Automotive Coatings Suggested Control Measure



## STAFF REPORT

FOR THE

PROPOSED SUGGESTED CONTROL MEASURE

FOR AUTOMOTIVE COATINGS

Stationary Source Division

Measures Assessment Branch

October 2005Automotive Coatings Suggested Control Measure



### State of California

AIR RESOURCES BOARD



## STAFF REPORT

FOR THE

PROPOSED SUGGESTED CONTROL MEASURE

FOR AUTOMOTIVE COATINGS

To be considered by the Air Resources Board on Octo ber 20 and 21, 2005, at:

California Environmental Protection Agency

Headquarters Building

1001 “I” Street Sacramento, California

Stationary Source Division: Robert Fletcher, Chief Robert D. Barham, Assistant Chief

Measures Assessment Branch: Barbara Fry, Chief Technical Development Section: Jose Gomez, Manager

This report has been prepared by the staff of the A ir Resources Board. Publication does not signify that the contents reflect the views and pol icies of the Air Resources Board, nor does mention of trade names or commercial products const itute endorsement or recommendation for

use.Automotive Coatings Suggested Control Measure



### State of California

AIR RESOURCES BOARD



## STAFF REPORT

FOR THE

PROPOSED SUGGESTED CONTROL MEASURE

FOR AUTOMOTIVE COATINGS

Contributing Authors

David Mehl (Lead) Nancy Adams Christian Hurley Marcia Jorgensen Reza Mahdavi, Ph.D. Gary Mouradian Lynna Negri

Legal Counsel

Diane Kiyota, Esq., Office of Legal Affairs Robert Jenne, Esq., Office of Legal AffairsAutomotive Coatings Suggested Control Measure



### Acknowledgements

We wish to acknowledge the participation and assist ance of air pollution control and air quality management districts. In particular, we wo uld like to thank the following district representatives that participated in the ARB/Distri ct Working Group:

Dan Belik, Bay Area Air Quality Management District Victor Douglas, Bay Area Air Quality Management Dis trict Bob McLaughlin, Butte County Air Quality Management District Dave Valler, Feather River Air Quality Management D istrict Kevin Williams, Sacramento Metropolitan Air Quality Management District Steven Moore, San Diego County Air Pollution Contro l District Esteban Gutierrez, San Joaquin Valley Air Pollution Control District Scarlett Noguera, San Joaquin Valley Air Pollution Control District Laki T. Tisopulos, South Coast Air Quality Manageme nt District Larry Bowen, South Coast Air Quality Management Dis trict Ed Muehlbacher, South Coast Air Quality Management District Ricardo Rivera, South Coast Air Quality Management District Stan Cowen, Ventura County Air Pollution Control Di strict Keith Duval, Ventura, San Joaquin Valley Air Pollut ion Control District Rebecca Geyer, Yolo Solano Air Quality Management D istrict Francisco Donez, U.S. EPA Region IX

We would also like to acknowledge the participation and assistance of:

Akzo Nobel

BASF

Bondo

Cumberland

DuPont

Earl Scheib

Ellis Paint

Fibre Glass - Evercoat

Hentzen

Jones-Blair Magni

Montana Products

PPG

Sherwin Williams Spies Hecker

Standox ValsparAutomotive Coatings Suggested Control Measure

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### TABLE OF CONTENTS

PAGE

EXECUTIVE SUMMARY ES-1

I. BACKGROUND

A. Overview I-1 B. Automotive Coatings Manufacturers I-2

C. Automotive Refinishing Facilities I-3

D. Regulatory Authority I-4

1. District Rules in California I-4

2. The National Automotive Coatings Rule I-6

3. California Clean Air Act I-7

II. DEVELOPMENT PROCESS FOR SUGGESTED CONTROL MEAS URE A. Automotive Coatings 2002 Survey II-1

B. Districts and U.S. EPA II-1

C. Public Process II-2

D. Evaluation of the District Rules and National Rule II-3 E. Technology Assessment II-3 F. Cost Analysis II-4

III. PROPOSED SUGGESTED CONTROL MEASURE A. Applicability III-1

B. Definitions III-1

C. Standards III-1

D. Administrative Requirements III-3

E. Test Methods III-4

IV. DESCRIPTION AND TECHNICAL ASSESSMENT OF THE COA TING

CATEGORIES AND SOLVENTS

A. Introduction IV-1 B. Categories that are in the SCM IV-4

1. Adhesion Promoter IV-4

2. Clear Coating IV-6

3. Color Coating IV-7

4. Multi-Color Coating IV-8

5. Pretreatment Coating IV-8

6. Primer IV-10

7. Single-Stage Coating IV-12

8. Temporary Protective Coating IV-13

9. Truck Bed Liner Coating IV-13

10. Underbody Coating IV-14

11. Uniform Finish Coating IV-14

12. Any Other Coating Type IV-15

C. Solvents IV-17Automotive Coatings Suggested Control Measure

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### TABLE OF CONTENTS

PAGE
V. AMBIENT AIR QUALITY AND EMISSIONS A. Ambient Air Quality and the Need for Emission Re ductions V-1

1. Ozone V-1

2. Fine Particulate Matter V-3 B. Estimated Emissions from Automotive Coatings V-9

VI. ENVIRONMENTAL IMPACTS A. Analysis of Reasonably Foreseeable Environmental Impacts of the Methods of Compliance VI-1

1. Potential Wastewater Impacts VI-1

2. Air Quality Impacts VI-2

3. Potential Hazardous Waste Impacts VI-6

4. Reasonably Foreseeable Feasible Mitigation Measures VI-7

5. Alternatives to the Proposed SCM VI-8 B. Community Health and Environmental Justice VI-8

VII. ECONOMIC IMPACTS

A. Introduction VII-1

1. Summary of Economic Impact VII-1

2. General Approach for Cost Estimation VII-2

3. Sources and Treatment of Cost Data VII-3 B. Annual Costs and the Cost-Effectiveness (C.E.) o f the Proposed SCM VII-4

1. Introduction VII-4

2. Methodology VII-4

3. Assumptions VII-5

4. Results VII-6

C. Economic Impacts on California Businesses VII-7

1. Legal Requirements VII-7

2. Potential Impact on California Businesses VII-7

3. Affected Businesses VII-7

4. Potential Impact on Employment VII-10

5. Potential Impact on Business Creation, Elimination, or Expansion VII-10

6. Potential Impact on Business Competitiveness VII-10

D. Potential Impacts on California State or Local Agen cies VII-11 E. Potential Impacts on California Consumers VII-11Automotive Coatings Suggested Control Measure

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APPENDICES A: Proposed Suggested Control Measure for Automotiv e Coatings A-1 B: 2002 Automotive Coatings Survey B-1 C: Summary of Cost Analysis Methodology C-1 D: Categories that are not in the SCM D-1

TABLES ES-1 Proposed Coating Categories and VOC Limits ES- 3 ES-2 Districts with Automotive Coatings Rules ES-6 ES-3 Chronology of the Automotive Coatings SCM Deve lopment ES-6

ES-4 Estimated Emission Reductions from Automotive Coatings ES-10 I-1 Top Seven Coatings Manufacturers I-2 I-2 Chronology of Development of Coating Technologi es I-3 I-3 Distribution of Automotive Refinishing Faciliti es Grouped by Total Annual

Revenue in 2002 I-4

I-4 Estimated Number of Automotive Refinishing Faci lities by District I-4 I-5 Existing District Rules I-5 I-6 Summary of VOC Limits I-6 II-1 List of Public Workshops and Meetings II-2 III-1 Proposed Coating Categories and VOC Limits II I-2 IV-1 Compliance Summary IV-2 IV-2 Comparison of Coating Categories IV-3 IV-3 Basic Physical Parameters IV-15 IV-4 Technical Feasibility IV-16 V-1 Ambient Air Quality Standards for Ozone, PM 10 and PM 2.5 V-4 V-2 Summary of the 2002 Automotive Coatings Survey V-9

V-3 Estimated Emissions and Emission Reductions fro m Automotive Coatings V-10 VII-1 Changes in Return on Owner’s Equity (ROE) for Typical Businesses in the Automotive Refinishing Industry VII-9

FIGURES V-1 Population-Weighted Exposure to Ozone Concentra tions Above the State Ambient Air Quality Standard V-2

V-2 2004 Area Designations for State Ambient Air Qu ality Standards-Ozone V-6 V-3 2004 Area Designations for State Ambient Air Qu ality Standards – PM 10 V-7 V-4 2004 Area Designations for State Ambient Air Qu ality Standards – PM 2.5 V-8Automotive Coatings Suggested Control Measure

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ACRONYMS 2002 Survey 2002 Automotive Refinish Survey

APA Administrative Procedure Act AQMP Air Quality Management Plan

ARB/Board Air Resources Board

ATCM Airborne Toxic Control Measure BAAQMD Bay Area Air Quality Management District Cal/OSHA California Department of Industrial Relati ons, Division of Occupational

Safety and Health Administration

CAPCOA California Air Pollution Control Officers’ A ssociation

CCAA California Clean Air Act CCR California Code of Regulations C.E. Control Efficiency CESQG Conditionally Exempt Small Quantity Generator s CEQA California Environmental Quality Act CFR Code of Federal Regulations CRF Capital Recovery Factor district Air Pollution Control or Air Quality Manag ement District DTSC Department of Toxic Substances Control EU European Union

FCAA Federal Clean Air Act g/l Grams Per Liter

HAP Hazardous Air Pollutant HEPA High Efficiency Particulate Abatement

HRA Health Risk Assessment HSC Health and Safety Code HVLP High Volume Low Pressure MEK Methyl Ethyl Ketone NAICS North American Industry Classification System NAP Neighborhood Assessment Program NIOSH National Institute for Occupational Safety an d Health

NO
x Nitrogen Oxides

OEHHA Office of Environmental Health Hazard Assessm ent OEM Original Equipment Manufacturer

PCBTF Parachlorobenzotrifluoride PEL Permissible Exposure Limit

PM Particulate Matter

PM 10 Particulate Matter with an aerodynamic diameter le ss than or equal to

10 microns

PM 2.5 Particulate Matter with an aerodynamic diameter le ss than or equal to

2.5 microns ppm parts per million REL Reference Exposure Level ROE Return On Owner’s Equity RTS Ready To Spray SCAQMD South Coast Air Quality Management DistrictAutomotive Coatings Suggested Control Measure

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ACRONYMS SCM Suggested Control Measure

SIC Standard Industrial Classification SIP State Implementation Plan SJVUAPCD San Joaquin Valley Unified Air Pollution C ontrol District SMAQMD Sacramento Metropolitan Air Quality Manageme nt District SOA Secondary organic aerosols

SRP Scientific Review Panel SWA Sales-Weighted Average

TAC Toxic Air Contaminant TBAC Tertiary-Butyl acetate TCLP Toxicity Characteristic Leaching Procedure TE Transfer Efficiency tpd tons per day TSP Total Suspended Particulate ug Microgram ug/m3 Micrograms per Cubic Meter U.S. EPA United States Environmental Protection Age ncy VOC Volatile Organic Compound

VOC act VOC in grams per liter of coating

VOC reg VOC in grams per liter of coating, excluding water and exempt compoundsAutomotive Coatings Suggested Control Measure

ES-1

EXECUTIVE SUMMARY

In this executive summary, we provide a summary of the information provided in the staff report. The executive summary is written in “question and answer” format and

includes:

 Background;

 SCM development process and evaluation of alternat ives;

 Summary of the proposed Suggested Control Measure (SCM);

 Technical analysis of coating categories in the pr oposed SCM;

 Environmental Impacts;

 Economic Impacts; and

 Future Plans.

I. BACKGROUND

What are automotive coatings?

Automotive coatings, as defined in the SCM, are coa tings that are applied to motor vehicles and mobile equipment. Automotive coatings are sold as components that must be mixed to be applied. The main coating cate gories include primers, color coatings, and clear coatings. These three broad ca tegories of coatings account for about 84 percent of the sales reported in 2001. Th e remaining sales consist of a variety of coatings such as pretreatment coatings o r adhesion promoters intended for use on bare metal or plastics. Automotive coatings , as defined in this SCM, do not include aerosol coatings (e.g., spray paint) or ori ginal equipment manufacturer coatings.

What are the emissions from automotive coatings?

The annual average volatile organic compound (VOC) emissions from automotive coatings are estimated to be about 20.7 tons per da y in California in 2001 or about two percent of the total stationary source VOC emission s statewide. When automotive coatings are applied, the solvents that hold the co atings in suspension evaporate into the atmosphere and contribute to VOC emissions.

VOC emissions are precursors to the formation of oz one and particulate matter (PM), California’s most serious air quality problems. VO Cs react photochemically with oxides of nitrogen (NO
x ) to form ozone. Ozone is a strong oxidizer that i rritates the human respiratory system, increases airway hyperreactivit y, increases airway inflammation, and damages plant life and property. Exposure to o zone is also associated with premature death, hospitalization for cardiopulmonar y causes, asthma episodes and restrictions in physical activity. VOCs also react in the atmosphere to form PM which consists of very small liquid and solid particles s uspended in the air. PM includes particles smaller than 10 microns in size (PM 10 ), as well as the subset of fine particles smaller than 2.5 microns in size (PM 2.5 ). PM 10 and PM 2.5 are inhaled deeply into the lungs and reduce human pulmonary function. Prematu re deaths linked to PM 10 andAutomotive Coatings Suggested Control Measure

ES-2

PM 2.5 exposure are now at levels comparable to deaths fro m motor vehicles and second

hand smoke. PM 10 and PM 2.5 may also contain toxic compounds. In the atmospher e, PM 10 and PM 2.5 reduce visibility.

Who is responsible for controlling VOC emissions fr om automotive coatings?

Control of emissions from automotive coatings is pr imarily the responsibility of the local air pollution control and air quality management di stricts (districts). However, the Air Resources Board (ARB) provides technical support to districts through the development of SCMs and other similar efforts. ARB staff, in c ooperation with the districts, has developed the proposed SCM for automotive coatings. The SCM will serve as a model for districts when adopting and amending their auto motive coatings rules. The proposed SCM, in part, relies upon the efforts of t he Enforcement Managers Committee

of the California Air Pollution Control Officers’ A ssociation. The proposed SCM reflects nearly four years of study of automotive coatings, and was developed in cooperation with the districts, the United States Environmental Protection Agency (U.S. EPA), and the affected industry.

Why are we proposing the SCM?

We are proposing the SCM to promote consistency and uniformity among district rules and to achieve VOC emission reductions. The propos ed SCM will also improve the enforceability of the rules by simplifying coating categories and establishing individual VOC limits for color coatings and clear coatings.

The proposed SCM will achieve significant emission reductions from this category. Many of the facilities that use these coatings are located in or near residential areas and can create disproportionate impacts to neighbor hoods. Reducing emissions in neigborhoods is part of the ARB’s Environmental Jus tice Policies and Goals. The emission reductions achieved by the SCM will help t he districts meet state implementation plan (SIP) and California Clean Air Act (CCAA) plan requirements.

How are emissions from automotive coatings controll ed in the SCM?

Automotive coatings contain solvents which evaporat e when they are applied. Most of the solvents used in automotive coatings are VOCs t hat contribute to California’s air quality problems. The SCM controls VOC emissions b y establishing limits on the VOC content of automotive coatings. These VOC limits a re expressed in grams of VOC per liter of coating, less water and exempt compounds, and vary with each coating category. In general, manufacturers will meet the VOC limits by replacing some of the solvents in automotive coatings with water or other exempt compounds 1 , or by increasing the amount of solids, such as resins and pigments or a combination of these approaches.

1 Solvents with low photochemical reactivityAutomotive Coatings Suggested Control Measure

ES-3

II. SUMMARY OF PROPOSED SUGGESTED CONTROL MEASURE (SCM)

What automotive coating categories are in the propo sed SCM?

As shown in Table ES-1 below, the proposed SCM (see Appendix A) will establish VOC content limits for twelve coating categories of aut omotive coatings. Many of these automotive coating categories are similar to those in existing district rules. The SCM would lower VOC limits for many categories but woul d retain some VOC limits currently

in effect in California.

Table ES-1 - Proposed Coating Categories and VOC Li mits VOC regulatory limit as applied Effective January 1, 2009
Coating Category grams/liter (pounds per gallon*)

Adhesion Promoter 540 4.5 Clear Coating 250 2.1 Color Coating 420 3.5 Multi-Color Coating 680 5.7 Pretreatment Coating 660 5.5

Primer 250 2.1 Single-Stage Coating 340 2.8 Temporary Protective Coating 60 0.5 Truck Bed Liner Coating 310 2.6 Underbody Coating 430 (3.6 Uniform Finish Coating 540 4.5 Any other coating type 250 2.1

* English units are provided for information only. VOC limits are expressed in grams VOC per liter of coating, less water and exempt compounds.

How does the proposed SCM differ from existing dist rict rules?

Current district rules have two sets of VOC limits for automotive coatings. The automotive coatings used on passenger cars typicall y have higher VOC limits than the automotive coatings used on large vehicles such as trucks and buses (commonly referred to as Group I and Group II vehicles). The district rules also have composite VOC limits for multi-stage systems that apply to th e total VOC content of the color coat and clear coat combined. The proposed SCM would es tablish a single set of VOC limits for all automotive coatings and would elimin ate the composite VOC limits for multi-stage systems. The key differences between t he proposed SCM and the existing

district rules are discussed below.Automotive Coatings Suggested Control Measure

ES-4

The SCM:

 Combines the Group I and Group II vehicle categori es, and establishes the same VOC limits for passenger vehicles, heavy-duty vehic les, and mobile equipment. This would improve enforcement and simplify recordk eeping;

 Eliminates the composite VOC limit for multi-stage systems, and replaces it with specific VOC limits for clear coatings and color co atings. This would improve enforcement;

 Simplifies and combines district coating categorie s reducing the total number of categories from thirty-four to twelve. See Table I V-3 in Chapter IV for a list of coating categories typically found in district rule s and the corresponding category in the proposed SCM;

 Eliminates the specialty coatings category and rep laces it with two specific category limits. The survey data indicate that sev eral coating types qualifying for a high VOC limit under the districts’ specialty coa tings category were not sold in California in 2001;

 Establishes a prohibition of possession provision, which would prohibit any person from having, at any automotive refinishing f acility, coatings or solvents that do not comply with the proposed VOC limits. O nly one district rule currently has a prohibition of possession. This would improve enforcement;

 Establishes a 25 grams per liter VOC limit for sol vents used in cleaning operations, including surface preparation and spray gun cleaning. This limit is consistent with the most stringent district VOC lim it for solvents which is in the South Coast Air Quality Management District (SCAQMD );

 Improves recordkeeping and labeling. The SCM sets consistent recordkeeping requirements for the coating end user. The SCM als o establishes labeling requirements for coating manufacturers which would improve enforcement; and

 Exempts tertiary butyl acetate from the VOC defini tion to provide compliance flexibility.

A more complete discussion of the requirements of t he proposed SCM can be found in Chapter III. The proposed regulatory language is i n Appendix A. These proposed changes would provide statewide consistency and inc rease the enforceability of district

rules.

Are any products exempt from the SCM?

Yes. The SCM does not apply to original equipment manufacturer (OEM) automotive coatings that are covered by separate district rule s. The SCM also does not apply toAutomotive Coatings Suggested Control Measure

ES-5

aerosol consumer products and aerosol coatings. Ho wever, these products are subject to the ARB’s statewide consumer products and aeroso l coatings regulations, respectively. Products manufactured for use outsid e of the applicable district, or for shipment to other manufacturers for reformulation o r repackaging are also exempt.

. Who would be affected by the proposed SCM?

If adopted by the districts, the proposed SCM would apply to anyone who sells, supplies, offers for sale, or manufactures any auto motive coatings for use within the applicable district, as well as any person who appl ies or solicits the application of any automotive coating within the district. The primar y impact would be on manufacturers and users of the coatings. Manufacturers would nee d to reformulate some products. Distributors of automotive coatings would also be i mpacted.

Distributors and retailers who must ensure that the y are selling or supplying products that comply with the new VOC limits will be impacte d. Because of the competitive nature of this industry, some distributors may incu r additional costs because they elect

to absorb some of the cost to transition automotive refinishing facilities to using lower VOC coatings. Suppliers of resins, solvents, and o ther ingredients may be impacted, depending on whether demand for their products chan ges. Although determined to be small, the cost to consumers for vehicle refinishin g may increase for some automotive coatings.

Which districts are expected to adopt the proposed SCM?

At a minimum, we expect the 20 districts that curre ntly have automotive coatings rules

to amend their rules based on the SCM. These distr icts are listed in Table ES-2 below. SCAQMD is expected to be the first district to adop t the SCM.

We have worked closely with the districts in develo ping the SCM. As a result, we encourage districts to adopt the SCM without major changes. We recognize that districts have the authority to include limited and specific exemptions to meet local needs. However, we anticipate that VOC limits, def initions, and implementation dates will not be changed. This will help to achieve uni formity across the State.

Districts without specific rules for automotive coa tings may want to consider adopting the SCM to help them achieve the State and federal ambient air quality standards. Districts without specific automotive coatings rule s will continue to be subject to the

VOC limits in the U.S. EPA’s National Rule.Automotive Coatings Suggested Control Measure

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Table ES-2 - Districts with Automotive Coatings Rul es Antelope Valley APCD Sacramento Metropolitan AQMD Bay Area AQMD San Diego County APCD Butte County APCD San Joaquin Valley Unified APCD El Dorado County APCD San Luis Obispo County APCD Feather River AQMD Santa Barbara County APCD Glenn County APCD Shasta County AQMD Imperial County APCD South Coast AQMD Kern County APCD Tehama County APCD Mojave Desert AQMD Ventura County APCD Placer County APCD Yolo-Solano County AQMD

III. SCM DEVELOPMENT PROCESS AND EVALUATION OF ALT ERNATIVES

How did ARB staff develop the proposed automotive c oatings SCM?

The SCM was developed in cooperation with districts , the U.S. EPA, the automotive coatings manufacturers, the collision repair indust ry, and other interested parties. The SCM development process included the following acti vities: (1) a comprehensive survey of automotive coatings manufacturers; (2) t echnical analyses of all the coating categories proposed in the SCM; (3) meetings with districts and U.S. EPA Region IX, and industry representatives; (4) an evaluation of potential environmental impacts; and (5) an analysis of the cost impacts. ARB staff als o conducted six public workshops and several meetings and conference calls with individu al manufacturers and other interested parties. Table ES-3 provides a chronolo gy of the major meetings held during the SCM development process.

Table ES-3 - Chronology of the Automotive Coatings SCM Development Date Meeting Location April 6, 2005 District Working Group Sacramento April 27, 2005 District Working Group Sacramento May 26, 2005 Industry and District

Conference Call Sacramento

June 8, 2005 Industry Symposium Contra Costa Colleg e June 11, 2005 Industry Meeting Anaheim June 14, 2005 District Working Group Sacramento June 28, 2005 Public Workshop Diamond Bar June 30, 2005 Public Workshop Sacramento August 9, 2005 Public Workshop Fresno August 11, 2005 Public Workshop Oakland August 23, 2005 Public Workshop Diamond Bar October 5, 2005 Public Workshop SacramentoAutomotive Coatings Suggested Control Measure

ES-7

Who has participated in the process?

The districts, the U.S. EPA, automotive coatings ma nufacturers and marketers, trade associations, and representatives of automotive ref inishing facilities have been active in the development of the proposed SCM.

What information was gathered in the ARB’s 2002 Aut omotive Coatings Survey?

The ARB’s 2002 Automotive Coatings Survey (2002 Sur vey) collected detailed sales

and formulation data from 17 manufacturers that sold automotive coatings in Cali fornia in 2001. This information was collected by coating category, and was provided either on a product specific basis, or for a group of prod ucts in the case of color coatings. The 2002 Survey also requested for each product, or gro up of products, the complete formulation (the speciation of the VOC ingredients, exempt solvents, and solids). See Appendix B for complete details of the type of info rmation collected as part of the 2002 Survey. The technical information gathered in the 2002 Survey was used, along with other information, to develop the proposed SCM.

Did ARB staff evaluate alternatives to the proposed SCM?

Yes. Under the California Environmental Quality Ac t (CEQA), project alternatives should be identified in the Environmental Impact As sessment. Alternatives include measures for attaining the objectives of the propos ed project. The alternatives analysis provides a means for evaluating the comparative mer its of each alternative. An alternative evaluating the merits of not having the project must also be included. The

alternatives considered feasible are then evaluated for potential environmental impacts that may result from their implementation.

The following alternatives were considered, but wer e rejected in favor of the proposed

SCM:

1) No project, assuming that the SCM will not be ad opted; and 2) Extending the effective date from January 1, 200 9 to January 1, 2010;

The no project alternative was rejected because it would not achieve emission reductions necessary to attain the State and federa l ambient air quality standards. The extended effective date alternative was rejected be cause compliant coatings are currently available or will be available before the proposed effective date of January 1, 2009.Automotive Coatings Suggested Control Measure

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How were the proposed VOC limits in the SCM establi shed?

Although some of the VOC limits in the proposed SCM are equivalent to those in SCAQMD’s Rule 1151, ARB staff performed an independ ent analysis of each of the proposed VOC limits. These analyses are included i n Chapter IV of the staff report. In proposing each of the VOC limits, ARB staff conside red: (1) the results of the ARB’s 2002 Survey; (2) the number of complying products c urrently on the market; (3) discussions with coating manufacturers, markete rs and representatives of automotive refinishing facilities; and (4) trade jo urnals and other literature related to the product category. As mentioned previously, the pro posed VOC limits are the result of extensive interaction with the affected coatings in dustry, including discussions during six public workshops and several meetings and confe rence calls. Although each of the proposed limits is based on factors unique to each individual coating category, the following guiding principles were applied:

 Technological and commercial feasibility - assurin g that reformulation technologies will be available by the effective dat e for each proposed limit, and that the overall performance of complying products will be similar to that of noncomplying products.

 Emission reductions achieved - assuring that our o verall proposal will achieve

the maximum feasible reduction in emissions.

 Minimize the potential for the use of Toxic Air Co ntaminants (TAC) - assuring that the proposal can be met without a significant increased use of TACs.

IV. COMPLIANCE WITH THE SCM PROPOSAL

How will manufacturers reformulate their products t o comply with the VOC

limits?

Manufacturers of coatings above the proposed VOC li mits will need to reformulate some of their products to meet the applicable VOC l imits. Manufacturers have the flexibility to choose any formulation that meets th e applicable VOC limits and the reformulation options vary with each coating catego ry (see Chapter IV of the staff report). In general, VOC solvents will need to be reduced by increasing the amount of water, exempt solvents, or coating solids. In solv ent-borne products, VOC solvents may be partially replaced with exempt solvents such as acetone, parachlorobenzotrifluoride (PCBTF) or tertiary buty l acetate (if districts exempt TBAC from their VOC definitions). These changes may als o require the use of different resin systems. For example, a higher solids formulation may need to use a less viscous resin system to improve flow and leveling. Solvent -borne products may also be reformulated to a water-borne system. As mentioned previously, ARB staff has proposed VOC limits that can be met without an incr ease in the use of TACs.Automotive Coatings Suggested Control Measure

ES-9

For the color coating category, there are water-bor ne coatings available that meet the proposed VOC limit. Water-borne color coatings hav e been used in Europe for about ten years and are being mandated there as of Januar y 1, 2007. Manufacturers’ literature for water-borne color coatings indicate that they perform as well as solventborne color coatings when applied properly.

Manufacturers have stated that additional color dev elopment is required before the water-borne color coatings that are currently marke ted in Europe can be fully introduced

in California. While manufacturers have indicated that most likely they will meet the color coating limit with water-borne coatings, they do not rule out the possibility of a solvent-borne reformulation option.

Are the VOC limits proposed in the SCM technologica lly and commercially

feasible?

Yes. Most of the VOC limits in the proposed SCM ar e based on coating technologies

that have been available since 2001. ARB staff ana lyzed our 2002 Survey data, consulted with coating manufacturers, evaluated coa tings being used in Europe, and reviewed technical literature to determine appropri ate VOC limits. As explained in detail in Chapter IV of the staff report, staff believes a ll of the VOC limits in the proposed SCM are technologically and commercially feasible b y the effective date.

Our 2002 Survey results demonstrate that for nearly all the coating categories proposed in the SCM, products are currently available that c omply with the proposed limits. Nine of the twelve categories for which we are proposing VOC limits have products that would meet the proposed limits. The complying mark etshares vary with each coating category; however, this is not unexpected since the current VOC requirements also vary throughout the State. The coating category called “any other coating type” has no complying products because it was established as a catch-all category for which no products were reported in the 2002 Survey. Only tw o coating categories with reported products, adhesion promoters and pretreatment coati ngs, do not currently have compliant products in the marketplace. However, at least one coating manufacturer has indicated that they will sell compliant coating s in these categories prior to the 2009 effective date. Staff will conduct a technology as sessment approximately one year prior to the implementation date for all the VOC limits t hat are more stringent than existing district limits. This technology review is a stand ard practice for identifying any unanticipated problems prior to implementation of t he proposed VOC limits.

Will the reformulated products perform similar to e xisting products?

Yes. ARB staff concluded that the performance of t he compliant products would be similar to the performance of their higher VOC coun terparts. This conclusion is based

on:

1) The current availability of complying products i n the marketplace;Automotive Coatings Suggested Control Measure

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2) ARB staff’s analyses of each product category, a s detailed in Chapter IV; and 3) The extended use of complying products both here and in Europe in the case of water-borne color coatings.

What will the automotive refinishing facilities nee d to do to comply with the proposed SCM?

Automotive refinishing facilities will need to use compliant coatings or use control devices to reduce VOC emissions from their operatio ns. Currently, only a few automotive refinishing facilities use control devic es to reduce VOC emissions. If manufacturers comply with the proposed VOC limit fo r color coatings with water-borne coatings, automotive refinishing facilities may nee d to purchase air movement equipment and may need to install heaters to accele rate drying. There are several technology options that can be used by automotive r efinishing facilities depending on their specific needs and their current equipment co nfigurations. Smaller facilities may be able to purchase less expensive air movement equ ipment and may not need to install heaters because they have a lower volume of production. Chapter VII and Appendix C present our analysis of the costs automo tive refinishing facilities may incur to comply with the proposed SCM.

What are the emission reduction benefits from the a utomotive coatings SCM proposal?

The total emission reduction from statewide impleme ntation of the proposed VOC limits is estimated to be about 13.4 tons per day (tpd) in California. This reduction equates to about a 63 percent reduction in the total VOC emiss ions from the coating categories in

the SCM.

Table ES-4 shows the estimated emission reductions by coating category.

Table ES-4 - Estimated Emission Reductions from Aut omotive Coatings Coating Category Emission Reduction (tpd) adhesion promoter .02 Clear coating 1.61 Color coating 8.78 Multi-color coating N/A Pretreatment coating .21

Primer 1.01 Single-stage coating 1.68 temporary protective coating <.01 Truck bed liner coating <.01 underbody coating <.01 uniform finish coating .05 any other coating type N/A

Total 13.4Automotive Coatings Suggested Control Measure

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V. ENVIRONMENTAL IMPACTS

Both CEQA and ARB policies require the ARB to evalu ate the potential adverse environmental impacts of proposed projects. The AR B is authorized to prepare a plan or other written document (such as an environmental analysis chapter in the staff report) in lieu of an environmental impact report. Chapter VI presents a detailed analysis of the environmental impacts of the propos ed SCM.

What are the expected environmental benefits of the automotive coatings SCM?

The primary environmental benefit of the SCM will b e a reduction in the formation of tropospheric (ground level) ozone, PM 10 and PM 2.5 . It has long been known that exposure to ground level ozone, PM 10 and PM 2.5 have adverse impacts on public health. Research has shown that, when inhaled, ozone, PM 10 and PM 2.5 can cause respiratory problems, aggravate asthma, and impair the immune s ystem.

