may have problems with product quality that could show up years later. 

Several commentors stated that the facilities that set their facility's MACT floor actually 

make a product different from theirs, and could, therefore, use lower-HAP resins and gel coats. 

They also stated that they believe there are errors in the resin and gel coat HAP contents shown 

in the data base. 

Convening Document - Plastics MACT SBAR Panel Page 5 
TABLE 1. LIST OF SMALL ENTITY REPRESENTATIVES 

Small Entity Representative 

Alaglas Pools 

Mr. Paul M. Felix 

803-655-5000 

Altec Engineering, Inc. 

Mr. Jon Lhommedieu 

219-293-1965 

Appalachian Plastics, Inc. 

Mr. Allen DeBusk 

540-429-2581 

Aqua Bath, Inc. 

Mr. George McAllister 

615-227-0017 

Arrowhead Plastic Engineering, Inc. 

Richard Moore 

765-286-0533 

Eckler Industries, Inc. 

Artie Schricker 

407-269-9680 

Empire Fiberglass Products. Inc. 

Neil Baum 

Empire Fiberglass Products. Inc. 

Fiber-Pro, Inc. 

Mr. Jack Griffiths 

231-775-0197 

Fiberbasin, Inc. 

Mr. Bradley R. Philo 

630-801-9770 

Region 

South 

(South Carolina) 

Midwest 

(Indiana) 

Mid-Atlantic 

(Virginia) 

Southeast 

(Tennessee) 

Midwest 

(Indiana) 

Southeast 

(Florida) 

Northeast 

(New York) 

Midwest 

(Michigan) 

Midwest 

(Illinois) 

Number of 

Employees 

11 

60 

30 

40-50 

150-170 

25-30 

30 

25 (87 in 

parent 

company) 

15 

Products 

In-ground fiberglass 

swimming pools 

Front and rear caps 

Tanks, ducting, 

playground equipment 

High end acrylic tubs 

truck and bus parts, 

tanks 

corvette and van parts, 

Scrubbers, exhaust 

systems 

Plywood panels 

covered by fiberglass 

Cooling tower shells, 

tanks 

Industry Sector(s) 

They Serve 

Residential 

construction 

Automotive 

Building materials, 

mining industry 

Commercial and 

residential 

construction 

Automotive, 

agriculture 

Automotive 

Multiple industry 

sectors 

Automotive, military 

Chemical industry, 

automotive, NASA 

Notes 

13 TPY of emissions 

corrosion-resistant 

40-55 TPY of emissions, 

non-corrosion resistant 

30 TPY of emissions, 

corrosion-resistant 

30 TPY of emissions, noncorrosion-resistant 

Three plants, 20 TPY of 

emissions each, non 

corrosion resistant 

Hand lay-up 

5 TPY emissions 

4 TPY of emissions, mainly 

assembly operation 

14 TPY of emissions, 

enlarging to 34 TPY 

Less than 25 TPY of 

emissions. Corrosion and 

non-corrosion resistant 

Convening Document - Plastics MACT SBAR Panel Page 6 
TABLE 1. LIST OF SMALL ENTITY REPRESENTATIVES (Con't) 

Small Entity Representative 

GPI Inc. 

Mr. George Zinser 

715-359-6123 

Justin Tanks, Inc. 

Ed Short 

302-856-3521 

Miles Fiberglass & Plastics, Inc. 

Lowell Miles 

503-775-7755 

North End Composites 

Jonathan Spaulding 

207-594-8821 

Palmer of Texas 

Mr. Jim Lee 

915-523-5904 

Peterson Products 

Ken Anderson 

650-591-7311 

The Phil Carter System 

Frank Ranson 

757-244-4903 

Trail Wagons-Chinook 

JeffGaskell 

509-452-5394 

Region 

Midwest 

(Wisconsin) 

Mid Atlantic 

(Delaware) 

Northwest 

(Oregon) 

Northeast 

(Maine) 

Southwest 

(Texas) 

West 

(California) 

Mid-Atlantic 

(Virginia) 

Northwest 

(Washington) 

Number of 

Employees 

30-40 

35-42 

90 

90 

67 

35 

28 

175 

(40 doing 

composites 

work) 

Products 

Tanks 

Tanks 

Railcar liners, tanks, 

duct work, RV 

components 

Molds 

Tanks 

Custom products 

Portable toilets 

Van conversions 

Industry Sector(s) 

They Serve 

Multiple industry 

sectors 

Food, 

pharmaceutical, 

water treatment, 

chemical 

Automotive, other 

transportation 

Marine industry 

Oil industry 

Medical 

Portable toilets 

Automotive 

Notes 

36 TPY of emissions, almost 

all corrosion-resistant, many 

types of resins 

30 TPY of emissions, all 

corrosion-resistant 

2 plants, 38 and 40 TPY of 

emissions, corrosion and 

non-corrosion resistant 

Make molds for other 

fiberglass shops, mainly 

boat builders, 15-16 TPY of 

emissions 

2 facilities, 100 TPY of 

emissions at larger facility 

7 TPY of emissions, noncorrosion-resistant, fire 

retardant products 

7 TPY of emissions, noncorrosion resistant, open 

molding 

Three facilities, currently at 

10.5 TPY of emissions, may 

go up to 30 TPY 

Convening Document - Plastics MACT SBAR Panel Page 7 
p.11 

Add-On Controls 

Commentors expressed concern that if they could not meet the resin and gel coat HAP 

contents required at the MACT floor, they would have to install add-on controls. If they produce 

large parts, they stated it would be difficult, if not impossible, to enclose the process and capture 

the emissions from open-molding processes. They also stated that they could not afford the 

capital cost of add-on controls. In many cases, small businesses carry significant debt, and their 

ability to borrow additional funds for controls is limited. 

Open Molding Averaging 

The planned regulation has provisions allowing a facility to show compliance with 

MACT based on a weighted average of its different resin and gel coat HAP contents. Most 

commentors stated that this provision is not useful because they have no control over their 

product mix; it is market driven. If the market for their products that use the lower-HAP content 

resins of their mix were to decline they would be out of compliance. As a result, they will still 

need to ensure that every resin system they use meets the requirements of MACT. 

Loss of Competitive Position 

Many reinforced plastics composite producers directly compete with producers of the 

same product made of other materials, such as steel or exotic metals. Commentors stated that the 

projected increases in raw material costs resulting from the switch to lower-HAP resins will 

result in loss of market share to these competitors. 

Convening Document - Plastics MACT SBAR Panel Page 8