SOUTH COAST AIR QUALIT Y MANAGEMENT DISTRICT

Staff Report for

PROPOSED AMENDED RULE 1151 – MOTOR VEHICLE AND MOBILE EQUIPMENT NON-ASSEMBLY LINE
COATING OPERATIONS

December 2005

Deputy Executive Officer Planning, Rule Development, & Area Sources Elaine Chang, DrPH

Assistant Deputy Executive Officer Planning, Rule Development, & Area Sources Laki T. Tisopulos, Ph.D., P.E.

Planning and Rule Manager VOC Rule Development Larry Bowen, P.E.

Author: Ricardo A. Rivera, Air Quality Specialist

Reviewed by: Ed Muehlbacher, P.E., Program Supervisor Frances Keeler, Senior Deputy District Counsel

Technical Assistance: Steve Jones, A.Q. Analysis and Compliance Supervisor James Koizumi, Air Quality Specialist Patricia Kwon, Air Quality Specialist Helmy Sultan, Ph.D., Air Quality Specialist Elizabeth Dooley, Student InternSOUTH COAST AIR QUALIT Y MANAGEMENT DISTRICT

GOVERNING BOARD Chair: WILLIAM A. BURKE, Ed.D. Speaker of the Assembly Appointee

Vice Chair: S. ROY WILSON, Ed.D. Supervisor, Fourth District Riverside County Representative

MEMBERS:

MICHAEL D. ANTONOVICH Supervisor, Fifth District Los Angeles County Representative

JANE W. CARNEY Senate Rules Committee Appointee

BEATRICE J. S. LAPISTO-KIRTLEY Mayor, City of Bradbury Cities Representative, Los Angeles County/Eastern Region

RONALD O. LOVERIDGE Mayor, City of Riverside Cities Representative, Riverside County

GARY OVITT Supervisor, Fourth District San Bernardino County Representative

JAN PERRY Councilmember, 9 th District Cities Representative, Los Angeles County, Western Region

MIGUEL PULIDO Mayor, City of Santa Ana Cities Representative, Orange County

JAMES SILVA Supervisor, Second District Orange County Representative

CYNTHIA VERDUGO –PERALTA Governor’s Appointee

DENNIS YATES Mayor, City of Chino Cities Representative, San Bernardino County

EXECUTIVE OFFICER

BARRY R. WALLERSTEIN, D.Env.TABLE OF CONTENTS

EXECUTIVE SUMMARY .....................................................................................1

BACKGROUND .....................................................................................................3

PROCESS DESCRIPTION .....................................................................................4

COATINGS AVAILABLE TO ME ET THE PROPOSED LIMITS.......................6

ALTERNATIVE CONTROLS................................................................................7

PROPOSED AMENDMENTS................................................................................8

AFFECTED SOURCES/EM ISSIONS INVENTORY..........................................12

EMISSION REDUCTIONS ..................................................................................14

COST AND COST-EFFECTIVENESS ................................................................15

INCREMENTAL COST-EFFECTIVENESS .......................................................18

COMPARATIVE ANALYSIS..............................................................................19

DRAFT FINDINGS...............................................................................................19

PUBLIC COMMENTS AND RESPONSES.........................................................20

REFERENCES ......................................................................................................24Staff Report for Proposed Amended Rule 1151

FSR - 1 - December 2005 EXECUTIVE SUMMARY

Rule 1151 – Motor Vehicle and Mobile Equipment Non-Assembly Line Coating Operations was adopted by the South Coast Air Quality Manageme nt District (AQMD) G overning Board on July 8, 1988, to control vol atile organic compound (VOC) emissions from motor vehicle and mobile equipment non-assembly line coating operations. Rule 1151 applies to both commercial and noncommercial refinishing coating applications that include, but are not limited to auto body repair/paint shops, production au to body paint shops, new car deal er repair/paint shops, fleet operators repair/paint shops, cu stom-made car fabrication facili ties, truck body builders, and any
other motor vehicle or mobile equipment non-assembly line painti ng operation. (Motor vehicle assembly line coating operations are subject to AQMD Rule 1115). Rule 1151 establishes VOC limits by coating category and vehicle type (Gro up I and Group II vehicles). Group I vehicles include large-sized trucks, buses and mobile equipment. Gr oup II vehicles include passenger cars, small-sized and medium-sized trucks and vans, motor homes, and motorcycles.

The objective of Proposed Amende d Rule (PAR) 1151 is to impleme nt portions of the 2003 Air Quality Management Plan (AQMP) Control Measure CTS-10 – Miscellaneous Industrial Coatings and Solvent Operations. Staff used the 2005 California Air Resources Board (CARB) Suggested Control Measure (SCM) for Automotive Refinishing Coatings 1 in the development of the proposed amendments. The final staff proposal may be amended to reflect the final SCM adopted by CARB.

The proposed amendments modify Rule 1151 coating categories and VOC limits in accordance with CARB’s 2005 Automotive Refinishing SCM. Specifically, the pro posed amendments: (1) Combine Group I and Group II vehicle categories and establish VOC lim its by coating category only; (2) Eliminate the composite VOC limit for multistage coating systems and establish independent VOC limits for both the color and cl ear parts of the multistage coating system; (3) Combine the primer, primer surfacer, and primer sealer categories and establish a single VOC limit for primers; and (4) Eliminate the general specialty coating category and replace it with specific categories, and VOC limits.

The new VOC limits proposed in Rule 1151 are e ssentially identical to the VOC limits being proposed in the CARB 2005 Automo tive Refinishing SCM. Accord ing to information generated by CARB, with the exception of the VOC lim its proposed for adhesion promoters and pretreatment coatings, the VOC limits proposed for new coating categories are based upon products that are currently available in the market place in the United States and/or other parts of
the world.

Although the proposed amendments are technology neutra l, the proposed VOC limit for basecoat (color coating) is based on waterborne techno logy. There are waterbor ne products currently available in the marketplace; however, the use of the technology in Southern California has been limited. The transition to waterborne technology in the refinishing industry is eminent. The European Union is implementing waterborne technology in 2007 as pa rt of the European

1 Proposed Suggested Control Measure for Automotive Coatings, CARB 2005Staff Report for Proposed Amended Rule 1151

FSR - 2 - December 2005 Parliament directive 2 to reduce VOC emission from coatings and solvents. Furthermore, CARB and AQMD staff have received information from coating manufacturers that the automotive coating industry is likely to rely on waterborne technology to comply with the proposed VOC
limits.

According to information given to CARB, most automotive coating manufacturers believe that the VOC limit proposed for basecoat or color co at in the SCM is feasible provided sufficient time is given to prepare for the implementation of waterborne technology in California. To this end, the VOC limits for color and clear coatings in PAR 1151 are proposed to become effective by July 1, 2008 with a sell-through provision of six months that requires full implementation of the proposed VOC limits on January 1, 2009. The VOC limits for adhesion promoters, primer, and single-stage coatings become effective January 1, 2010. The VOC limits for all other categories are proposed to beco me effective January 1, 2009.

The proposed amendments also add, in accordance with the CARB SCM, a prohibition of possession that will prohibit possession of non-co mpliant coatings unless specific conditions are met. The prohibition of possession is proposed to become effective six months after adoption of the proposed rule.