In the presence of sunlight, the VOCs from automoti ve coatings and other sources react with oxides of nitrogen (NO
x ) to form ozone. In addition, VOCs have been found

to be a source of PM 10 and PM 2.5 , either through condensation of the VOCs or comple x reactions of VOCs with other compounds in the atmos phere. Therefore, districts that adopt the SCM will reduce their VOC emissions and e xperience a positive impact on air quality and public health. The exact reductions in ozone, PM 10 and PM 2.5 cannot be accurately predicted due to the wide variety of fac tors that impact the formation of ozone, PM 10 and PM 2.5 . These factors include atmospheric conditions, th e ratio of

VOCs to NO
x

in the atmosphere, and the reactivity (ozone forma tion potential) of the

individual VOCs emitted. However, numerous scientific studies have shown th at by reducing VOC emissions, ozone, PM 10 and PM 2.5 concentrations are reduced. Therefore, by reducing ozone and PM concentrations, this SCM would reduce the health risks posed by exposure to these pollutants.

Additionally, automotive coatings contain several k nown TACs such as toluene, xylenes, and methyl ethyl ketone (MEK). To the ext ent these are reduced by the reformulation to lower VOC coatings, there would be a decrease in TAC emissions. Currently, these compounds account for over 27 perc ent of the VOC emissions. If districts exempt TBAC from their VOC definitions, i t may be used as a substitute for toluene, xylenes and MEK, which would decrease the use of these TACs. The extent of TBAC substitution could vary by coating category, h owever, it is believed that as much as 50 percent of the toluene, xylenes, and MEK coul d be replaced with TBAC. Because many automotive refinishing facilities are located in or near low-income residential areas, decreasing TAC emissions from au tomotive coatings would benefit environmental justice communities.Automotive Coatings Suggested Control Measure

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Are there any potential significant adverse environ mental impacts?

No. In Chapter VI, we examined the potential effec t of the proposed SCM on air quality, water demand, water quality, public servic es (public facility maintenance, fire protection), transportation and circulation, solid waste/hazardous waste, and hazards to the public or the environment. Based on our analys is, we do not expect any significant adverse environmental impacts to result from the im plementation of the proposed SCM.

There is a slight potential for an adverse environm ental impact if districts exempt TBAC

from their VOC definitions. The Office of Environm ental Health Hazard Assessment has determined that TBAC is a potential carcinogen because it metabolizes to tertiary butyl alcohol. Assuming under a worst-case scenari o that TBAC is substituted for 50 percent of the toluene, xylenes, and MEK in auto motive coatings, the maximum potential cancer risk is estimated to be 2.8 excess lifetime cancer cases per million for a resident living near the largest known auto body sh op (1,100 gallons per year). However, if the VOC limit for color coatings is met with water-borne coatings, the maximum potential cancer risk would be reduced to a bout 1.4 excess lifetime cancer cases per million.

VI. ECONOMIC IMPACTS

How did ARB staff evaluate the potential economic i mpacts of the proposed

SCM?

ARB staff evaluated the economic impacts of the pro posed SCM by: 1) contacting coating manufacturers; 2) comparing the ingredient costs of typical low VOC formulations with higher VOC formulations; and 3) c ontacting spray booth equipment and air movement equipment manufacturers. The anal ysis assumes that all districts adopt the proposed SCM, including areas that are no w subject to the U.S. EPA National Rule. As detailed below, this information was used to perform a business impacts analysis and a cost-effectiveness analysis for the SCM.

How was the business impacts analysis conducted and what are the results?

In our economic impact analysis, we evaluated the p otential impact of the proposed VOC limits on profitability and other aspects of bu sinesses subject to the limits. To conduct our analysis, we relied on information prov ided by coating manufacturers, ingredient costs for typical complying and noncompl ying formulations, and information from manufacturers of spray equipment and air movem ent equipment. We then evaluated the impact of these costs on typical busi nesses using a combination of publicly available financial databases (Dun and Bra dstreet and Ward’s Business Directory of United States Manufacturing Industries ), industry journals/literature such as the Chemical Market Reporter, and discussions with industry representatives.Automotive Coatings Suggested Control Measure

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We utilized the change in “return-on-owner’s equity ” (ROE) as an indicator of the SCM’s potential impacts on business profitability. The c ost to comply with the proposed SCM, through increased research and development, equipme nt purchases, and increased ingredients costs is presumed to impact a business’ ROE and therefore its profitability. Our analysis indicates that the total annualized co st to comply with the proposed SCM is about $14 million. The average annual cost to a utomotive coating manufacturers is estimated to be about $320,000. This results in an average estimated change in ROE of 0.07 percent. The average annual cost to automo tive refinishing facilities is estimated to be about $3,400 resulting in an averag e change in ROE of 15 percent. This cost estimate assumes that coating manufacture rs pass on all of their costs to the automotive refinishing facilities. The estimated c hange in ROE for automotive refinishing facilities would be significant if the costs are not passed on to the

consumers.

Our ROE analysis for the proposed SCM may overestim ate the impact on businesses because it assumes that all of the costs of the pro posed SCM will either be absorbed by the coating manufacturers or the automotive refinis hing facilities. In reality, we expect that at least some of the investment costs to compl y with the proposed VOC limits will be passed on to consumers. For example, an automot ive refinishing facility could pass their entire costs on to consumers by adding $11 to an average repair cost. Adding $11 to an average repair cost would increase the repair cost by only 0.5 percent. The analysis also does not quantify the extent of cost mitigation due to “technology-transfer” between product lines.

While we expect that most businesses will be able t o absorb the costs of the proposed limits without significant adverse impacts on their profitability, there is the possibility that some individual businesses will be adversely affect ed when districts adopt the proposed SCM. Therefore, it is possible that the proposed S CM may have a significant adverse impact on some businesses that are not in a market position to invest monies to develop new low VOC products, or to absorb the incr eased cost resulting from their compliance with the proposed SCM.

Based on our analysis, we do not expect the propose d limits in the SCM to have a significant impact on employment, or business creat ion, elimination, or expansion. We also do not expect the proposed SCM to have a signi ficant impact on the competitiveness of California businesses compared w ith those outside of California. This is because all companies that sell these produ cts in the State would have to meet the proposed requirements, whether located in or ou tside of California.

The VOC limits in the proposed SCM will primarily i mpact automotive coatings manufacturers and automotive refinishing facilities that use those coatings. However, we recognize that other industries could also be im pacted to a lesser amount, which is difficult to quantify. These industries include di stributors, retailers, and “upstream” suppliers who supply solvents and other chemicals u sed in automotive coatings.Automotive Coatings Suggested Control Measure

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Distributors and retailers could be impacted becaus e they need to ensure that noncomplying products are not sold after the implem entation date. In addition, the current market dynamics are such that often distrib utors or manufacturers provide

incentives to customers in order to obtain and main tain accounts. While this is the cost of doing business, the changes may require some new equipment that distributors would likely be expected to provide. However, we a re unable to quantify the magnitude of such costs because industry wide data are not av ailable nor are the incentives consistent across the industry.

Upstream suppliers could be impacted because manufa cturers will be purchasing some

different solvents and other materials for their re formulated products. However, we do not expect these changes to result in a major impac t on the affected industries because chemical companies generally supply many different industries, and because many of the upstream suppliers also provide the alternative products which will be used in the reformulated products. In fact, we expect some ups tream suppliers will benefit since the proposed limits are likely to create new or inc reased demand for materials to be used in compliant formulations.

Will the proposed SCM be cost-effective?

Yes. Cost-effectiveness is one measure of the SCM’ s efficiency in reducing a given amount of pollutant (often reported in “dollars (to be) spent per pound of VOC reduced”). The methodology used to determine cost- effectiveness is well established and often used to compare a proposed regulation’s c ost-efficiency with those of other regulations. To calculate the cost-effectiveness o f the SCM, we divided the estimated

total annual cost to manufacturers and automotive r efinishing facilities by the total emission reduction. To conduct our analysis, we re lied on specific formulation data from the 2002 Survey, industry journals/literature such as the Chemical Market Reporter for ingredient unit prices, and discussion s with industry representatives. We estimate the cost-effectiveness weighted by emissio ns reductions across all the proposed limits to be about $1.43 per pound of VOC reduced. This estimated costeffectiveness value is within the typical range of costs of existing ARB control measures

and district rules.

Will automotive refinishing facilities have to pay more for automotive coatings subject to the proposed SCM?

Yes. Automotive refinishing facilities may have to pay more for some products subject to the automotive coatings SCM, depending on the ex tent to which manufacturers are able to pass along their costs to automotive refini shing facilities. While the raw material costs for compliant coatings is comparable or, in s ome cases, less costly than that of higher VOC coatings, typically there is a premium c harged by paint manufacturers for new coatings. It is not possible to quantify the p otential price increase per gallon of coating because most manufacturers did not provide cost data as part of the survey.Automotive Coatings Suggested Control Measure

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Will consumers have to pay more for automotive repa irs?

Yes. As discussed in Chapter VII of the staff repo rt, assuming that all the costs of the proposed SCM are passed along to the consumers who need automotive repairs, the average cost of a repair would increase by about $11. The average repair cost is estimated to be about $2,200.

VII. FUTURE PLANS

What happens if the Board approves the proposed SCM ?

If the Board approves the proposed SCM, staff will assist the districts, if requested, as they embark in their own rulemakings to incorporate the SCM into their local rules.

Will ARB staff track industry’s progress toward mee ting the proposed VOC

limits?

Yes. Staff plans to conduct technology assessments for all of the proposed VOC limits that are more stringent than existing district limi ts at least one year prior to the 2009 effective date. We believe that the proposed limit s are feasible based on all the evidence available to us. However, it is standard practice for the ARB to conduct these reviews to ensure that unanticipated problems do no t arise.

VIII. RECOMMENDATION

Staff recommends that the Board approve the propose d SCM and direct staff to

transmit the SCM to the districts for consideration

.Automotive Coatings Suggested Control Measure

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I. BACKGROUND

In this staff report, we present the results of an evaluation of automotive coatings which led to our proposal for a Suggested Control Measure (SCM). The assessment included: a survey of automotive coatings sold in California in 2001; an examination of several compliance flexibility options; technical assessmen ts for the various coating categories; an environmental impact assessment; and a cost impa ct analysis. The proposed SCM for automotive coatings is the first collaborative regulatory effort undertaken by the Air Resources Board (ARB/Board) staff, the air pollutio n control or air quality management districts (districts), and affected industry repres entatives for this coating category. The development of the SCM was the direct result of a r equest from the districts for ARB to provide technical assistance to improve the consist ency and enforceability of existing

rules.

A. OVERVIEW

Automotive coatings are coatings used, or recommend ed for use, in motor vehicles or mobile equipment refinishing, repair, or restoratio n. Typical automotive coatings include primers, color coatings and clear coatings. These coatings are used for refinishing vehicles such as: automobiles, trucks, buses, golf carts, vans, motorcycles, tanks, armored personnel carriers, trains, railcars, truck trailers, mobile cranes, bulldozers and street cleaners. The estimated volatile organic co mpound (VOC) emissions from automotive coatings in California were about 20.7 t ons per day (tpd), on an annual average basis, in 2001. This represents about two percent of the total stationary source

VOC emissions.

VOCs are precursors to the formation of ozone and p articulate matter (PM). Ozone and PM are two of the most serious air pollutants for w hich the State and national ambient air quality standards are exceeded in much of Calif ornia. Ozone is formed from photochemical reaction of oxides of nitrogen and VO Cs. Scientific studies show that exposure to ozone can result in reduced lung functi on, increased respiratory symptoms, increased airway hyperreactivity, and increased air way inflammation. Exposure to ozone is also associated with premature death, hosp italization for cardiopulmonary causes, asthma episodes and restrictions in physica l activity. Ozone is a strong oxidizer and exposure to levels of ozone exceeding the current ambient air quality standards lead to a variety of adverse health effec ts, as well as a reduction of crop and timber production, and damage to plants and propert y. Emissions of VOCs also react in the atmosphere to form PM 10 and PM 2.5 . Inhalation of PM 10 and PM 2.5 deep into the lungs reduces human pulmonary function. Premature deaths linked to PM 10 and PM 2.5 exposure are now at levels comparable to deaths fro m motor vehicle accidents and second-hand smoke. Attaining the current State amb ient air quality standards for PM 10 and ozone would annually prevent approximately 6,50 0 premature deaths or three percent of all deaths in California. (ARB, 2002)Automotive Coatings Suggested Control Measure

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B. AUTOMOTIVE COATINGS MANUFACTURERS

The automotive coatings market in California was es timated at approximately 3.7 million gallons in 2001. Approximately 95 perc ent of the total sales for 2001 were supplied by seven manufacturers. Table I-1 lists t he top seven manufacturers based on data reported in the 2002 Survey (ARB, 2005).

Automotive coatings are normally supplied to automo tive refinishing facilities through a network of distributors (jobbers). The distributor s are generally independent businesses or may be owned by the coating manufacturer (e.g., Sherwin Williams). Most distributors sell coatings locally or regionally.

Table I-1 - Top Seven Coatings Manufacturers Company Scope

Akzo Nobel Global

BASF Global

DuPont Global

Ellis Paint California

PPG Global

Sherwin Williams Global Standox/Spies Hecker Global

Automotive coatings are formulated using solids and liquids. The solids consist of three main categories: (1) resins (polymers or binders) bind the pigments and additives together and form a film upon drying. Sometimes co -polymers are used to modify the properties of the primary resin. Some resins used in automotive coatings include alkyds, latex, oils, vinyl, acrylics, celluloses, e poxies, urethanes, and polyurethanes; (2) pigments are finely ground powders dispersed in the coating; pigments provide color, hide the underlying surface, and contribute other properties; and (3) additives or specialty chemicals which assist in manufacture and application, may improve the properties of the finished film. Examples of addit ives include preservatives, wetting agents, coalescing agents, freeze-thaw stabilizers, anti-foam agents, and thickeners. Liquids are usually solvents, which are the volatil e carriers used to control the viscosity of the coating and provide application properties. Some typical solvents used are: aromatic or aliphatic hydrocarbons, ketones, esters , alcohols, glycols, glycol ethers, and

water.

Most automotive coatings are sold as components wit h a few available for use in readyto-use containers. The coating components are mixe d in the automotive refinishing facility, as needed, by the painter, prior to use. Mixing ratios of components can vary depending on temperature and other factors. Genera lly, to make the coating ready to spray, the process requires combining the base prod uct with a VOC solvent, water, or an exempt solvent depending upon the manufacturer’s specifications for reaching the correct viscosity for spraying application. Colors normally require inter-mixing various

toners in order to achieve the desired color.Automotive Coatings Suggested Control Measure

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Table I-2 is a chronology of the development of aut omotive coatings technologies (Entec, 2000). Most automotive refinishing facilit ies have a “mixing bank”, and may use an automatic mixing machine to insure precise color formulations. Small operations use ready-to-spray (RTS) coatings or will acquire the m ixed coatings from a supplier or jobber.

Table I-2 - Chronology of Development of Coating Te chnologies Date Coating Technology

1920s Nitrocellulose Resins 1950s Alkyd Resins 1960s Thermoplastic Acrylic Resins 1970s 2 Component Polyurethane-Acrylic Resins 1990s High Solids Urethanes

C. AUTOMOTIVE REFINISHING FACILITIES

Automotive coatings operations are conducted at aut omotive refinishing facilities which include auto body repair/paint shops, production au to body paint shops, new car dealer repair/paint shops, fleet operator repair/paint sho ps and custom restoration facilities. Some of these facilities do collision repair and so me do commercial vehicle refinish and repair. While we do not have a specific breakdown of facilities doing commercial (fleet) vehicle refinish only, we expect this group to be r elatively small. Most of the facilities perform collision repair and refinishing for the pa ssenger car segment with some performing mostly complete paint jobs (i.e., facili ties such as MAACO and Earl Scheib).

The total number of facilities involved in the repa ir and refinishing of vehicles is estimated to range from about 4,000 to over 6,000. (DuPont, 2005; DCA, 2005). Many of these operations do not have a district permit b ecause they use relatively small volumes of coatings. Some districts do not require a permit if a facility uses less than a specified volume of coatings and cleaning solvents, typically one gallon per day. However, most districts require a permit if a facil ity has a spray booth, regardless of the volume of coatings and cleaning solvents used.

The majority of automotive refinishing facilities a re small businesses typically having from one to five employees. Table I-3 lists the nu mber of facilities based on gross annual revenue. Over 70 percent of automotive refi nishing facilities are estimated to

have one million dollars or less in annual revenue (DuPont, 2005). Some of these facilities may be doing body repair work without pa inting the vehicle. We are aware that some facilities subcontract the painting portion of the repair job. However, we are unable to quantify the number of facilities involve d only in body repair.Automotive Coatings Suggested Control Measure

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Table I-3 - Distribution of Automotive Refinishing Facilities Grouped by Total

Annual Revenue in 2002

Total Annual Revenue Number of Facilities Percent of Total Less than $0.5 Million 2,074 50.4 $0.5 to $1 Million 878 21.3 >$1 to $2.5 Million 883 21.5 > $2.5 Million 278 6.8 Total Statewide 4,113 100

The automotive refinishing facilities vary greatly in size and level of sophistication. Some automotive refinishing facilities are medium t o large, well run, relatively automated facilities while others are family-run sh ops, which may have one or two employees. Table I-4 shows the estimated number of automotive refinishing facilities in the larger districts. (DuPont, 2005)

Table I-4 - Estimated Number of Automotive Refinish ing Facilities by District

District Number of

Facilities South Coast Air Quality Management District (SCAQMD ) 1,790 Bay Area Air Quality Management District (BAAQMD) 9 34 San Joaquin Valley Air Pollution Control District ( SJUVAPCD) 330 Sacramento Metropolitan Air Quality Management Dist rict (SMAQMD) 171

Other Districts 888

Total Statewide 4,113

D. REGULATORY AUTHORITY

In California, the districts have primary responsib ility for controlling emissions from automotive refinishing facilities. In 1988, the di stricts began to develop regulations for automotive coatings and refinishing operations.

1. District Rules in California

Typically, the districts develop regulations that d efine coating categories and set VOC limits that affect manufacturers, suppliers, and us ers of automotive coatings. The rules

establish VOC content limits to achieve the maximum feasible emission reductions. Coatings that are high in VOCs are either replaced with an existing low-VOC coating, or

are reformulated to meet the VOC limits established in the rules.

The ARB has authority to oversee the districts’ act ivities. In consultation with the districts, the affected industry and the U.S. EPA, ARB staff developed the proposed SCM. The SCM will be used as a model by the distri cts when adopting or amending their automotive coatings rules. The SCM will prov ide uniformity and enhance enforcement of district rules. In Chapter III, we provide a detailed description of the proposed SCM.Automotive Coatings Suggested Control Measure

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Twenty of the 35 districts in California have rules regarding automotive coatings. Currently, approximately 95 percent of the State’s population is covered by the existing

district rules. Most of the rules have been includ ed in the State’s Implementation Plan (SIP). Table I-5 lists the districts’ rules for th is category.

Table I-5 - Existing District Rules

District Rule Number Adopted Last Amended Antelope Valley APCD 1151 7-8-88 7-20-99 Bay Area AQMD 8-45 6-7-89 7-1-99 Butte County APCD 235 6-19-97 8-22-02 El Dorado County APCD 230 9-27-94
Feather River AQMD 3-19 8-6-98 Glenn County APCD V-105 5-19-99 Imperial County APCD 427 9-14-99 Kern County APCD 410-4A 5-16-91 3-7-96 Mojave Desert AQMD 1116 3-2-92 4-12-99 Placer County APCD 234 11-3-94 4-9-98 Sacramento Metropolitan AQMD 459 12-7-95 10-2-97 San Diego County APCD 67-20 11-13-96 8-13-97 San Joaquin Valley APCD 4602 4-11-91 12-20-01 San Luis Obispo County APCD 423 2-23-88 11-13-02 Santa Barbara County APCD 339 8-13-97 4-17-19 Shasta County AQMD 3-25 4-1-97
South Coast AQMD 1151 7-8-88 12-11-98 Tehama County APCD 4-35 11-10-98 Ventura County APCD 74-18 1-28-92 9-10-96 Yolo-Solano County AQMD 2-26 8-13-97

Although there are some similarities in the distric t rules, the rules vary from district to

district. Some of the differences include: defini tions of terms, coating categories, VOC limits, exemptions allowed, and recordkeeping requi rements. Table I-6 summarizes the key VOC limits from four district rules.Automotive Coatings Suggested Control Measure

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Table I-6 – Summary of VOC Limits

SCAQMD

Rule 1151 SJUVAPCD

Rule 4602 SMAQMD

Rule 459 BAAQMD

Rule 8-45 Cars* Large**

Vehicles Cars Large

Vehicles Cars Large

Vehicles Cars Large

Vehicles

Category g/l g/l g/l g/l g/l g/l g/l g/l

Pretreatment

Wash Primer 780 780 780 780 780 780 780 780

Precoat N/A N/A 600 600 600 600 580 580

Primer/Primer

Surfacer 250 250 250 250 250 250 250 250

Primer Sealer 340 250 420 340 420 250 420 340

Topcoat 420 340 420 420 420 420 420 420

Metallic

Iridescent Topcoat 420 340 520 420 520 420 520 420

Multi-stage Topcoat 420 340 540 N/A 540 N/A 540 N/A

Specialty Coating 840 840 840 840 840 840 840 840

Camouflage N/A N/A N/A 420 N/A 420 N/A 420

Multi-Colored 685 685 N/A N/A N/A N/A N/A N/A

MultiColored Multistage 420 N/A N/A N/A N/A N/A N/A N/A

Rubberized Asphaltic Underbody N/A N/A N/A N/A 540 540 N/A N/A

Temporary

Protective Coating N/A N/A 60 60 60 60 N/A N/A

* Passenger cars, small-sized trucks and vans, medi um-sized trucks and vans, motor homes and motorcycles.
** Large sized trucks, buses and mobile equipment

2. The National Automotive Coatings Rule

The districts that do not have their own rule for a utomotive coatings implement

U.S. EPA’s national rule. In the 1990 Clean Air Ac t Amendments, the United States Congress enacted section 183(e), which established a new regulatory program for controlling VOC emissions from consumer and commerc ial products. Section 183(e)

directs the U.S. EPA Administrator to determine the ozone forming potential of these products, and to prioritize the need for regulation of these products.Automotive Coatings Suggested Control Measure

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The U.S. EPA promulgated a final rule to control VO C emissions from automotive refinish coatings, such as primers and topcoats on August 14, 1998. The national rule was published in the Federal Register on September 11, 1998 (EPA, 1998). This rule was specifically aimed at manufacturers and importe rs of automotive coatings. However, the national rule had little effect on the rules already adopted by the districts. The VOC limits in the district rules are generally more stringent than those in the

national rule.

3. California Clean Air Act

In addition to the federal planning requirements, t he CCAA imposes a separate set of planning requirements on districts. The CCAA was e nacted in 1988, and has the fundamental goal that all areas of California are t o attain the State ambient air quality standards for ozone by the earliest practicable dat e. The Board sets the State ozone standards. In March 2005, the Board reviewed Calif ornia’s 1-hour standard for ozone and determined that it alone was not sufficiently p rotecting human health. Consequently, ARB adopted a new 8-hour standard for ozone and retained the existing

1-hour ozone standard. California’s ozone standard s are:

 1-hour average standard at 0.09 ppm, not to be exc eeded

 8-hour average standard at 0.070 ppm, not to be ex ceeded

California’s new 8-hour ozone standard is more stri ngent than the federal 8-hour ozone standard of 0.08 ppm. The U.S. EPA recently elimin ated the national 1-hour ozone standard of 0.12 ppm and replaced it with their 8-h our ozone standard. As specified in the CCAA, the ARB has designated areas of Californi a to be in “attainment” or

“nonattainment” for the State ozone standards. The districts that are nonattainment for the State ozone standards are required by the CCAA to prepare plans, which must be designed to achieve and maintain the standards by t he earliest practicable date. Each nonattainment district is also required to update t heir plans every three years to include the latest technical information, and any changes i n demographics or other relevant information. In developing their plans, each distr ict determines which measures are necessary to include, as well as the specific detai ls of each included measure. In many of the nonattainment districts, substantial additio nal emission reductions will be necessary in order to achieve and maintain the Stat e ozone standards. By revising their existing rules to be consistent with the SCM, the d istricts can achieve greater emission reductions to help them attain the ozone standards.Automotive Coatings Suggested Control Measure

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REFERENCES

Air Resources Board. 2002 Automotive Refinishing Survey (ARB, 2005)

Air Resources Board. 2001 Architectural Coatings S uggested Control Measure. (ARB, 2001)

Air Resources Board. 2001 Airborne Toxic Control M easure for Emissions of

Hexavalent Chromium and Cadmium from Motor Vehicle and Mobile Equipment Coatings. (ATCM, 2001)

Air Resources Board and Office of Environmental Hea lth Hazard Assessment. Staff Report: Public Hearing to Consider Amendments to t he Ambient Air Quality Standards for Particulate Matter and Sulfates, May 2002. (AR B, 2002)

Bay Area Air Quality Management District . Rule 8-24 – Motor Vehicle and Mobile Equipment Coatings Operations. January 6, 1999. (BAAQMD, 1999)

Consumer Affairs. Licensed Automotive Refinish Ope rations in California. August 2005. Via the internet – http://www.dca.ca.gov (DCA, 2005)

DuPont Corporation. Demographic Data Summary Regar ding Automotive Refinishing Facilities In California. Via email from Emily Tay lor, DuPont Corporation. August 8, 2005. (DuPont, 2005)

European Commission, Reducing VOC Emissions From Th e Vehicle Refinishing Sector, Final Report August 2000. Entec UK and the Paint Research Association. (Entec, 2000)

Sacramento Metropolitan Air Quality Management Dist rict. Rule 459 – Automotive. Truck and Heavy Equipment Refinishing Operations . October 2, 1997. (SMAQMD, 1997)

San Joaquin Valley Unified Air Pollution Control Di strict. Rule 4602 – Motor Vehicle and Mobile Equipment Coatings Operations. December 20, 2001. (SJUVAPCD, 2001)

South Coast Air Quality Management District. Rule 1151 – Motor Vehicle and Mobile Equipment Non-Assembly Line Coatings Operations. December 11, 1998. (SCAQMD, 1998)

South Coast Air Quality Management District. 1994 Air Quality Management Plan 1997 AQMP Revision. 1997. (SCAQMD, 1997)

U.S. Environmental Protection Agency. 40 CFR Part 59, National Volatile Organic Compound Emission Standards for Automobile Refinish Coatings (EPA, 1998).Automotive Coatings Suggested Control Measure

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II. DEVELOPMENT PROCESS FOR SCM

Development of the SCM was initiated by ARB staff i n cooperation with the districts. The key objectives of the SCM are to: (1) improve t he overall effectiveness and enforceability of district rules; (2) improve consi stency among district rules; and (3) achieve VOC emission reductions.

Development of the SCM included the following activ ities :

 Conducting a survey of automotive coatings manufac turers;

 Conducting meetings with districts, U.S. EPA Regio n IX representatives, and representatives of the affected industry;

 Reviewing existing district rules and the National Volatile Organic Compound Emission Standards for Automobile Refinish Coatings ;  Holding public workshops and meetings with individ ual manufacturers, distributors, automotive refinishing facility owner s, and other interested parties;

 Assessing and evaluating existing coatings technol ogies for the categories; and

 Preparing a comprehensive emissions and cost analy sis.

A. AUTOMOTIVE COATINGS 2002 SURVEY (2002 Survey)

In 2001, ARB staff began working with manufacturers and industry groups to develop a new survey of automotive coatings sold in Californi a. In 2002, ARB sent out the Automotive Refinish Survey seeking 2001 product ing redient and sales data. A draft 2002 Survey report was made available to industry i n March 2005. Appendix B is a copy of the survey. The 2002 Survey report can be obtained from the SCM webpage at http://www.arb.ca.gov/coatings/autorefin/scm/scm.ht m

.

B. DISTRICTS AND U.S. EPA

ARB staff formed a working group with districts and U.S. EPA staff to assist in the development of the SCM. The main objectives of the working group meetings were to

discuss:

 The needs of the districts regarding the implement ation of the SCM;

 The emission reductions achievable from automotive coatings;

 Findings of the 2002 Survey;

 Specific regulatory language; and

 Flexibility options for manufacturers to comply wi th new automotive coatings regulations.Automotive Coatings Suggested Control Measure

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C. PUBLIC PROCESS

A vital element of the SCM development process is t he participation of members of the industry and other affected parties. The ARB staff held a series of public workshops. These workshops were attended by representatives fr om industry (e.g., manufacturers and suppliers of automotive coatings and components , ingredient manufacturers, automotive refinishing facility owners and trade as sociations), districts, the U.S. EPA, and other interested parties. In addition to the p ublic workshops, ARB staff held meetings with individual manufacturers and distribu tors, as well as automotive refinishing facility owners to ascertain their conc erns, and accept suggestions and necessary data. Table II -1 lists the public workshops and meetings staff conducted as part of the SCM development process.

Table II-1 - List of Public Workshops and Meetings Date Type of Meeting Location April 6, 2005 District Working Group Sacramento April 27, 2005 District Working Group Sacramento May 26, 2005 District Working Group Sacramento June 8, 2005 Industry Symposium Contra Costa Colleg e June 11, 2005 Industry Meeting Anaheim June 14, 2005 District Working Group Sacramento June 28, 2005 Public Workshop Diamond Bar June 30, 2005 Public Workshop Sacramento August 9, 2005 Public Workshop Fresno August 11, 2005 Public Workshop Oakland August 23, 2005 Public Workshop Diamond Bar October 5, 2005 Public Workshop Sacramento

During the development of the SCM, a series of docu ments were created. The documents include: SCM draft regulatory language, working group invitations, public workshop notifications and meeting notices, as well as reports, and other correspondence and communication. In an effort to include all interested parties in the development process, an extensive mailing list of o ver 6,000 recipients was compiled that included manufacturers, suppliers, automotive refinishing facilities, district contacts, U.S. EPA contacts, trade associations, and other in terested parties. Web and list serve pages dedicated to the SCM were developed. The web page was used to post relevant documents, announcements, and staff contact informa tion. The list serve page assisted

in the distribution and assimilation of information regarding the development of the

SCM. The function of the list serve was to inform over 165 subscribers of all additions and updates to the SCM webpage.Automotive Coatings Suggested Control Measure

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D. EVALUATION OF THE DISTRICT RULES AND NATIONAL R ULE

The motivation for developing the SCM was to provid e consistency in district rules, increase rule enforceability, and achieve the maxim um feasible reduction in VOC emissions. The national rule applies to manufactur ers and importers of automotive coatings. In contrast, the SCM applies to supplier s, sellers, manufacturers, or anyone that distributes any automotive coating, the compon ents, or associated solvent for use within the district, as well as any person who uses , applies, or solicits the use or application of any automotive coating or associated solvent within the district. Since the district rules have limits that are equal to, or lo wer than, the limits in the national rule, the objective of the SCM is to set limits that are at least or more stringent than those in existing district rules. The national rule specifi cally allows states or local governments to adopt more stringent emission limits.

E. TECHNOLOGY ASSESSMENT

An essential element of developing the SCM was to a ssess the technical feasibility of the proposed limits for the coatings categories. S taff conducted a technology assessment for all the coating categories included in the SCM. Some of the sources of information utilized in the technology assessment i ncluded:

 The ARB 2002 Survey data;

 Manufacturers’ brochures and product technical dat a sheets;

 Product labels and material safety data sheets;

 Internet websites;

 Books and trade magazines;

 Technical reports and training manuals;

 Discussions with manufacturers, suppliers, and use rs of coatings;

 District rules and discussions with district staff ; and

 Information from trade associations.

