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Bay Area Air Quality Management District
939 Ellis Street
San Francisco, CA 94109





Proposed Amendments to
Regulation 8, Rule 3:
Architectural Coatings

and

Manual of Procedures, Volume I,
Number 7: Emissions Averaging Procedure
For Architectural Coatings




DRAFT
Staff Report



October 9, 2001





Daniel Belik
Planning and Research Division




DRAFT
Regulation 8, Rule 3: Architectural Coatings


DRAFT Staff Report


Oct. 9, 2001




TABLE OF CONTENTS

1. Executive Summary 1
2. Background 2
3. Regulation 8, Rule 3 Regulatory History 4
4. Proposed Amendments to Regulation 8, Rule 3 6
Section 100: General
7
Section 200: Definitions
7
Section 300: Standards
10
Section 400: Administrative Requirements
12
Section 500: Monitoring and Records
13
Section 600: Manual of Procedures
13
5. Emission Reductions 14
6. Economic Impacts 15
7. Socioeconomic Impacts 16
8. Incremental Costs 16
9. Environmental Impacts 18
10. Regulatory Impacts 19
11. District Staff Impacts 22
12. Comments and Responses 23
13. Conclusions 23
DRAFT
Regulation 8, Rule 3: Architectural Coatings


DRAFT Staff Report


Oct. 9, 2001



1
EXECUTIVE SUMMARY

Regulation 8, Rule 3 limits the volatile organic compound (VOC) content of paints and
coatings used on architectural structures, their appurtenances, pavements and curbs.
VOCs are hydrocarbons that enter the atmosphere from various sources, including:
gasoline refining, distribution and marketing; evaporation of the organic solvents in
paints, coatings and consumer products such as deodorants, hair spray, cleaning products,
and insecticides; and from incomplete combustion of fuels in motor vehicles. These
VOCs react with oxides of nitrogen (NO
x
) in the presence of ultraviolet light to produce
ozone, or photochemical smog. Reduction of VOCs is the focus of the proposed 2001
San Francisco Bay Area Ozone Attainment Plan for the 1-Hour Ozone Standard. Rule 3
affects coating manufacturing, wholesale and retail sales, and use. The proposed
amendments, as in Control Measure SS-11 in the Ozone Attainment Plan, will impose
more stringent VOC requirements on some categories of coatings. The proposed
amendments are derived from a Suggested Control Measure (SCM) developed by staff of
the California Air Resources Board (CARB) and approved by CARB on June 22, 2000.
The SCM, and proposed Rule 3 amendments, contain definitions, VOC limits, container
labeling requirements, reporting requirements, and references to test methods for
compliance determinations. The proposed new chapter in the Manual of Procedures,
Volume I, Number 7: Emissions Averaging Procedure for Architectural Coatings, is also
derived from the SCM.

In association with the proposed amendments to Rule 3 and to the Manual of Procedures,
staff have prepared a Draft Environmental Impact Report (EIR). The Draft EIR is tiered
from the Program EIR certified by CARB at their June 22, 2000 hearing. It also contains
analyses of potential environmental impacts specific to the Bay Area. The Draft EIR
concludes that there are no significant potential adverse environmental impacts associated
with the adoption of the proposed amendments to Rule 3. The comment period for the
Draft EIR closes at 5:00 pm, November 5, 2001.

Architectural coatings emit an estimated 24.7 tons of VOC emissions in the Bay Area
each day. The proposed amendments are expected to reduce VOC emissions from
architectural coatings by 3.75 tons per day. This represents an emission reduction from
this source category of 15%. The proposed Rule 3 amendments will also account for a
significant part (46%) of the 8.2 tons VOC per day reduction from stationary sources
necessary to meet the commitments of the 2001 Ozone Attainment Plan.

The cost of the proposed amendments is expected to range from $2.70 to $3.90 per pound
of VOC emission reduced ($5400 to $7800 per ton VOC emission reduced). The price of
a gallon of paint to the consumer is expected to increase by an average of $5.20, although
the increase for more commonly used paints and coatings is expected to be significantly
less. The decrease in manufacturers Return on Equity calculated in the CARB staff
report was 1.1%, which is considered less than significant. This cost is in the range of DRAFT
Regulation 8, Rule 3: Architectural Coatings


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Oct. 9, 2001



2
costs projected by CARB for consumer product regulations, from $0 to $6.90 per pound
of VOC reduced. The cost of the proposed amendments is also within the cost estimates
of other measures projected in the 2001 Ozone Attainment Plan, which range from from
$1000 to $12,000 per ton VOC reduced.