Finally, the proposed amendments also add language to the rule that exempts tertiary butyl acetate (TBAc) as a VOC for Rule 1151 operations on a limited basis. This limited exemption
deviates from the SCM recommendation that exempts TBAc as a VOC for all automobile refinish coatings. The California Environmen tal Protection Agency (Cal/EPA) conducted an environmental impact assessment (EIA) pursuan t to California Environmental Quality Act (CEQA) to determine the environmental impact s associated with granting an exemption for
TBAc as a VOC in the CARB Consumer Pr oducts Regulation. (Environmental Impact Assessment of Tertiary-Butyl Acetate, June 2006). CARB concluded that there were no significant impacts statewide associated with the exemption of TBAc as a VOC in the definition in the CARB Consumer Products Regulation. The EIA further recommended that local regulatory agencies conduct their own analysis prior to exempting TBAc as a VOC in any applicable rule. As a result, CARB staff afte r their analysis recommended in the SCM that TBAc be exempt as a VOC for all automotive refinish coatings. At the federal level, TBAc was recently delisted as a VOC by U.S. EPA due to its low photochemical reactivity. As part of the federal delisting of TBAc, the manufacturer of TB Ac committed itself to work with U.S. EPA to conduct the additional toxicity tes ting necessary to resolve the long- term toxicity uncertainty of TBAc. As recommended by CARB, the District has issued a Draft Environmental Assessment
for PAR 1151. The Draft Environmental Assessmen t is based on the health analysis provided by
Cal/EPA but uses a worst-case scenario in assessi ng potential carcinogenic risk. The analysis of
the Draft Environmental Assessment examines the staff recommendation that TBAc use be limited to coating categories other than clear an d color coatings. Staff believes that there are sufficient compliant coatings available on the ma rket in the clear and co lor coating categories
that will meet the VOC limits of the rule without the use of TBAc. Howeve r, in other categories
the use of TBAc is warranted to ensure the development of lower VOC coatings. The Draft
Environmental Assessment concludes that the limite d use of TBAc would result, for the largest

2 Directive 2004/42/CE of the European Parliament and of the council.Staff Report for Proposed Amended Rule 1151

FSR - 3 - December 2005 automobile refinishing facility in the AQMD, in an estimated carcinogenic risk of five in one million, which is lower than the significance thre shold of 10 in one million for CEQA. Acute
and chronic hazard indices were also estimated to be less than the significance threshold of 1.0.

Furthermore, the rule include s a commitment to conduct a tec hnical assessment on the use of TBAc by July 1, 2007. Upon completion of this tec hnical assessment, staff will report back to the Board on the appropriateness of mainta ining TBAc as a non-VOC. The proposed limited exemption will maintain the potential risk at low levels, while providing some level of flexibility in developing compliant coatings.

Historically, the AQMD has identified appr oximately 3,500 business that use automotive coatings. However, AQMD records indicate th at there are only appr oximately 1,730 commercial refinishing facilities with permits to construct and opera te spray booths. The remaining facilities are believed to use or handle automotive coatings on a limited basis. The emissions inventory for this source category is 10.3 tons per day (tpd).

The proposed amendments will result in VOC em ission reductions of 3.7 tpd, which represent a reduction of approximately 36 percent from curren t emission levels. The cost-effectiveness for the proposed amendments to Rule 1151 is estimated at $2,291 per ton of VOC reduced.

BACKGROUND

Rule 1151 has been amended 11 times since its 1988 adoption and currently regulates VOCs, as well as, stratospheric ozone-d epleting and global warning compounds, and carcinogenic (cadmium and hexavalent chromium) emissi ons from non-assembly vehicle and mobile equipment refinishing operations. Motor vehicl e assembly line coating operations are regulated
under Rule 1115 – Motor Vehicle Asse mbly Line Coating Operations.

Rule 1151 was first amended on May 5, 1989, to incorporate Rule 109 recordkeeping requirements. The rule was amended again on March 2, 1990, along with the adoption of Rule
108 – Alternative Emission Control Plans for cons istency. Other amendments to 1151 followed that same year on June 1, November 2, and December 7, 1990 to incorporate equivalent methods of equipment cleaning, phase out aerosol spray can usage in t ouch-up coatings, and make the rule language consistent with ot her adopted rules, respectively. On August 2, 1991 the rule was again amended as part of the adoption of Rule 1171 – Solvent Cleaning Operations.

On September 6, 1991, Rule 1151 underwent the most significant revision to date in response to the automotive refinishing industry’s concerns regarding coating technology and enforceability.

The September 6, 1991, amendment added new coa ting categories, restructured VOC limits and adjusted compliance dates. Specifically, the cat egories added to the ru le as part of this amendment included primer surfacer, primer sealer, multistage, metallic iridescent, and specialty coatings. The September 6, 1991 amendments contained technology-forcing VOC limits that were to become effective on January 1995. Howe ver, the rule was again amended on December 9, 1994, to delay the implementation of the 1995 limits by two years to January 1997. The 1994Staff Report for Proposed Amended Rule 1151

FSR - 4 - December 2005 amendments to the rule also included language corrections a nd other administrative changes requested by United States Environm ental Protection Agency (U.S. EPA).

On June 13, 1997, the rule was amended to correct State Implementation Plan (SIP) deficiencies, improve rule language and other administrative amendments to ma ke the rule consistent with changes made to other AQMD rules. Rule 1151 was last amended on December 11, 1998, to delay the implementation of VOC limits for Group II multistage topcoat; exempt topcoats used on prototype vehicles fr om VOC limits, add a usage limitation for specialty coatings, and extend the applicability of the prohibition of sale, offer for sale, and distribution requirements. The last amendment to the rule also included language cl arifications as well as other administrative changes.

Recent Developments

Coating manufactures have expressed dissatisfacti on with the lack of uniformity of air quality regulations that apply to the au tomotive refinishing industry within California. At issue are the different VOC limits, how coating categories are de fined, and varying rule interpretations that exist throughout the state. These variations make it difficult for coating manufactures to create and sell products statewide that are in compliance with current applicable district rules. In November 2000, CARB proposed the development of a statewide automotive coating operations suggested control measure to addre ss the concerns of coating manuf acturers. In re sponse to this proposal, the California Air Poll ution Control Officer’s Associ ation (CAPCOA) assembled the CAPCOA Enforcement Automotive Coating Worki ng Group and developed a model rule for automotive coating operations to be used by each of the air pollution contro l agencies within the
state of California in lieu of a statewide rule. The model rule was intended to provide the desired uniformity to the automotive refining industry. The final draft rule was issued by the Enforcement Automotive Coating Working Group in 2002.

To provide a mechanism to formalize the model rule, CARB is in the pr ocess of developing a SCM for Automotive Refinishing. CARB is collabo rating with California’ s air districts on the SCM, which is scheduled for a public hearing in October 2005.

PROCESS DESCRIPTION

Rule 1151 is applicable to auto motive and mobile equipment refi nishing operations. Automotive coatings are applied to motor vehicles and mobile equipment to pr otect and enhance the appearance of exterior surfaces. In terms of the use of coa tings materials, the automotive refinishing industry consists of th e application of coatings at a ny time subsequent to the initial manufacturing process. Automotiv e refinishing products are applied as part of a repair process following accidental damage to a vehicle to rectify damage or erro rs that occur during manufacturing or in transit or to change the a ppearance or color of a vehicle. Refinishing facilities include five broad categories: auto body repair/paint shops, production auto body paint shops, new car dealer repair/paint shops, fleetoperators repair/paint shops, and truck bodybuilders.