The proposed VOC limits for the coating categories in the SCM are based on our

assessment of detailed information from manufacture rs on coatings sold in 2001. Staff evaluated technical data provided by the manufactur ers for coatings in each category. Staff evaluated the coatings, solids content by vol ume, and VOC content, as well as other characteristics. The technology assessment f or the SCM is discussed in Chapter IV.Automotive Coatings Suggested Control Measure

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F. COST ANALYSIS

Although it is not required under the California Ad ministrative Procedure Act (APA), the economic impact of the SCM on affected businesses a nd consumers was evaluated and quantified. In 2002, the ARB sent a survey to manufacturers of automotive coatings. The formulation data received from this survey was one of the sources of information used to perform a cost-effectiveness an alysis and a business impacts analysis. The cost-effectiveness analysis measures how cost-efficient the proposed SCM will be in reducing VOCs relative to other regu latory programs. The business impacts analysis evaluates the impacts on profitabi lity, employment, and competitiveness to California businesses, consumers , and government agencies.

Staff used survey formulation data and performed re search to identify typical noncomplying and complying formulations for the coatin g categories, and the relative cost

of raw materials were estimated for these formulati ons. Examples of sources of information for the cost analysis were: the 2002 S urvey; material safety data sheets; formulations data provided by coating manufacturers ; equipment manufacturers; district staff; trade magazines; and Internet searches. Res ults of the cost analysis are reported in Chapter VII.Automotive Coatings Suggested Control Measure

III-1 III. PROPOSED SUGGESTED CONTROL MEASURE

In this chapter, we provide a plain English discuss ion of the staff’s proposed SCM for automotive coatings, which is contained in Appendix A. All sections of the proposed SCM are discussed below. Where applicable, key ter ms or concepts of the proposed

SCM are discussed.

Control of emissions from automotive coatings is pr imarily the responsibility of the districts. The proposed SCM may be used as a model by the districts when adopting and amending their local automotive coatings rules. Accordingly, throughout the staff report references are made to the most common or mo st restrictive district VOC limits, since the district rules are the enforceable regula tions.

A. APPLICABILITY

The proposed SCM applies to manufacturers, distribu tors, sellers, and users of automotive coatings, but does not apply to aerosol coatings in containers of any size. The proposed SCM applies to coatings that are used to coat any part or component of motor vehicles (such as cars, buses, and golf carts ) or mobile equipment (such as railcars and tractors). For the complete definitio ns of motor vehicle and mobile equipment, please see sections 3.19 and 3.20 of the proposed SCM. The proposed SCM also applies to manufacturers, distributors, se llers, and users of solvents used in cleaning operations.

B. DEFINITIONS

To help clarify and enforce the proposed SCM, secti on 3 of the proposed SCM provides definitions for terms used which are not self-expla natory. This section also provides equations to determine the VOC content of automotiv e coatings.

C. STANDARDS

The proposed SCM differs from the U.S. EPA’s nation al rule and current district rules by eliminating the composite VOC limit for basecoat (c olor) and clear coating systems. The composite VOC limit is being replaced with indi vidual VOC limits for color coatings and clear coatings. A total of 12 VOC limits are p roposed, which would become effective on or after January 1, 2009.

The table of standards in the proposed SCM, reprint ed below as Table III-1, contains the proposed limits for maximum VOC content in each category of automotive coatings. If the coating is represented in such a way that in dicates it can be used in more than one of the coating categories listed in Table III-1 , then the lowest, or most restrictive, VOC content limit will apply.Automotive Coatings Suggested Control Measure

III-2 If a coating does not meet any of the definitions f or the specific categories listed in Table III-1, that coating will fall into the catego ry labeled “Any other coating type” and the VOC limit of 250 grams per liter (g/l) will app ly. Limits are expressed in grams of VOC per liter of coating thinned to the manufacture r’s maximum recommendation, excluding the volume of any water and exempt compou nds.

Table III-1 - Proposed Coating Categories and VOC L imits VOC regulatory limit as applied Effective January 1, 2009
Coating Category grams/liter (pounds per gallon*)

Adhesion Promoter 540 4.5 Clear Coating 250 2.1 Color Coating 420 3.5 Multi-Color Coating 680 5.7 Pretreatment Coating 660 5.5

Primer 250 2.1 Single-Stage Coating 340 2.8 Temporary Protective Coating 60 0.5 Truck Bed Liner Coating 310 2.6 Underbody Coating 430 (3.6 Uniform Finish Coating 540 4.5 Any other coating type 250 2.1

* English units are provided for information only. VOC limits are expressed in grams VOC per liter of coating, less water and exempt compounds.

The proposed SCM also prohibits anyone from applyin g, manufacturing, blending, repackaging for sale, supplying, offering for sale, distributing, possessing (at an automotive refinishing facility) or selling any coa ting that does not meet the VOC limits listed in Table III-1, except when the coating is s old for use with an approved emission control system that is at least 85 percent efficien t. It is a violation of the proposed SCM to solicit, require or specify the use of a coating that does not meet the VOC limits set forth in Table III-1, unless the coatings are used at a facility that complies with section 4.3 (alternative compliance provisions).

The standards section specifies the manner in which coatings may be applied. With the exception of underbody coatings, truck bed liner co atings, coatings used in graphic arts and coatings of any type if less than one fluid oun ce, the automotive coating must be applied by brushing, dipping, rolling, electrostati c spraying, or spraying with a highvolume, low-pressure spray (HVLP) gun or an approve d equivalent.

Section 4.8 of the proposed SCM also prohibits the use of solvents that exceed a VOC content of 25 g/l at an automotive refinishing faci lity, and specifies that any VOCcontaining materials or products must be stored in closed, vapor-tight containers when not in use. Spray guns must be cleaned in a closed system or its approved equivalent.Automotive Coatings Suggested Control Measure

III-3 D. ADMINISTRATIVE REQUIREMENTS

The proposed SCM requires each manufacturer to prov ide written data for each of their products that includes the physical properties of t he coating, coating component, or solvent. For a complete description of what inform ation must be included on the manufacturer data sheets, please see sections 5.1.1 , 5.1.2, and 5.1.3 of the proposed SCM. Manufacturers must also clearly label all coa tings and coating components with the applicable use categories listed in Table III-1 and the VOC content. Manufacturers

must label solvents with the VOC content.

The proposed SCM requires that those who use automo tive coatings or solvents at automotive refinishing facilities keep records indi cating the name and manufacturer of the coating or solvent, method of applying the coat ing or solvent, coating type and mix ratio, VOC content of the coating or solvent, and w hether the product used is a coating or a solvent. This information, along with manufac turer’s data sheets or other written materials that provide the actual and regulatory VO C content and purchase records listing the coating type, name, and volume of coati ngs or solvents must be kept at the location where the coatings are applied for a minim um of three years. These records are to be made available for inspection upon reques t.

Anyone using an approved emission control system pe r section 4.3 instead of using coatings that meet the VOC limits in Table III-1 mu st keep daily records, to be maintained for a minimum of three years. These rec ords will prove continuous and correct use of the control system during the time t hat emissions are occurring.

The proposed SCM specifies that no person shall man ufacture, blend, repackage for sale, supply, sell, offer for sale, or distribute o r apply any automotive coating or automotive coating component that does not meet the VOC limits in the proposed SCM. However, if the coating is for use exclusively with in an emission control system or outside the district, a person may manufacture, ble nd, repackage for sale, supply, sell, offer for sale, or distribute an automotive coating or component that does not meet the VOC limits. In this situation, that person must ke ep records of the quantity manufactured, blended, repackaged, supplied, sold, offered for sale, or distributed; size and number of containers; VOC content; name, addres s, phone number, retail tax license number, and valid district permit number fo r the person to whom or for whom the coating or component was manufactured, blended, rep ackaged, supplied, sold, offered for sale or distributed; and whether the coating is for use in an approved emissions control system or outside the district. As with al l records pertaining to the proposed SCM, this information must be kept for a minimum of three years and be made available for inspection upon request.Automotive Coatings Suggested Control Measure

III-4 E. TEST METHODS

Test methods for automotive coatings and solvents s ubject to the proposed SCM are provided in this section. These include tests for metallic and acid content, tests for the determination of various exempt compounds, a method for determining VOC content of solvents or coatings, tests to determine control an d transfer efficiency, and a method to determine if a spray gun’s transfer efficiency is e quivalent to that of a HVLP spray gun. Please see section 6 of the proposed SCM for comple te descriptions and reference

numbers for these test methods.Automotive Coatings Suggested Control Measure

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IV. DESCRIPTION AND TECHNICAL ASSESSMENT OF THE COA TING

CATEGORIES AND SOLVENTS

A. INTRODUCTION

To ensure that the proposed SCM is technologically and commercially feasible, we considered the following:

1) The results of the 2002 Automotive Coatings Surv ey; 2) Information from automotive coating manufacturer s, solvent suppliers, and other industry groups; 3) The existing VOC limits for automotive coatings and solvents; and 4) The results of our technical analyses of all the coating categories proposed in the

SCM.

Based on the technical analyses, we believe that th e overall performance of the reformulated products in each category will be simi lar to the performance of their higher VOC counterparts. Except for the adhesion promoter and pretreatment coating categories, complying products are commonly availab le and currently being used. However, we will conduct technology reviews for the proposed VOC limits that are lower than the most stringent limits in existing district rules prior to the effective date of those

limits.

In this chapter, we provide a discussion of the aut omotive coating categories and the solvents included in the proposed SCM. The coating categories are adhesion promoter, clear coating, color coating, multi-color coating, pretreatment coating (formerly called pretreatment wash primer), primer, single-stage coa ting (formerly called topcoat), temporary protective coating, truck bed liner coati ng, underbody coating, uniform finish coating, and any other coating type.

Appendix D discusses categories that are currently in district rules or the national rule, but which are not specifically listed in the propos ed SCM. These coating categories are multi-stage topcoat system, specialty coating, meta llic/iridescent, primer sealer, primer surfacer, camouflage, precoat, extreme performance coatings, elastomeric material, anti-glare safety coating, impact resistant coating , water hold-out coating, weld-thru coating, bright metal trim repair, gloss flatteners , heat resistant, and jambing (cut-in)

clear coat.

The structure of the proposed SCM differs significa ntly from existing district rules. Currently, the district rules and the U.S. EPA auto motive coatings rule allow for a composite VOC limit for “multi-stage topcoat” syste ms. The SCM replaces the composite VOC limit with specific VOC limits for cl ear and color coatings.Automotive Coatings Suggested Control Measure

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Also, the proposed SCM eliminates the distinction b etween Group I and Group II vehicle categories, and establishes the same VOC limits for coatings used on passenger vehicles, heavy-duty vehicles, and mobile equipment . The SCM will clarify and, where applicable, combine coating categories. The SCM el iminates the specialty coatings category and replaces it with specific category lim its as needed. The 2002 Survey data indicated that several of the coating types current ly allowed under the specialty coatings category are no longer sold in California.

Most of the coatings have two or more individual co mponents that are combined into one formulation. For example, a color coating may be a combination of up to ten individual toners plus hardeners, reducers, and spe cialty additives. As such, we cannot determine the volume applied of any single mixture. For an estimate of the emissions from each coating category, we assumed that an equa l amount of base material was used in every formulation that could be made with t hat base material.

ARB staff analyzed the survey data to propose appro priate VOC limits, as listed in Chapter III, Table III-1. Table IV-1 shows the num ber of companies that reported coatings that meet the proposed VOC limits in the S CM. Table IV-2 shows coating categories found in the existing district rules and their corresponding category in the proposed SCM.

Table IV-1 - Compliance Summary

Coating Category

Number of Companies

that: Adhesion

Promoter Clear Color

*** Multicolor Pretreatment Primer Single

Stage

*** Temporary

Protective Truck

Bed

Liner Underbody Uniform

Finish

Sold type of coating

in CA 5 15 12 0 13 15 13 2 1 3 5

Reported

mixtures 4 14 11 0 11 14 10 2 1 3 3

Reported

valid

mixtures * 4 14 11 0 11 14 10 2 1 3 3

Reported compliant

mixtures ** 0 11 5 0 0 12 1 1 1 2 1

17 companies responded to survey.

* Mixtures are considered valid if ARB has all nec essary information for all components of the mixture and the information for each component met ARB standards. ** Mixtures that meet the VOC limits proposed in t he SCM. *** Single-Stage and Color Coatings are reported f or systems and not individual mixtures.Automotive Coatings Suggested Control Measure

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Table IV-2 - Comparison of Coating Categories Existing District Categories SCM Categories Camouflage Color Coating Extreme Performance Primer, Color Coating, Clear Coating, Single-Stage Coating, or Underbody Coating General Topcoat Single-Stage Coating Metallic/Iridescent Topcoat Single-Stage Coating Multi-Color Multi-stage Multi-Color Coating Multi-Color Topcoat Multi-Color Coating Multi-stage Topcoat (aka Multi-stage Topcoat System) Color Coating & Clear Coating

Precoat Primer Pretreatment Wash Primer (aka Pretreatment or Pretreatment Coating) Pretreatment Coating

Primer Primer

Primer Sealer Primer

Primer Surfacer Primer Rubberized Asphaltic Underbody Underbody Coating Single-Stage Nonmetallic/Noniridescent Topcoat Sing le-Stage Coating Single-Stage Metallic/Iridescent Coating Single-Sta ge Coating Solid Color Topcoat Single-Stage Coating Temporary Protective Coating Temporary Protective C oating Topcoat (aka All Other Topcoats) Single-Stage Coati ng Specialty Coatings The generic category has been eliminated and replaced with specific categories for the various coatings previously grouped together and are

addressed below. Adhesion promoter Primer or Adhesion Promoter Anti-glare Safety Coating (aka Antiglare/Safety Coatings) Clear Coating, Color Coating, or Single-Stage Coating Bright Metal Trim Repair Coating Any Other Coating Type Camouflage Color Coating Elastomeric Materials (aka Elastomeric Coatings) Primer, Color Coating, Clear Coating, Single-Stage Coating, or Underbody Coating Extreme Performance Primer, Color Coating, Clear Coating, Single-Stage Coating, or Underbody Coating Gloss Flatteners (aka Low-Gloss Coatings) Clear Coa ting Heat Resistant Primer, Color Coating, Clear Coating, or Single-Stage Coating Impact Resistant Coating Single-Stage Coating, Clea r Coating,Automotive Coatings Suggested Control Measure

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Table IV-2 - Comparison of Coating Categories Existing District Categories SCM Categories Underbody Coating, or Truck Bed Liner Coating Jambing (Cut-In) Clear Coats Clear Coating Multi-Color Coatings Multi-Color Coatings Rubberized Asphaltic Underbody Coating Underbody Co ating Uniform Finish Blenders (aka Finish Blenders) Unifo rm Finish Coating Water Hold-Out Coating Primer Weld-Thru Coatings (aka Weld-Thru Primers and Weld-Through Primer) Primer

B. CATEGORIES THAT ARE IN THE SCM

This section describes each of the categories in th e SCM. Chapter V, Table V-3, details the estimated emissions and anticipated emission re ductions, in tpd, from each category in the proposed SCM. Table IV-3, at the e nd of this section, provides basic physical parameters for each coating category in th e proposed SCM. Table IV-4 shows the number of compliant mixtures and complying mark etshare for each coating category as of 2001. All averages expressed in this chapter are simple, arithmetic averages.

1. Adhesion Promoter

Adhesion promoters are coatings applied directly to uncoated plastic surfaces to facilitate bonding of subsequent coatings. All adh esion promoter mixtures reported in the 2002 Survey are solvent-borne coatings. None o f the mixtures reported contain any water or exempt compounds. Other than resins, the solids include pigments and various other compounds. These include proprietary compounds, titanium dioxide, talc,

and barium sulfate.

The proposed VOC limit of 540 g/l is technologicall y and commercially feasible by the January 1, 2009, effective date based on discussion s with coating manufacturers. Manufacturers may increase the exempt compound cont ent in order to comply with the proposed VOC limit. Five companies reported sellin g adhesion promoter coatings in the 2002 Survey. None of the four companies that repor ted complete and valid information for adhesion promoters have coatings that meet the proposed limit. One coating manufacturer has stated that they expect to have a product that meets the proposed VOC limit in the market by 2008.Automotive Coatings Suggested Control Measure

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Issues :

1. Issue: No product currently meets the proposed l imit.

Response: Manufacturers may add exempt compounds to their coatings to meet the proposed VOC limit.

Below is a sample formulation of a compliant adhes ion promoter. This is

intended to illustrate how the VOC content could be lowered to meet the proposed VOC limit. In developing this formulation , we relied on nearly compliant formulations of existing mixtures and inc reased the amount of exempt compounds. The volume percent is derived from the weight percent and individual densities of compounds in the coating fo rmulation. To protect data confidentiality, the formula below groups various s olids and VOCs together.

Ingredient Wt % Vol %

resin 19 17.4

solids 18 5.9 TBAC (or other exempts) 29.5 35.5

VOCs 33.5 41.2

total 100 100

solids 37 23.3 exempts 29.5 35.5

VOC 33.5 41.2

overall density (g/cm3) 1.04

VOC limit 540 g/l

VOCreg 539.0 g/l

VOCact 347.6 g/l

This is a small usage category, about 3,600 gallons in 2001. If compliant products are formulated with TBAC, the emissions of TBAC from th is coating category would be only 25 lbs per day statewide. Exempts other than TBAC could be used to achieve the same

VOC content.Automotive Coatings Suggested Control Measure

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2. Clear Coating

Clear coatings are coatings that contain no pigment s and are applied over a color coating or clear coating. All clear coating mixtur es reported in the 2002 Survey are solvent-borne coatings. The coatings employ a vari ety of solvents that manufacturers mix to vary the rate of evaporation of the carrier (solvent). Many of the mixtures reported contain trace to minor amounts of water.

Over half of the mixtures reported contain exempt c ompounds. In those mixtures, the exempt content, by weight, ranges from about one-ha lf percent up to sixty-six percent. Overall, the average exempt compound content is abo ut nine percent by weight.

The majority of the solid content of a clear coatin g is resin. Some clear coatings have materials such as talc and silica to disperse light and create a matted appearance. Other clear coatings have plasticizers or flexibliz ing agents added to create an elastomeric coating. Other than resins, the solids include proprietary compounds, silica, ultra-violet light absorbers, light stabilizers, an d many other compounds in minor

amounts.

The proposed VOC limit of 250 g/l is technologicall y and commercially feasible by the January 1, 2009, effective date. The SCAQMD Rule 1 151 requires that all manufacturers who offer clear coatings for sale in the district offer at least one product line with a VOC content of 2.1 lbs/gal (250 g/l) or less. Fifteen companies reported selling clear coatings in the 2002 Survey. Eleven of the fourteen companies that reported complete and valid information for clear c oatings have coatings that meet the proposed limit.

Issues :

1. Issue: Low gloss/matted clears need a higher VO C limit to accommodate the additives that are used to disperse light.

Response: Manufacturers currently add a flattenin g agent to a high gloss clear coating to achieve a low gloss coating. This formu lation approach results in an unnecessarily high VOC content. The VOC content of low gloss clear coatings could be reduced to 250 g/l if products are formula ted directly as low gloss products.

Issue: Elastomeric clears need a higher VOC limit.

Response: The ARB has been informed that elastome ric/flex additives are currently available at 1.9 lb/gal (228 g/l) which w ould enable an elastomeric clear coating to achieve the 250 g/l VOC limit.Automotive Coatings Suggested Control Measure

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3. Issue: Compliant solvent-borne clear coatings h ave not been tested for compatibility with water-borne color coatings.

Response: The ARB has found manufacturer data she ets that indicate that at least two companies market 250 g/l clear coatings t hat are compatible with their respective water-borne color coating systems. The PPG Corporation stated at the fourth public workshop in Oakland that it has a compliant solvent-borne clear coating that is marketed for use with its water-bor ne color coatings.

3. Color Coating

Color coatings are pigmented coatings, excluding ad hesion promoters, primers and multi-color coatings, that require a subsequent cle ar coating. Color coatings include metallic/iridescent color coatings. These coatings were previously called basecoats and midcoats as part of the multi-stage systems in dist rict rules. These coatings require a subsequent clear coating for protection, durability , and gloss.

Two companies reported sales of water-borne systems in the 2002 Survey. Another company reported three specific water-borne mixture s. All other coatings in this category are solvent-borne. Many mixtures reported contain trace to minor amounts of water. Exempt compounds are in about half of the m ixtures reported. In those mixtures with exempt compounds, the amount of exempt compoun ds ranged from one-tenth of a percent to seventy-three percent by weight. Overal l, the average amount of exempt compounds was three percent by weight.

This is the largest emitting category of automotive coatings. Color coatings account for about 60 percent of the VOC emissions from automoti ve coatings. Other than resins, the solids include pigments and various other compo unds. These include titanium dioxide, mica, nickel compounds, iron compounds, ru tile, aluminum, silica, carbon black, molybdenum compounds, tin compounds, barium sulfate , copper compounds, and numerous other compounds.

Most of the major manufacturers have water-borne co lor coatings that have been developed to comply with European Union (EU) emissi on standards. The EU directive will require all manufacturers to meet a 420 g/l VO C limit for color coatings as of January 1, 2007. The EU does not allow the use of exempt compounds to comply with the VOC content limit. Consequently, manufacturers have developed water-borne technologies to meet the EU VOC limit.Automotive Coatings Suggested Control Measure

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Based on discussions with manufacturers, they inten d to use these water-borne systems to comply with the proposed SCM VOC limit. Thus, the proposed VOC limit of 420 g/l is technologically and commercially feasibl e by the January 1, 2009, effective date. Twelve companies reported selling color coat ings in the 2002 Survey. Six of the eleven companies that reported complete and valid i nformation for color coatings have solvent-borne systems that meet the proposed limit currently in use in California. However, these solvent-borne systems are only used for fleet vehicles, not for passenger vehicles that have greater performance de mands.

If manufacturers choose to comply with the color co ating limit with water-borne coatings, this will be a significant change from the current use of high VOC solvent-borne coatings. It will likely require changes by the en d users, including the addition of air movement equipment to quickly dry the water-borne c oatings and perhaps heat to maintain current production levels.

4. Multi-Color Coating

Multi-color coatings are coatings that exhibit more than one color in the dried film after a single application, are packaged in a single contai ner, and hide surface defects on areas of heavy use. These coatings are commonly ca lled “splatter” coatings due to their appearance. They are more commonly used in i ndustrial settings and on items such as small fishing boats.

No coatings in this category were reported as being sold in California in 2001. We have found this type of coating marketed on the internet , with one of the listed uses being automotive. We have assumed that everyone who mark ets this coating is in compliance with the current national limit.

The proposed VOC limit of 680 g/l is technologicall y and commercially feasible. The proposed limit is the same as the current limit of 680 g/l in the National Volatile Organic Compound Emission Standards for Automobile Refinish Coatings , 40CFR59, Sections 59.100 through 59.111, and Table 1 to Subp art B

.

5. Pretreatment Coating

Pretreatment coatings contain a minimum of one-half (0.5) percent acid by weight to provide surface etching, and not more than 16 perce nt solids by weight. They are applied directly to bare metal surfaces to provide corrosion resistance and adhesion. The SCAQMD and Antelope Valley AQMD are the only di stricts that limit the solids content of pretreatment coatings. Limiting the sol ids content is intended to reduce film build from a pretreatment coating, thereby reducing the incentive to use a high VOC content material as a primer able to fill large scr atches or voids.Automotive Coatings Suggested Control Measure

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All of the reported mixtures in the 2002 Survey are solvent-borne. Of the 57 reported mixtures, 48 mixtures contain negligible to minor a mounts of water. Water content ranges up to almost four percent by weight. Of the 57 reported mixtures, 43 mixtures do not contain any exempt compounds. Six mixtures have about one percent exempt compounds by weight and the remainder of mixtures r ange from two percent up to 15 percent exempt compounds by weight. Of the coat ings that meet the solids content provision of the SCM, most do not use any exempts. The maximum exempt content found in the coatings that meet the solids content provision is approximately six percent. Other than resins, the solids include pigments and various other compounds. These include titanium dioxide, talc, zinc compounds, iro n oxide, calcium carbonate, zinc phosphate, silica, and numerous other compounds. T he primary acid used is phosphoric acid.

ARB staff believes the proposed VOC limit of 660 g/ l is technologically and commercially feasible by the January 1, 2009 effect ive date based on discussions with the coating manufacturers (current limit is 780 g/l ). One coating manufacturer has stated that they expect to have a pretreatment coat ing that meets the proposed limit on the market by the end of 2005.

One mixture reported in the 2002 Survey had a VOC c ontent of 660 g/l, however, its solids content was greater than 16 percent, by weig ht. We believe it is possible for manufacturers to increase the exempt compound conte nt in order to comply with the proposed VOC limit. Thirteen companies reported se lling pretreatment coatings in the 2002 Survey. Eleven companies reported complete an d valid information for pretreatment coatings, however, none have coatings that meet the proposed limit.

Issues:

1. Issue: No product currently meets the proposed l imit.

Response: ARB staff believes that the manufacture rs have time to reformulate their coatings to meet the proposed limit. Because no products currently meet the proposed VOC limit, we will conduct a technolog y assessment approximately one year before the effective date of the limit.

Below is a sample formulation of a compliant pretr eatment coating. This is

intended to illustrate how the VOC content could be lowered to meet the proposed VOC limit. In developing this formulation , ARB staff relied on nearly compliant formulations of existing mixtures and inc reased the amount of exempt compounds. The volume percent is derived from the weight percent and individual densities of compounds in the coating fo rmulation. To protect data confidentiality, the formula below groups various s olids and VOCs together for display.Automotive Coatings Suggested Control Measure

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Ingredient Wt % Vol %

Resin 5.5 4.4

Solids 9.1 2.5 phosphoric acid 1.4 0.8 Acetone (or other exempts) 7.5 8.6 TBAC (or other exempts) 41.5 43.5

VOCs 35 40.3

Total 100 100

Solids 16 7.7 Exempts 49 52.1

VOC 35 40.3

overall density (g/cm3) 0.90

VOC limit 660 g/l

VOCreg 659.4 g/l

VOCact 316.0 g/l

This is a small usage category, about 45,000 gallon s in 2001. If compliant products were formulated with TBAC, the emissions of TBAC fr om this coating category would be less than 400 lbs per day statewide.

6. Primer

The primer category currently exists in district ru les. The SCM retains it and expands it to include the current district coating categories of primer surfacers and primer sealers. Most districts have the same VOC limit for primers and primer surfacers. Currently, the VOC limit for primer sealers is slightly higher (e. g., 340 g/l in SCAQMD). Primers are coatings applied to a substrate to provide:

1) A bond between the substrate and subsequent coat s; 2) Corrosion resistance; 3) A smooth substrate surface; or 4) Resistance to penetration of subsequent coats. Some primers are pigmented to allow the painter to use less color coating to achi eve the desired color.

The vast majority of primers reported in the 2002 S urvey are solvent-borne, with only a small percentage being water-borne. One mixture of primer, four mixtures of sealer, 14 mixtures of surfacer, and one mixture of precoat are water-borne. All other mixtures reported are solvent-borne.Automotive Coatings Suggested Control Measure

IV–11

Almost 75 percent of the primers reported contain e xempt compounds. For those mixtures with exempt compounds, the exempt content ranges from one-tenth of a percent to almost 64 percent, by weight, with the a verage exempt content being just under six percent.

The resin content varies widely within the primer c ategory depending upon usage and manufacturer, from a low of 0.2 percent to a high o f 57 percent, by weight, both of which are in the surfacer subcategory. Most primers have approximately 20 to 29 percent resin, by weight. Other than resins, the solids in clude pigments and various other compounds. These include barium sulfate, talc, tit anium dioxide, calcium carbonate, zinc phosphate, mica, clay, aluminum, iron oxide, m agnesium carbonate, and numerous other compounds.

The proposed VOC limit of 250 g/l is technologicall y and commercially feasible by the January 1, 2009, effective date. SCAQMD’s Rule 115 1 already requires all primers, primer surfacers, and primer sealers used on large vehicles and mobile equipment to meet a VOC content of 250 g/l. Fifteen companies r eported selling primers in the 2002 Survey. Twelve of the 14 companies that reported c omplete and valid information for primers have coatings that meet the proposed limit.

Issues :

During the SCM development process, manufacturers r equested a 340 g/l VOC limit for sealers. The reasons cited for the need for a high er VOC limit and our responses are

discussed below.

1. Issue: Sealers have a lower solids content than surfacers and therefore cannot

meet the same limit.

Response: ARB staff analyzed the solids content o f surfacers and sealers and

found that while there were differences between the solids contents for any given manufacturer, the differences were insignificant wh en compared to the differences between manufacturers. The ranges for any given manufacturer overlapped, as well as between manufacturers. One manufacturer has stated that it will not be difficult to meet the proposed limit for sealers using exempts in

the solvent mix.

2. Issue: Sealers have less pigment and more resin than surfacers and therefore need a higher limit.

Response: ARB staff analyzed the types of solids in the sealers and surfacers and found that there is a lot of overlap between th e ranges of the types of solids

in sealers and surfacers. ARB staff believes that both products can meet the proposed limit. One manufacturer has stated that i t will not be difficult to meet the proposed limit for sealers using exempts in the solvent mix.Automotive Coatings Suggested Control Measure

IV–12

7. Single-Stage Coating

Single-stage coatings are pigmented coatings, exclu ding primers and multi-color coatings, for application without a subsequent clea r coating. Single-stage coatings include metallic/iridescent single-stage coatings. This is an older coating technology that is diminishing in usage in the collision repai r industry. It is being replaced by color coating/clear coating systems that use less materia l and provide a higher gloss with a more durable finish. Single-stage coatings are use d mostly in production shops where the entire vehicle is painted, and a single coating can achieve the desired color, protection and durability in one application.

All but two of the reported mixtures of single-stag e coatings in the 2002 Survey are solvent-borne. Only about four percent of reported mixtures contain water. For most of these mixtures, the water content is negligible. F our mixtures contain significant amounts of water, ranging from 25 to 55 percent, by weight.

Over half of the mixtures reported do not contain a ny exempt compounds. In the remaining mixtures the exempt content, on a mass ba sis, increases gradually from 0.5 percent up to a maximum exempt content of 61 pe rcent, by weight.

Other than resins, the solids include pigments and various other compounds. These include mica, titanium dioxide, iron oxide, talc, c opper compounds, aluminum, barium sulfate, carbon black, silica, nickel compounds, an d numerous other compounds.

The proposed VOC limit of 340 g/l is technologicall y and commercially feasible by the January 1, 2009, effective date. SCAQMD Rule 1151 currently requires all single-stage coatings used on large vehicles and mobile equipmen t to meet a VOC limit of 340 g/l. The proposed SCM extends the 340 g/l VOC limit in S CAQMD to all vehicles, including passenger cars. Thirteen companies reported sellin g single-stage coatings in the 2002 Survey. One of the ten companies that reporte d complete and valid information for single-stage coatings has a complete single-sta ge system that meets the proposed

limit.

Issues:

1. Issue: Metallic single-stage coatings at the pro posed limit do not currently exist

for the automotive market.

Response: There were some metallic single-stage c oatings sold in 2001 that comply with the proposed VOC limit. One manufactur er has stated that they have a complete single-stage system, including meta llics, that complies with the proposed limit.Automotive Coatings Suggested Control Measure

IV–13

However, based on discussions with manufacturers, i t appears that single-stage coatings are not a good technology for metallic coa tings. Currently, pearl or iridescent coatings are only achieved by using a co lor coating/clear coating technology. It appears that the best way to achiev e a metallic coating is to use a color coating/clear coating technology. This is du e to the way the paint film is created in single-stage coatings. The metallic fla kes are not spread evenly throughout the film and reside only near the surfac e of the film making them more susceptible to damage, both mechanical and che mical. This would alter the appearance of the paint. Whereas in a color co ating/clear coating system, the metallic flakes are fully protected by the clea r coating.

8. Temporary Protective Coating

Temporary protective coatings are coatings used to temporarily protect areas from overspray or mechanical damage. These coatings are commonly used instead of taping off an area before painting another area or applied prior to shipping a vehicle. These coatings are removed after a primer or topcoa t application, or after a vehicle

reaches its destination.

