Proposal:

Amend Rule 1145 - Plastic, Rubber and Glass Coatings

Synopsis:

Proposed amendments will: 1) lower VOC requirements for electric dissipating and shock-free coatings; 2) replace solvent cleaning operations language with a reference to Rule 1171 provisions; 3) add a transfer efficiency requirement of 65% to be consistent with other AQMD coating rules; 4) replace outdated compliance test methods with current AQMD test methods; and, 5) add an exemption for air brush operations from transfer efficiency requirements. Proposed amendments will result in an emission reduction of approximately 1.4 tons of VOC per day.

Committee:

Stationary Source, December 5, 1996, reviewed.

Recommended Action:

1. Certify the CEQA Final Subsequent Environmental Assessment (EA) for the proposed amendments in accordance with the attached Resolution.

2. Adopt the Statement of Findings, Statement of Overriding Considerations, and Mitigation Monitoring Plan in accordance with the attached Resolution.

3. Amend Rule 1145 - Plastic, Rubber and Glass Coatings in accordance with the attached Resolution.

James M. Lents, Ph.D.
Executive Officer

Background

AQMD Rule 1145 - Plastic, Rubber, and Glass Coatings was adopted on July 8, 1983. At that time there were two coating categories - general coatings and military specification coatings. In 1986 the general two-component category was amended to lower the VOC limit from 4.2 to 3.5 pounds per gallon. Also in 1986, the military specification one-component and two-component coating VOC limits were reduced from 3.5 to 2.8 and 4.2 to 3.5 pounds per gallon, respectively. In 1987 there were eight

additional coating categories added to Rule 1145 to take into account the many specialty coatings that existed within the Rule 1145 universe. Since 1987 there have not been any changes to the VOC limits for any of the coating categories.

The majority of VOC limits for Rule 1145 coating categories are at levels that do not lend themselves to any further reduction. There currently are no new technologies available that can be used to develop lower VOC coatings with acceptable results. There is, however, one coating category - electric dissipating and shock-free coatings - where water-based technology is making significant progress toward replacing solvent-based coating for the plastic electronic enclosure industry.

To obtain local input on Proposed Amended Rule 1145, AQMD held a public workshop on Tuesday, April 9, 1996, and a public consultation meeting on Tuesday, July 16, 1996. A public notice was mailed to approximately 1,400 contacts including Certified Permitting Professionals, Board agenda subscribers, consultants, and effected facilities prior to each meeting. The preliminary AQMD staff report and proposed rule language was available at the public consultation meetings and on the AQMD’s Internet home page. Participants had two weeks to submit comments preceding the public consultation meetings.

Proposal

Proposed amendments to Rule 1145 will:

¬ Lower the VOC limit for electric dissipating and shock-free coatings from 6.7 pounds per gallon to 3.0 pounds per gallon;

¬ Remove the language used to describe the requirements for solvent cleaning operations and replace it with a reference to the provisions of Rule 1171 - Solvent Cleaning Operations;

¬ Amend the transfer efficiency provision to change the default transfer efficiency requirement to a value of not less than 65% instead of the current high-volume, low-pressure (HVLP) standard;

¬ Add a provision to exempt air brush operations from transfer efficiency requirements; and

¬ Replace outdated compliance test methods with the test methods that are currently being used by the AQMD.

The lowering of the VOC limit for electric dissipating and shock-free coatings will result in a net emission reduction of 1.4 tons per day of VOC emissions. This reduction will impact that segment of the industry that coats plastic television cabinets and medical enclosures. These enclosures shield the user from electronic components that have a potential to be harmful. These lower VOC coatings are presently available. Within the next year there is expected to be enough formulations developed to satisfy all coatings users in this category.

The language in Rule 1145 pertaining to the VOC emissions from the solvent cleaning operations is proposed to be replaced with a reference to the provisions of Rule 1171. Rule 1171 was adopted as a separate rule to consolidate the general requirements for all cleaning operations that emit VOC emissions that are subject to the source-specific Regulation XI rules.

The transfer efficiency requirements for Rule 1145 were previously defined in terms of HVLP spray application rather than as a minimum percentage value. This is inconsistent with other recently modified AQMD coating rules, and staff recommends changes to the transfer efficiency language to be consistent.