Refinishing may be done on a spot, a panel, or the entire vehicle or mobile equipment. Spot repair and paint work is generally performed on a small damaged area. The repair work wouldStaff Report for Proposed Amended Rule 1151

FSR - 5 - December 2005 generally include the physical repair of th e damaged area, conditioning of substrate and application of undercoats and topcoa ts. Panel repair is similar of that of a spot work except that the work area is larger it may include a hood or a door for example. Overall work, as the word implies, involves the refinishing of the entire body. Overall work may be performed to repair a faded color on an automobile or piece of equipmen t or to change the color of the vehicle. Therefore, refinishing operations, in term of a pplication of coatings, refers to the activity of restoring a vehicle’s finish to it s original condition as well as to the activity of repainting an entire vehicle to change or enhance its appearance.

Refinishing Industry Coatings

There are two main classes of automotive coa tings: undercoats and topcoats. Undercoats including, primers, primer surfacers, and prim er sealers prepare the exterior surfaces by providing corrosion resistance, adhesion and a smooth foundation for subsequent topcoats. Topcoats are applied to provide co lor, gloss, and a protective finis h. Topcoats can be classified into three main categories: (1) si ngle-stage solid color or mono-co ats, (2) single-stage metallic finish, and (3) multistage systems.

Single-stage topcoats consist of only one final coating, which is applied over undercoats to provide color, gloss, and protect ion. The difference in the single- stage solid color and the single stage-metallic finish is that the solid colors do not contain any metal flakes.

Multistage coatings, unlike the conve ntional single-stage coatings, c onsist of two or more layers, each contributing separately to the final finish’ characteristics. The initial layer, or basecoat layer, contains the pigmentations and metallic flakes that provide the final color and color effects. Multistage coatings include two-stage systems as well as three-stage systems. Threestage coatings differ from the two stage-systems in that it includes a midc oat layer that provides additional color effects, such as a pearlized li ght effect resulting from mica flakes. The final coatings in multistage systems are non-pigmented clear coats that provide hardness and durability to the final finish. The nature of the coating systems requires that all coating components be used to refinish the vehicle in order to provide the required appearance and performance.

The main difference in the application of coati ngs in a manufacturing setting to that of a refinishing environment are the curing characteristics of the coatings. Automotive original equipment manufacturing (OEM) co atings are typically cured by the use of baking ovens that operate at high temperatures. The types of coati ngs used in refinishing operations are typically air dry, cured with the aid of in frared lamps, or by forced-air spray booths. Refinishing shops cannot use high temperature ovens due to the pote ntial damage to other automobile components made of plastic or other materials that may be damaged at high temperatures. Therefore, automotive refinishing coatings are formulated for faster drying times.Staff Report for Proposed Amended Rule 1151

FSR - 6 - December 2005 COATINGS AVAILABLE TO MEET THE PROPOSED VOC LIMITS

The proposed coating categories and the corresp onding VOC limits are essentially identical to the categories and VOC limits proposed under th e 2005 CARB Automotive SCM. In developing the revised coating categories and VOC limits for the Automotive SCM, CARB staff considered the results of the 2002 Automotive Refinishing Co atings survey; information from automotive refinishing coating manufacturers, solvent suppliers, and other industry groups; the existing VOC limits for automotive refinishing coatings; and, the results of CARB’ s technical analysis that included the review of trade journals and other literature relate d to product information.

Based on their review, CARB st aff has concluded that th e proposed VOC limits are technologically and commercially feasible for full implementation by January 1, 2009. With the exception of two coating categories, adhesion pr omoter and pretreatment coatings, CARB has concluded that there are compliant products currently available in the market place to meet the proposed VOC limits. However, CARB also believes based on information received from coating manufacturers as part of the public re view process of the SCM, that compliant pretreatment and adhesion promoters coatings will be available in the market place prior to the 2009 implementation date. AQMD staff has received similar information from a local coating manufacturer stating that their company is working on having complia nt pretreatment coatings in the market place by 2006.

Approximately 90 percent of the emission reductions associated with the proposed amendments are due to the lowering of the VOC limit for basecoat or the color portion of the multistage coating systems. The proposed amendments to Rule 1151 are technology neutral. Exempt compounds and waterborne technology are the predominant technologies for automotive refinishing, however ultraviole t (UV) technology is making in roads and may be used as a potential alternative technology. However, the co ating manufacturers have stated that the most likely technology that would be use to comply with the VOC limit for color coating is waterborne technology. Although used in a very limited basis in California, waterborne technology is available that meet s the proposed limits. Waterborne basecoats have been used in Europe for many years and are being mandate d there as of January 1, 2007 (CARB 2005).

Coating manufacturers have stated that additiona l color development is required before the waterborne technology currently used in Europe before it can be fu lly introduced into California. For this reason, the proposed compliance schedu le has been set for July 1, 2008 with a sellthrough provision until December 31, 2008.

Table 1 – Current Compliant Coatings Summary, provides a summary of coatings that comply with the proposed VOC limits. The informati on presented in Table 1 was generated based on information received from CARB. CARB genera ted this information based on data submitted by major automotive refinishing coating manufactur ers as part of the 2002 automotive refinishing survey. The coating manufacturers that submit ted information included, Akzo-Nobel, Bondo, BASF, Cumberland, DuPont, Earl Scheib, Ellis Paint, Fibre Gl ass – Evercoat, Hentzen, JonesBlair, Magni, Montana Products, PPG, Sherwin Williams, Spies Hecker, Standox, and Valspar. The information presented in the Table 1 is limited to the coating categories that are affected by the proposed amendments to Rule 1151.Staff Report for Proposed Amended Rule 1151

FSR - 7 - December 2005Staff Report for Proposed Amended Rule 1151

FSR - 8 - December 2005 Table 1 – Current Compliant Coatings Summary (CARB Data, 2005)

Number of Companies that: Companies With Compliant

Coatings VOC (g/l) Coating Category Sold Type of Coating in CA Reported Compliant
Mixtures (1)

Adhesion

Promoter 5 0 (3) (3)

Akzo-Nobel < 420

PPG < 420 Spies Hecker < 420

Standox North
America < 420 Color Coating (2) 12 5

Valspar < 400

Pretreatment Coatings 13 0 (3) (3)

Primer (Primer Sealer) 15 12 Ellis Paint 250

Spies Hecker 331 Single-Stage Coating (2) 13 1

Ellis Paint 336 Temporary
Protective Coating 2 1 Ellis Paint 34

Truck Bed Liner Coating 1 1 Fibre Glass Evercoat 278

Underbody Coating 3 1 Akzo-Nobel 46

Fibre Glass Evercoat 404

Uniform Finish Coating 5 2 PPG 524

(1) Valid mixtures (coatings) that meet the proposed VOC limits. (2) The mixtures (coating) for the color coating and single stage categories where reported as systems and not individual mixtures. (3) At this time there are no compliant coa tings available for these categories.