Both of the reported mixtures of temporary protecti ve coatings in the 2002 Survey are water-borne. Neither of the mixtures reported cont ains any exempt compounds. Other than resins, the solids include pigments and variou s other compounds.

The proposed VOC limit of 60 g/l is technologically and commercially feasible by the January 1, 2009, effective date. Several district rules currently require temporary protective coatings to meet a VOC limit of 60 g/l. Two companies reported selling temporary protective coatings in the 2002 Survey. One of the two companies that reported complete and valid information for tempora ry protective coatings has a coating that meets the proposed limit.

9. Truck Bed Liner Coating

Truck bed liner coatings are coatings for applicati on to a truck bed to protect it from surface abrasion. These coatings do not include cl ear coatings, color coatings, multicolor coatings, or single-stage coatings. These co atings are often a rubbery type of coating that provides traction and keeps materials from dinging or scratching the bed. The one reported mixture of truck bed liner coating s in the 2002 Survey is solventborne. It contains no water or exempt compounds. Other than resins, the solids include pigments and various other compounds.

The proposed VOC limit of 310 g/l is technologicall y and commercially feasible by the January 1, 2009, effective date. One company repor ted selling truck bed liner coatings in the 2002 Survey. The company reported complete and valid information, and the coating meets the proposed VOC limit.Automotive Coatings Suggested Control Measure

IV–14

10. Underbody Coating

Underbody coatings (formerly called “rubberized asp haltic underbody coatings”) are applied to wheel wells, the inside of door panels o r fenders, the underside of a trunk or hood, or the underside of the motor vehicle itself. The coatings are typically used for sound deadening or protection. ARB staff changed t he name of the category to “Underbody Coating” and modified the definition to also include coatings with a similar purpose that do not contain rubberized asphalt.

Only four districts define this type of coating, an d some districts do not list it as a specialty coating in their specialty coating defini tion. Of the four districts that define this type of coating, three districts have it specifical ly listed as a specialty coating. Sacramento Metropolitan AQMD has a limit of 540 g/l for these coatings.

Five of the six mixtures reported are solvent-borne ; the remaining mixture is waterborne. None of the solvent-borne coatings contain any water. None of the reported mixtures, whether solvent-borne or water-borne, con tain any exempt compounds.

Other than resins, the solids include pigments and various other compounds. These include talc, calcium carbonate, titanium dioxide, and iron oxide.

The proposed VOC limit of 430 g/l is technologicall y and commercially feasible by the January 1, 2009, effective date based on data provi ded by the coating manufacturers. Three companies reported underbody coatings in the 2002 Survey. Three companies reported complete and valid information and two com panies have coatings that meet the proposed limit.

11. Uniform Finish Coating

Uniform finish coatings are coatings applied to the area around a spot repair for the purpose of blending a repaired area’s color or clea r coating to match the appearance of an adjacent area’s existing coating. While all dis tricts except for one identify this as a specialty coating, only five districts and the nati onal rule define the coating.

All of the coatings reported as uniform finish coat ings in the 2002 Survey are solvent-borne. None of the reported mixtures conta in any water. Only two mixtures contain exempt compounds. Both of these mixtures c ontain about ten percent exempt compounds by weight. The non-resin portion of the solids is composed of pigment and

other solids.

The proposed VOC limit of 540 g/l is technologicall y and commercially feasible by the January 1, 2009, effective date based on data provi ded by the coating manufacturers. Five companies reported uniform finish coatings in the 2002 Survey. Three companies reported complete and valid information and two of the companies have coatings that meet the proposed limit.Automotive Coatings Suggested Control Measure

IV–15

12. Any Other Coating Type

This category is for any coating that does not fit into the specified coating categories. It was created so that if such a coating existed it wo uld not be exempt from the VOC content limits. Currently, we are unaware of any c oating that would be in this category. The proposed VOC limit of 250 g/l was set to preser ve the emission reductions from the proposed SCM.

Table IV-3 - Basic Physical Parameters Minimum Maximum Average

Volume % Solids 1.1 35.8 14.3 Weight % Solids 1.0 51.8 20.3 Weight % Resin 1.0 12.5 3.6 VOC actual (g/l) 579 857 745 Adhesion

Promoter

VOC regulatory (g/l) 579 857 745

Volume % Solids 2.7 72.3 41.5 Weight % Solids 3.6 76.5 46.9 Weight % Resin 3.4 73.9 37.4 VOC actual (g/l) 29 840 429 Clear Coating

VOC regulatory (g/l) 82 840 464

Volume % Solids 0.7 92.8 25.7 Weight % Solids 2.7 94.0 34.3 Weight % Resin 0.8 93.2 29.1 VOC actual (g/l) 62 883 602 Color Coating

VOC regulatory (g/l) 63 883 626

Multi-Color Coating No information was reported.

Volume % Solids 2.9 17.8 11.6 Weight % Solids 3.8 34.0 23.9 Weight % Resin 1.4 13.9 6.2 VOC actual (g/l) 579 933 721 Pretreatment Coating

VOC regulatory (g/l) 660 933 736

Volume % Solids 3.8 85.8 38.8 Weight % Solids 4.5 84.3 56.5 Weight % Resin 0.2 56.7 25.4 VOC actual (g/l) 5 831 477 Primer

VOC regulatory (g/l) 12 831 502

Volume % Solids 7.6 82.0 33.6 Weight % Solids 10.0 86.4 41.5 Weight % Resin 8.2 73.2 28.3 VOC actual (g/l) 69 797 543 Single-Stage Coating

VOC regulatory (g/l) 87 829 561 Temporary Protective Coating This information is proprietary.

Truck Bed Liner This information is proprietary.Automotive Coatings Suggested Control Measure

IV–16

Table IV-3 - Basic Physical Parameters Minimum Maximum Average Coating

Volume % Solids 24.0 41.4 28.7

Weight % Solids 31.9 55.0 39.7 Weight % Resin 15.4 20.0 17.5 VOC actual (g/l) 25 597 466 Underbody Coating

VOC regulatory (g/l) 46 597 469

Volume % Solids 2.8 35.7 32.4 Weight % Solids 3.7 41.0 36.9 Weight % Resin 3.6 38.3 34.3 VOC actual (g/l) 464 827 573 Uniform Finish Coating

VOC regulatory (g/l) 524 827 584 Any Other Coating Type No information was reported.

Table IV-4 - Technical Feasibility

Number of Currently Complying Mixtures Estimated Currently Complying Market Share (percent)

Adhesion Promoter 0 0 Clear Coating 33 8 - 26 Color Coating Systems 8 (6 fleet) 8 Multi-Color Coating NA NA Pretreatment Coating 0 0

Primer 99 40 - 45 Single-Stage Coating Systems 1 NR Temporary Protective Coating P P Truck Bed Liner Coating P P Underbody Coating P P Uniform Finish Coating P P Any Other Coating Type NA NA

NA - Information not available NR - Volumes not reported P - Proprietary informationAutomotive Coatings Suggested Control Measure

IV–17

C. SOLVENTS

Solvents, as the term is used in the SCM, are clean ing solutions that contain VOCs. While most districts regulate solvents used for cle aning operations in their automotive coating rules, a couple of districts (e.g., SCAQMD) have separate rules for cleaning solvents. ARB is addressing solvents used in autom otive coating cleaning operations as part of the SCM.

Most district rules divide solvents into two catego ries: surface preparation and cleanup, and application equipment cleaning. These solvent categories typically have different VOC limits, with application equipment cleaning bei ng given a higher VOC limit. Some districts further divide surface preparation solven ts into those used to clean plastic parts and all other surface preparation solvents. In the se cases, the plastic parts cleaners are given higher VOC limits than the non-plastic parts cleaners. A few districts provide a separate and higher VOC limit for solvents applied from hand-held spray containers. A few districts provide a separate and higher VOC lim it for solvents used to clean road tar, engine oil, grease, overspray, and adhesives.

The proposed VOC limit of 25 g/l is technologically and commercially feasible by the January 1, 2009, effective date. The SCAQMD Rule 1 171, requires all solvents used for cleaning at automotive coatings operations to m eet a 25 g/l VOC limit as of July 1, 2005. There are solvents available that me et the 25 g/l VOC limit through the use of exempt compounds. The SCM would extend the existing SCAQMD limit to the

rest of the State.Automotive Coatings Suggested Control Measure

IV–18

REFERENCES

California Air Resources Board 2002 Automotive Coat ings Survey data.

Code of Federal Regulations Title 40 Part 59 – Nati onal Volatile Organic Compound

Emission Standards for Consumer and Commercial Prod ucts, Sections 59.100 through 59.111 and Table 1 to Subpart B.

Antelope Valley Air Quality Management District Rul e 1151 – Motor Vehicle and Mobile Equipment Coating Operations.

Bay Area Air Quality Management District Regulation 8 – Organic Compounds, Rule 45 – Motor Vehicle and Mobile Equipment Coating Operat ions.

Butte County Air Quality Management District Rule 2 35 – Requirements for Vehicle and Mobile Equipment Coating Operations.

El Dorado County Air Quality Management District Ru le 230 – Automotive Refinishing Operations.

Feather River Air Quality Management District Rule 3.19 – Vehicle and Mobile Equipment Coating Operations.

Glenn County Air Pollution Control District Article IV Prohibitions, Section 105 – Vehicle and Mobile Equipment Coating Operations.

Imperial County Air Pollution Control District Rule 101 – Definitions.

Imperial County Air Pollution Control District Rule 427 – Automotive Refinishing Operations.

Kern County Air Pollution Control District Rule 410 .4A – Motor Vehicle and Mobile Equipment Refinishing Operations.

Mojave Desert Air Quality Management District Rule 1116 – Automotive Refinishing Operations.

Placer County Air Pollution Control District Rule 2 34 – Automotive Refinishing Operations.

Sacramento Metropolitan Air Quality Management Dist rict Rule 459 – Automotive, Truck & Heavy Equipment Refinishing Ops.

San Diego County Air Pollution Control District Rul e 67.20 – Motor Vehicle and Mobile Equipment Refinishing Operations.Automotive Coatings Suggested Control Measure

IV–19

San Joaquin Valley Unified Air Pollution Control Di strict Rule 4602 – Motor Vehicle and Mobile Equipment Coating Operations.

San Luis Obispo County Air Pollution Control Distri ct Rule 423 – Motor Vehicle and Mobile Equipment Coating Operations.

Santa Barbara County Air Pollution Control District Rule 339 – Motor Vehicle and Mobile Equipment Coating Operations.

Shasta County Air Quality Management District Rule 3:25 – Vehicle and Mobile Equipment Coating Operations.

South Coast Air Quality Management District Rule 11 51 – Motor Vehicle and Mobile Equipment Non-Assembly Line Coating Operations.

Tehama County Air Pollution Control District Rule 4 :35 – Vehicle and Mobile Equipment Coating Operations.

Ventura County Air Pollution Control District Rule 74.18 – Motor Vehicle and Mobile Equipment Coating Operations.

Yolo-Solano Air Quality Management District Rule 2. 26 – Motor Vehicle and Mobile Equipment Coating Operations.

Confidential conversations with paint manufacturers regarding proprietary information related to product development.Automotive Coatings Suggested Control Measure

V -1

V. AMBIENT AIR QUALITY AND EMISSIONS

California’s extreme air quality problems require u nique strategies for meeting federal and State ambient air quality standards. In this c hapter, we provide an overview of these air quality problems and the need for signifi cant emission reductions from all sources of air pollution. We also describe the nee d for the regulation of automotive coatings and provide a summary of the emissions fro m the coating categories proposed for regulation.

A. AMBIENT AIR QUALITY AND THE NEED FOR EMISSION RE DUCTIONS

VOC emissions contribute to the formation of ozone, and fine particulate matter (PM). PM pollution consists of very small liquid and soli d particles in the air. PM includes particles smaller than 10 microns in size (PM 10 ), and particles smaller than 2.5 microns in size (PM 2.5 ). Ozone formation in the lower atmosphere results from a series of chemical reactions between VOCs and nitrogen oxides in the presence of sunlight.

PM 10 and PM 2.5 pollution result from both direct and indirect emis sions. Direct sources

of PM 10 and PM 2.5 include emissions from fuel combustion and wind er osion of soil.

Indirect PM 10 and PM 2.5 result from the chemical reaction of VOCs, nitrogen oxides, sulfur oxides and other chemicals in the atmosphere . Federal and State ambient air quality standards for these contaminants have been established to protect California’s population from the harmful effects of ozone and PM

.

1. Ozone

VOCs and nitrogen oxides (NO
x ) react in the presence of sunlight to form ozone. The rate of ozone generation is related closely to the amount and reactivity of VOC

emissions as well as the amount of NO
x emissions available in the atmosphere (U.S. EPA, 1996; Seinfeld and Pandis, 1998). Ozone is a colorless gas and the chief component of urban smog. It is one of the State’s more persistent air quality problems. As shown in Figure V-1, the population-weighted ave rage exposure to ozone concentrations above the 1-hour State ambient air q uality standard (of 0.09 ppm) in the South Coast Air Basin has been declining. However, despite this decline and nearly 25 years of regulatory efforts, ozone continues to be an important environmental and

health concern.

It has been well documented that ozone adversely af fects the respiratory functions of

humans and animals. Human health studies show that short-term exposure to ozone injures the lung (ARB, 2000b, 1997; U.S. EPA, 1996) . In some animal studies, permanent structural changes with long-term exposur es to ozone concentrations considerably above ambient levels were noted; these changes remain even after periods of exposure to clean air (U.S. EPA, 1996). Ozone is a strong irritant that can cause constriction of the airways, forcing the resp iratory system to work harder in order to provide oxygen to the body. Ozone is a powerful oxidant that can damage the respiratory tract, causing inflammation and irritat ion, and induces symptoms such as coughing, chest tightness, shortness of breath, and worsening of asthma symptomsAutomotive Coatings Suggested Control Measure

V -2

(U.S. EPA, 1996). Ozone in sufficient doses increa ses the permeability of lung cells, rendering them more susceptible to toxins and micro organisms.

The greatest risk is to those who are more active o utdoors during smoggy periods, such as children, athletes, and outdoor workers. Exposu re to levels of ozone above the current ambient air quality standard leads to lung inflammation and lung tissue damage,

and a reduction in the amount of air inhaled into t he lungs. Recent evidence has, for the first time, linked the onset of asthma to expos ure to elevated ozone levels in exercising children (McConnell et al., 2002).

One requirement of The Children’s Environmental Hea lth Protection Act is that the ARB, in consultation with OEHHA, review all of Californi a's health-based ambient air quality standards by December 31, 2000 (Senate Bill 25, Esc utia, 1999). The purpose of the review was to determine whether the standards adequ ately protect public health, especially the health of infants and children. The findings are summarized in the report, "Adequacy of California Ambient Air Quality Standar ds: Children's Environmental Health Protection Act" (ARB, 2000b). This report found th at the standards for particulate matter, ozone, and nitrogen dioxide are inadequate to protect public health. The standards for particulate matter (PM 10 and sulfates) were found to have the highest priority for revision. At the December 9, 2000, Pu blic Meeting, the Board approved the report and urged staff to work as expeditiously as possible to present them with recommendations due to the serious impact of these pollutants on the health of Californians. In March 2005, the State adopted a n ew 8-hour standard for ozone, and retained the existing 1-hour ozone standard.

Figure V-1 Population-Weighted Exposure to Ozone Concentration s Above the State Ambient Air Quality Standard

0 5 10 15 20 25 30 35 40 45

1983 1985 1987 1989 1991 1993 1995 1997 1999 2001Total Annual Exposure(pphm-hrs/person)

South CoastAutomotive Coatings Suggested Control Measure

V -3

Not only does ozone adversely affect human and anim al health, but it also affects vegetation throughout most of California resulting in reduced yield and quality in agricultural crops, disfiguration or unsatisfactory growth in ornamental vegetation, and damage to native plants. During the summer, ozone levels are often highest in the urban centers in southern California, the San Joaqu in Valley, and Sacramento Valley, which are adjacent to the principal production area s in the State’s multibillion-dollar agricultural industry. ARB studies indicate that o zone pollution damage to crops is estimated to cost agriculture over 300 million doll ars annually (ARB, 1987). Similarly, the U.S. EPA estimates national agricultural losses to exceed 1 billion dollars annually (U.S. EPA, 1996). Elevated levels of ozone also ca use damage to materials such as rubber, paints, fabric, and plastics.

In 1997, the U.S. EPA promulgated a new 8-hour ozon e ambient air quality standard (U.S. EPA, 1997). On April 15, 2004, U.S.EPA desig nated nonattainment areas for the new 8-hour ozone standard effective June 15, 2004 ( U.S. EPA, 2004a, 2004b). In California, many of these areas are already designa ted nonattainment for the federal

1-hour standard. New nonattainment areas include a number of rural Sierra foothill counties and additional parts of the Sacramento Val ley. This action starts the transition

from the 1-hour standard to the 8-hour standard. T he federal 1-hour standard was

revoked in June 2005.

SIPs showing how each area will meet the federal 8- hour standard are due by 2007. In order to maintain progress towards clean air, th e Clean Air Act prohibits backsliding on the control program. Since the federal 8-hour s tandard is more health-protective than the federal 1-hour standard, ARB expects that California will need to reduce emissions beyond the existing 1-hour SIP targets. All major urban areas in California

continue to violate the federal and State ozone sta ndards, and need additional emission reductions in ozone precursors – such as VOCs – to attain these health-based

standards.

2. Fine Particulate Matter

PM is prevalent in the urban atmosphere (see, for e xample, Pandis et al., 1992), and ambient PM, especially PM 2.5 is known to have negative impacts on human health (Schwartz et al. , 1996; Moolgavkar and Leubeck, 1996). Like ozone, PM can be formed via atmospheric oxidation of organic compounds (Fin layson-Pitts and Pitts, 2000). According to the results from several recent studie s, photochemically derived PM (i.e. secondary organic aerosol) could contribute u p to 80 percent of the fine particle burden observed in severe air pollution episodes (P andis et al., 1992; Turpin and Huntzicker, 1991, 1995). In urban PM, these second ary organic aerosols (SOA) could produce effects such as visibility degradation and toxicity (see, for example Atkinson and Arey

, 1994).Automotive Coatings Suggested Control Measure

V -4

The relative contribution of primary versus seconda ry PM also varies by region and by season. While only limited information is availabl e on how much of the measured PM 2.5 organic carbon component is SOAs, available studies suggest that in the South Coast on an annual average basis, SOAs may constitute six to 16 percent of PM 2.5 . In urban areas of the San Joaquin Valley during the winter, SOAs may contribute up to an average of eight percent of PM 2.5 (ARB 2005c).

Significant advances have been made in the theoreti cal and the experimental studies of the formation of SOAs (Pankow, 1994a, 1994b; Odum et al., 1996; Seinfeld and Pandis, 1998; Harner and Bidleman, 1998; Kleindienst, et al., 1999; Yu et al., 1999). In addition, modeling techniques to determine the amount of ozon e, as well as the amount of aerosol formed from a VOC have been established (Bo wman et al., 1995), and the concept similar to maximum incremental reactivity i s being applied to quantitatively assess the aerosol formation potential of a VOC (i. e. incremental aerosol reactivity) (Griffin et al., 1999). Based on the results of these studies, we n ow know that there is a mechanistic linkage between the ozone formation and SOA formation of a VOC.

Although most organic compounds contribute to ozone formation (Carter, 2000), SOA is usually formed from photooxidation of organic compo unds with carbon numbers equal to seven or more (Grosjean and Seinfeld, 1989; Wang et al., 1992). This observation is consistent with the fact that both reactivity and a product’s volatility need to be considered for evaluating the aerosol formation pot ential of a VOC (Odum et al. , 1997). It has also been shown that aromatic compounds are more likely to participate in the formation of SOA than are alkenes (Grosjean, 1992; Pandis et al., 1992). Only chemicals which react fast enough in the atmosphere will generate sufficient amounts of low volatility products for forming aerosols.

The federal and State ambient air quality standards for ozone and PM are shown in

Table V-1.

Table V-1 - Ambient Air Quality Standards for Ozone , PM 10 and PM 2.5

Pollutant Averaging Time State Standard National Standard

Ozone 1 hour 0.09 ppm (180 μ g/m 3 ) ------------

8 hour 0.070 ppm

(137 μ g/m 3 ) 0.08 ppm

(157 μ g/m 3 )

PM 10 24 hour Annual

Annual Arithmetic Mean 50 μ g/m 3

20 μ g/m 3 150 μ g/m 3

50 μ g/m 3

PM 2.5 24 hour Annual

Annual Arithmetic Mean --------- 12 μ g/m 3 65 μ g/m 3

15 μ g/m 3Automotive Coatings Suggested Control Measure

V -5

The U.S. EPA adopted standards for PM 2.5 in addition to the PM 10 standards (U.S. EPA, 1997). PM 2.5 consists of directly emitted particulate matter, a nd secondary particulate matter such as nitrates, sulfates and condensables that are formed in the atmosphere from precursors such as NOx, ammonia, SOx and compl ex hydrocarbons. Because

PM 2.5 is a subset of PM 10 , these precursors contribute to PM 10 pollution as well. In 2002, California established an annual average PM 2.5 standard of 12 μ g/m 3 , which is more health-protective than the federal standard (1 5 μ g/m 3 ).

U.S. EPA set a February 15, 2004 deadline for state s to provide their PM 2.5 nonattainment designation recommendations based on ambient monitoring data from 2000 through 2002. ARB submitted the data and reco mmendations on February 11, 2004. (ARB 2004) U.S. EPA finalized t he PM 2.5 designations in January 2005. Nonattainment areas for the federal PM 2.5 standard include the South Coast Air Basin and the San Joaquin Valley Air Basi n. The PM 2.5 SIPs are due by April 2008.

The vast majority of California’s population who li ve in urban areas breathe unhealthy air. Figures V-2, V-3, and V-4 show that unhealthy levels of ozone, PM 10 , and PM 2.5 respectively, are not limited to urban areas, but c an be found in nearly every county in California. As shown in these maps for 2004, 46 co unties are currently designated as nonattainment (or nonattainment-transitional, which is a subcategory of nonattainment) for the State ozone standard, while 54 counties are designated as nonattainment for the

State PM 10 standard (ARB, 2004). Over 99 percent of Californ ia’s population lives in areas designated as nonattainment for the State ozo ne and PM 10 standards, a clear indication of the magnitude of the air quality prob lems in California. (ARB, 2005a)

The California Clean Air Act requires districts tha t have been designated nonattainment for the State ambient air quality standards for ozo ne, carbon monoxide, sulfur dioxide, or nitrogen dioxide to prepare and submit plans for attaining and maintaining the standards (see Health and Safety Code § 40910 et seq .). In addition, the federal Clean Air Act requires that districts designated nonattai nment for the federal ambient air quality standards prepare SIPs to demonstrate attai nment with the federal standards. In some of these districts, substantial additional emi ssion reductions will be necessary if attainment is to be achieved. In developing their plans, each district determines which measures are necessary to include, as well as the s pecific details of each included

measure.

The plans from various districts underscore the inc reasing role of pollution from areawide sources, including consumer products, architec tural coatings, and automotive coatings. As emissions from facilities and vehicle s are reduced, the area-wide sources become a larger part of the inventory, and are incl uded as a more significant area for potential reductions of VOC emissions. It is estim ated that without additional automotive coatings regulations, the inventory for automotive coatings emissions will increase due to population growth.Automotive Coatings Suggested Control Measure

V -6 Figure V-2Automotive Coatings Suggested Control Measure

V -7 Figure V-3Automotive Coatings Suggested Control Measure

V -8 Figure V-4Automotive Coatings Suggested Control Measure

V -9

B. ESTIMATED EMISSIONS FROM AUTOMOTIVE COATINGS

Emissions from automotive coatings are estimated fr om the survey of automotive coatings that the ARB conducted in 2002. In June 2 002, the ARB mailed survey questionnaires to companies that potentially sold a utomotive coatings products in California in 2001. A total of 17 companies submit ted data. The survey collected data on the VOC contents of products, which were then us ed to estimate VOC emissions from automotive coatings. Estimated emissions from automotive coatings were 7,631 tons per year or approximately 20.7 tpd in 20 01, based on the survey data. These quantities do not include emissions from solv ents used for surface preparation and cleanup because the 2002 Survey did not collect this data. Table V-2 summarizes key findings from the 2002 Survey data.

The survey also collected information on speciation of VOCs. The quantity of VOC ingredients reported in the survey is close to the quantity of VOC emissions calculated using sales and VOC content data. This indicates a good correlation between the speciated ingredient data and the data that are use d to calculate VOC emissions.

Table V-2 - Summary of the 2002 Automotive Coatings Survey Total volume (gallons) 3,685,636 Volume of water-based/solvent-based coatings (perce nt) 1/99 Estimated emissions (tpd) 20.7 Volume per capita (gallons) 0.11 Emissions per capita (pounds) 0.44

Total VOC emissions from stationary sources (includ ing area-wide sources) in California were estimated to be about 1,336 tpd in 2001. VOC emissions from automotive coatings are estimated to be about 20.7 tpd based o n ARB 2002 Survey data (ARB, 2005b). This represents about two percent of the V OC emissions from stationary

sources.

Table V-3 presents the estimated emissions and emis sion reductions by category based on the coating information provided in the 2002 Sur vey. The emissions estimate accounts for the total volume of products sold. Be cause the 2002 Survey did not collect data on solvent usage for surface preparation and c leanup, we are unable to quantify the emission reduction from the 25 g/l VOC limit fo r solvents. However, the emission reduction from the 25 g/l VOC limit has already bee n accounted for in the SCAQMD under Rule 1171. Although not quantified, extendin g the 25 g/l VOC limit for solvents

statewide would achieve emission reductions outside of the SCAQMD.Automotive Coatings Suggested Control Measure

V -10

Table V-3 - Estimated Emissions and Emission Reduct ions from Automotive Coatings

Estimated

Emission Baseline (tpd) Estimated

Emission Reductions (tpd) Percent

Reduction

Adhesion Promoter 0.03 0.02 78 Clear Coating 2.70 1.61 60 Color Coating 12.85 8.78 68 Multi-color Coating 0.00 0.00 0 Pretreatment Coating 0.36 0.21 59

Primer 1.78 1.01 56 Single-stage Coating 2.87 1.68 58 Temporary Protective Coating <0.01 <0.01 43

Truck Bed Liner Coating <0.01 <0.01 0 Underbody Coating 0.01 <0.01 53

Uniform Finish Coating 0.08 0.05 63 Any Other Coating Type 0.00 0.00 0

Total 20.7 13.4 65Automotive Coatings Suggested Control Measure

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REFERENCES

Air Resources Board. California Almanac of Emissio ns and Air Quality, 2005. (ARB, 2005a)

Air Resources Board. The 2002 Automotive Coatings Survey Data. June 2005. (ARB, 2005b)

Air Resources Board, Staff Report. Effect of Ozone on Vegetation and Possible Alternative Ambient Air Quality Standards . March, 1987. (ARB, 1987)

Air Resources Board. Characterization of Ambient P M10 and PM2.5 in California, Technical Report, June 2005. (ARB 2005c)

Air Resources Board. Letter to Ms. Mary Nichols, U nited States Environmental Protection Agency. ARB Comments on U.S. EPA Propos als for New, National Clean

Air Goals and Policies . March 11, 1997. (ARB, 1997)

Air Resources Board. Final Program Environmental I mpact Report Suggested Control Measure for Architectural Coatings , June 2000. (ARB, 2000a)

Air Resources Board and Office of Environmental Hea lth Hazard Assessment. Adequacy of California Ambient Air Quality Standard s: Children's Environmental Health

Protection Act . December 22, 2000, available at http://www.arb.ca.gov/research/aaqs/caaqs/ad-aaqs/a d-aaqs.htm (ARB, 2000b)

Air Resources Board and Office of Environmental Hea lth Hazard Assessment. Staff Report: Public Hearing to Consider Amendments to th e Ambient Air Quality Standards

for Particulate Matter and Sulfates , available at http://www.arb.ca.gov/research/aaqs/std-rs/pm-final /pm-final.htm . (ARB, 2002a)

Air Resources Board. 2004 Area Designations and Ma ps . Available at http://www.arb.ca.gov/desig/adm/adm.htm. (ARB, 200 4)

Air Resources Board. The 2003 California Almanac o f Emissions and Air Quality

, available at http://www.arb.ca.gov/aqd/almanac/almanac03/toc03.h tm . (ARB, 2003),

Atkinson, R. and J. Arey. Atmospheric Chemistry of Gas-phase Polycyclic Aromatic Hydrocarbons: Formation of Atmospheric Mutagens. Environmental Health Perspectives, 102 (Supplement 4), 117-126. (Atkins on and Arey

, 1994)

Bowman, F.M., Pilinis, C. and Seinfeld, J.H. Ozone and aerosol productivity of reactive organics. Atmospheric Environment, 29, 579-589. (Bowman et al., 1995)

Carter, W.P.L. Documentation of the SAPRC-99 Chemi cal Mechanism for VOC Reactivity Assessment. Final report to California Air Resources Board, C ontract No. 92- 329 and No. 95-308. (Carter, 2000)Automotive Coatings Suggested Control Measure

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Finlayson-Pitts, B.J. and J.N. Pitts Jr. Chemistry of the Upper and Lower Atmosphere Chapter 9, Academic Press, New York. (Finlayson-Pi tts and Pitts, 2000)

Griffin, R.J., Cocker III, D.R., and Seinfeld, J.H. Incremental aerosol reactivity: application to aromatic and biogenic hydrocarbons . Enviorn. Sci. Technol., 33, 2403-2408. (Griffin et al., 1999)

Grosjean, D. In situ

organic aerosol formation during a smog episode: e stimated production and chemical functionality . Atmospheric Environment, 26A, 953-963. (Grosjean, 1992)

Grosjean, D. and J.H. Seinfeld. Parameterization o f the Formation Potential of Secondary Organic Aerosols . Atmospheric Environment

, 23, 1733-1747. (Grosjean and Seinfeld, 1989)

Harner, T. and Bidleman, T.F. Octanol-air partitio n coefficient for describing particle/gas partitioning of aromatic compounds in urban air . Environ. Sci. Technol., 32, 1494-1502. (Harner and Bidleman, 1998)

Kleindienst, T.E., Smith, D.F., Li, W., Edney, E.O. , Driscoll, D.J., Speer, R.E., and Weathers, W.S. Secondary organic aerosol formation from the oxidation of aromatic hydrocarbons in the presence of dry submicron ammon ium sulfate aerosol

. Atmos. Enviorn., 33, 3669-3681. (Kleindienst et al., 1999)

McConnell, R., K. Berhane, F. Gilliland, S.J. Londo n, T. Islam, W.J. Gauderman, E. Avol, H.G. Margolis, and J.M. Peters. Asthma in exercising children exposed to ozone: A cohort Study . Lancet, 359:386-391. (McConnell et al., 2002)

McConnell, R., K. Berhane, F.Gilliland, J. Molitor, D. Thomas, F. Lurmann, E. Avol, W.J. Gauderman, and J.M. Peters. Prospective study of air pollution and bronchitic symptoms in children with asthma . Am J Respir Crit Care Med, Vol 168, 790-797 (McConnell et al., 2003)

Moolgavkar, S.H. and Leubeck, E.G. A critical revi ew of the evidence on particulate air pollution and mortality . Epidemiology, 7, 420-428. (Moolgavkar and Leube ck, 1996)

Odum, J.R., T. Hoffmann, F. Bowman, D. Collins, R.C . Flagan, and J.H. Seinfeld. Gas/Particle Partitioning and Secondary Organic Aer osol Yields

. Environmental Science & Technology

, 30, 2580-2585. (Odum et al., 1996)

Odum, J.R., T.W.P. Jungkamp, R.J. Griffin, H.J.L. F orstner, R.C. Flagan, and J.H. Seinfeld. Aromatics, Reformulated Gasoline, and At mospheric Organic Aerosol

Formation

. Environmental Science & Technology, 31, 1890-1897. (Odum et al., 1997)Automotive Coatings Suggested Control Measure

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Pandis, S.N., R.A. Harley, G.R. Cass, and J.H. Sein feld. Secondary Organic Aerosol Formation and Transport . Atmospheric Environment, 26A, 2269-2282. (Pandi s et al., 1992)

Pankow, J.F. An absorption model of gas/particle p artitioning of organic compounds in the atmosphere . Atmospheric Environment, 28, 185-188. (Pankow, 1994a)

Pankow, J.F. An absorption model of the gas/aeroso l partitioning involved in the formation of secondary organic aerosol . Atmospheric Environment, 28, 189-193. (Pankow, 1994b)

Schwartz, J., Dockery, D.W., and Neas, L.M. Is dai ly mortality associated specifically with fine particles . J. Air Waste Manage. Assoc., 46, 927-939. (Schw artz et al., 1996)

Seinfeld, John H., and Pandis, Spyros N. Atmospher ic Chemistry and Physics-From Air Pollution to Climate Change . John Wiley & Sons, New York, 1998. (Seinfeld an d Pandis, 1998)

Senate Bill 25 , Escutia, Stats. 1999, Ch 731 (Senate Bill 25, Es cutia, 1999)

Turpin, B.J. and Huntzicker, J.J. Secondary format ion of organic aerosol in the Los Angeles basin: a descriptive analysis of organic an d elemental carbon concentrations

. Atmospheric Environment, 25A, 207-215. (Turpin and Huntzicker, 1991)

Turpin, B.J. and Huntzicker, J.J. Identification o f secondary organic aerosol episodes and quantitation of primary and secondary organic a erosol concentrations during
SCAQS . Atmospheric Environment, 29, 3527-3544. (Turpin and Huntzicker,1995)

United States Environmental Protection Agency. Air Quality Criteria for Ozone and

Related Photochemical Oxidants . July, 1996, Volume I and III. (U.S. EPA, 1996)

United States Environmental Protection Agency. Nat ional Ambient Air Quality Standards for Particulate Matter; Final Rule . Federal Register. July 18, 1997, Volume 62, Number 138, available at http://www.epa.gov/ttncaaa1/t1/fr_notices/pmnaaqs.p df (U.S. EPA, 1997)

United States Environmental Protection Agency. Fin al Rule to Implement the 8-Hour Ozone National Ambient Air Quality Standard – Phase 1 , Federal Register: 69 23951 (April 30, 2004), available at http://www.epa.gov/ozonedesignations/finalrule.pdf (U.S. EPA, 2004a)

United States Environmental Protection Agency. Air Quality Designations and

Classifications for the 8-Hour Ozone National Ambie nt Air Quality Standards; Early Action Compact Areas with Deferred Effective Dates . Federal Register: April 30, 2004, Volume 69, Number 84, Rules and Regulations, Page 2 3857-23951, available at http://www.epa.gov/fedrgstr/EPA-AIR/2004/April/Day- 30/a9152.htm (U.S. EPA, 2004b)Automotive Coatings Suggested Control Measure

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Yu J., Cocker III, D.R., Griffin, R.J., Flagan, R.C ., and Seinfeld, J.H. Gas-Phase Ozone Oxidation of Monoterpenes: Gaseous and Particulate Products . J. Atmos. Chem., 34, 207-258. (Yu et al., 1999)

Wang, S.C., S.E. Paulson, D. Grosjean, R.C. Flagan, and J.H. Seinfeld. Aerosol Formation and Growth in Atmospheric Organic/NO
x Systems-I. Outdoor Smog

Chamber Studies of C 7 - and C 8 -Hydrocabrons . Atmospheric Environment, 26A, 403-420. (Wang et al., 1992)Automotive Coatings Suggested Control Measure

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VI. ENVIRONMENTAL IMPACTS

Both the California Environmental Quality Act (CEQA ) and ARB policy require the ARB to evaluate the potential adverse environmental imp acts of proposed projects. The intent of the proposed SCM is to protect the public health by reducing the public’s exposure to potentially harmful emissions of VOCs. An additional consideration is the impact that the proposed SCM may have on the enviro nment. Based on available information, the ARB has determined that no signifi cant adverse environmental impacts should occur as a result of districts adopting the proposed SCM. This chapter summarizes the potential impacts that the proposed SCM may have on wastewater treatment, air quality, and hazardous waste disposa l.