A provision to exempt air brush operations from transfer efficiency requirements has been added along with an air brush operations definition. Air brush operations occasionally occur with Rule 1145 coatings and are insignificant to air quality.

The section on compliance test methods has been updated to reflect the most recent test methods that the AQMD uses to determine VOC content of materials, efficiency of emission control systems, multiple test methods and demonstration of transfer efficiency.

AQMP & Legal Mandates

By statute, AQMD is required to adopt an AQMP demonstrating compliance with all state and federal ambient air quality standards [Health and Safety Code Section 40460(a)] for the Basin and non-Basin areas under the jurisdiction of the AQMD. The AQMD must adopt rules and regulations that carry out the AQMP [California Health and Safety Code, Section 40440(a)]. This proposal meets those requirements by amending an existing adopted rule that can further reduce VOC emissions through advanced coating technology. This proposal also meets these requirements without undue administrative burden on industry, the AQMD or other agencies.

CEQA & Socioeconomic Analysis

AQMD staff has reviewed the proposed amendment to Rule 1145 - Plastic, Rubber, and Glass Coatings pursuant to the CEQA Guidelines Section 15002(k)(1) - Three Step Process, and determined the amendments are not exempt from the requirements of CEQA. The proposed amendments do make substantial changes and potential impacts to the previous final Environmental Impact Report (EIR) that would require a subsequent document to account for the proposed amendments.

The subsequent CEQA document contains only the information necessary to make the previous document adequate for the project as revised and has been circulated by itself without recirculating the previous draft or final CEQA document. The subsequent Environmental Assessment (EA) focuses solely on the proposed amendments to Rule 1145 and not on the existing rule.

A socioeconomic impact assessment has been prepared as part of the rule adoption hearing package. The approach proposed in the rule is not expected to result in significant financial impact on facilities and will result in much lower compliance costs than if the rule were implemented at a lower threshold.

Implementation Plan

AQMD permitting staff will be responsible for implementing the changes to Rule 1145, while AQMD enforcement staff will be responsible for field compliance with the new permit requirements.

Resource Impact

Existing AQMD resources will be sufficient for implementation of the changes to Rule 1145 with no impact on the budget.

Attachments
Summary of Proposed Amendment
Rule Development Flow Chart
Key Contacts
Key Issues and Responses
Resolution
Proposed Amended Rule 1145
Staff Report
Environmental Assessment

ATTACHMENT A

SUMMARY OF PROPOSED AMENDMENTS

Rule 1145

The proposed amendments to Rule 1145:

• Lower the VOC limit for electric dissipating and shock-free coatings from 6.7 lbs/gal to

3.0 lbs/gal, effective January 1, 1998, resulting in a 1.4 ton per day VOC emissions reduction;

• Delete all solvent cleaning, storage and disposal operations language and replace it with a reference to Rule 1171- Solvent Cleaning Operations;

• Delete the reference to high-volume, low-pressure spray as the guideline for proper transfer efficiency and replace it with "at least 65 percent" as the minimum transfer efficiency requirement;

• Replace all outdated compliance test method references with the test methods that are currently being used by the AQMD; and,

• Add an exemption for air brush operations from transfer efficiency requirements.

ATTACHMENT B

RULE DEVELOPMENT PROCESS

RULE 1145 - Plastic, Rubber, and Glass Coatings

Public Workshop: April 9, 1996

1,400 notices mailed

Public Consultation Meeting: July 16, 1996

1,400 notices mailed

Set Public Hearing: December 13, 1996

Public Hearing: January 10, 1997

ATTACHMENT C

KEY CONTACTS

Precision Painting	End User
Kyowa America Corporation	End User
Plastic Dress-Up Company	End User
Air Logistics Corp.	End User
Lynette Decor Products	End User
On-Line Graphics, Inc.	End User
Silvestri Studio, Inc.	End User
American Caster Corp.	End User
Armstrong World Ind., Inc.	End User
Structural Composites	End User
Schuller International Inc.	End User
AB Plastics Corporation	End User
Industrial Molding Corp.	End User
Vacuum Metallizing Co.	End User
T & V Industries Inc.	End User
Coating Resources	Supplier
Cardinal Industrial Finishes	Supplier
Fusion UV Curing Systems	Supplier
Radtech International	Supplier
Red Spot Paints	Supplier
Rohm and Haas	Supplier
Sherman Williams	Supplier
Sartomer Co.	Supplier
I.V.C. Industrial Coatings	Supplier