ALTERNATIVE CONTROLS

In general, the most widely used method fo r control of surface coating VOC emissions is modifying the chemistry of the coating material to reduce the VOC content of the coating. Improvement in application methods to improv e transfer efficiency can also reduce VOC
emissions. The use of add-on controls is anot her method for VOC reduction that has been used in surface coating applications.Staff Report for Proposed Amended Rule 1151

FSR - 9 - December 2005 The use of add-on control tec hnology requires that VOC-laden air from process areas or emissions points be captured and directed to air pollution control equipment. The effectiveness of an add-on control system is based on the capture efficiency and the VOC destruction capability of the emissions control device. Capture efficiency refers to the ability of a ventilation system to capture and transfer VOC released from process areas or emission points to the pollution control device. If the process areas or em ission points meet the crit eria set forth in U.S. EPA Method 204, the area or emission point may be considered a permanent total enclosure (PTE) and the capture efficiency is assumed to be 100 percent. If the criteria of U.S. EPA Method 204 is not met then source testing must be performed to determine the capture efficiency of the system.

The options for control devices are numerous, each having different cost a nd control efficiencies. The selection is dependant upon th e needs of the specific facility. Although there are many types
of control devices that work on different principles such as ad sorption or destruction of VOC emissions, the most typical type of control equi pment for the control of VOC emissions is the use of thermal destruction equipment such as a thermal oxidizer or a catalytic oxidizer.

Rule 1151 allows use of add-on control equipm ent as an option for achieving compliance. Although this method of control may be most effective for some operators, it could be prohibitively expensive for others, particularly those that are small businesses or have low throughputs. Therefore, th e use of add-on controls is offered as an option rather than a mandated requirement.

PROPOSED AMENDMENTS

The proposed amendments modify the rule coating categories and VOC limits in accordance with the CARB SCM. Specifically, the proposed amendments: (1) combine Group I and Group II vehicle categories and establish VOC limits by coating category only; (2) eliminate the composite VOC limit for multistage systems and establish independent VOC limits for both the color and clear parts of the multistage coating sy stem; (3) combine the primer, primer surfacer, and primer sealer categories a nd establish a single category and VOC limit for primers; and, (4) eliminate the specialty coating category and repl ace it with specific categories and VOC limits.

Table 2 – Current and Proposed Coating Categorie s, below provides a summary of the existing and proposed coating categories and VOC limits for the main coating categories in Rule 1151. Table 3 – Current and Proposed Coating Categorie s - Specialty Coatings, provides a summary of the current and proposed categories and VOC limits for specialty coatings.Staff Report for Proposed Amended Rule 1151

FSR - 10 - December 2005 Table 2 – Current and Proposed Coating Categories

Existing VOC Limit (lbs/gal) Existing Coating Category Group I 1 Group II 2 Proposed Coating Category Proposed
VOC Limit

(lbs/gal)
Pretreatment

Pretreatment 6.5 6.5 Pretreatment 5.5

Primers

Primer 2.1 2.1

Primer Surfacer 2.1 2.1

Primer Sealer 2.1 2.8 Primer 2.1

Topcoats

General 2.8 3 3.5

Metallic/Iridescent 2.8 3.5 Single Stage Coating 2.8

Multi-Colored 5.7 5.7 Multi-Colored 5.7 Color Coating 3.5 4 Multistage 2.8 3 3.5 Clear Coating 2.1

1 Group I Vehicles include large truc ks, buses and mobile equipment.

2 Group II Vehicles include passenger cars, small-sized trucks and vans, medium-sized trucks and vans, motor homes, and motorcycles.

3 The VOC limit for sporty repairs on Group I Vehicles is 3.5 lb/gal.

4 Assuming a 2.1 lbs/gal clear coat ing VOC limit, the existing co lor coating VOC limits are 4.2 and 6.3 lbs/gal for Group I and II vehicles, respectively.Staff Report for Proposed Amended Rule 1151

FSR - 11 - December 2005 Table 3 – Current and Proposed Categories – Specialty Coatings

Existing VOC Limit (lbs/gal) Existing Coating Category Group I Group II Proposed Coating Category Proposed
VOC Limit

(lbs/gal) Specialty Coatings

Adhesion

Promoters 7.0 7.0 Adhesion Promoter 4.5

Uniform Finish
Blenders 7.0 7.0 Uniform Finishing Coating 4.5

Primer (Plastic/Flexible Primers) 2.1 Elastomeric
Materials 7.0 7.0

Clear Coat (Elastomeric Clears) 2.1

Anti-Glare Safety Coating 7.0 7.0 Any other Coating 2.1

Impact Resistant Coating 7.0 7.0 Any other Coating 2.1

Rubberized Asphaltic underbody Coating 7.0 7.0 Underbody Coating 3.6

Water Holdout Coating 7.0 7.0 Any other Coating 2.1

Weld Thru Coatings 7.0 7.0 Any other Coating 2.1

Bright Metal Trim Repair Coating 7.0 7.0 Any Other Coating 2.1

Other Not Currently in
Rule 1151 Truck Bed Liner Coating 2.6

The proposed amendments also add, in accord ance with the SCM, a pr ohibition of possession that will prohibit possession of non-compliant co atings unless specific c onditions are met. This prohibition will improve the enfo rceability of the rule by disc ouraging the unlawful use of noncompliant coatings. Further, the proposed rule language and structure of the rule has also changed to reflect the content of the CARB SCM. The modified coating categories and VOC limits for color and clear coatings are proposed to be effective on July 1, 2008, with a sellthrough provision in effect until January 1, 2009. This transitional period will allow users to become familiar with use of the new coating technologies with less impact to their ongoing operations. Consistent with the adopted SCM, the VOC limits for adhesion promoters, primers, and single-stage coatings are proposed to beco me effective January 1, 2010. The VOC limits for all other categories are proposed to become effective January 1, 2009. The prohibition of possession is to become effective July 1, 2006.Staff Report for Proposed Amended Rule 1151