A. ANALYSIS OF REASONABLY FORESEEABLE ENVIRONMENTAL IM PACTS

OF THE METHODS OF COMPLIANCE

1. Potential Wastewater Impacts

Wastewater is regulated in California by the Water Resources Control Board. In California, wastewater containing hazardous substan ces is not allowed to be disposed of in the sewer system. Discharge of wastewater fr om automotive coatings facilities to a sanitary sewer can result in the solids portion of the coating accumulating in sewage treatment sludge, preventing its beneficial use. S ome contaminants “pass through” and are discharged to lakes, rivers, bays, and oceans. Although the practice is illegal, facility operators may introduce hazardous substanc es to the sewer system by washing down areas containing over spray and allowing that water to enter the sewer system.

Most waste paint is a result of over spray and is c ollected primarily on the paint booth exhaust filter or in floor sweepings. Coating faci lities may also generate paintcontaminated disposable rags, masking tape and pape r, disposable mixing cups and sticks, and disposable paint strainers. The dry pa int related wastes are typically

landfilled. The reduction of VOC content will redu ce the amount of VOCs landfilled.

The SCM is also not expected to adversely impact wa ter quality. First, use of exempt solvents (solvents not considered to be VOCs, such as acetone and PCBTF) is expected to result in equivalent or fewer water qua lity impacts than currently used solvents (such as toluene, xylenes, mineral spirits , and methyl ethyl ketone), since the exempt solvents are less toxic. Second, because cu rrently available compliant color coatings are already using water-based technology, no additional water quality impacts from future compliant water-based coatings are expe cted, although use of water-based coatings is expected to increase. The current manu facturing and clean-up practices associated with water-based coatings are not expect ed to change as a result of the SCM. Lastly, the SCM is not expected to promote th e use of compliant coatings

formulated with hazardous solvents that could creat e adverse water quality impacts.Automotive Coatings Suggested Control Measure

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Tertiary-Butyl acetate (CH 3 COOC(CH 3 ) 3 ) is the common name for acetic acid, 1,1- dimethylethyl ester. Other names include t -butyl acetate, tert

-butyl acetate, and informally, TBAC or TBAc TM . It is an effective viscosity reducer with an int ermediate flash point and vapor pressure. Industrially, it c an be used in a variety of coatings. ARB

staff has recommended that the districts consider e xempting TBAC from their VOC definitions. It is anticipated that this exemption will be granted, by some if not all districts, allowing TBAC to be substituted for non- exempt VOCs of higher reactivity when reformulating automotive coatings and potentia lly cleaning solvents. In ARB’s Draft Environmental Impact Assessment of Tertiary -Butyl Acetate (ARB, 2005), the staff determined that in automotive coating products, the compounds most likely to be replaced by TBAC are xylenes, toluene, and methyl e thyl ketone (MEK). (see http://www.arb.ca.gov/research/reactivity/tbac1.pdf )

ARB’s assessment of TBAC also examined the potentia l impact on water of an increased use of TBAC. Based on information provid ed by the Lyondell Chemical Company and a literature search, the potential risk to surface waters of California is expected to be low, assuming the material is stored , used, and disposed of in accordance with hazardous materials regulations.

2. Air Quality Impacts

There are two basic kinds of air emissions from act ivities conducted at automotive refinishing facilities: VOCs and particulates (sol ids). Particulates make up the solid part of the paint that contains the binder, pigment, and other additives. To control particulates, painting should be performed inside a paint spray booth equipped with paint arrestors (filters) and a ventilation system sufficient to draw the air from the booth through the filters. Paint booth air emissions con trols are limited to collection of paint particulates. Generally, no control of VOCs from t he air exhausted from the paint booth is required or practiced.

The adoption and implementation of the proposed SCM on a statewide basis is expected to produce substantial, long-term, VOC emi ssion reductions. VOCs are regulated because they contribute to the formation of both ozone and PM 10 . Numerous

VOCs have also been identified as toxic air contami nants and are regulated through the ARB’s Toxic Air Contaminant (TAC) Control Program. If the proposed VOC content limits in the SCM were implemented statewide, emiss ions would be reduced by approximately 13 tons per day beginning in 2009, a net air quality benefit.

Based on ARB’s 2002 Survey, xylenes, toluene, and M EK account for approximately 27.5 percent of the VOCs used in automotive coating s. As previously mentioned, ARB’s Draft Environmental Impact Assessment of Tertiary -Butyl Acetate indicates that these compounds are the most likely VOCs to be repl aced by the use of TBAC. Assuming a replacement of 25 to 50 percent of these three VOCs, TBAC substitution would result in a potential use of TBAC of 1.4 to 2 .9 tpd. However, color coatings account for about 63 percent of the total VOC emiss ions and about 50 percent of theAutomotive Coatings Suggested Control Measure

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xylenes, toluene, and MEK emissions from automotive coatings. If, as expected, coating manufacturers choose to meet the VOC limit for color coatings with water-borne coatings, the potential emissions of TBAC would be reduced to about 1.5 tpd (assuming 50 percent substitution for xylenes, toluene and ME K).

The California Department of Industrial Relations, Division of Occupational Safety and Health Administration (Cal/OSHA) regulates the conc entration of many TACs in the workplace environment. To protect worker safety, C al/OSHA has established a permissible exposure limit (PEL) for many of these compounds (the PEL is the maximum, 8-hour, time-weighted average concentratio n for occupational exposure). The current Cal/OSHA PEL for TBAC is 200 ppm for an 8 hour time-weighted average. If TBAC is substituted for xylenes, toluene, and ME K, the worker’s TBAC exposure would not be expected to exceed the current workpla ce exposure standard.

Workers in the automotive coatings industry are exp osed to isocyanates, found in polyurethane sealers and some primers. Paper masks offer no protection against isocyanate exposure, only the most protective respi rators should be used for situations involving exposures to isocyanates that have poor w arning properties, are potent sensitizers, or may be carcinogenic. These respirat ors include:

 any self-contained breathing apparatus with a full face piece operated in a pressure-demand or other positive-pressure mode, an d

 any supplied-air respirator with a full face piece operated in a pressure-demand or other positive-pressure mode in combination with an auxiliary self-contained breathing apparatus operated in a pressure-demand o r other positive-pressure

mode.

A complete respiratory protection program should in clude:

1) regular training and medical evaluation of perso nnel,

2) fit testing,

3) periodic environmental monitoring,

4) periodic maintenance, inspection, and cleaning o f equipment

5) proper storage of equipment, and

6) written standard operating procedures governing the selection and use of respirators. The program should be evaluated regula rly.

Some manufacturers and districts have expressed a c oncern over the possible increased worker exposure to glycol ethers and TBAC upon reformulation to lower VOC automotive coatings and cleaning solvents. Because of the history of isocyanateAutomotive Coatings Suggested Control Measure

VI-4

exposure in the automotive refinish industry, avail able personal protection systems are sufficient to protect against worker exposure to gl ycol ethers and TBAC.

In ARB’s Draft Environmental Impact Assessment of Tertiary -Butyl Acetate, it is estimated that a large body shop uses 3,000 gallons of automotive coatings per year, and assumes that the average amount of toluene, xyl enes and MEK present in automotive coatings is 50 percent of the total VOC content of the coating. Under this worst-case scenario, a large automotive refinishing facility would emit more than 6,500 pounds per year of TBAC if TBAC was substitut ed for toluene, xylenes, and MEK on a one-for-one basis. However, the SCAQMD has re cently indicated that the largest automotive refinishing facility in their district u ses no more than 1,100 gallons of coatings per year. Based on ARB’s 2002 Automotive Survey, xylenes, toluene, and MEK account for approximately 27.5 percent of the V OCs used in automotive coatings. Under this scenario, which we believe most accurate ly defines the worst-case scenario for a large automotive refinishing facility, the am ount of TBAC emitted annually would be approximately 1,350 pounds if TBAC was substitut ed on a one-for-one basis for toluene, xylenes and MEK.

The TBAC analysis also assesses the potential cance r risk from TBAC emissions from automotive refinishing facilities. The highest est imated cancer risk for a facility emitting 2,692 pounds per year of TBAC was 11 excess lifetim e cancer cases per million. Based on the updated emission estimate for a large facility and the substitution assumption of 50 percent, we estimate the maximum p otential risk to be 2.8 excess lifetime cancer cases per million. However, if the VOC limit for color coatings is met with water-borne coatings, the potential cancer ris k would be reduced to about 1.4 in a

million.

Staff also analyzed the potential for other air qua lity impacts. During past regulatory efforts affecting coatings, industry representative s have alleged that the use of low VOC coatings may create certain significant adverse air quality impacts. While similar concerns have not been raised during the developmen t of this SCM, we examined the following issues in order to determine if any of th ese concerns were applicable to automotive coatings:

 Will the use of lower VOC automotive coatings resul t in a thicker film coating?

No. In previous rulemakings on coatings, some indu stry representatives contended that lower VOC coatings are formulated with high so lids contents and were therefore difficult to handle during application, tending to produce a thick film when applied. A thicker film supposedly indicates that a smaller su rface area is covered with a given amount of material, thereby increasing VOC emission s per unit area covered as compared to higher VOC coatings. Although high sol ids, low VOC coatings are being used, the recommended film thickness for thes e coatings is similar to that for higher VOC coatings. Thus, a lower VOC coating wou ld cover the same or larger surface area than a higher VOC coating.Automotive Coatings Suggested Control Measure

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 Will the use of lower VOC automotive coatings resul t in illegal thinning of the product?

Excessive thinning is not expected to be a problem because many of the coatings already comply with the SCM limits. Addit ionally, the VOC limit for color coatings is expected to be met with the use of wate r-borne formulations. Even if some thinning occurs, thinning would likely be done with water or exempt solvents. As a result, the potential for excessive thinning is minor and concerns about significant adverse air quality impacts are u nfounded.

 Will the use of lower VOC automotive coatings requi re additional priming for proper adhesion to the substrate?

No. Automotive coatings primers are currently solv ent-borne coatings, and many already meet the VOC limits in the proposed SCM. M anufacturers’ data show that substrate preparation for low VOC color coatin gs is similar to substrate preparation for higher VOC color coatings. No inst ances of poor adhesion between primers and low VOC color coatings are expe cted.

 Will the use of lower VOC automotive coatings requi re the use of more topcoats?

In previous rulemakings on coatings, some industry representatives have claimed that the proposed lower VOC limits would yi eld products that provide inferior coverage, resulting in the use of more coa tings to provide the same coverage as their higher VOC counterparts. This is not the case with automotive coatings. In fact, some low VOC water-borne automo tive coatings currently sold and used in the United States provide greater cover age than solvent-borne automotive coatings. Manufacturers and current use rs of water-borne automotive coatings have indicated that coverage is superior to that of solventborne coatings, and therefore do not require the ap plication of additional coats to achieve the necessary coverage.

 Will the use of lower VOC automotive coatings requi re more frequent recoating?

No. Water-borne automotive coatings have been used successfully by the majority of the automobile manufacturers for severa l years; they are also used in manufacturer’s vehicle processing centers, where ca rs are touched up prior to

distribution in the United States. Data from the a utomotive coatings sector do not support the claim that lower VOC automotive coating s require more frequent recoating.Automotive Coatings Suggested Control Measure

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 Will the use of lower VOC automotive coatings resul t in product substitution by the end-users?

There are currently available low VOC automotive co atings with performance characteristics comparable to higher VOC automotive coatings, therefore it is not anticipated that spray technicians will substitute a product from a higher VOC category. Typically, manufacturers market coatings as a system and will not warranty the products’ performance if the user devi ates from the recommended usage. Additionally, the products within each auto motive coatings category are specific to certain applications, and do not lend t hemselves to use in another coating category.

 Will the use of lower VOC automotive coatings resul t in coatings with higher reactivity?

Using the Maximum Incremental Reactivity (MIR) scal e as the basis for comparing reactivities of VOCs it is true that, on a per gram basis, some VOCs used in water-borne coatings are more reactive than some VOCs used in solvent-borne coatings (Carter, 1999). For example , using the MIR scale as a basis, a typical VOC used in water-borne coatings, such as propylene glycol, is two to three times more reactive than a typical min eral spirits. However, less reactive solvents such as mineral spirits are not e xtensively used in automotive coatings. Automotive coatings tend to have solvent s with higher reactivity such as xylenes and toluene. The reactivity of propylen e glycol is approximately onethird the reactivity, on a gram for gram basis, of xylenes and toluene. Additionally, it is anticipated that manufacturers will incorporate the use of water and exempt solvents when formulating to meet the lo wer VOC limits of the proposed SCM. We have concluded, based on this inf ormation, that the total reactivity of the lower VOC automotive coatings wil l be less than the reactivity of the higher VOC automotive coatings.

3. Potential Hazardous Waste Impacts

The Department of Toxic Substances Control (DTSC) i s the lead agency in California for hazardous waste management. DTSC enforces the California's Hazardous Waste Control laws, issues permits to hazardous waste fac ilities, and mitigates contaminated hazardous waste sites. In California, all hazardou s waste must be disposed of at a facility that is registered with DTSC. Under these programs, automotive coatings may be classified as hazardous waste if they contain su bstances listed as toxic or if they

meet other hazard criteria.

Many counties in California operate a Small Busines s Waste Program, providing lowcost programs for small businesses that qualify as Conditionally Exempt Small Quantity Generators (CESQG). In order to qualify as a CESQG , as defined in the California Health and Safety Code, section 25218.1, and the Co de of Federal Regulations (40Automotive Coatings Suggested Control Measure

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CFR 261.5), the business must generate no more than 100 kilograms (220 pounds or approximately 27 gallons) of hazardous waste, or on e kilogram (2.2 pounds) of extremely hazardous waste. The small business cons idered a CESQG must also store less than 2,200 pounds of all kinds of hazardous wa ste at any time. In order to encourage businesses to participate in their progra ms, many cities help subsidize disposal costs. Often times the disposal costs are tax deductible and the long-term liability of the materials is taken over by the cou nty or city agency.

It is difficult to determine the amount of liquid w aste paint generated from automotive coatings since the waste paint is usually mixed wit h waste paint thinner. Waste paint thinner is usually generated when paint guns and ot her paint equipment are cleaned. The waste paint thinner is usually collected in a 5 5 gallon drum and is mixed with waste paint. In almost all cases, waste coatings in liqu id form must be managed as hazardous

waste. The reduction of solvents in automotive coa tings is not expected to result in non-hazardous liquid waste coatings. Solvent-based automotive coatings waste will still be classified as hazardous due to ignitability char acteristics.

It is anticipated that resin manufacturers and coat ings formulators will continue the trend of using less hazardous solvents such as Oxsol 100, and propylene glycol in their compliant coatings. It is expected that future com pliant coatings will contain less hazardous materials, or nonhazardous materials, as compared to conventional coatings, resulting in a net benefit. Therefore, h azard impacts associated with the proposed SCM will be negligible.

Coating facilities that have filter-type paint boot hs also generate paint booth exhaust filters. Paint booth exhaust filters are changed e very few weeks to few months depending on the amount of painting being done. Wa ste paint filters need to be tested for ignitability and toxicity characteristics. The “Toxicity Characteristic Leaching

Procedure” (TCLP) is used to determine if the filters contain toxic materials. It is rare that a paint booth filter will meet the definition of hazardous waste assuming that only typical automotive coatings have been used. Waste filters are typically thrown into the trash for disposal at the sanitary landfill. It is not anticipated that the proposed SCM will impact the quantity or toxicity of the paint booth exhaust filters currently being landfilled.

4. Reasonably Foreseeable Feasible Mitigation Measu res

ARB is required to do an analysis of reasonably for eseeable mitigation measures. We have concluded that no significant adverse environm ental impacts should occur from implementation of the proposed SCM. As a result, n o mitigation measures would be

necessary.Automotive Coatings Suggested Control Measure

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5. Alternatives to the Proposed SCM

As alternatives to the proposed SCM, ARB staff eval uated taking no action and delaying

the effective date. ARB staff determined that neit her of these alternatives would be as effective at reducing VOC emissions from automotive coatings activities as the proposed SCM. The no action alternative was reject ed because it would not achieve emission reductions necessary to attain the State a nd federal ambient air quality standards. The delayed effective date alternative was rejected because compliant coatings are currently available or will be availab le before the proposed effective date of January 1, 2009.

B. COMMUNITY HEALTH AND ENVIRONMENTAL JUSTICE

The ARB is committed to evaluating community impact s of proposed regulations, including environmental justice concerns. ARB's go al is to reduce or eliminate any disproportionate impacts of air pollution on low-in come and minority populations so that all individuals in California can live, work, and p lay in a healthful environment. The proposed SCM is not expected to result in significa nt negative impacts in any community. The result of the proposed SCM will be reduced exposure to VOCs and toxic air contaminants (e.g., xylenes, toluene, and MEK) for California communities, including those with large populations of low-incom e and minority residents.

As part of our Community Health and Environmental J ustice Programs, we assess and reduce the localized impacts of pollution from mult iple sources. The cumulative, multipollutant focus of this important program compels u s to take a more comprehensive, integrated approach to defining the ARB’s overall c ontrol strategy.

Many communities in California are composed of a mi x of residential, commercial, and industrial sites. During and after World War II, t hese areas experienced tremendous development due to rapid population growth and capi tal investment in military and industrial complexes. This rapid growth and develo pment did not allow for proper residential planning, therefore, residential areas and industrial zones may be integrated. As a result, parts of these communities exhibit an unhealthy mixture of homes, schools, and environmentally hazardous facilities. Homes wi thin these neighborhoods may be in close proximity to multiple sources of air pollutio n, such as businesses, industries, storage facilities, and freeways.

Automotive refinishing facilities, whose operations produce VOCs, are often among those types of small businesses located in low-inco me, minority communities. The higher than average incidence of asthma and other r espiratory illnesses in children living in these communities may be related to poor air quality (U.S. EPA, 2000).Automotive Coatings Suggested Control Measure

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REFERENCES

Air Resources Board, Staff Report. Draft Environme ntal Impact Assessment of Tertiary

Butyl Acetate. June, 2005 (ARB, 2005)

United States Environmental Protection Agency Regio n 9. Fact Sheet: Barrio Logan Environmental Justice Project News Release 11/13/2000. (U.S. EPA 2000)Automotive Coatings Suggested Control Measure

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VII. ECONOMIC IMPACTS

A. INTRODUCTION

This chapter discusses the economic impacts ARB sta ff anticipates from statewide implementation of the SCM. In general, economic im pact analyses are inherently imprecise, especially given the unpredictable behav ior of companies in a highly competitive market. While we quantified the econom ic impacts to the extent feasible, some projections are necessarily qualitative or sem i-quantitative and based on general observations about the automotive refinishing indus try. This analysis, therefore, serves to provide a general picture of the economic impact s that typical businesses subject to the proposed SCM might encounter; we recognize that individual companies within each district may experience impacts different than those projected in this analysis.

The overall projected impacts are summarized first, followed by a detailed discussion of specific aspects of the economic impacts in the sec tions listed below:

B) Annual Costs and the Cost-Effectiveness of the P roposed SCM; C) Economic Impacts on California Businesses; D) Potential Impacts on California State or Local A gencies; and E) Potential Impacts on California Consumers.

It is important to note that ARB staff conducted th e economic impacts analysis, even though the analysis is not required under the Admin istrative Procedure Act for a SCM, such as the staff’s proposal. The analysis uses vi rtually the same methodology adopted by the Board in approving the 2000 Architectural Co atings SCM (ARB, 2000) and consumer product rulemakings since 1990 (ARB; 1990; ARB, 1991; ARB, 1997; ARB, 1999).

1. Summary of Economic Impact

Our analysis shows that the cost-effectiveness of t he proposed limits is similar to the cost-effectiveness of the existing consumer product regulations (Phase I-II and MidTerm Measures I-II), as well as other existing ARB regulatory programs. We estimate the overall cost-effectiveness of the proposed SCM to be $1.43 per pound of VOC

reduced in current dollars. This cost-effectivenes s is comparable in magnitude to that reported for other ARB consumer product regulations and measures, which generally have fallen within a range of no cost to about $6.9 0 per pound of VOC reduced. The architectural coatings SCM had an average cost-effe ctiveness of $3.20 per pound of

VOC reduced.

In this analysis, we considered the impact to manuf acturers of automotive coatings and automotive refinishing facilities. Overall, most a utomotive refinishing facilities and coatings manufacturers would be able to absorb the cost of the proposed SCM with noAutomotive Coatings Suggested Control Measure

VII-2

significant adverse impacts on their profitability. This finding is indicated by the staff’s estimated change in “return on owner’s equity” (ROE ) analysis. The analysis found an average decrease in ROE of about 0.07 percent for c oating manufacturers, and 15 percent for automotive refinishing facilities. If all costs of the proposed SCM are absorbed by automotive refinishing facilities, the decrease in ROE exceeds the 10 percent threshold typically used to indicate a p otential for adverse impacts on profitability. However, we expect the costs incurr ed by manufacturers and automotive refinishing facilities to be passed on to consumers . If the entire cost of the proposed SCM were passed on to consumers, the average price for a repair would increase by about $11, which represents an increase of about 0. 5% for a $2,200 repair. Because we expect most businesses to pass on their costs to consumers, we do not expect a noticeable change in employment; business creation, elimination or expansion; and business competitiveness in California. We also fo und no significant adverse fiscal impacts on any local or State agencies.

To project the maximum potential impacts on consume rs, we assume the opposite scenario relative to the business impacts analysis. That is, rather than determining

whether businesses can absorb all costs incurred an d not have a significant impact on their profitability, we assume for the consumer imp acts analysis that coating manufacturers and automotive refinishing facilities are able to pass on all the costs to the consumers by raising the price of refinishing a vehicle. If the cost were passed on to consumers, most of the impact would probably be in the form of increased insurance premiums. For the purpose of this analysis, we ass ume that only consumers who have their vehicle repaired or refinished are impacted. With this assumption, we project an average cost increase of about $11 per vehicle repa ired or refinished.

2. General Approach for Cost Estimation

The economic impacts analysis consists of several p arts. First, we calculated the total annual costs of the proposal. An analysis was cond ucted to determine the impacts on

the annual costs to manufacturers based on raw mate rial costs of typical complying and noncomplying coatings. In addition, we estimated t he cost to market and distribute coatings that comply with the limits of the propose d SCM based on discussions with manufacturers. Because the 2002 Survey did not col lect data on cleaning solvents, the analysis does not include the potential costs of co mplying with the proposed VOC limit for solvents. However, solvent manufacturers marke ting in the SCAQMD already incurred the costs to develop 25 g/l cleaning solve nts because the limit is already in
effect the SCAQMD. We then estimated the annual co st to automotive refinishing facilities to use complying coatings without loss o f production. The projected annual costs then become the inputs for determining the th ree main outputs of the analysis: the cost-effectiveness, the business impacts, and the c onsumer impacts.

The cost-effectiveness is presented to compare the proposal’s cost efficiency in reducing a pound of VOC relative to the cost-effici ency of other rules and control measures adopted by the districts and the ARB. The business impact analysis employs

two scenarios under which all costs incurred to mee t the proposal are absorbed by theAutomotive Coatings Suggested Control Measure

VII-3

coating manufacturers, and then by assuming that al l costs incurred by both the manufacturers and automotive refinishing facilities are absorbed by the automotive refinishing facilities. On the other hand, the con sumer impact analysis operates under the hypothetical regime where all costs incurred to meet the proposal are passed on to

the consumers in the form of increased cost to refi nish a vehicle. These three parts of the analysis represent the boundaries of expected i mpacts, with the actual regulatory impacts from the proposal probably falling somewher e between these three extremes (i.e., some costs are absorbed by the manufacturer, some costs are absorbed by the automotive refinishing facilities, with the remaini ng costs passed on to consumers). Thus, the actual business impacts and price increas es will likely be less than predicted in this analysis.

Distributors of automotive coatings may also incur some costs if those costs cannot be passed on to the automotive refinishing facilities because of competitive pressures. Potential cost to these operations might include so me cost sharing between the

manufacturer and distributor to transition customer s to new products such as waterborne color coats. Based on discussions with indus try representatives, it appears that cost sharing arrangements can vary widely and are n ot available to all automotive refinishing facilities. Thus, staff is unable to a ssess the potential impacts to distributors. However, because all coating and solvent manufactur ers are subject to the same VOC limits, any impacts to distributors should be simil ar regardless of what manufacturer’s products they market.

3. Sources and Treatment of Cost Data

The cost analysis relied on various sources of info rmation. For cost information specific to manufacturers, we relied on estimates based on d iscussions with manufacturers of automotive coatings. Most manufacturers already ma rket coatings that would comply with the limits in the SCM, and the estimated cost was primarily based on the cost for all

manufacturers to market and distribute those coatin gs in California (Taylor, 2005). Compliant cleaning solvents are also currently mark eted in California.

For industry wide data on automotive refinishing fa cilities, we relied on the U.S. Census Bureau, industry organizations, the SCAQMD, and inf ormation from third party sources. To estimate the cost of equipment, training, and ot her services automotive refinishing facilities may need to comply with the SCM and main tain sufficient levels of production,

we relied on discussions with distributors of autom otive coatings, spray booth manufacturers, air movement manufacturers, and auto motive refinishing facility operators (US Census, 2005; Henderson, 2005; SCAQMD , 2005; Taylor, 2005; Elders, 2005; Ortiz, 2005; Hagan, 2005; Mac, 2005; Phillips , 2005).

We assumed that operating and maintenance costs for new equipment and waste disposal for water-borne color coatings is five per cent of the equipment costs.Automotive Coatings Suggested Control Measure

VII-4

B. ANNUAL COSTS AND THE COST-EFFECTIVENESS (C.E.) O F THE

PROPOSED SCM

1. Introduction

In the following analysis, we present the anticipat ed annual costs and cost-effectiveness of the proposed SCM. Determining the proposal’s co st-effectiveness allows us to compare the efficiency of the proposed SCM in reduc ing a pound of VOC relative to other existing regulatory programs. To do this, we applied a well-established methodology for converting compliance costs, both n onrecurring and recurring costs, to an annual basis. We then report the ratio of the a nnual costs to the annual emission reductions in terms of “dollars (to be) spent per p ound of VOC reduced.” To put the proposal’s cost-effectiveness into proper perspecti ve, we compare the results of our analysis with the cost-effectiveness of other ARB r egulations and control measures.

2. Methodology

As noted previously, the cost-effectiveness of a re gulation is generally defined as the ratio of total dollars to be spent to comply with t he regulation (as an annual cost) to the mass reduction of the pollutant(s) to be achieved b y complying with that regulation (in annual pounds). Annual costs include annualized no nrecurring costs (e.g., total research and development (R&D), product and consume r testing, equipment purchases/modifications, one-time distributional/ma rketing changes, etc.) and annual recurring costs (e.g., increases or decreases in ra w material costs, labeling, packaging, recordkeeping & reporting, etc.). Thus, the cost-e ffectiveness is calculated according to the following general equations:

Cost-Effectiveness = Annualized Nonrecurring Costs + Annual Recurring Costs

Annual Emission reductions where,

Annualized Nonrecurring Costs = CRF x ∑ (Nonrecurring Costs) Annual Recurring Costs = Raw Material Costs + Non R aw Material Costs

The CRF is calculated as follows:

CRF i i

i n

n = +

+ − ( )

( ) 1

1 1
where,

CRF = Capital Recovery Factor

I = discount interest rate in real terms (assumed to be four percent) n = project horizon or useful life of equipmentAutomotive Coatings Suggested Control Measure

VII-5

As shown above, we annualized the nonrecurring cost s (i.e., one-time fixed costs such as R&D, equipment purchases, etc.) using the Capita l Recovery Method, which is the recommended approach under California Environmental Protection Agency (Cal/EPA) guidelines. Using this method, we multiply the est imated total fixed costs to comply with each proposed limit by the Capital Recovery Factor (CRF) to convert these fixed costs into discounted, equal annual payments in current d ollars over the selected project horizon (i.e., the projected useful life of the inv estment) (Cal/EPA, 1996). We then sum

the annualized fixed costs with the annual recurrin g costs and divide that sum by the

annual emission reductions to calculate the cost-ef fectiveness of each limit.