ATTACHMENT D

KEY ISSUES AND RESPONSES

Rule 1145
Issue	Response
The process of testing and assisting in the development of a water-based coating for shock-free applications has not been an easy or quick task and is still not complete.	The AQMD is allowing 12 months from the adoption date to the effective date for final compliance with the VOC limit based on conversations with coating users and manufacturers. This amount of time, along with the time that has already been spent in testing and development, should be more than sufficient time for manufacturers to procure an acceptable water-based coating for their products.
Reported difficulties with compliant coatings include compatibility with other decorating processes and the ability to dry the paint rapidly enough for it to be packaged immediately after decoration.	Manufacturers using water-based coatings that have experienced drying and/or curing problems have installed forced air and/or thermal drying systems to resolve these concerns. These manufacturers have not experienced any difficulties in applying a decorative process or in packaging.
Presently, water-based coatings in this category (shock-free coatings) have VOC content levels as low as 3.5 lb. VOC/gallon. By lowering the limit to 3.5 lbs VOC/gallon, users are restricted to the lowest limit available. This creates a possible monopoly for one supplier.	The majority of coating manufacturers that were contacted by staff indicated that the current VOC level of the electric dissipating and shock-free coatings is between 2.7 and 3.0 pounds per gallon. It was also evident that there are several coating manufacturers that supply these coatings and there is no indication that any one of these coating manufacturers have a monopoly on any specific coating material.
The estimates for additional costs incurred should not only include the purchase price of the coating but also associated equipment.	The purchase cost of the coating was used because it is a universal cost that applies to all users. Other costs, such as new ovens or other related drying equipment, are normally already part of a solvent-based coating system and should not be considered as a new cost. In some cases, ovens may need to be modified to be used in a water-based coating line which would add slightly to
ATTACHMENT D KEY ISSUES AND RESPONSES CONTINUED
Rule 1145
Issue	Response
	the overall cost of using water-based coatings.
Based on the reduction of the VOC limit of shock-free coatings, hardships could be seen in loss of customers if a facility cannot use this reduced-VOC coating. One facility stated that, based on their current employment of approximately 400 employees of which 200 were responsible for coating operations, the reduction in the VOC limit would equate to laying off approximately 200 employees, impacting the employment data in Southern California.	If a facility cannot successfully convert from a solvent-based coating system to a water-based system by the effective date, there are options. A variance can be requested to obtain additional time for coming into compliance under special cirumstances. Research indicates that some facilities inside and outside the United States have successfully converted, others have done partial conversions, while the remainder are in testing stages with final conversion estimated to be within six months to a year. If a facility has a specialty product or some other unique process for which a water-based coating cannot be formulated, the facility should request a rule exemption or seek a variance.
Air brush guns which hold only very small quantities of paint, typically four ounces or less, should be either added to the list of approved application methods or they should be granted a specific exemption.	Since air brush operations are not part of any production line and the quantity of coating used is less than two gallons per year per facility, staff agrees that it is reasonable to exempt this operation from Rule 1145 transfer efficiency requirements for usage of five gallons or less per year. In addition, since there are less than four facilities that fall into this category, the emission impact is minuscule.
ATTACHMENT D KEY ISSUES AND RESPONSES CONTINUED
Rule 1145
Issue	Response
It would be a substantial benefit to users if subparagraph (h)(1)(E) could be modified to read, "Any individual coating category used in volumes less than 50 gallons in any one year, provided that the total usage of all such coatings does not exceed 200 gallons per year per facility." Eliminating the clause, "If substitute compliant coatings are not available" would remove a very stringent burden of proof from a facility needing to use small quantities of higher VOC content products.	This provision allows an operator that needs to use a unique coating on small production runs the flexibility to use a non-compliant coating in limited quantities. The current provision was never intended to allow an operator to use non-compliant coatings for small production runs when a compliant coating was available. Therefore, the phrase "If substitute compliant coatings are not available" is needed to keep the initial intent of the provision in place.