FSR - 12 - December 2005 Finally, the proposed amendments also add language to the rule that exempts tertiary butyl acetate (TBAc) as a VOC for Rule 1151 operations on a limited basis. This limited exemption
deviates from the SCM recommendation that exempts TBAc as a VOC for all automotive refinish coatings. Cal/EPA c onducted an EIA pursuant to CEQA to determine the environmental impacts associated with granting an exemp tion for TBAc as a VOC the CARB Consumer Products Regulation. The EIA was performed as a collaborative effort that involved CARB, OEHHA, the SWRCB and the DTSC. The EIA for TB Ac concluded that the data concerning the adverse health effects from exposur e to TBAc were limited; and th erefore, it is not possible to characterize the potential for non-cancer health effects resulting form the potential exposures. However, because a metabolite, TBA, has been s hown to induce tumors in both rats and mice, exposure to TBAc may result in a cancer risk to humans if indeed a significant amount metabolizes into TBA. As part of the EIA work for TBAc, an inhalation unit risk factor for TBA was derived using TBA data. This inhalation unit risk factor was used to determine the carcinogenic risk of using TBAc by OEHHA. CARB concluded th at there were no significant impacts statewide associated with exemption of TBAc as a VOC in the definition in the CARB Consumer Products Regulation. Following this recommendation and using the information contained in the Cal/EPA EIA for TBAc, CARB staff, in the development of the SCM,
conducted a health risk assessment for TBAc usi ng an assumption that TB Ac would replace 50 percent of toluene, xylene and MEK in automo tive coatings. Their health risk assessment indicated a potential cancer risk of 2.8 in one m illion. Based on the results of their health risk assessment and the potential health benefits due to the low phot ochemical reactiv ity of TBAc, the SCM recommended that TBAc be exempt as a VOC for all automotive refinish coatings. At the federal level, TBAc was recently delisted as a VOC by U.S. EPA due to it’s low photochemical reactivity. As part of the federal delisting of TBAc the manufacturer of TBAc
committed itself to work with U.S. EPA to c onduct the additional long-term toxicity testing necessary to resolve the toxicity uncertainty of TBAc. As recommended by CARB, the District
has issued a Draft Environmental Assessm ent for PAR 1151. The Draft Environmental Assessment is based on the health analysis provid ed by Cal/EPA but uses a worst-case scenario in assessing potential carcinogen ic risk. The analysis of th e Draft Environmental Assessment examines the staff recommendation that TBAc use be limited to coating categories other than clear and color coatings. Staff believes that ther e are sufficient compliant coatings available on the market in the clear and color coating categor ies that will meet the VOC limits of the rule
without the use of TBAc. Howeve r, in other categories the use of TBAc is warranted to ensure the development of lower VOC coatings. The Draft Environmental Assessment concludes that the limited use of TBAc would result, for the largest automobile refinishing facility in the AQMD, in an estimated carcinogenic risk of fi ve in one million, which is lower than the significance threshold of 10 in one million for CEQA. Acute and chronic hazard indices were also estimated to be less than the significance threshold of 1.0. The Draft EA concludes that use of TBAc exemption would result for the largest au tomobile refinishing facility in the AQMD, in an estimated carcinogenic risk to the nearest reside ntial receptor of five in one million, which is lower than the significance threshold of 10 in one million for CEQA. Acute and chronic hazard
indices were also estimated to be less than the significance thres hold of 1.0. As can be seen in Graph 1, below the potential ca rcinogenic risk to the nearest residential receptor for approximately 90 percent of the faci lities subject to PAR 1151 is estim ated to be less than one in
one million.Staff Report for Proposed Amended Rule 1151

FSR - 13 - December 2005 Furthermore, the rule include s a commitment to conduct a tec hnical assessment on the use of TBAc by July 1, 2007. Upon completion of this tec hnical assessment, staff will report back to the Board on the appropriateness of mainta ining TBAc as a non-VOC. The proposed limited exemption will maintain the potential risk at low levels, while providing some level of flexibility in developing compliant coatings. To conduct its analysis AQMD is pl anning to review the further toxicity testing that the manufacturer of TBAc proposed as part of the federal delisting of TBAc. The manufacturer of TBAc was to perform toxicity testing to resolve the current uncertainty as it relates to TBAc toxicity and to submit those results to a scientific independent peer review panel to determine if additional testing was warranted.

Graph 1 – Carcinogenic Risk of the TBAc Exemption per Facility Grouping

0 200 400 600 800 1000 1200 1400 1600 1800

5 > 1 < 5 < 1

Carcinogenic Risk in a MillionNumber of Facilities

AFFECTED SOURCES/EM ISSIONS INVENTORY

There are approximately 3,500 facilities in the AQM D that use or handle automotive coatings. Approximately 1,700 facilities are fu lly dedicated to refinishing operations that currently operate approximately 2,500 spray booths under AQMD permit. The remaining facilities are believed to apply primer and single stage coat ings without the use of a spray booth. The facilities that make up the refinishing industry include: auto body repair/paint shops, production auto body paint shops, new car dealer repair/pai nt shops, fleet operato rs repair/paint shops, custom-made car fabrication facilities, and truck body builders.Staff Report for Proposed Amended Rule 1151

FSR - 14 - December 2005 The 2005 emissions inventory for this source category is estimated at 10.3 tpd. The 2010 emission inventory for 2010 is estimated at 11.2 t pd. The emissions inventory is based on the 2001 Survey of Automotive Refinish Coatings conducted by CARB. The emissions estimate for the AQMD was derived by adjusting the VOC emi ssions estimate for the State of California, approximately 20.7 tons per day (Ref. 2), using the regional population fact ors of 46 percent of the state population, and AQMP em ission growth factors to corre ct the 2001 CARB data to 2005 inventory. The AQMD inventory calculates to be 7,519,000 lbs/year or 10.3 tons per day. The VOC emissions inventory for refinishing operati ons in the AQMD is comprised of three main coating categories: emissions from undercoats, t opcoats, and specialty coatings. Tables 4, 5 and 6, provide the emissions percent distribution for each of the coating cate gories broken out by the relative contribution of Group I and Group II vehi cle categories in the existing rule. The emissions distribution presented in Tables 4, 5, and 6 was developed on information from previous Rule 1151 inventories as well as available AQMD perm it and annual emissions data, and reflects the relative percentage contribution of each coating category in the current emissions inventory. For example, the ba seline emission inventory for pretreatment coatings (150,380 lbs/year) was calculate d by multiplying the total current emissions inventory (10.3 tpd or 7,519,000 lbs/year) by the 2.0 perc ent contribution of pr etreatment coating to the total inventory (0.2 and 1.8 percent for Group I and Group II vehicles, respectively).

Table 4 - Emissions Inventory Percent Distribution - Undercoats

Coating Category Percent Contribution for Group I Vehicles Percent Contribution for Group II Vehicles

Primer 0.2 1.5

Primer Surfacer 0.4 3.4

Primer Sealer 0.2 2.3

Pretreatment 0.2 1.8

Subtotal 1.0 9.0

Total 10.0

Table 5 – Emissions Inventory Per cent Distribution – Top Coats

Coating Category Percent Contribution for Group I Vehicles Percent Contribution for Group II Vehicles Multistage Coating 8.0 72.1 Single Stage Coating 0.8 7.2 Multi-Colored Coating 0.1 0.8
Subtotal 8.9 80.1

Total 89.0Staff Report for Proposed Amended Rule 1151

FSR - 15 - December 2005 Table 6 – Emissions Inventory Percent Distribution – Specialty Coatings

Coating Category Percent Contribution for Group I Vehicles Percent Contribution for Group II Vehicles

Adhesion Promoters 0.03 0.22 Underbody Coating 0.01 0.07 Uniform Finishing Coating 0.07 0.60
Subtotal 0.11 0.89

Total 1.0

EMISSION REDUCTIONS

The emission reductions for the proposed amendmen ts are estimated at 3.7 tpd and are presented
in Table 7. The VOC emission redu ctions were calculated using a comparison of the current and proposed VOC emissions limits. Typically, this t ype of analysis is done on a solid basis. However, for this project, the replacement coatings are, in general, coatings that have the similar solid content by weight and speci fic gravity. The following provi des the information and steps used to develop and calcul ate the data in Table 7.

1. The total emissions inventory (7,519,000 lbs/y r) was distributed by categories using the information in tables 4, 5, and 6.

2. The baseline usage of coatings (gallons per ye ar), based on the curren t emissions inventory, was determined by dividing the emissions from each category by the current applicable VOC emission limit. This calculation yields the nu mber of gallons currently used by each of the affected categories, assuming all coatings sold are at the current applicable limit. Although this estimate is a calculated number, the results generated correspond well to the data reported under the CARB 2002 Survey of Automotive Coatings.