3. Assumptions

There are a number of assumptions made to determine the impact to automotive refinishing facilities. Due to the number and uniq ue needs of automotive refinishing facilities in California, some of these businesses will incur costs which will be different than what we have estimated in this analysis.

In determining the impact to automotive refinishing facilities as a worst case scenario, staff assumed that every facility will need to appl y water-borne color coatings. Compliant color coatings may be developed with exem pt solvents that would require little modification to existing equipment in automo tive refinishing facilities. There are also some automotive refinishing facilities that on ly use single stage coatings which we expect to remain solvent-borne. We don’t expect th ese facilities to be impacted by the

SCM.

Coating manufacturers recommend additional air move ment equipment to dry waterborne color coatings quickly. Heating equipment wa s suggested as an option that would allow automotive refinishing facilities to im prove production levels. There are a

number of solutions available to automotive refinis hing facilities to meet air movement needs. These range from small hand held devices to fully integrated air movement systems. Although each automotive refinishing faci lity will evaluate the costs and benefits of air movement systems, we assumed that a utomotive refinishing facilities with high annual revenues will generally install the mor e expensive upgrades to their spray booths to maintain current production levels. We a lso assumed that automotive refinishing facilities with low annual revenues wil l install less expensive equipment to save on overall cost. The specific assumptions are discussed in Appendix C.

ARB staff estimated there are about 4,100 automotiv e refinishing facilities in California. Staff estimated the average gross annual revenue fo r an automotive refinishing facility to be about one million dollars (Taylor, 2005).

We assumed that 57 percent of all automotive refini shing facilities have a single spray booth. In the absence of industry wide statistics on the number of spray booths for automotive refinishing facilities in California, we used data from the SCAQMD to estimate the number of facilities with multiple boo ths (SCAQMD, 2005). Although there may be facilities in all revenue categories that ha ve a single spray booth, staff assumedAutomotive Coatings Suggested Control Measure

VII-6

that only automotive refinishing facilities with an nual revenue of less than one million dollars have a single spray booth. We also assumed that 25 percent of the booths have heating equipment, based on data from the SCAQMD. We assumed that all facilities with greater than $2.5 million annual revenue have heating equipment, and all facilities

with less than one million dollars annual revenue h ave no heating equipment.

ARB staff conducted an analysis of raw material cos ts to manufacturers based on typical ingredients found in complying and noncompl ying coatings. Staff determined that the raw material costs of products that comply with the limits of the proposed SCM are generally less than the raw material costs of p roducts that do not comply with the proposed SCM. To be conservative, staff assumed th ere would be no cost savings to manufacturers or to automotive refinishing faciliti es from raw material prices.

We also assumed that some small coating manufacture rs would cease to sell products in California. According to the 2002 Automotive Co atings Survey, there were 17 manufacturers that sold automotive coatings in C alifornia in 2001. Ten of these manufacturers account for about 98 percent of the t otal volume of automotive coatings

sold in California in 2001. We assume that the rem aining seven manufacturers that sell very low volumes of coatings in California will cea se to sell their products here due to the cost of complying with the SCM.

We also assumed a project horizon of five years and a real discount rate of four percent throughout the project horizon. The five year proj ect horizon is appropriate because that is the generally accepted project horizon used in cost analyses involving chemical processing industries. In addition, five years is the number of years for a project horizon generally recommended by Cal/EPA when conducting a cost-effectiveness analysis (Cal/EPA, 1996, supra ). With regard to the discount rate, Cal/EPA recom mends two percent plus the current yield for a U.S. Treasury note of similar maturity to the project horizon ( Id. ), which in recent years has been about four percen t (CNN, 2005). We also assumed a two percent inflation rate.

4. Results

The cost-effectiveness of the SCM is estimated to b e $1.43 per pound of VOC reduced, which compares favorably with the cost-effectivenes s of measures such as the 2000 Architectural Coatings SCM ($3.20 per pound of VOC reduced). The average annual cost to automotive coating and solvent manufacturer s is estimated to be about $320,000. The average annual cost to automotive re finishing facilities is estimated to be about $3,400. The total annualized cost to comp ly with the proposed SCM is estimated to be about $14 million.Automotive Coatings Suggested Control Measure

VII-7

C. ECONOMIC IMPACTS ON CALIFORNIA BUSINESSES

1. Legal Requirements

ARB staff conducted an economic impacts assessment although it is not legally required for the proposed SCM. Section 11346.3 of the Government Code requires State agencies to assess the potential for adverse economic impacts on California business enterprises and individuals when proposing to adopt or amend any administrative regulation. The assessment shall in clude a consideration of the impact of the proposed regulation on California jobs, busines s expansion, elimination or creation, and the ability of California business to compete w ith businesses in other states. Because the staff’s proposal is a SCM rather than a n administrative regulation, the business impacts assessment is not required. Howev er, ARB staff conducted the normally required business impacts assessment to pr ovide the Board and districts a comprehensive evaluation of the potential cost impa cts. Similarly, we also evaluated the SCM’s potential impacts to State and local agen cies. Normally, State agencies are required to estimate the cost or savings to any Sta te or local agency and school district in accordance with instructions adopted by the Depa rtment of Finance. The estimate shall include any nondiscretionary cost or savings to local agencies and the cost or savings in federal funding to the State. A major r egulation is defined as a regulation that will have a potential cost to California busin ess enterprises in an amount exceeding ten million dollars in any single year.

2. Potential Impact on California Businesses

Only one company, Ellis Paint, currently manufactur es automotive coatings in the State. The impact on this company is expected to be minima l since they have coatings that meet the proposed limits in most categories. Addit ionally, Ellis Paint does not produce color coatings, which will require the most reformu lation under the proposed SCM. Ellis Paint also manufactures cleaning solvents that meet the proposed VOC limit of 25 g/l.

3. Affected Businesses

Any person that uses, supplies, sells, offers for s ale, manufactures, distributes, blends, or repackages for sale automotive coatings or assoc iated solvents or performs automotive refinishing would potentially be affecte d by the proposed SCM. Also, potentially affected are businesses that manufactur e air movement or heating equipment for spray booths; or supply resins, exemp t solvents, or other ingredients and equipment to these manufacturers or marketers.

The focus of this analysis, however, will be on coa ting manufacturers and automotive refinishing facilities because these businesses wou ld be directly affected by the proposed SCM. Distributors of automotive coatings may also incur some cost if those costs cannot be passed on to the automotive refinis hing facilities because of competitive pressures. However, ARB staff is unabl e to quantify these impacts. Potential costs to distributors might include some cost sharing between theAutomotive Coatings Suggested Control Measure

VII-8

manufacturer and distributor to transition automoti ve refinishing facilities to new products such as water-borne color coatings. Staff does not have data on the extent to which such cost sharing might occur.

Automotive coatings are manufactured or marketed by 17 companies nationwide, of which one is based in California, according to the 2002 Survey. The bulk of the sales volume in California was generated by a few compani es; three manufacturers account for 65 percent of the volume, with the remaining 14 companies accounting for the other 35 percent (ARB, 2005). The automotive coating man ufacturers marketed about 3.7 million gallons of coatings in California in 20 01, of which an estimated one million gallons were compliant and 2.7 million gallons were noncompliant with the proposed SCM ( Id. ).

Staff estimates there are approximately 4,100 autom otive refinishing facilities in California. These businesses generated about $2.4 billion in annual revenue in 1997 (U.S. Census, 2005). About half of these facilitie s have an annual revenue of less than $500,000 per year (Taylor, 2005).

a. Study Approach

Sixteen of the 17 manufacturers of automotive coati ngs who responded to ARB’s 2002 Survey sold coatings in California in 2001 that did not meet the proposed SCM limits.

Staff did not have information on the 17 th manufacturer to make this determination. In addition, for purposes of determining worse-case po tential economic impact, staff assumes that all automotive refinishing facilities in California will need to incur costs to comply with the proposed SCM. This is a conservati ve estimate because facilities that use only single-stage color coatings would not need to invest in air movement equipment or heat because they would continue to us e currently available, compliant solvent-borne coatings. The approach used in evalu ating the potential economic impact of the proposed SCM on these businesses is outlined as follows:

1) Compliance cost was estimated for manufacturers and automotive refinishing facilities; 2) Estimated cost was adjusted for federal and Stat e taxes; and 3) The three-year average ROE was calculated for bu sinesses by averaging the median ROEs for 2002 through 2004. Actual financia l data were used for coating manufacturers where such data were available public ly. In case of the automotive refinishing facilities, however, actual financial data were not available publicly. Thus, we developed a financial profile o f a typical California automotive refinishing facility with an annual revenue of $1 m illion using the Dun and Bradstreet financial ratios for the industry.

ROE is calculated by dividing the net profit by the net worth. The adjusted cost was then subtracted from the net profit data. The resu lts were used to calculate an adjusted three-year average ROE. The adjusted ROE was then compared with the ROE before the subtraction of the adjusted cost to determine t he potential impact on the profitabilityAutomotive Coatings Suggested Control Measure

VII-9

of the businesses. A reduction of more than 10 per cent in profitability is considered to indicate a potential for significant adverse econom ic impacts.

The threshold value of 10 percent has been used con sistently by the ARB staff to determine impact severity (ARB, 1990; ARB, 1991; AR B, 1995; ARB, 1998). This threshold is consistent with the thresholds used by the U.S. EPA and others.

b. Assumptions

The ROEs before and after the subtraction of the ad justed compliance costs were calculated for a typical business using financial d ata for 2002 through 2004. The calculations were based on the following assumption s:

1) Selected businesses are representative of affect ed businesses; 2) All affected businesses were subject to the high est federal and State corporate tax rates of 35 percent and 9.3 percent respectivel y; and 3) Affected businesses are not able to increase the prices of their products, nor can they lower their costs of doing business through sh ort-term cost-cutting

measures.

Given the limitation of available data, staff belie ves these assumptions are reasonable

for most businesses at least in the short run. How ever, they may not be applicable to all

businesses.

c. Results

Table VII-1 shows the estimated change in ROE on af fected industry groups.

Table VII-1 Changes in Return on Owner’s Equity (R OE) for Typical Businesses in the Automotive Refinishing Industry
SIC Code and Category Change in ROE 2851 Manufacturing - Paints, Varnishes, Lacquers, Enamels, And Allied Products 0.07 percent

7532 Automotive Repair - Top, Body, and Upholstery Repair facilities and Paint facilities 15 percent

The estimated average decline in profitability of b usinesses is about 0.07 percent for manufacturers, and about 15 percent for automotive refinishing facilities. If the automotive refinishing facilities absorbed all cost s, they would be adversely impacted by the proposed SCM. However, we expect automotive re finishing facilities to pass on the costs of the proposed SCM to consumers. If the ent ire cost of the proposed SCM were passed on to consumers, the average price for a rep air or refinish would increase by about $11, which represents an increase of about 0. 5% for a $2,200 repair.

The performance of businesses may differ from year to year. Hence, the average financial data used may not be representative of an average year performance for some businesses. The estimated changes to ROEs may be h igh because affectedAutomotive Coatings Suggested Control Measure

VII-10

businesses probably would not absorb all of the inc rease in their costs of doing business. They might be able to either pass some o f the cost on to consumers in the form of higher prices, reduce their costs, or do bo th.

4. Potential Impact on Employment

The paint or body repair facilities (NAICS 811121/S IC 7532) are defined as establishments engaged in repairing or customizing automotive vehicles, such as passenger cars, trucks, and vans, and all trailer b odies and interiors; and/or painting

automotive vehicles and trailer bodies. It is esti mated that there are 27,665 paid employees involved in the automotive body repair an d refinishing services (U.S. Census, 2005).

We expect the proposed SCM to have minimal impact o n most employees that do automotive refinishing. While it is possible that some automotive refinishing facilities may experience higher costs than those estimated ab ove, we believe that most will not be impacted adversely if districts adopt the propos ed SCM.

Cost impacts on coating manufacturers will be minim al. Most coating manufacturers are global companies and the proposed SCM would hav e minimal impact on their operations as indicated by the change in ROE. Thus , we do not expect any significant impact in the employment at these companies.

5. Potential Impact on Business Creation, Eliminati on, or Expansion

The proposed SCM should have no noticeable impact o n the status of California businesses. This is because the costs are not expe cted to impose a significant impact on the profitability of businesses in California. However, some small automotive refinishing facilities with little or no margin of profitability may lack the financial resources to modify their facilities in a timely ma nner. Should the proposed measures impose a significant hardship on these businesses, temporary relief in the form of a compliance date extension under the local districts ’ variance provision may be

warranted.

While some individual businesses may be affected ad versely, the proposed SCM may provide business opportunities for existing Califor nia businesses or result in the creation of new businesses. California businesses that prod uce air movement equipment for spray booths or provide consulting services to affe cted businesses may benefit from increased industry spending.

6. Potential Impact on Business Competitiveness

The proposed SCM is not expected to have a signific ant impact on the ability of automotive refinishing facilities in California to compete with businesses from another state. Most automotive refinishing facilities are independent operations that compete for local business within their region and rarely seek business from outside the State.Automotive Coatings Suggested Control Measure

VII-11

The proposed SCM should have no significant impact on the ability of California manufacturers of automotive coatings to compete wit h businesses in other states. Because the proposed measures would apply to all bu sinesses that manufacture or market automotive coatings for sale in California r egardless of their location, the staff’s proposal should not present any economic disadvanta ges specific to California businesses. Of the 17 companies involved in manufa cturing or marketing of automotive coatings in California, only one company is located in California.

D. POTENTIAL IMPACTS ON CALIFORNIA STATE OR LOCAL AGENCIES

We have identified no State or local agency that wo uld be adversely affected by the proposed SCM. One State agency, the California Dep artment of Transportation, performs touch-up work on their fleet vehicles with single-stage color coatings. Since many single-stage color mixtures already comply wit h the limits of the proposed SCM, we do not expect them to be adversely affected. Ad ditionally, we expect single-stage color coatings to remain solvent-borne, thus there would not be a need for air movement equipment. There are cleaning solvents al ready available that meet the proposed VOC limit in the SCM. Thus, the solvent r equirement is not expected to have an adverse impact on State or local agencies.

E. POTENTIAL IMPACTS ON CALIFORNIA CONSUMERS

The potential impact of the SCM on consumers depend s upon the extent to which affected businesses are able to pass on the increas ed cost to consumers in terms of higher prices for their services. Given the small impact of the proposed SCM on the profitability of most automotive refinishing facili ties, we do not expect a noticeable change in the price of services provided by these b usinesses. Since most repairs are paid directly by insurance companies, consumers may be impacted by higher insurance premiums. We anticipate the impact, if any, on con sumers to be negligible. If the annual cost of the proposed SCM were divided among the total number of repairs in California per year, the average cost of a repair w ould increase by about $11. This represents a 0.5% increase in cost for a typical re pair of $2,200. If the consumer is paying for the refinishing directly, he or she woul d have to absorb the entire cost.Automotive Coatings Suggested Control Measure

VII-12

REFERENCES

Air Resources Board. Draft Report: 2002 Survey of Automotive coatings. June, 2005. (ARB, 2005).

Air Resources Board, Executive Summary and Technica l Support Document. Initial Statement of Reasons for Proposed Amendment s to the California Consumer Products Regulation. (a.k.a. Mid-Term Mea sures I). June 6, 1997. (ARB, 1997).

Air Resources Board, Hearing Notice and Staff Repor t. Proposed Amendments to the California On-Road Motorcycle Regulation . October 1998. (ARB, 1998).

Air Resources Board. Initial Statement of Reasons for a Proposed Statewide Regulation to Reduce Volatile Organic Compound Emis sions from Aerosol Coating Products and Amendments to the Alternative Control Plan for Consumer

Products. February 3, 1995. (ARB, 1995)

Air Resources Board, Introduction and Executive Sum mary and Technical Support Document. Initial Statement of Reasons for Proposed Amendments to the California Consumer Products Regulation. (a.k.a . Mid-Term Measures II). September 10, 1999. (ARB, 1999).

Air Resources Board staff discussions with Al Ortiz , Rely-On Spray Booth Company. August, 2005. (Ortiz, 2005).

Air Resources Board staff discussions with Bob Hend erson, Body Shop Business. August, 2005. (Henderson, 2005).

Air Resources Board staff discussions with Cindy El ders, JunAir. July, 2005. (Elders, 2005).

Air Resources Board staff discussions with Emily Ta ylor, DuPont. July, 2005. (Taylor, 2005).

Air Resources Board staff discussions with Karl Hag an, Air Filtration Company. August, 2005. (Hagan, 2005).

Air Resources Board staff discussions with Dave Har shbarger and Dave Luer, Mac Distributing. August, 2005. (Mac, 2005).

Air Resources Board staff discussions with Peter Ph illips, Trisk Company. July, 2005. (Phillips, 2005).

Air Resources Board staff discussions with South Co ast Air Quality Management District Staff. August, 2005. (SCAQMD, 2005).Automotive Coatings Suggested Control Measure

VII-13

Air Resources Board, Technical Support Document. P roposed Amendments to the Statewide Regulation to Reduce Volatile Organic Compound Emissions from Consumer Products – Phase II. (a.k.a. Phase II Con sumer Products Regulation). October 1991. (ARB, 1991).

Air Resources Board. Staff Report for the Suggeste d Control Measure for Architectural Coatings . June 6, 2000. (ARB, 2000).

Air Resources Board, Technical Support Document. P roposed Regulation to Reduce Volatile Organic Compound Emissions from Con sumer Products. (a.k.a. “Phase I Consumer Products Regulation). August 1990. (ARB, 1990).

Air Resources Board, Technical Support Document. S uggested Control Measure for Architectural and Industrial Maintenance (AIM) Coatings. July 1989. (ARB, 1989).

California Environmental Protection Agency (Cal/EPA ), Memorandum from Peter M. Rooney, Undersecretary, to Cal/EPA Executive Of ficers and Directors. Economic Analysis Requirements for the Adoption of Administrative Regulations. Appendix C (Cal/EPA Guidelines for Evaluating Alter natives to Proposed Major Regulations). December 6, 1996. (Cal/EPA, 1996).

Dun and Bradstreet, Financial Profile. Industry pr ofile of Auto Body Repair/Painting Industry. September, 2005. (Dunn and Bradstreet, 2005).

Online quote of the yield on a 10 year and 5 year t reasury bond, www.cnn.com. September, 2005. (CNN, 2005).

U.S. Census Bureau. Online query of industry stati stics. www.census.gov

. August, 2005. (U.S. Census, 2005).Automotive Coatings Suggested Control Measure

A-1 

## Appendix A

Proposed Suggested Control Measure for

Automotive CoatingsAutomotive Coatings Suggested Control Measure

A-2 California Air Resources Board Proposed Suggested Control Measure for Automotive C oatings

1. Purpose

The purpose of this rule is to limit volatile organ ic compound (VOC) emissions from coatings and solvents associated with the coating o f motor vehicles, mobile equipment, and associated parts and components.

2. Applicability

2.1 Except as provided in section 2.2, this rule is applicable to any person who supplies, sells, offers for sale, manufactures, or distributes any automotive coating or associated solvent for use within the Di strict, as well as any person who uses, applies, or solicits the use or ap plication of any automotive coating or associated solvent within the District. 2.2 This rule does not apply to: 2.2.1 Any automotive coating or associated solvent that is offered for sale, sold, or manufactured for use outside of the District or for shipment to other manufacturers for reformulation o r repackaging. 2.2.2 Any aerosol coating product. 2.2.3 Any automotive coating that is sold, supplied , or offered for sale in

0.5 fluid ounce or smaller containers intended to b e used by the general public to repair tiny surface imperfections

. 2.2.4 Any coating applied to motor vehicles or mobi le equipment, or their associated parts and components, during manufacture on an assembly line.

3. Definitions

3.1 “Adhesion promoter” means a coating, which is l abeled and formulated to be applied to uncoated plastic surfaces to facilita te bonding of subsequent coatings, and on which, a subsequent coating is app lied.

3.2 “Aerosol Coating Product” means a pressurized c oating product containing pigments or resins that dispenses produc t ingredients by means of a propellant, and is packaged in a disposa ble can for hand-held application, or for use in specialized equipment fo r ground traffic/marking applications.

3.3 “Assembly Line” means an arrangement of industr ial equipment and workers in which the product passes from one specia lized operation to another until complete, by either automatic or manu al means.Automotive Coatings Suggested Control Measure

A-3 3.4 “Associated Parts and Components” means structu res, devices, pieces, modules, sections, assemblies, subassemblies, or el ements of motor vehicles or mobile equipment that are designed to b e a part of motor vehicles or mobile equipment but which are not atta ched to motor vehicles or mobile equipment at the time of coating the stru cture, device, piece, module, section, assembly, subassembly, or element. “Associated parts and components” does not include circuit boards.

3.5 “Automotive Coating” means any coating or coati ng component used or recommended for use in motor vehicle or mobile equi pment refinishing, service, maintenance, repair, restoration, or modif ication, except metal plating activities. Any reference to automotive re finishing or automotive coating made by a person on the container or in pro duct literature

constitutes a recommendation for use in motor vehic le or mobile equipment refinishing.

3.6 “Automotive Coating Component” means any portio n of a coating, including, but not limited to, a reducer or thinner , toner, hardener, and additive, which is recommended by any person to dis tributors or end-users for use in an automotive coating, or which is suppl ied for or used in an automotive coating. The raw materials used to prod uce the components are not considered automotive coating components.

3.7 “Automotive Refinishing Facility” means any sho p, business, location, or parcel of land where motor vehicles or mobile equip ment or their associated parts and components are coated, includi ng autobody collision repair shops. “Automotive Refinishing Facility” do es not include the original equipment manufacturing plant where the mo tor vehicle or mobile equipment is completely assembled.

3.8 “CARB” means the California Air Resources Board

.

3.9 “Cleaning Operations” means the removal of loos ely held uncured adhesives, inks, coatings, or contaminants, includi ng, but not limited to, dirt, soil, or grease, from motor vehicles, mobile equipment, associated parts and components, substrates, parts, products, tools, machinery, equipment, or general work areas.

3.10 “Clear Coating” means any coating that contain s no pigments and is labeled and formulated for application over a color coating or clear coating.

3.11 “Coating” means a material which is applied to a surface and forms a film in order to beautify, preserve, repair, or protect such a surface.Automotive Coatings Suggested Control Measure

A-4 3.12 “Color Coating” means any pigmented coating, e xcluding adhesion promoters, primers, and multi-color coatings, that requires a subsequent clear coating and which is applied over a primer, a dhesion promoter, or color coating. Color coatings include metallic/iri descent color coatings.

3.13 “Electrostatic Spray Application” means any me thod of spray application of coatings where an electrostatic attraction is creat ed between the part to be coated and the paint particles.

3.14 “Emission Control System” means any combinatio n of capture systems

and control devices used to reduce VOC emissions fr om automotive coating operations.

3.15 “Exempt Compounds” means, for the purposes of this rule, the compounds listed in sections 3.34.1 and 3.34.2.

3.16 “Graphic Arts Operation” means the application of logos, letters, numbers, or graphics to a painted surface by brush, roller, or airbrush.

3.17 “High-Volume, Low-Pressure (HVLP)” means spray equipment permanently labeled as such and which is designed and operated between 0.1 and 10 pounds per square inch, gauge, ( psig) air atomizing pressure measured dynamically at the center of the air cap and at the air

horns.

3.18 “Metallic/Iridescent Color Coating” means any coating that contains more than 0.042 pounds per gallon (5 grams per liter) of metal or iridescent particles as applied, where such particles are visi ble in the dried film.

3.19 “Mobile Equipment” means any device that may b e drawn and/or driven on rails or a roadway including, but not limited to , trains, railcars, truck trailers, mobile cranes, bulldozers, street cleaner s, and implements of husbandry or agriculture.

3.20 “Motor Vehicle” means any self-propelled vehic le, including, but not limited to, cars, trucks, buses, golf carts, vans, motorcyc les, tanks, and armored personnel carriers.

3.21 “Multi-Color Coating” means any coating that e xhibits more than one color in the dried film after a single application, is pa ckaged in a single container, and hides surface defects on areas of he avy use, and which is applied over a primer or adhesion promoter.

3.22 “Person” shall have the same meaning as define d in Health and Safety

Code section 39047.Automotive Coatings Suggested Control Measure

A-5 3.23 “Pretreatment Coating” means any coating that contains a minimum of one-half (0.5) percent acid by weight and not more than 16 percent solids by weight necessary to provide surface etching and is labeled and formulated for application directly to bare metal s urfaces to provide

corrosion resistance and adhesion.

3.24 “Primer” means any coating, which is labeled a nd formulated for application to a substrate to provide 1) a bond bet ween the substrate and subsequent coats, 2) corrosion resistance, 3) a smo oth substrate surface, or 4) resistance to penetration of subsequent coats , and on which a subsequent coating is applied. Primers may be pigm ented.

3.25 “Single-Stage Coating” means any pigmented coa ting, excluding primers and multi-color coatings, labeled and formulated fo r application without a subsequent clear coat. Single-stage coatings inclu de single-stage metallic/iridescent coatings.

3.26 “Solvent” means a VOC-containing fluid used to perform cleaning operations.

3.27 “Spot Repair” means repair of an area on a mot or vehicle, piece of mobile equipment, or associated parts or components of les s than 1 square foot (929 square centimeters).

3.28 “Temporary Protective Coating” means any coati ng which is labeled and formulated for the purpose of temporarily protectin g areas from overspray or mechanical damage.

3.29 “Transfer Efficiency” means the amount of coat ing solids adhering to the object being coated divided by the total amount of coating solids sprayed, expressed as a percentage.

3.30 “Truck Bed Liner Coating” means any coating, e xcluding clear, color, multi-color, and single stage coatings, labeled and formulated for application to a truck bed to protect it from surfa ce abrasion.

3.31 “Underbody Coating” means any coating labeled and formulated for application to wheel wells, the inside of door pane ls or fenders, the underside of a trunk or hood, or the underside of t he motor vehicle.

3.32 “Uniform Finish Coating” means any coating lab eled and formulated for application to the area around a spot repair for th e purpose of blending a repaired area’s color or clear coat to match the ap pearance of an adjacent area’s existing coating.

3.33 “U.S. EPA” means the United States Environment al Protection Agency.Automotive Coatings Suggested Control Measure

A-6 3.34 “Volatile Organic Compound (VOC)” means any vo latile compound containing at least one atom of carbon, excluding c arbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate, and excluding the following: 3.34.1 methane; methylene chloride (dichloromethane); 1,1,1-trichloroethane (methyl chloroform); trichlorofluoromethane (CFC-11); dichlorodifluoromethane (CFC-12); 1,1,2-trichloro-1,2,2-trifluoroethane (CFC-113); 1,2-dichloro-1,1,2,2-tetrafluoroethane (CFC-114); chloropentafluoroethane (CFC-115); chlorodifluoromethane (HCFC-22); 1,1,1-trifluoro-2,2-dichloroethane (HCFC-123); 2-chloro-1,1,1,2-tetrafluoroethane (HCFC-124); 1,1-dichloro-1-fluoroethane (HCFC-141b); 1-chloro-1,1-difluoroethane (HCFC-142b); trifluoromethane (HFC-23); pentafluoroethane (HFC-125); 1,1,2,2-tetrafluoroethane (HFC-134); 1,1,1,2-tetrafluoroethane (HFC-134a); 1,1,1-trifluoroethane (HFC-143a); 1,1-difluoroethane (HFC-152a); cyclic, branched, or linear completely methylated s iloxanes; the following classes of perfluorocarbons: (A) cyclic, branched, or linear, completely fluori nated alkanes; (B) cyclic, branched, or linear, completely fluori nated ethers with no unsaturations; (C) cyclic, branched, or linear, completely fluori nated tertiary amines with no unsaturations; and (D) sulfur-containing perfluorocarbons with no uns aturations and with the sulfur bonds only to carbon and fluorine; and 3.34.2 the following low-reactive organic compounds which have been exempted by the U.S. EPA:

acetone; ethane; parachlorobenzotrifluoride (1-chloro-4-trifluoromet hyl benzene); perchloroethylene; methyl acetate; and tertiary butyl acetate (tBAc).Automotive Coatings Suggested Control Measure

A-7 3.35 VOC Content

3.35.1 “VOC regulatory for Coatings” means VOC in g rams per liter of coating, excluding water and exempt compounds, and shall be calculated by the following equation:

VOC regulatory content = Wv - Ww - Wec

Vm - Vw - Vec

3.35.2 “VOC actual for Coatings” means VOC in grams per liter of material shall be calculated using the following equation:

VOC actual content = Wv - Ww - Wec

Vm

3.35.3 “VOC content for Solvents” means VOC in gram s per liter of material shall be calculated by the following equat ion:

VOC content = Wv - Ww - Wec

Vm

Where:

VOC content = amount of volatile organic compounds in grams/liter

Wv = weight of volatiles in grams

Ww = weight of water in grams

Wec = weight of exempt compounds in grams

Vm = volume of material (coating or solvent, as app licable) in liters

Vw = volume of water in liters

Vec = volume of exempt compounds in litersAutomotive Coatings Suggested Control Measure

A-8 4. Standards

4.1 Coating Limits. No person shall apply to any motor vehicle, mobil e equipment, or associated parts and components, any coating with a VOC regulatory content, as calculated pursuant to secti on 3.35.1, in excess of the following limits, except as provided in section 4.3:

Coating Category VOC regulatory limit, as applied, effective January 1, 2009 in grams/liter (pounds per gallon*) Adhesion Promoter 540 (4.5) Clear Coating 250 (2.1) Color Coating 420 (3.5) Multi-Color Coating 680 (5.7) Pretreatment Coating 660 (5.5)

Primer 250 (2.1) Single-Stage Coating 340 (2.8) Temporary Protective Coating 60 (0.5) Truck Bed Liner Coating 310 (2.6) Underbody Coating 430 (3.6) Uniform Finish Coating 540 (4.5) Any other coating type 250 (2.1) *English units are provided for information only.

4.2 Most Restrictive VOC Limit. If anywhere on the container of any automotive coating, or any label or sticker affixed to the container, or in any sales, advertising, or technical literature sup plied by a person, any representation is made that indicates that the coat ing meets the definition

of or is recommended for use for more than one of t he coating categories listed in section 4.1, then the lowest VOC content limit shall apply.

4.3 Alternative Compliance. Instead of complying with the VOC content limits specified in section 4.1, a person may use a n emission control system that has been approved, in writing, by the E xecutive Officer or Air

Pollution Control Officer of the District and which achieves an overall control efficiency of at least 85 percent as determ ined pursuant to sections 6.5 and 6.6. Any approved system emission control must be maintained and used at all times in proper working condition.

4.4 Prohibition of Possession. No person shall possess at any automotive refinishing facility, any automotive coating that i s not in compliance with section 4.1 or 4.3, as applicable, or any solvent w ith a VOC content greater than 25 grams per liter.Automotive Coatings Suggested Control Measure

A-9 4.5 Prohibition of Sale or Manufacture. No person shall manufacture, blend, repackage for sale, supply, sell, offer for sale, or distribute within the District any coating with a VOC content in exce ss of the limits specified in section 4.1.

Notwithstanding the provisions of this section, a p erson may manufacture, blend, repackage for sale, supply, sell, offer for sale, or distribute a coating with a VOC content in excess of the limits specifie d in section 4.1 under the following circumstances and provided all of the requirements of

section 5.6 are also met:

4.5.1 The coating is for use exclusively within an emission control system as allowed in section 4.3, or

4.5.2 The coating is for use outside the District.

4.6 Prohibition of Specification. No person shall solicit or require the use of, or specify the application or use of any coatin g or solvent on a motor vehicle or mobile equipment, or associated parts an d components, if such use or application results in a violation of this r ule. This prohibition shall apply to all written or oral contracts, including, but not limited to, job orders, under the terms of which any coating or sol vent that is subject to the provisions of this rule is to be used or applie d. This prohibition shall not apply to coatings that meet the criteria specif ied in section 4.5.