The SCM adopted by the CARB is the result of eight public workshops and many
meetings with industry and the statewide CAPCOA steering committee. Staff will
discuss rule amendments at a public workshop scheduled for October 22.

BACKGROUND

Regulation 8, Rule 3: Architectural Coatings imposes volatile organic compound (VOC)
limits on paints and coatings applied to architectural structures. Coatings with VOC
contents (a measure of the amount of organic solvent) above the limits may not be sold,
distributed or used in the District. Architectural coatings are any coatings, including
primers, sealers, and stains, sold for application to stationary structures and their
appurtenances, including houses, buildings, bridges, tanks, railings, streets, highways and
curbs. The rule affects manufacturing, sale, distribution, and use of architectural coating
products. The Rule contains a general VOC limit and numerous categories of products
that have specific VOC limits. The specific category VOC limits are based on unique
properties of the coating product that dictate the need for higher levels of VOC, or special
characteristics of the application or substrate which have demonstrated the need for
specific types of coating with higher levels of VOC.

The Bay Area District is designated as a non-attainment area for the federal one hour
ozone standard. Ozone, a criteria pollutant, is formed from a reaction of volatile organic
compounds and oxides of nitrogen in the presence of ultraviolet light (sunlight). The
EPA has set primary national ambient air quality standards (NAAQS) for ozone and other
air pollutants to define the levels considered safe for human health. The District is
designated as an unclassified non-attainment area for the NAAQS for ozone. This means
that the District is not classified into one of the standard federal categories of moderate,
serious, severe, or extreme pursuant to the 1990 Clean Air Act Amendments. EPA had
redesignated the Bay Area to attainment status for the national 1-hour ozone standard on
May 22, 1995. The EPA did this because the Bay Area attained the ozone standard at the
end of the 1992 ozone season (having had three clean years 1990, 1991 and 1992),
and had maintained the standard in 1993 and 1994. In the summers of 1995 and 1996,
the Bay Area experienced a number of episodes of hot, stagnant weather. This led to
exceedances of the standard. EPA received two petitions requesting redesignation of the
Bay Area to nonattainment status (63 Fed. Reg. 37261). EPA determined that the
"contingency measures" in the Ozone Maintenance Plan, approved by EPA in 1995 were
not adequate to bring the region back into compliance with the standard and that the DRAFT
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3
region's adopted and projected actions would not be sufficient to re-establish attainment
of the standard.
1


EPA published a final notice that revoked the region's ozone attainment status on July 10,
1998.
2
The co-lead agencies responsible for air quality planning in the Bay Area, the
District, the Association of Bay Area Governments, and the Metropolitan Transportation
Commission, prepared the 1999 Ozone Attainment Plan to comply with these
requirements. The 1999 Plan was submitted to EPA in August, 1999. The deadline EPA
set for attaining the 1-hour national ozone standard was November 15, 2000. The region
continued to experience exceedances of the 1-hour ozone standard in 1999 and 2000.
Emission reductions from control measures in the 1999 Ozone Attainment Plan did not
prove to be sufficient to bring the Bay Area back into compliance. On March 30, 2001,
EPA proposed to make a formal finding that the Bay Area has not attained the national 1-
hour ozone standard. The notice also proposed partial approval and partial disapproval of
the 1999 Plan
3
. The notice, finalized on August 28, 2001, set new planning requirements
for the District and co-lead agencies
4
. On July 18, 2001, the Board of Directors of the
District approved the San Francisco Bay Area Ozone Attainment Plan for the 1-Hour
National Ozone Standard. The Plan was submitted to the CARB as an amendment to the
California State Implementation Plan, but was not approved. The Plan, since revised by
staff, is scheduled to be again considered at a joint meeing of the co-lead agencies,
BAAQMD, MTC, and ABAG, on October 24, 2001 and, if approved, by the CARB on
November 1, 2001. The Plan contains new transportation, mobile source and stationary
source control measures. Among the stationary s