3. The usage for compliant coatings (gallons per y ear) is assumed to be equal to the estimated current usage since the solid content by wei ght, and specific gravity of both baseline and future coatings are assumed to be constant . This assumption is based on information provided by coating manufacturers.

4. The ending emissions are then calculated by multiplying the proposed coating usage by the proposed emission limit.

5. The emission reductions are calculated by using the difference of between current emissions and the ending emissions.Staff Report for Proposed Amended Rule 1151

FSR - 16 - December 2005 Table 7 – Emission Reductions

Baseline Proposed Emission
Reductions Coating Category Usage (gals/year) VOC
Limit (lbs/gal) Emissions (lbs/year) Usage (gals/year) VOC
Limit (lbs/gal) Emissions (lbs/year) (lbs/year) (tons/day)

Pretreatment 23,135 6.5 150,380 23,135 5.5 127,245 23,135 0.03 Group II
Primer
Sealer 61,763 2.8 172,937 61,763 2.1 129,703 43,234 0.06

Single Stage (Group II) 154,677 3.5 541,368 154,677 2.8 433,094 108,274 0.15

Group I Multistage (Color Portion) 143,219 4.2 601,520 143,219 3.5 501,267 100,253 0.14

Group II Multistage (Color Portion) 860,508 6.3 5,421,199 860,508 3.5 3,011,777 2,409,422 3.30

Adhesion

Promoter 2,685 7.0 18,798 2,685 4.5 12,084 6,713 0.01

Underbody Coating 859 7.0 6,015 859 3.6 3,094 2,922 0.004

Uniform Finishing Coating 7,197 7.0 50,377 7,197 4.5 35,215 15,162 0.02

Total 2,632,058 3.7

COST AND COST-EFFECTIVENESS

Although the proposed amendments to Rule 1151 are technology ne utral, the cost and costeffectiveness analyses for PAR 1151 are based on a scenario that color coatings will transition from solvent borne to waterborne technology and that compliant coatings are or will be available in the market for the other coating categories that are affected by the proposal. Information provided by automobile coating manufacturers as part of the SCM public testimony as well as communication with AQMD staff indicate that coating manufacturers will rely on waterborne technology already available in Europe to comply with the proposed VOC limits.

The cost and cost-effectiveness analyses for th e proposed amendments to Rule 1151 have two main cost components: 1) the cost to coa tings manufacturers to br ing waterborne technology into the California market, and 2) the upgrade (to use waterborne technology) cost to refinishing
facilities. No cost increases are assumed for the non-spray booth facilities since their operations will not change. These operations consist of the a pplication of primers and single-stage coatings that comply with the current and future VOC limits. Cince there is no additional equipment required and the cost of the compliant coatings is not expected to change, there will be no additional cost to these operators.Staff Report for Proposed Amended Rule 1151

FSR - 17 - December 2005 The cost and cost-effectiveness analyses are based on the following assumptions that were developed in collaboration with CARB staff as part of the CARB SCM development work.

1) The total cost to coating manuf acturers to bring waterborne technology into the California market is approximately $14.4 million in non- reoccurring costs (C ARB 2005). Assuming that the AQMD represents approximately 46 pe rcent of the automotive refinish industry (based on population), the cost to manufacturer s to supply waterborne coatings to the AQMD is estimated at $6,624,000.

2) The capital costs for retrofit equipment at refi nishing facilities is based on production (using total annual revenue as a surrogate), retrof it costs are capital investment costs for air movement equipment, heating equipment, re placement of mixing bank lids, upgrade of spray gun equipment, and the cost to upgrade wast e disposal equipment. There are other nonreoccurring costs associate the change from solvent-borne to water-borne technology; these costs include employee training, mate rial loss, and other incidental costs. All these costs and operational and maintenance costs are presente d by facility size in Table 8. The cost presented in Table 8, were developed using the assumptions CARB staff used to estimate the cost of the CARB SCM. The per facility co sts are the same used in the CARB SCM. However, the distribution of f acilities is based on AQMD data using Dunn & Bradstreet data for the AQMD facilities.

Table 8 – Capital, Non-Recurring, and O & M Estimates per Facility by Facility Size

Facility Size/Description Non-Recurring Retrofit Equipment

Costs Other Non-Recurring

Costs O & M Costs (annual cost)

Small
One booth $3,100 $3,500 $155
Small Two booths $4,700 $3,500 $235

Medium Two booths no heating equipment $37,500 $4,500 $1,875

Medium Two booths and existing heating equipment $11,500 $4,500 $575 Large Two booths and existing heating equipment $41,500 $6,500 $2,075 Large
Three booths and existing heating equipment $61,500 $6,500 $3,075Staff Report for Proposed Amended Rule 1151

FSR - 18 - December 2005 3) There are 1,726 dedicated automotive refini shing facilities in the AQMD operating approximately 2,500 spray booths.

4) 25 percent of the spray booths ar e heated-downdraft spray-booths.

5) The facility distribution base d on revenue, verified through Dunn & Bradstreet, are 78, 9, and 13 percent small, medium, and large faciliti es, respectively. Small, medium, and large
facilities are facilities with annua l revenues of under $1,000,000, $1,000,000 to $2,500,000, and over $2,500,000, respectively.

Based on these assumptions, the co st for the proposed amendments is presented in Table 9 – Cost Analysis. The costs are the product of the number of facilities in each category multiplied by the cost per facility presented in Table 7.

Table 9 – Cost Analysis

Facility Size/Description Facility Count Non-Recurring
Retrofit Equipment Cost Other Non-Recurring
Cost Annual
O & M

Small
w/ 1 booth 1157 $3,586,700 $4,049,500 $179,335

Small
w/ 2 booths 170 $799,000 $595,000 $39,950

Medium w/ two booths no heating equipment 84 $3,150,000 $378,000 $157,500

Medium w/ 2 booths and existing heating equipment 91 $1,046,500 $409,500 $52,325

Large w/ two booths and existing heating equipment 60 $2,490,000 $390,000 $124,500

Large w/ two booths and existing heating equipment 164 $10,086,000 $1,066,000 $504,300

Totals 1726 $21,158,200 $6,888,000 $1,057,910

The cost-effectiveness of the SCM was estimated by CARB staff using the levelized cash flow method of analysis. Consistent with the AQMD cost-effectiveness proce dures, the discount cash flow method of analysis is used to calculate the cost-effectiveness for the proposed amendments
to Rule 1151. The cost-effec tiveness for the proposed amendm ents is calculated by the following equation.