4.7 Coating Application Methods. No person shall apply any coating to any motor vehicle, mobile equipment, or associated part s and components unless one of the following application methods is used:

4.7.1 Brush, dip, or roller.

4.7.2 Electrostatic spray.

4.7.3 High-Volume Low-Pressure (HVLP) spray equipme nt.

4.7.4 Use of a spray gun: If a spray gun is used, t he end user must demonstrate that the gun meets the HVLP definition in section 3.17 in design and use. A satisfactory demonstration mu st be based on the manufacturer's published technical material on the design of the gun and by a demonstration of the operation of the gun using an air pressure tip gauge from the manufacturer of the gun

.Automotive Coatings Suggested Control Measure

A-10 4.7.5 Any alternative method that achieves a transf er efficiency equivalent to, or higher than, the application meth ods listed in sections 4.7.1, 4.7.2, or 4.7.3 as determined per s ection 6.9. Written approval from the Executive Officer or Air Pollution Control

Officer of the District shall be obtained for each alternative method prior to use.

section 4.7 does not apply to underbody coatings, g raphic arts operations, truck bed liner coatings, or any coating use of les s than one (1) fluid ounce (29.6 milliliters).

4.8 Solvent Limits and Evaporative Loss Minimizatio n

4.8.1 Each solvent present at any automotive refini shing facility shall not exceed a VOC content of 25 grams per liter as calcu lated pursuant

to section 3.35.3.

4.8.2 Solvent-laden materials shall be stored in cl osed containers.

4.8.3 All automotive coating components, automotive coatings, and solvents shall be stored in closed vapor-tight cont ainers.

4.8.4 No person shall clean spray equipment unless a closed system is used. However, equivalent control equipment can be used if the

Executive Officer or Air Pollution Control Officer of the District approves it in writing prior to use.

4.8.5 All waste automotive coating components, auto motive coatings, and solvents shall be stored in closed vapor-tight containers, except while adding to or removing them from the co ntainers.

5. Administrative Requirements

5.1 Compliance Statement Requirement

5.1.1 For each individual automotive coating or aut omotive coating component, the manufacturer and repackager shall in clude the following information on product data sheets, or an equivalent

medium: 5.1.1.1 The VOC actual for coatings and VOC regulat ory for coatings, expressed in grams per liter; 5.1.1.2 The weight percentage of volatiles, water, and exempt compounds; 5.1.1.3 The volume percentage of water and exempt c ompounds; and, 5.1.3.4 The density of the material (in grams per l iter).Automotive Coatings Suggested Control Measure

A-11 5.1.2 For each individual ready to spray mixture (b ased on the manufacturer’s and repackager’s stated mix ratio), the manufacturer and repackager shall include the follo wing information on product data sheets, or an equivalent medium: 5.1.2.1 The VOC actual for coatings and VOC regulat ory for coatings, expressed in grams per liter; 5.1.2.2 The weight percentage of volatiles, water, and exempt compounds; 5.1.2.3 The volume percentage of water and exempt c ompounds; and, 5.1.2.4 The density of the material (in grams per l iter).

5.1.3 The manufacturer and repackager of solvents s ubject to this rule shall include the VOC content as supplied, calculat ed pursuant to section 3.35.3, expressed in grams per liter, on pr oduct data sheets, or an equivalent medium.

5.2 Labeling Requirements

5.2.1 The manufacturer and repackager of automotive coatings or automotive coating components shall include on all containers the applicable use category(ies), and the VOC actual fo r coatings and VOC regulatory for coatings, as supplied, expressed in grams per

liter.

5.2.2 The manufacturer and repackager of solvents s ubject to this rule

shall include on all containers the VOC content for solvents, as supplied, expressed in grams per liter.

5.3 Maintenance of Records. Records required by this rule shall be retained for a minimum of three years and made available for inspection by District personnel upon request.

5.4 Record Keeping Requirements. Any person who uses coatings or solvents subject to this rule shall maintain and ha ve available at all times, on site, the following:

5.4.1 A current list of all coatings and solvents u sed that are subject to this rule. This list shall include the following i nformation for each coating and solvent:

5.4.1.1 material name and manufacturer 5.4.1.2 application method 5.4.1.3 coating type (as listed in section 4.1) and mix ratio specific to the coating 5.4.1.4 VOC actual for coatings and VOC regulatory for coatings, as applied, or VOC content for solvent.Automotive Coatings Suggested Control Measure

A-12 5.4.1.5 whether the material is a coating or solven t.

5.4.2 Current manufacturer specification sheets, ma terial safety data sheets, technical data sheets, or air quality data sheets, which list the VOC actual for coatings and VOC regulatory for coatings of each ready-to-spray coating (based on the manufactu rer’s stated mix ratio) and automotive coating components, and V OC content of

each solvent.

5.4.3 Purchase records identifying the coating type (as listed in section 4.1), name, and volume of coatings and solv ents.

5.5 Record Keeping Requirements for Emission Control Sy stems. Any person using an emission control system shall maint ain daily records of key system operating parameters which will demonstr ate continuous operation and compliance of the emission control sy stem during periods of VOC emission producing activities. “Key system ope rating parameters” are those parameters necessary to ensure or documen t compliance with section 4.3, including, but not limited to, tempera tures, pressure drops,

and air flow rates.

5.6 Record Keeping Requirements for Prohibition of Sale

. Any person claiming an exception specified in section 4.5 shal l keep a detailed log of each automotive coating component and automotive co ating manufactured, blended, repackaged for sale, supplie d, sold, offered for sale, or distributed showing: 5.6.1 The quantity manufactured, blended, repackage d for sale, supplied, sold, offered for sale, or distributed, including s ize and number of containers; 5.6.2 The VOC regulatory for coatings; 5.6.3 The VOC actual for coatings; 5.6.4 To whom they were supplied, sold, offered for sale, or distributed, or for whom they were manufactured, blended, or rep ackaged for sale including the name, address, phone number, ret ail tax license number, and valid district permit number; and, 5.6.5 The specific exception being utilized under s ection 4.5.

6. Test Methods. The following test methods are incorporated by re ference herein, and shall be used to test coatings and solvents sub ject to the provisions of this rule. A source is in violation of this rule if any measurement by any of the listed applicable test methods exceeds the standards of th is rule.Automotive Coatings Suggested Control Measure

A-13 6.1 Methyl Acetate, Acetone, t-Butyl Acetate, and PCBTF Content. The quantity of methyl acetate, acetone, t-butyl acetat e, and parachlorobenzotrifluoride (as specified in section s 3.15, 3.34, and 3.35) shall be determined by using ASTM Method D6133-02: “Standard Test Method for Acetone, p -Chlorobenzotrifluoride, Methyl Acetate or t -Butyl

Acetate Content of Solventborne and Waterborne Pain ts, Coatings, Resins, and Raw Materials by Direct Injection Into a Gas Chromatograph” (February 2003).

6.2 Acid Content. Measurement of acid content (as specified in secti on 3.23) shall be determined by using ASTM D1613-03 “Standar d Test Method for Acidity in Volatile Solvents and Chemical Intermedi ates Used in Paint, Varnish, Lacquer, and Related Products” (October 20 03).

6.3 Alternative Test Methods. The use of other test methods which are determined to be equivalent or better and approved, in writing, by the

Executive Officer or Air Pollution Control Officer of the District, CARB, and U.S. EPA may be used in place of the test methods s pecified in this rule.

6.4 VOC Content of Coatings or Solvents. VOC content (as specified in sections 3.35, 4.1, and 4.8.1) shall be determined by U.S. EPA Method 24 as set forth in Appendix A of Title 40 of the Code of Federal Regulations (40 CFR) Part 60, “Determination of Volatile Matter Content, Water Content, Density, Volume Solids, and Weight Solids of Surface Coatings”.

6.5 Control Efficiency. When either U.S. EPA Method 25, 25A, or 25B is used to determine VOC emissions, control device equ ivalency (as specified in section 4.3) shall be determined as sp ecified in U.S. EPA’s “Guidelines for Determining Capture Efficiency,” (J anuary 9, 1995) and 40 CFR 51, Appendix M, Methods 204 –204f as applicable

.

6.6 Determination of Alternative Compliance. Alternative compliance (as specified in section 4.3) shall be determined by U. S. EPA Method 25, 25A, or 25B, Title 40 Code of Federal Regulations, Part 60, Appendix A as applicable. A source is in violation if the measur ed VOC emissions, as measured by any of the test methods, exceed the sta ndards specified in

section 4.3.

6.7 Metallic Content. The metallic content of a coating (as specified i n section 3.18) shall be determined by South Coast Ai r Quality Management District Method 318-95, "Determination of Weight Pe rcent Elemental Metal in Coatings by X-ray” (July 1996).Automotive Coatings Suggested Control Measure

A-14 6.8 Exempt Compound Content. Exempt compound content, other than as determined pursuant to section 6.1, (as specified i n sections 3.15, 3.34 and 3.35) shall be determined by using CARB Method 432, “Determination of Dichloromethane and 1,1,1-Trichloroethane in Pai nts and Coatings”(September 12, 1998); CARB Method 422, “De termination of Volatile Organic Compounds in Emissions from Statio nary Sources” (January 22, 1987); or, South Coast Air Quality Man agement District (SCAQMD) Method 303-91, “Determination of Exempt Co mpounds” (February 1993).

6.9 Transfer Efficiency. Spray equipment transfer efficiency (as specified in sections 3.29 and 4.7.5) shall be determined by usi ng South Coast Air Quality Management District “Spray Equipment Transf er Efficiency Test Procedure for Equipment User” (May 24, 1989).

6.10 HVLP Equivalency. Spray equipment HVLP equivalency (as specified in section 4.7.4) shall be determined by using South C oast Air Quality Management District “Guidelines for Demonstrating E quivalency with District Approved Transfer Efficient Spray Guns” (S eptember 26, 2002).

7. Construction of Headings. Section and subsection headings do not in any manner affect the scope, meaning, or intent of the provisions of this Suggested

Control Measure.

8. Severability. Each part of this Suggested Control Measure shall be deemed severable, and in the event that any part of this S uggested Control Measure is held to be invalid, the remainder of this Suggested Control Measure shall

continue in full force and effect.Automotive Coatings Suggested Control Measure

B-1 

## Appendix B

2002 Automotive Coatings Survey

(Refinish Coatings Only)Automotive Coatings Suggested Control Measure

B-2



# 2002 Automotive Coatings Survey

(Refinish Coatings Only)

California Environmental Protection Agency



# Air Resources BoardAutomotive Coatings Suggested Control Measure

B-3 TABLE OF CONTENTS

2002 AUTOMOTIVE COATINGS SURVEY

SECTION AND TITLE PAGE

I. PART A – SURVEY FORMS AND INSTRUCTIONS ............................... 1

• Confidential Information Submittal Form .................................

............ 2

• Survey Forms............................................................................... 3 – 7

• Survey Instructions .........

............................................................... 8 – 15

• Submitting Survey Forms or Data ...................................................... 16

II. PART B – SUPPLEMENTAL INFORMATION ....................................... 17

• Definitions .................................................................................. 18 – 22

• VOC Calculations and Conversion Factors .................................

........... 23 – 24

• Reactivity Bin Numbers for Aliphatic and Aromatic H ydrocarbon Solvents ...... 25

• U.S. Resident Population ................................................................. 26

III. PART C – EXAMPLE OF COMPLETED SURVEY FORMS 27 - 32

SUBMITTAL OF FORMS

Please return the completed survey to the following address: Regular Mail Overnight

California Air Resources Board California EPA Headquarters Building Air Resources Board (6 th Floor)

P.O. Box 2815 1001 I Street
Sacramento, CA 95812 Sacramento, CA 95814

ATTN: SSD / Measures Assessment Branch Automotive Coatings Survey ATTN: SSD / Measures Assessment Branch Automotive Coatings Survey

ELECTRONIC SUBMITTAL OPTIONS Electronic submittal options are available. Detail s can be obtained by contacting the ARB or by visit ing our web site at “www.arb.ca.gov/coatings/auto/survey/2002s urvey.htm.” Additional survey packages can also be

downloaded from this site.

QUESTIONS

If you have any questions or other requests please contact any of the following staff:

Name Phone Email Jose Gomez, Manager 916-324-8033 jgomez@arb.ca.gov Dave Mehl, Survey Lead 916-324-8177 dmehl@arb.ca.go v Gary Mouradian 916-324-8175 gmouradi@arb.ca.gov Mark Watkins 916-323-9687 mwatkins@arb.ca.govAutomotive Coatings Suggested Control Measure

B-4



# 2002 Automotive Coatings Survey

PART A

SURVEY FORMS

AND

INSTRUCTIONS

DUE DATE: SEPTEMBER 30, 2002Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-5 CONFIDENTIAL INFORMATION SUBMITTAL FORM

If you wish to designate any information contained in your survey data as CONFIDENTIAL INFORMATION , please provide the data requested below and return it with your completed s urvey forms.

In accordance with Title 17, California Code of Reg ulations (CCR), sections 91000 to 91022, and the Ca lifornia Public Records Act (Government Code Section 6250 et seq.), the informa tion that a company provides to the Air Resources B oard (ARB) may be released: (1) to the public upon request, except trade secret s which are not emission data or other information which is exempt from disclosure or the disclosure of which is prohibited by law; (2) t o the Federal Environmental Protection Agency (EPA) , which protects trade secrets as provided in Section 114(c) of the Clean Air Act and amendments thereto (42 USC 7401 et seq.) and in fe deral regulation; and, (3) to other public agencies provided that those agencies preserve the protections afforded information which is identified as a trade secret, or otherwise exempt from disclosure by law (Section 39 660(e)).

Trade secrets as defined in Government Code Section 6254.7 are not public records and therefore will n ot be released to the public. However, the California Public Records Act provides that air pollution emission data are always public records, even if the data comes

within the definition of trade secrets. On the oth er hand, the information used to calculate air poll ution emissions may be withheld from the public if the information is a trade secret.

If any company believes that any of the information it provides is a trade secret or otherwise exempt from disclosure under any other provision of law, it must identify the confidential information as s uch at the time of submission to the ARB and must p rovide the name, address, and telephone number of the individu al to be consulted if the ARB receives a request for disclosure or se eks to

disclose the data claimed to be confidential. The ARB may ask the company to provide documentation of its claim of trade secret or exemption at a later date. Data identified as conf idential will not be disclosed unless the ARB deter mines, in accordance with the above referenced regulations, that the data does not qual ify for a legal exemption from disclosure. These r egulations establish substantial safeguards before any such disclosure.

In accordance with the provisions of Title 17, Cali fornia Code of Regulations, sections 91000 to 91022 , and the California Public Records Act (Government Code Sections 6250 et seq.),

Company Name : _________________________________________________ ____________________ declares that only those porti ons specifically identified

and submitted in response to the California Air Re sources Board's information request on the survey a re confidential " trade secret " information, and requests that it be protected as such from public disclosure. All inquiries pertai ning to the confidentiality of this information should be direc ted to the following person:

Name (please print): _____________________________

_________________________________________________

Signature: ______________________________________

________________________________________

Title: _________________________________________

_____________________________________

Telephone #: ____________________________________

__________________________________________

Mailing Address: _________________________________

_____________________________________________

________________________________________________

______________________________Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-6 

### FORM 1

General Information – Reporting Year 2001

Company Name: Web Site:

Division:

Address:

City: State: Zip:

Contact Person: Position:

Phone: FAX: e-mail:

1) Did your company manufacture and distribute coat ings in 2001 (for use in California) for motor vehi cles or mobile equipment, or coatings that you know to be used in those types of applications? YES NO

2) Did your company distribute coatings in 2001 (fo r use in California) manufactured by another compan y, which are for motor vehicles or mobile equipment, or that you know are used in those types of applications? YES NO If yes, please list these companies along with a m ailing address and contact person. (Please use a s eparate sheet of paper labeled as question 2.)

3) Did your company manufacture coatings for anothe r company to distribute in 2001 that are for motor vehicles or mobile equipment, or that you know are used in those types of applications? YES NO If yes, please list these companies along with a m ailing address and contact person. (Please use a se parate sheet of paper labeled as question 3.)

4) Is your company a wholly owned subsidiary of ano ther company? YES NO If yes, please list the name of the parent company along with a contact person’s name and position, c omplete mailing address, telephone and facsimile numbers, and an e-mail addr ess for the contact person. (Please use a separate sheet of paper labeled as question 4.)

If you answered “Yes” to question 1, 2 or 3 please complete the remainder of the survey prior to retur ning it to the ARB. If you answered “No” to all these questions, please return only this form.

CERTIFICATION by Authorized Official

I hereby certify that, to the best of my knowledge and belief, all information entered on Form 1 – Gen eral Information, Form 2 – Company Information, Form 3 – Product Information, Form 4 – Ingredient Information, and Form 5 Ready-T o-Spray Information is complete and accurate.

Name: Position:

Signature: Date:Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-7 FORM 2 Company Information – Reporting Year 2001

Type of Business (check all that apply) Company Marketing Classification (check one)

 Manufacturer  International

 Importer  National

 Retail Distributor  Regional (e.g., western U.S.)

 Wholesale Distributor list:

 Private Label Manufacturer  California Statewide

 Toll Manufacturer  California Region (e.g. Southern California)

 Other (Specify): list:

Company – Gross Annual Receipts ($) for Calendar

Year 2001 (check one) Company – California Gross Annual Receipts ($) for

Calendar Year 2001 (check one)

 Less than 500,000  Less than 500,000

 500,000 to 1 million  500,000 to 1 million

 >1 million to 2 million  >1 million to 2 million

 >2 million to 5 million  >2 million to 5 million

 >5 million to 10 million  >5 million to 10 million

 >10 million to 100 million  >10 million to 100 million

 >100 million to 1 billion  >100 million to 1 billion

 >1 billion  >1 billion

Automotive Coatings – Gross Annual Receipts ($) for

Calendar Year 2001 (check one) Automotive Coatings – California Gross Annual Recei pts ($) for Calendar Year 2001 (check one)

 Less than 500,000  Less than 500,000

 500,000 to 1 million  500,000 to 1 million

 >1 million to 2 million  >1 million to 2 million

 >2 million to 5 million  >2 million to 5 million

 >5 million to 10 million  >5 million to 10 million

 >10 million to 100 million  >10 million to 100 million

 >100 million to 1 billion  >100 million to 1 billion

 >1 billion  >1 billion

Employees for Calendar Year 2001 (check one) Employees–California for Calendar Year 2001 (check one)

 Less than 10  Less than 10

 10 to 99  10 to 99

 100 to 249  100 to 249

 250 to 499  250 to 499

 500 or more  500 or more

Automotive Coatings Employees for Calendar Year

2001 (check one) Automotive Coatings Employees – California for

Calendar Year 2001 (check one)

 Less than 10  Less than 10

 10 to 99  10 to 99

 100 to 249  100 to 249

 250 to 499  250 to 499

 500 or more  500 or more

How did you determine California Year 2001 Sales Vo lume? (check all that apply)

 Direct California retail sales  Prorated from national retail sales

 Direct California wholesale distribution  Prorated from national wholesale distribution

 Other (explain):Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-8 FORM 3 Product Information – Reporting Year 2001

Entry # : *

Product Code:

Product Name:

Brand and Product Line(s):

Physical And Other Data

Type Code
(10 – 60) Specify

(for codes 10, 20, 40 and 60 only) Coverage (ft 2 /gal) Recommended

Thickness (mil) Water or

Solvent Borne
(W or S) Density

(lbs/gal)

Weight Percent Volume Percent

Solids Volatile

Material Water Exempts Solids Volatile

Material Water Exempts

As Packaged

VOC Actual VOC Regulatory - Less Water & Exempts

(g/l) (g/l)

2001 California Sales (gallons)

* Note: This entry # must also appear on your corr esponding FORM 4.

Page ______ of ______ Enter the current page # out of the total pages submitted.

NOTE: Each FORM 3 must have a corresponding FORM 4

.

Photocopy this page as necessaryAutomotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-9 FORM 4 Ingredient Information – Reporting Year 2001

Entry # from FORM 3:

# Ingredient Bin # * CAS # wt

%**

Aggregated ingredients < 0.1 wt. % N/A N/A

Total of All Ingredients (Must Equal 100%)

* For hydrocarbon solvents only. Refer to page 25 or contact solvent supplier for bin #.

** Enter the weight percent for each ingredient tha t is at least 0.1% of the total mass of the product . Toxic air contaminants (e.g., lead and nickel) should be reported to lower than 0.1% i f known.

Page ______ of ______ Enter the current page # out of the total pages submitted.

NOTE: Each FORM 4 must have a corresponding FORM 3

.

Photocopy this page as necessaryAutomotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-10 FORM 5 Ready-To-Spray (RTS) Information – Reporting Year 2 001

Note: RTS mixtures within a single product line may be grouped if the mixing ratios remain constant an d all possible combinations are viable products.

For each combination of products listed i n Form 3 that requires mixing to be RTS please list the following:

Ready-To-Spray Mixture #

Mixing Components Entry #: (from Form 3)

Mixing Ratio:

Recommended Thickness (mil)

Production Cost ($/gal)

Minimum Sales Weighted Average Maximum

If grouping 4 or more RTS mixtures from the top tab le please complete both of the following tables. I f reporting one RTS mixture or grouping 3 or less RTS mixtures, please complete ju st the appropriate number of columns of the first t able.

low median high Low median high

VOC regulatory VOC

actual

Color Color

Density Coverage

Coverage Density

VOC actual VOC regulatory

Page ______ of ______ Enter the current page # out of the total pages submitted.

Photocopy this page as necessaryAutomotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-11 Form 1 Instructions General Information – Reporting Year 2001

The information requested on Form 1 will be used by the California Air Resources Board to determine wh at companies distribute motor vehicle and mobile equip ment coatings (automotive coatings) for sale in Cal ifornia. These companies will be required to complete the su rvey, based on the coatings sold in calendar year 2 001. If your company is not a paint manufacturer, but is li sted as “manufactured for” or “distributed by” on t he product label, you are responsible for completing the reque sted information in this survey. You are encourage d to coordinate your responses with the appropriate manu facturer of your product to avoid double reporting of data. Holding companies or subsidiaries may also need to complete this survey.

Company Name: The legal business name of your company. If you are completing this survey for more than one company, please submit different surveys for each c ompany. Web Site: The company web site address, for example, www.paintcompany.com.

Division: If the company has multiple divisions, please spe cify which division this survey was completed for.

Address: Enter street address or post office box of your c ompany where mail is received. City: The city where mail is received.

State: The state where mail is received. Zip: Enter the postal zip code at which mail is receiv ed

Contact Person: Name of the person to be contacted if there are q uestions about survey responses.

Position: Business position of the contact person.

Phone: Telephone number of the contact person.

Fax: Fax number of the contact person.

e-mail: e-mail address of the contact person.

Please answer questions 1 through 4. List requeste d information where appropriate.

If you answered yes to question 1, 2 or 3, please a lso complete Forms 2, 3, 4 and 5. If you answered n o to these questions, please return only the completed Form 1 to the ARB at the address listed on page 2.

Certification: Please have a responsible company officer (Presid ent, Treasurer, Secretary, or Vice-President of a principle business function) certify that the Gener al Information (Form 1), Company Information (Form 2), Product Information (Form 3), Ingredient Informatio n (Form 4), and Ready-To-Spray Information (Form 5) is complete and accurate. This person is to clearly p rint or type his name and business position, and si gn and date the

form where indicated.Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-12 Form 2 Instructions Company Information – Reporting Year 2001

Type of Business: Check all boxes that describe the types of busine ss conducted by your company. Manufacturer

– A company that produces, packages, or repackages motor vehicle or mobile equipment coatings for sale or distribution in California.
Importer – A company that brings motor vehicle or mobile equ ipment coatings into the United States for

sale or distribution within California.

Retail Distributor

– A company who sells or supplies motor vehicle or mobile equipment coatings at the

retail level.

Wholesale Distributor

- A company who sells or supplies motor vehicle o r mobile equipment coatings for the purpose of resale or distribution in commerce a t the wholesale level. Private Label Manufacturer – A company that manufactures motor vehicle or mob ile equipment coatings for sale under another company’s name. Toll Manufacturer

– A company that manufactures motor vehicle or mob ile equipment coatings based on the formula of another company and places that comp any’s name on the product label.

Company Marketing Classification: Check the box that best describes your company’s primary marketing

classification.

International – Two or more nations. For example, United States , Canada, and Mexico.

National – All of the United States. Regional – A portion of the United States. For example, Cal ifornia, Oregon, and Arizona. California Statewide – All of California. California Local – A portion of California. For example, Southern California or the San Francisco Bay

Area.

The information on annual receipts and employees sh ould be provided for both the company and the autom otive coatings unit, as appropriate.

Gross Annual Receipts: Check the box which identifies the gross annual rec eipts generated by your company. This means the total income of the company before e xpenses are deducted.

Gross Annual Receipts - California: Check the box which identifies the gross annual r eceipts generated by your company in California.

Employees: Check the box that indicates the total number of fu ll-time equivalent employees of the company.

Employees - California: Check the box that identifies the number of full-ti me equivalent employees in

California.

How did you determine California Year 2001 Sales Vo lume?: Check the box that best identifies the method

used to determine California sales volume for use o n Form 3.Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-13 Form 3 Instructions Product Information – Reporting Year 2001

Entry # : Each Form 3 completed must be numbered sequentially , beginning with “1.” This entry # must also appear on your corresponding Form 4 and will be use d in completing Form 5.

Product Code: Enter product code.

Product Name: Enter the product / label name for the product co de above. Product Line(s): Enter the product line(s) which the coating is us ed in.

Type Code: Enter the code from the Type Code table, on page 1 1 that best describes the coating. Specify: If the Type Code entered was 10, 20, 40 or 60, pl ease clarify/specify what type of coating it is. Coverage: Specify the coverage of the coating when applied a t the recommended thickness, in terms of square feet per gallon of coating.

Recommended Thickness: Specify the recommended thickness used in determi ning the coatings’ coverage, in

mils.

Water or Solvent Borne: Note if the coating is solvent (by marking “S”) or water (by marking “W”) borne. Density: Density of the coating in pounds per gallon (lbs/ gal).

Weight Percent of Solids: Solids content of the coating expressed as a percen tage of total coating weight. Weight Percent of Volatile Material: Volatile material (VOC+water+exempts) content exp ressed as a percentage of total coating weight. See page 22 fo r the definition of VOC (volatile organic compound) and VOC

content. Weight Percent of Water: Water content as a percentage of total coating weig ht. Weight Percent of Exempts: Exempt compounds content expressed as a percentag e of total coating weight. See page 18 for definition of exempt compounds.

Volume Percent of Solids: Solids content of the coating expressed as a percen tage of total coating volume.

Volume Percent of Volatile Material: Volatile material (VOC+water+exempts) content exp ressed as a percentage of total coating volume. See page 22 fo r the definition of VOC (volatile organic compound) and VOC

content.
Volume Percent of Water: Water content expressed as a percentage of total coating volume. Volume Percent of Exempts: Exempt compounds content expressed as a percentag e of total coating volume. See page 18 for definition of exempt compounds.

VOC Actual: Also known as Material VOC. VOC content of coati ng, as supplied, in grams of VOC per liter of coating. This is the weight of all volatile materia ls less the weight of water and exempt compounds pe r the entire volume of the coating. This is NOT the same as VOC Regulatory. See “VOC Calculations ” page 23. VOC Regulatory (Less Water & Exempts): Also known as Coating VOC. VOC content of the co ating, as supplied, in grams of VOC per liter of coating less water and exempt compounds . This may be determined from the formulation data or previously determined by EP A Method 24, 40 CFR Part 60, as amended in Federal Register Vol. 57, No. 133, July 10, 1992, or ASTM D 3960-92. See “VOC Calculations” page 23.

2001 California Sales: The volume, in gallons, of the coating sold in Ca lifornia in 2001.Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-14 Form 3 Instructions, Continued

Type Codes

Coating Type Code Undercoat (specify) 10 primer 11 primer sealer 12 primer surfacer 13 pretreatment wash primer 14 precoat 15 ground coat 16 flexible primer 17 plastics primer 18

Color coat (specify) 20 single-stage 21 single-stage multicolor 22 multi-stage color coat 23 multi-stage multicolor coat 24 camouflage 25

metallic/iridescent 26

Clearcoat 30

Additive (specify) 40

reducer 41

hardener 42 catalyst 43

activator 44

extender 45

flattener 46 plasticizer 47 fish eye eliminator 48

accelerator 49

Truck bed coating 51 Underbody coating 52 Temporary protective coating 53 Uniform finish coating 54 Anti-glare/safety coating 55

Other (specify) 60

Please use the major category code if a coating doe s not fall within one of the more specific codes. For example, if a coating is an additive (uniform finish blender) which is not one of the specific additives listed, use code 40. “Un iform finish blender” would then be listed under “Specify.”Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-15 Form 4 Instructions Ingredient Information – Reporting Year 2001

Form 4 requests product ingredient information. In this table provide all ingredients which are part of the product formulation. Complete one Form 4 for each Form 3 c ompleted.

Entry # From Form 3: Enter the Entry # from corresponding Form 3.

#: Number each ingredient sequentially, beginning wi th “1.”

Ingredient: Enter the standard (IUPAC) chemical name of the i ngredient. Chemical names must be distinguished from trade names, by labeling trade names with an a sterisk prior to the name . For example, the desir ed chemical name of SD 40 Alcohol or ethyl alcohol is ethanol. Only enter the trade name of the ingredient if the chemical name is unknown. If the ingredient is proprietary or a mixture (e.g., petroleum distillates) identify the trade name and manufacturer / primary supplier.

Resin entries should be grouped by resin type inste ad of listing each specific resin composition. Rep ort only the total weight percentage for each resin group. Plea se choose from the resin types in the table below. If the resin does not fit within one of these categories, please contact Dave Mehl at (916) 361-0342 or dmehl@arb.c a.gov to help you determine a resin type, for data consisten cy.

Resin Types Acrylic Epoxy Silicone, Silane, Siloxane Acrylic Copolymer Oleoresin Styrene-butadiene Alkyd Phenolic Urethane, Polyurethane Amines, Amides Polyester (Not Alkyd) Polyvinyl Chlo ride (PVC) Cellulosic Polyvinyl Acetate (PVA) Vinyl Toluene Chlorinated Rubber Shellac Vinyl Acrylic Copolymer

NOTE: The volatile portions of resin solutions, coloran ts or additives must be listed as separate ingredie nt entries. For example, do not include the volatile portion of a resin solution as a solid.

Bin #: For aliphatic or aromatic hydrocarbon solvents ent er the bin number that best represents the nature o f the solvent from page 25.

CAS#: Enter the Chemical Abstract Service (CAS) number for the ingredient.

Weight % (of total material): Enter the percent by weight for each ingredient i n the final product that is at least 0.1% of the total mass of the product. Toxic air c ontaminants (e.g., lead and nickel) should be repor ted to lower than 0.1% if known. If an ingredient is a mixture of known components, list the components separately with their individual weight percentages in the final product. If the components of a mixture cannot be determin ed, list the ingredient as a single entity. For example, you ma y not know the weight percentage of individual ingr edients of petroleum distillates, resins, or biocides. In cas es such as these identify the weight percent of the mixture.

Total of All Ingredients: The sum of all ingredients in the table must equa l 100.00 percent by weight. If this value does not sum to 100.00, please recheck the in formation.Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-16 Form 5 Instructions Ready-To-Spray Information – Reporting Year 2001

Ready-To-Spray Mixture#: Number entries sequentially, beginning with “1.”

Mixing Components: List entry #s from Form 3 for all components to b e mixed together to create a Ready-ToSpray (RTS) coating, in the same order as the mixin g ratio. RTS mixtures within a single product line may be grouped if the mixing ratios remain constant and al l possible combinations are viable products.