CE = [Capital Cost + (11.118 x Annual O& M)]/(Annual Emission Reductions x 15)Staff Report for Proposed Amended Rule 1151

FSR - 19 - December 2005 Where, Capital Cost = Non-recurring costs to manufacturers + Non-recurring equipm ent costs + non-recurring
other cost

11.118 = Present value factor for 15 years at 4% interest 15 = Assumed Productive Life of the Equipment in years

The cost-effectiveness for the proposed amendments is:

CE = [($6,624,000 + $21,158,200+$6,888,000) + ($1,057,910* 11.118)]/1351*15

CE = ($34,670,200 + $11,761,843)/20,265 tons

CE = $46,432,043/20,265 tons

CE = $2,291 per ton of VOC Reduced

INCREMENTAL COST-EFFECTIVENESS

The incremental cost-effectiveness for Proposed Amended Rule 1151 is based on the affected facilities complying through the use of add-on controls. Specifically, this control option assumes that all spray booths op erated by the automotive refinishi ng industry are controlled by addcontrols rather than the implementation of wa terborne technology. The add-on control system assumed for this control option is a hybrid add-on c ontrol system that uses adsorption and catalytic incineration to achieve ove rall emission reductions of at least 85 percent. This type of system is considered Best Available Control Technology for integrated automotive downdraft spray booths. The capital and installation cost to equip one spray booth with such a system is estimated at $150,000. 3 There are approximately 2,500 spra y booths operated by the refinishing industry in AQMD. Therefore, th e total cost to equip all spray booths with add-on controls is
estimated at 375 million dollars. The additional emission reductions are estimated by assuming 90 percent capture efficiency and a 95 destructi on efficiency across the control device or 85 percent overall control efficiency. The alte rnative compliance option yields an emission reduction of 8.8 tpd. The compliance option pr oposed by AQMD staff yi elds an emission reduction of 3.7 tpd. Therefore, the additional emission reductions are estimated to be 5.1 tpd or 1862 tons per year.

Using the discounted cash flow method the annual cost of this contro l option assuming 15 years life for the equipment is calculated using the following equation:

Annual Cost of Control Option = [Cap ital Cost + (11.118 x Annual O& M)]/15

Where,

3 CAPCOA 2003 Engineering Symposium, April 1, 2003.Staff Report for Proposed Amended Rule 1151

FSR - 20 - December 2005 11.118 = Present value factor at 15 years and 4% interest Capital Cost for this control option= $375,000,000 Annual O & M (Estimated to be 10%of Capital Cost) = $37,500,000

Annual Cost of Control Option = [$375,000,000 + (11.118) 37,500,000)]/15

= $791,925,000/15 = $52,795,000

The incremental cost-effectiveness is calculated by using the following equation:

ICE = [Annual Cost of Control Option – Annual Cost of Proposal] /[Control Option Emission Reductions – Em issions reductions of the proposal].

ICE = [$ 52,795,000- $3,095,470]/[3,212 – 1,351 tons]

ICE = $49,699,530/1,861 tons

ICE = $26,706 per ton of additional VOC reduced.

COMPARITIVE ANALYSIS

As required by Health and Safety Code Sectio n 40727.2, the purpose of th is analysis is to identify and compare any other AQMD, or federal regulations that apply to the same equipment or source type. 40 CFR Part 9 and 59 – Na tional Volatile Organic Compound Emissions Standards for Automotive Refinish Coatings (National Rule), sets VOC limits for some of the categories in Proposed Amended Rule 1151. These VOC limits are applicab le to all coatings manufactured for use, or coat ings imported for use in the Un ited States. The categories and limits set by the national rule are presented in Table 10 – National Ru le Categories and VOC Limits. The VOC limits of PAR 1151 are generall y more stringent than those of the national rule, with the exception of multi-colo red topcoats that is the same.

Table 10 – National Rule Categories and VOC Limits

VOC Content Less Water and Exempts Coating Category PAR 1151 (g/l) National Rule (g/l)

Pretreatment Wash Primer 250 780

Primer/Primer Surfacer 250 580

Primer Sealer 250 550 Single/2-stage Topcoats 340/250-420 600 Topcoats of 3 or more stages 250-420 630 Multi-Colored topcoats 680 680 Specialty Coatings 60-660 840

DRAFT FINDINGSStaff Report for Proposed Amended Rule 1151

FSR - 21 - December 2005 Before adopting, amending or repealing a rule , the AQMD shall make findings of necessity, authority, clarity, consistency, non- duplication, and reference, as defined in Health and Safety
Code Section 40727. The draf t findings are as follows:

Necessity - The AQMD Governing Board finds and de termines that Proposed Amended Rule 1151 – Motor Vehicle and Mobile Equipment N on-Assembly Line Coating Operations, is necessary in order to implemen t the 2003 Ozone Air Quality Management Plan and to achieve the VOC emission reduction targets.

Authority - The AQMD Governing Board obtains its auth ority to adopt, amend or repeal rules and regulations from Health and Safety Code §§40000, 40001, and 40440.

Clarity - The AQMD Governing Board finds and de termines that Proposed Amended Rule 1151 – Motor Vehicle and Mobile Equipment Non-Assemb ly Line Coating Operations, is written and displayed so that the meaning can be easily understood by persons directly affected by it.

Consistency – The AQMD Governing Board finds and de termines that Proposed Amended Rule 1151 – Motor Vehicle and Mobile Equipment Non- Assembly Line Coati ng Operations, is in harmony with, and not in conflict with or contradi ctory to, existing statut es, court decisions, or federal or state regulations.

Non-Duplication – The AQMD Governing Board has dete rmined that Proposed Amended Rule 1151 – Motor Vehicle and Mobile Equipment Non- Assembly Line Coating Operations, does not impose the same requirements as any ex isting state or fe deral regulations.

Reference - In adopting these proposed amendments , the AQMD Governing Board references the following statutes which AQMD hereby implements, interprets or makes specific: Health and Safety Code Sections 40001 and 40440.

PUBLIC COMMENTS AND RESPONSES

Comment 1: The District should not exempt TBAc as part of the pr oposed amendments to Rule 1151. The appropriate rule to consider th e exemption of TBAc as a VOC is Rule 102. However, the commenter opposes a full or limited exemption of TBAc as a
VOC on the basis that there is little toxicity informa tion on TBAc. Currently, the exemption of TBAc can only be evaluated using an inhalation unit risk value for tert-butyl alcohol (TBA) which is a meta bolic product of TBAc. There is limited toxicity data available for TBAc itself a nd the chemical has not been tested for chronic toxicity. If TBAc were a carci nogen and was a more potent carcinogen than TBA, the risk calculated for TBAc would be underestimated.

Response 1: The exemption of TBAc as a VOC for au tomotive refinishing is being addressed
within the amendments to Rule 1151 and not in Rule 102 consistent with the recommendations made by Cal/EPA as part of their environmental document to exempt TBAc from the VOC definiti on in the CARB Consumer Products Regulation.Staff Report for Proposed Amended Rule 1151

FSR - 22 - December 2005 At this point, AQMD staff has decided to examine the impacts of TBAc as a VOC to be evaluated specifically for this industry opposed to a complete exemption
under Rule 102.

CARB evaluated the exemption of TBAc as a VOC in their SCM. Based on their analysis the maximum carcinogenic risk was estimated at 2.8 in one million. AQMD staff evaluated the potential ca rcinogenic risk ba sed on a more conservative analysis for the TBAc exemption by including the possible replacement of other exempt compounds namely PCBTF and acetone. This assessment was part of the CEQA analysis for PAR 1151 and is included in the Draft Environmental Assessment (EA). Based on AQMD risk assessment analysis and public comments, staff has concluded that the exemption should be limited to Rule 1151 coating categories other than the color and clear coating categories. The limited exemption using a worst case analysis (that includes the 100 percent replacement of PCBTF and acetone with TBAc) estimated a carcinogenic risk of five in one million for 13 facilities subject to PAR 1151. However, it is important to note that of the remaining facilities, 105 would have a
risk between one and less than five in one million, and 1,609 would have a risk of less than one in one million. Additionally, the results of the worst case carcinogenic risk analysis are below the CEQA threshold of 10 in one million. Furthermore, staff is also proposing to conduct a technical analysis regarding the toxicity or potential toxicity of TBAc. This commitment is included in the proposed rule language and will also be included in the Adopting Board
Resolution.