Tints from within a product line can be grouped tog ether for reporting ready-to-spray mixtures, instea d of reporting for each individual color combination. W hen grouping tints within a product line, the mixin g component listed would be the name of the product line and “t ints,” e.g. “Supernova tints.” Please identify th e relevant Form 3 entry #s for the “grouped” tints.

Example:

Ready-To-Spray Mixture # 2

Mixing Components Entry #: (from Form 3) Supernova
tints, 4 – 53 &

56 – 60 92

Mixing Ratio: 2 1

Other components of a RTS coating can also be group ed, i.e. reducers, hardeners, or even a main compon ent, such as primers. More than one category can be grouped on one form. For example, if the first column is a clear coat,

the second column could be the various hardeners an d the third column the reducers, similar to the exa mple below. However, every possible combination represented in the grouping matrix must be an actual marketed RTS product. Please remember that it is only possible to have gr ouping on this form if the mix ratios are identical for every possible combination.

Example:

Ready-To-Spray Mixture # 3

Mixing Components Entry #: (from Form 3) 5 10, 11, 12 20, 21, 22

Mixing Ratio: 4 1 1

The above table would yield 9 different post-mixing combinations: 5-10-20, 5-10-21, 5-10-22, 5-11-20, 5-11-21,
5-11-22, 5-12-20, 5-12-21, and 5-12-22.Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-17 If not all of the above combinations are actual mar keted combinations, then it cannot be grouped as ab ove. For example if 5-11-20 and 5-11-21 are not marketed com binations then at least 2 Form 5s would need to be
submitted, such as

Ready-To-Spray Mixture # 3

Mixing Components Entry #: (from Form 3) 5 10, 11, 12 22

Mixing Ratio: 4 1 1

and

Ready-To-Spray Mixture # 4

Mixing Components Entry #: (from Form 3) 5 10, 12 20, 21

Mixing Ratio: 4 1 1

Mixing Ratio: The relative ratio, by volume, of each component to be mixed to create a ready-to-spray coating, in the same order as the mixing components.

Recommended Thickness: Specify the recommended thickness used in determi ning the RTS coatings’ coverage,

in mils.

Production Cost, Minimum: Indicate the lowest production cost for a RTS mixt ure from the form, in dollars per gallon ($/gal). Production cost includes the cost of materials plus labor.

Production Cost, Sales Weighted Average: Indicate the sales weighted average production co st of the RTS mixtures from the form, in dollars per gallon ($/ga l). Production cost includes the cost of materials plus labor.

Production Cost, Maximum: Indicate the highest production cost for a RTS mix ture from the form, in dollars per gallon ($/gal). Production cost includes the cost of materials plus labor.

For VOC actual and VOC regulatory report your lowes t, median, and highest color. For each color repor ted, report the corresponding information on the coverag e, density, and either VOC actual or VOC regulatory as appropriate. If grouping 4 or more RTS mixtures fr om the first table, complete both of the tables. I f reporting one RTS mixture or grouping 3 or less RTS mixtures, com plete just the appropriate number of columns of the first

table.

Coverage: Specify the coverage of the coating when applied at the recommended thickness, in terms of square feet per gallon of coating.Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-18 Density: Density of the coating in pounds per gallon (lbs/ gal).

VOC Actual: Also known as Material VOC. VOC content of coati ng, as supplied, in grams of VOC per liter of coating. This is the weight of all volatile materia ls less the weight of water and exempt compounds pe r the entire volume of the coating. This is NOT the same as VOC Regulatory. See “VOC Calculations ” page 23.

VOC Regulatory (Less Water & Exempts): Also known as Coating VOC. VOC content of the co ating, as supplied, in grams of VOC per liter of coating less water and exempt compounds . This may be determined from the formulation data or previously determined by EP A Method 24, 40 CFR Part 60, as amended in Federal Register Vol. 57, No. 133, July 10, 1992, or ASTM D 3960-92. See “VOC Calculations” page 23.Automotive Coatings Suggested Control Measure
2002 California Automotive Coatings Survey

Air Resources Board, P.O. Box 2815 - Sacramento, CA 95812 - Attention: Stationary Source Division, Mea sures Assessment Branch

Phone: 916.324.8023 FAX: 916.324.8026 www.arb.ca.go v/coatings/auto/survey/2002survey.htm

B-19 Submitting Survey Forms or Data

Option 1: For each form type, assemble the pages in numerica l entry order, beginning with Form 1 and

continuing through Form 5.

Option 2: Same as Option 1, except group each Form 4 with it s corresponding Form 3.

Option 3: Submit Data Electronically.

Survey data may be submitted electronically. The f ile formats, in order of preference, are:

1. Microsoft Access

2. Microsoft Excel

3. ASCII tab delimited file

If you wish to submit survey data in any other elec tronic format, please contact us for additional

information.

To obtain information on file formats visit www.arb.ca.gov/coatings/auto/survey/2002survey.htmAutomotive Coatings Suggested Control Measure

C-1 

### Appendix C

Summary of Cost Analysis MethodologyAutomotive Coatings Suggested Control Measure

C-2

Summary

The total cost of the proposed SCM to affected busi nesses is estimated to be $65 million in nonrecurring costs and $5.7 million per year in recurring costs. This equates to $13.9 million dollars annually over the useful life of the control equipment. This represents the cost of raw materials, research and development, and changes to distribution for the manufacturers, and the cost of new equipment, training, and energy costs to automotive refinishing facilities. The an nual average cost to a typical automotive coatings manufacturer is estimated to be $320,000. The annual average cost to a typical automotive refinishing facilities is estimated to be about $3,400.

Methodology

For this analysis, we considered the impact on two groups of businesses; coating manufacturers and automotive refinishing facilities . The total cost of the proposed SCM represents the combined costs to these two groups. Distributors of automotive coatings may also incur some costs if those costs cannot be passed on to the automotive refinishing facilities because of competitive press ures. However, we are unable to quantify these impacts. Potential costs to distrib utors include some cost sharing

between the manufacturer and distributor to transit ion customers to new products such as water-borne color coatings. Staff does not have data on the extent to which such cost sharing might occur.

Cost to Businesses

The total cost to coating manufacturers is estimate d to be $14.4 million in non-recurring costs. This equates to $3.2 million in annual cost . This estimate includes the cost to market and distribute compliant coatings in Califor nia, and is based on discussions with manufacturers (Taylor, 2005).

The total cost to automotive refinishing facilities is estimated to be $65 million in nonrecurring costs and $5.7 million per year in recurr ing costs, assuming coating manufacturers pass on all their costs to automotive refinishing facilities. This equates to $13.9 million dollars annually. The non-recurring costs include the cost of obtaining air movement and heating equipment which may be necessa ry to use water-borne coatings and maintain the level of production, and equipment and training costs associated with switching from solvent-borne to water-borne coating s.

Staff estimates there are about 4,100 automotive re finishing facilities in California. Since the large number of facilities makes it impra ctical to determine the impact on each facility, staff divided these facilities into gener al categories based on their annual revenue. Also, based on SCAQMD data, staff estimat ed the statewide number of heated spray booths and automotive refinishing faci lities with multiple spray booths. Staff acknowledges that some facilities will experi ence cost impacts that differ from these estimates, but based on discussions with indu stry, the general assumptions are valid for typical facilities within each category. Table C-1 provides an overall summay of costs. Tables C-2 through C-4 summarize the estima ted breakdown of costs forAutomotive Coatings Suggested Control Measure

C-3

automotive refinishing facilities (Elders, 2005; De cker, 2005; Phillips, 2005; SCAQMD, 2005; Taylor, 2005; Hagan, 2005; Mac, 2005; Phillip s, 2005).

Table C-1 Summary of Costs

Annual Revenue Category Less Than

1 Million Between 1 Million

and 2.5 Million Greater Than

2.5 Million Total

Number of Facilities 2,952 883 278 4,113

Facilities with One Booth/No Heat 2,332 Non-Recurring Cost per Facility 6,600

Annualized Cost 1,648

Facilities with Two Booths/No Heat 620 503 1,123
Non-Recurring Cost per Facility 8,200 42,000

Annualized Cost 1,871 7,966

Facilities with Two Booths/Existing Heat 380 69 449
Non-Recurring Cost per Facility 16,000 48,000

Annualized Cost 4,327 9,685

Facilities with Three Booths/Existing Heat 209 209
Non-Recurring Cost per Facility 68,000

Annualized Cost 12,484

Total Cost 20,475,200 27,206,000 7,524,000 65,205,200 Total Annualized Cost 5,002,416 5,651,032 3,277,324 13,930,772

Table C-2

Estimated Cost for Facilities with Annual Revenue L ess Than 1 Million

Category Item Non-Recurring

Costs Recurring

Costs Annualized

Cost*

Air Movement Equipment 1,600 144
Other Equipment 1,500 185
Training 1,000 225

Material Loss 2,500 562
Operating and Maintenance Costs 155 155
Increased Cost of Coatings 378 378 Single

Booth with

No Heating Equipment

Total 6,600 1,648

Air Movement Equipment 3,200 288
Other Equipment 1,500 185
Training 1,000 225

Material Loss 2,500 562
Operating and Maintenance Costs 235 235
Increased Cost of Coatings 378 378 Two

Booths

with No Heating Equipment

Total 8,200 1,871Automotive Coatings Suggested Control Measure

C-4 Table C-3

Estimated Cost for Facilities with Annual Revenue B etween 1 Million and 2.5 Million

Category Item Non-Recurring

Costs Recurring

Costs Annualized

Cost*

Air Movement Equipment 10,000 899
Heating Equipment 26,000 2,338
Other Equipment 1,500 185
Training 2,000 449

Material Loss 2,500 562
Operating and Maintenance Costs 1,875 1,875
Increased Cost of Coatings 1,657 1,657 Two

Booths

with No Heating Equipment

Total 42,000 7,966

Air Movement Equipment 10,000 899
Other Equipment 1,500 185
Training 2,000 449

Material Loss 2,500 562
Operating and Maintenance Costs 575 575
Increased Cost of Coatings 1,657 1,657 Two

Booths

with Existing Heating Equipment

Total 16,000 4,327

Table C-4

Estimated Cost for Facilities with Annual Revenue G reater Than 2.5 Million

Category Item Non-Recurring

Costs Recurring

Costs Annualized Cost*

Air Movement Equipment 40,000 3,598
Other Equipment 1,500 185
Training 4,000 899

Material Loss 2,500 562
Operating and Maintenance Costs 2,075 2,075
Increased Cost of Coatings 2,367 2,367 Two

Booths

with Existing Heating Equipment

Total 48,000 9,685

Air Movement Equipment 60,000 5,396
Other Equipment 1,500 185
Training 4,000 899

Material Loss 2,500 562
Operating and Maintenance Costs 3,075 3,075
Increased Cost of Coatings 2,367 2,367 Three

Booths

with Existing Heating Equipment

Total 68,000 12,484Automotive Coatings Suggested Control Measure

C-5

Impact on Businesses

In evaluating the impact of the SCM on businesses, we assumed that all costs were either completely absorbed by coating manufacturers or by automotive refinishing facilities. This gives us a worst-case scenario fo r coating manufacturers and automotive refinishing facilities. In reality, it is likely t hat coating manufacturers and automotive refinishing facilities will absorb and pass on some of the cost, making the actual impact

to businesses less than what is estimated here.

To determine the maximum possible impact on coating manufacturers, we assumed they would absorb all costs relating to producing a nd marketing compliant coatings when calculating the change in “return on owner’s e quity “(ROE). ROE is calculated by dividing the net profit by the net worth.

To calculate the change in ROE, we subtracted the c ost to manufacturers from profit data. The results were used to calculate an adjust ed three-year average ROE. The adjusted ROE was then compared with the ROE before the subtraction of the adjusted cost to determine the potential impact on the profi tability of the businesses. A reduction of more than 10 percent in profitability is conside red to indicate a potential for significant adverse economic impacts. The analysis found an av erage decrease in ROE of about 0.07 percent for coating manufacturers and 15 perce nt for automotive refinishing

facilities.

To determine the maximum impact on automotive refin ishing facilities, we assumed that manufacturers would pass on all costs from the SCM to the automotive refinishing facilities. To project a worst-case scenario, we a ssumed the automotive refinishing facilities would absorb all costs that they directl y incur, as well as all costs passed on by the manufacturers. As with the manufacturers, sta ff calculated the change in ROE for these automotive refinishing facilities.

To determine the maximum impact on consumers, staff assumed that all costs from both the manufacturers and automotive refinishing f acilities would be passed on to the consumers. If costs were passed on to the consumer , the impact would generally be in the form of higher insurance premiums and the total cost would be spread out among

several million insured drivers in California. The impact to an individual consumer would be based on a number of factors such as type of insurance, driving history, and demographics. For this analysis, we assume costs w ould be directly passed on to consumers who need automotive refinishing. In this case, the average cost of having a vehicle refinished would increase by about $11. If the consumer is paying for the refinishing directly, he or she would have to absor b the entire cost.

Annualized Costs

We annualized non-recurring fixed costs using the C apital Recovery Method. Using this method, we multiplied the non-recurring fixed costs by the Capital Recovery FactorAutomotive Coatings Suggested Control Measure

C-6

(CRF) to convert these costs into equal annual paym ents over a project horizon at a discount rate. The Capital Recovery Method for ann ualizing fixed costs is recommended by Cal/EPA (Cal/EPA, 1996), and is cons istent with the methodology used in previous cost analyses for ARB regulations (ARB, 2000a; ARB, 2000b).

The CRF is calculated as follows:

CRF i i

i n

n = +

+ − ( )

( ) 1

1 1
where, CRF = Capital Recovery Factor i = discount interest rate in real terms (assumed to be 4%) n = project horizon or useful life of equipment

The costs of air movement and heating equipment for automotive refinishing facilities were annualized over 15 years, and all other equipm ent costs were annualized over 10 years. These values are based on an estimate of th e expected lifetime of the equipment. All other costs were annualized over 5 years. The total annualized cost was obtained by adding the annual recurring costs t o the annualized fixed costs derived by the Capital Recovery Method. With regard to the discount rate, Cal/EPA recommends 2% plus the current yield for a U.S. Tre asury Note of similar maturity to the project horizon. Treasury yields have been aro und 4% in recent years and when adjusted for an inflation rate of 2%, the correspon ding discount rate is 4%. (CNN, 2005).Automotive Coatings Suggested Control Measure

C-7

REFERENCES

Air Resources Board. “Initial Statement of Reasons for Proposed Amendments to the Vapor Recovery Certification and Test Procedures fo r Gasoline Loading and Motor Vehicle Gasoline Refueling at Service Stations.” (ARB, 2000a).

Air Resources Board. Staff Report for the Suggeste d Control Measure for Architectural Coatings . June 6, 2000. (ARB, 2000b).

California Environmental Protection Agency, Memoran dum from Peter M. Rooney, Undersecretary, to Cal/EPA Executive Officers and D irectors. Economic Analysis Requirements for the Adoption of Administrative Reg ulations. Appendix C (Cal/EPA Guidelines for Evaluation Alternatives to Proposed Major Regulations ).. December 6, 1996. (Cal/EPA, 1996).

Air Resources Board staff discussions with Al Ortiz , Rely-On Spray Booth Company. August, 2005. (Ortiz, 2005).

Air Resources Board staff discussions with Cindy El ders, JunAir. July, 2005. (Elders, 2005).

Air Resources Board staff discussions with Emily Ta ylor, DuPont. July, 2005. (Taylor, 2005).

Air Resources Board staff discussions with Dave Har shbarger and Dave Luer, Mac Distributing. August, 2005. (Mac, 2005).

Air Resources Board staff discussions with Greg Dec ker, Color Source Inc. July 14, 2005. (Decker, 2005).

Air Resources Board staff discussions with Karl Hag an, Air Filtration Company. August, 2005. (Hagan, 2005).

Air Resources Board staff discussions with Peter Ph illips, Trisk Company. July, 2005. (Phillips, 2005).

Air Resources Board staff discussions with South Co ast Air Quality Management District Staff. August, 2005. (SCAQMD, 2005).

Online quote of the yield on a 10 year and 5 year t reasury bond, www.cnn.com. September, 2005. (CNN, 2005).Automotive Coatings Suggested Control Measure

D-1 

### Appendix D

Categories that are not in the SCMAutomotive Coatings Suggested Control Measure

D-2 The following district and U.S. EPA national rule c ategories have been reclassified into one or more of the categories inc luded in the proposed SCM (see Table IV-1).

Multi-Stage Topcoat System

The proposed SCM restructures the current district rules and establishes individual limits for the color and clear coatings. This restructuring is designed to enhance enforcement of district rules. Currently, most multi-stage systems consist of two stages, a color coating and a clear coating. The first stage of the finish, the basecoat or color coating, contains the pigments that give the finish

the desired color. In the case of metallic finishe s, the basecoat also contains the “metallic” flakes. The second stage of the finish is the clear coating, a durable finish that protects the basecoat.

The purpose of the basecoat is to achieve the desir ed color tint and metallic appearance. Color coatings do not contain the addi tives needed to withstand chemical and ultraviolet deterioration, or the chem icals necessary to achieve a high gloss surface. Basecoats typically contain ac rylic enamel, polyester, or urethane resins, and are designed to be easy sprayi ng and quick drying to keep

the base free of dirt and other contaminants. The quick-drying effect also locks the metallic flakes in position to achieve a mottle -free finish.

To protect the basecoat, a durable clear coating is applied. This clear coating can often be applied over the color coating after o nly 15 to 30 minutes of cure time. Clear coatings typically contain acrylic ure thane or polyurethane resins, although acrylic enamel and lacquer clears are also available. Clear coatings are designed to flow upon application, resulting in a s mooth, glass-like finish in as

few as two coats.

Most districts allow for two- and three-stage syste ms, with some having a fourstage system as well. A two-stage system consists of a basecoat and a clear coating. Three-stage systems are a two-stage syste m with either a midcoat or groundcoat. Four stage systems are two stage syste ms with both a midcoat and a groundcoat.

The basecoat is the main color coating. The clear coating provides gloss and durability. Groundcoats are typically tinted prime rs, however district definitions vary. Midcoats can be translucent color coatings ( achieved by adding filler to a color coating to reduce the pigment density) or tin ted clear coatings.

ARB staff’s evaluation of the multi-stage topcoat s ystem indicates that up to three of the four stages in a four-stage system may be co lor coatings. Alternatively, two stages of a three-stage system may consist of a clear coating and a modified clear coating.Automotive Coatings Suggested Control Measure

D-3 The composite VOC system was created to provide man ufacturers flexibility in complying with lower VOC limits. To comply with th e lower VOC limits,

manufacturers have formulated lower VOC clear coati ngs and retained high VOC color coatings.

The methodology for calculating the composite VOC l imit for multi-stage systems assumes that the volume of clear coating applied is twice the volume of the color coating. The 2002 Survey data indicate this is not the case. The volume of color coating sold was about 2.5 times the volume of clea r coating sold. Consequently, in consultation with the districts, A RB staff split the multi-stage system into two categories for analysis – color coa tings and clear coatings.

Most district rules currently specify a multi-stage system limit of 420 or 540 g/l. Because the composite VOC calculation method assume s two gallons of clear coating are applied for every gallon of color coati ng, manufacturers have focused on lowering the VOC content of the clear coatings. This compliance approach has enabled color coatings to retain a VOC content ranging from 600 to 800 g/l. The proposed SCM sets separate VOC limits for color coatings and clear coatings.

Metallic/Iridescent

Metallic/Iridescent coatings are either a single-st age or multi-stage coating that contains more than 0.042 pounds per gallon (5 g/l) of metal or iridescent particles as applied, where such particles are visible in the dried film.

Metallic colors contain various sizes of aluminum f lakes. These flakes have reflective properties and when used in various comb inations and/or amounts, modify the optical characteristics of the color. M etallic pigment consists of thin opaque aluminum flakes (made by ball milling either a disintegrated aluminum foil or a rough metal powder and then polishing to obtain a flat, brilliant surface on each particle) or copper alloy flakes (known as bronze pigments). These coatings produce silvery and other metal-like effec ts. Iridescent coatings contain mica in various sizes to create what is called a pe arlescent effect.

Either a metallic or iridescent pigment is mixed wi th a base color to create the metallic or pearl color. There is no difference be tween the base color for a solid color and a metallic/iridescent color. They are mi xed from the same tint bank at the auto body shop. Thus, metallic/iridescent coat ings are included in the color and single-stage coating analyses above.Automotive Coatings Suggested Control Measure

D-4 Primer Sealer

Primer sealers are applied prior to the topcoat, if necessary. Sealers provide adhesion between the topcoat and the surface, provi de a neutral colored base for easy coverage, seal sanded surfaces to prevent solv ent penetration, and fill minor surface imperfections. Sealer types include lacquer sealers, enamel sealers, and urethane sealers. These sealers are i ntended to be coated by lacquer, enamel, and urethane topcoats, respectivel y, and generally require only one coat prior to application of the topcoat. In a ddition to general sealers, there are specialty sealers available for use on specific problem surfaces.

Some sealers reported in the 2002 Survey comply wit h the proposed VOC limit. However, some manufacturers have stated that the 25 0 g/l sealers are intended

for the fleet vehicle market and are not suitable f or the collision repair industry. Other manufacturers have stated that that they can formulate sealers for the collision repair industry that comply with the prop osed limit of 250 g/l. One manufacturer has marketed a compliant sealer to the collision repair industry for almost a year. Primer sealers are included in the primer category. We believe that primer sealers can be formulated to be in comp liance with the proposed primer limit. We have included primer sealer in th e primer analysis above.

Primer Surfacer

Primer surfacers are typically high-solids automoti ve coatings applied over prep coats, such as pretreatment coatings, precoat, or a dhesion promoters. Primer surfacers function to provide adhesion between the prep coat and the material to be applied over the primer surfacers. They provide corrosion protection, act as a filling material to cover minor surface flaws, and provide a surface that can be easily sanded to a smooth surface. District rules currently establish the same VOC limit for primer surfacers and primers. We pro pose to continue this in the proposed SCM. We have included primer surfacers in the primer category.

Precoat

Precoats are coatings that are applied directly to bare metal primarily to deactivate the metal surface prior to application o f a subsequent coating. Precoats commonly dry by oxidation or chemical poly merization. The SCAQMD treats these coatings as primers. Most other distr ict rules allow for precoat usage at a higher VOC content than primers, but limit the amount of precoat that can be

used.

Approximately 65 percent of the coatings reported i n the survey as precoats were also listed as plastic primers, which is in conflic t with its defined purpose. Another nine percent were listed as surfacers and t hree percent were listed as ground coats.Automotive Coatings Suggested Control Measure

D-5 Based on this information, the precoat category is included in the primer category. The precoats were included in the primer analysis above.

Camouflage

Camouflage is a pigmented coating used primarily by the military to make it more difficult for vehicles and equipment to be visually located by enemy forces. Camouflage coating can also be applied to hide vehi cles and equipment from game by hunters. Camouflage is applied in patterns with different shades of a

color.

One district lists camouflage as a specialty coatin g. Some districts list camouflage as a distinct coating category. The dis tricts that list it as a distinct category only do so for mobile equipment and not fo r motor vehicles, which are also painted by the military with camouflage. The districts that have this category give it the same VOC limit as their general topcoat limit. For motor vehicles they treat camouflage as any other topcoat. There is no thing in these districts’ definitions regarding any special physical properti es for camouflage as opposed to any other color coating. Thus, camouflage coati ngs are included in the color coat analysis above.

Extreme Performance Coatings

Eight districts list extreme performance coatings a s a distinct coating category. These districts allow a VOC content of either 420 g /l or 750 g/l. There are four different definitions used in these eight districts . Five districts define extreme performance coatings as coatings which are exposed to extreme environmental conditions such as high temperatures, corrosive or erosional environments, during principal use. One district defines extreme performance coatings as coatings that are intended, during use, to be expos ed to: 1) industrial grade detergents, cleaners, or abrasive scouring agents; 2) unprotected shipboard conditions; or 3) corrosive environmental condition s. Another district defines these products as coatings which during intended us e are exposed to any of the following conditions: a) industrial grade detergent s, cleaners, or abrasive scouring agents; b) extreme environmental condition s as determined by the Air Pollution Control Officer during the vehicle’s prin cipal use; c) chronic exposure to corrosive, caustic or acidic agents, chemicals, che mical fumes, chemical mixtures or solution; d) repeated exposure to tempe ratures in excess of 250 degrees Fahrenheit; or e) repeated heavy abrasion, including mechanical wear and repeated scrubbing with industrial grade solven ts, cleaners, or scouring agents. The last district defines these coatings a s coatings which during intended use are exposed to any of the following co nditions: a) chronic exposure to corrosive, caustic or acidic agents, chemicals, chemical fumes, chemical mixtures or solutions; b) repeated exposure to temp eratures in excess of 250 degrees Fahrenheit; c) repeated heavy abrasion, inc luding mechanical wear andAutomotive Coatings Suggested Control Measure

D-6 repeated scrubbing with industrial grade solvents, cleansers, or scouring agents; or d) exterior exposure of steel and non-ferrous me tal structures.

Only one district lists this type of coating as a s pecialty coating. This district defines extreme performance coatings as coatings th at encounter acute or chronic exposure to salt water, corrosives, caustic s, acids, oxidizing agents, wind- or ocean-driven debris, or electromagnetic pu lses.

No coatings in this category were reported as being sold in California in 2001. We have no knowledge of anyone applying these coati ngs to vehicles in

California.

Specialty Coating

Specialty coatings are high VOC coatings (up to 840 g/l) that have historically been necessary due to unusual job performance requi rements. Specialty coatings include, but are not limited to, truck bed liner coating, adhesion promoter, elastomeric materials, anti-glare/safety coatings, impact resistant coatings, rubberized asphaltic underbody, water hol d-out coatings, weld-thru coatings, bright metal trim repair, camouflage, and extreme performance coatings. The U.S. EPA automotive coatings rule de fines specialty coatings to include only adhesion promoters, low-gloss coatings , bright metal trim repair coatings, jambing (cut-in) clear coats, elastomeric coatings, impact resistant coatings, underbody coatings, uniform finish blende rs, and weld-through primers.

Three districts’ (SCAQMD, Antelope Valley AQMD, and Sacramento Metropolitan AQMD) definitions of specialty coating do not conta in the “but not limited to” clause or an equivalent phrase. For these district s, only the listed coatings can be used as specialty coatings. One district, Sacra mento Metropolitan AQMD, requires manufacturers to specifically designate th eir specialty coatings as such. For all other districts the definition is not speci fic.

Specialty coating usage at body shops is limited to either five to ten percent of total coating usage depending upon the district. S ome districts have a volume usage as an alternative to the percentage usage. T hese districts allow one gallon per day or three gallons per month of specia lty coating use per facility.

Because of the variability in district requirements , we evaluated each category listed in district rules as a specialty coating ind ividually. ARB staff evaluated what special attributes or function each coating ty pe provides, and what VOC content was necessary to provide said attributes or function. ARB staff then set individual category definitions and higher VOC cont ent limits for categories as

necessary.Automotive Coatings Suggested Control Measure

D-7 Elastomeric Material

Elastomeric materials are coatings that are formula ted for application over flexible substrates such as plastic parts, elastome ric bumpers, and spoilers. All districts, except for one, and the national rule id entify elastomeric materials as specialty coatings. However, only five districts a nd the national rule have a definition for “elastomeric materials.” Two types of products were listed in the 2002 Survey as elastomeric materials. They are ela stomeric primers and elastomeric clears. The elastomeric primer mixture s reported in the survey had a slightly higher VOC content than the 250 g/l VOC li mit proposed for primers in the SCM. The elastomeric clear mixtures reported i n the survey had a VOC content ranging from about 480 to 550 g/l.

Many elastomeric materials are created by using pla sticizing additives mixed with another mixture, as opposed to using an elastomeric base component. This allows for a wide variety of elastomeric materials while keeping the number of components to a minimum.

Based on discussions with manufacturers, ARB staff determined that elastomeric additives have a VOC content less than 250 g/l. Th erefore, addition of these additives to clear coatings or primers will not res ult in exceedances of the 250 g/l VOC limits proposed for these categories. Elastome ric clears are included in the clear coating category and elastomeric primers are included in the primer category.

Anti-Glare Safety Coating

Anti-glare safety coatings are coatings that minimi ze light reflection for safety purposes. The commonly used standard is a reflecta nce of 25 or less on a 60 degree gloss meter. Some districts restrict usage to the interior of a vehicle. All districts except one identify this as a specialty c oating, however the district definitions vary regarding reflection allowed and v ehicle application.

No coatings in this category were reported as being sold in California in 2001. We have no knowledge of these coatings being used i n California. If these coatings are used in the future, they will be inclu ded in the clear coating, color coating, or single-stage coating category, as is ap propriate, based on usage.

Impact Resistant Coating

Impact resistant coatings are coatings designed to resist chipping caused by road debris. Typical usage for impact resistant co atings would be on rocker panels. While all districts except one identify th is as a specialty coating, only four

districts and the U.S. EPA national rule define the se coatings.Automotive Coatings Suggested Control Measure

D-8 No coatings in this category were reported as being sold in California in 2001. We have no knowledge of these coatings being used i n California. If these coatings are used in the future, they will be inclu ded in the clear coating or single-stage coating category, as is appropriate, b ased on usage.

Water Hold-Out Coating

Water hold-out coating is a coating applied to the interior cavity of doors, quarter panels, and rocker panels for the purpose of corros ion resistance to prolonged water exposure. While all districts and the U.S. E PA national rule include this as a specialty coating, only three districts and the U .S. EPA national rule define the coating. This definition meets the existing distri ct definition of a primer. Therefore, water hold-out coatings are included in the primer category.

No coatings in this category were reported as being sold in California in 2001. We have no knowledge of anyone applying these coati ngs to vehicles in

California.

Weld-Thru Coating

Weld-thru coatings are primers applied to metal imm ediately prior to welding to provide corrosion resistance. While all districts allow this as a specialty coating, only ten districts and the U.S. EPA national rule d efine these coatings. This definition meets existing districts’ definitions of a primer. Therefore, weld-thru coatings are included in the primer category.

No coatings in this category were reported as being sold in California in 2001. We have no knowledge of anyone applying these coati ngs to vehicles in

California.

Bright Metal Trim Repair

Bright metal trim repair is a coating applied direc tly to a metal-plated surface to restore the luster and texture of the plated surfac e. While districts include these products in the specialty coating category, only fi ve districts have a definition for these coatings. The U.S. EPA national rule does no t define this type of coating.

Four of the five districts with definitions restric t the usage to chrome-plated metal

surfaces.

No products were reported in the 2002 Survey as bri ght metal trim repair. We have no knowledge of anyone applying these coatings to vehicles in California.Automotive Coatings Suggested Control Measure

D-9 Gloss Flattener

Low-gloss coatings, also called gloss flatteners, a re coatings that exhibit a gloss reading less than or equal to 25 on a 60 degree glo ss meter. The U.S. EPA national rule and 15 district rules include these p roducts in the specialty coating category. However, only the U.S. EPA national rule defines these coatings.

No coatings in this specific category were reported as being sold in California in 2001. As discussed in the clear coating category s ection above, these coatings can comply with the clear coating VOC limit and do not need a higher VOC limit.

Heat Resistant

Heat resistant coatings are coatings which, during normal use, must withstand temperatures of at least 400 degrees Fahrenheit. O nly one district lists this type of coating as a specialty coating.

No coatings in this category were reported as being sold in California in 2001. We have no knowledge of anyone applying these coati ngs to vehicles in

California.

Jambing (Cut-In) Clear Coat

Jambing, or cut-in, clear coats are fast-drying, cl ear coatings applied to surfaces such as door jambs and trunk and hood edges to allo w for quick closure. This coating is only referenced in the U.S. EPA national rule. No districts list this type of coating in their specialty coating definitions.

No coatings in this category were reported as being sold in California in 2001. We have no knowledge of anyone applying these coati ngs to vehicles in

California.