Comment 2: The AQMD should conduct additional studies to ensure that TBAc is not a health risk if it is exempted as a VOC in the proposed amendments to Rule 1151.

Response 2: In considering the exemption for TBAc AQ MD staff conducted a risk analysis as part of the CEQA analysis and include d it in the Draft EA (see response to comment 2) and has evaluated the public comments on the issue. Based on this analysis and public comments received that included the benefits of TBAc in the reduction of ground level ozone, staff has concluded that a limited exemption for TBAc as a VOC is appropriate.

Comment 3: TBAc and its metabolic product TBA have not been found to be a carcinogen by any national or international public health research organization. TBAc has been exempted as a VOC by U.S.EPA a nd CARB has recommended the AQMD to exercise caution when exempting TBAc as a VOC. TBAc w ould provide health benefits by replacing know n toxic air contaminants in automotive refinishing coatings including toluene, xylene, and MEK. The CARB TBAc environmental impact analysis states that the bene fits from ozone re duction outweigh anyStaff Report for Proposed Amended Rule 1151

FSR - 23 - December 2005 perceived toxic effects of TBAc. On th is basis, we request the AQMD issue a complete exemption of TABC as a VOC.

Response 3: As stated in response to comment 1, st aff has evaluated the exemption of TBAc
and has concluded based on the results of health risk an alysis and public testimony that a limited exemption for TBAc would effectively minimize the potential health risk while providing some flexibility in formulating compliant products. To this end, staff is proposing to exempt TBAc as a VOC only for Rule 1151 coating categories, other than the color and clear coating categories.

Comment 4: The majority of the emission reductions benefits from the proposed amendments to Rule 1151 are generated from the reduction on the VOC limit for the color coating category. Currently, there are no compliant coati ngs available to meet the proposed limits for primer sealer, adhesi on promoters, and single stage coatings for Group II type vehicles. We request that the AQMD maintain the current VOC limits for these three coating categories. The impact in terms of VOC emission reductions to the proposed project is minimal.

Response 4: According to information provided to CARB and AQMD staff, there are epoxy, isocyanate-free, and polyurethane two-co mponent primer sealers for automotive refinishing (Group II quality) currently av ailable in the market that meet the proposed VOC limit of 2.1 pounds per gall on. Relative to the adhesion promoters, CARB has received inform ation from coating manufacturers indicating that compliant products would s oon be available in the market place. The effective compliance date of January 1, 2009 allows the time necessary for completion of the development of compliant coatings and their implementation in the market place.

Comment 5: There are products available in the market s that meet the proposed limits for the primer (primer sealer for passenger vehicles) and the single stage coating categories.

Response 5: Thank you, your comment has been noted.

Comment 6 : Please specify the specific conditions for compliance with the prohibition of possession.

Response 6: Effective July 1, 2006, a pe rson can be in possession of non-compliant coatings only if the coating is located at a facility that an emission control device and those coatings meet the limits specified in th e permit conditions of the coatings at the facility or the coating is lo cated at a facility that ope rates in compliance with an approved alternative complian ce plan or the coatings are needed at an exemptStaff Report for Proposed Amended Rule 1151

FSR - 24 - December 2005 coating training center or exempted prototype motor vehicle manufacturing facility.

Comment 7: The future proposed VOC limits will cause manufacturers to change the
chemistries of current automotive coati ngs. The new complia nt coatings will most likely require changes to the met hods and techniques of how the automotive coating “shops” effectively apply these new coatings. Automotive coating applicators will need some time to familia rize themselves with these new coating technologies prior to the proposed effective date of January 1, 2009. Please consider phasing-in the proposed future li mits for the different categories rather than having them effective at the same time.

Response 7: Staff has revised the proposed amendments to phase in the proposed VOC limits for color and clear coatings effective on July 1, 2008. At the same time, staff has included a sell-through provi sion that allows the sa le, possession and use of noncompliant color and clear coatings until December 31, 2008. This revision will provide coating applicators six months to familiarize themselves with the new color and clear coating technologies. All other VOC limits will be effective January 1, 2009. The proposed amendments to Rule 1151 are co mparable to the CARB SCM that has an implementati on date of January 1, 2009, with no sell through provision for these categories.

Comment 8: As it relates to the exis ting version of Rule 1151, pl ease clarify whether sport utility vehicles (SUVs) that have a manu facturer’s gross vehi cle weight greater than 8,600 pounds are Group I Vehicles or Group II Vehicles.

Response 8: At the time Rule 1151 was last ame nded there were no SUVs that had a manufacturer’s gross vehi cle weight of greater than 8,600 pounds. A SUV, regardless of the gross wei ght, is designed primarily to transport less than twelve passengers and clearly fits the definiti on of passenger car. Although, there is overlap with the definiti on of bus and large truck based on the 8,600 pound gross vehicle weight for some SUVs, the func tion of an SUV more closely fits the definition of passenger car and for the purpose of Rule 1151 all SUVs are classified as Group II Vehicles.

Comment 9: The compliance date for adhesion promoter s, primers, and single-stage coatings was delayed to January 1, 2010 as part of the adoption by CA RB of the SCM for Automotive Coatings on October 20, 2005. Please be consistent with the SCM and delay the implementation date for adhesion promoters, primer, and singlestage coatings to January 1, 2010.

Response 9: The implementation date for the adhesi on promoters, primers and single-stage coating categories has been moved from January 1, 2009 to January 1, 2010.Staff Report for Proposed Amended Rule 1151

FSR - 25 - December 2005 Comment 10: Please be aware that there are UV-tec hnology based compliant coatings available to meet the proposed VOC limits. Please include this information in the staff
report.

Response 10: Staff agrees that UV coatings may be av ailable that can and will meet the current
and future VOC limits in PAR 1151. PAR 1151 is technology neutral and any coating that complies with the VOC limits specified in the rule may be used.Staff Report for Proposed Amended Rule 1151

FSR - 26 - December 2005 REFERENCES

1. Final Staff Report for: Proposed Amended Rule 1151 – Motor Vehicle and Mobile Equipment Non-Assembly Line Coating Operations, August 6, 1991.

2. Staff Report for the Proposed Suggested Control Measure for Automotive Coatings,
California Environmental Prot ection Agency, Air Resources Board, Stationary Source Division, Measures Assessment Branch, October 2005.

3. Directive 2004/42/CE of the European Pa rliament and of the council, April 2004

4. European Commission Reducing VOC Emissions fr om the Vehicle Refinishing Sector, Entec UK Limited and The Paint Research Association, August 2000.

5. 40 CFR Part 51, Revision of Volatile Organic Compounds - Exclusion of t-butyl Acetate, USAEPA, December 2004.

6. EnviroCure Abatement Systems, CAPCOA 2003 Engineering Symposium, April 2003.

7. 40 CFR Parts 9 and 59 – National Volatile Organic Compound Emission Standards for Automobile Refinishing Coatings.

8. Environmental Impact Assessment of Tertiary-B utyl Acetate (Draft) Staff Report, Cal/EPA
CARB June 2005