Compliance Date Extension; Formaldehyde Emission Standards for Composite Wood Products

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule; compliance date extension.

SUMMARY:

EPA is extending the compliance dates for the formaldehyde emission standards for composite wood products final rule issued pursuant to the Toxic Substances Control Act (TSCA) Title VI, and published in the Federal Register on December 12, 2016. EPA is extending the December 12, 2017, manufactured-by date for emission standards, recordkeeping, and labeling provisions until December 12, 2018; extending the December 12, 2018 compliance date for import certification provisions until March 22, 2019; and extending the December 12, 2023, compliance date for provisions applicable to producers of laminated products until March 22, 2024. Additionally, this final rule will extend the transitional period during which the California Air Resources Board (CARB) Third Party Certifiers (TPC) may certify composite wood products under TSCA Title VI without an accreditation issued by an EPA TSCA Title VI Accreditation Body, so long as the TPC remains approved by CARB, is recognized by EPA, and complies with all aspects of the December 12, 2016 final rule until March 22, 2019. EPA believes that extension of these compliance dates and the transitional period for CARB TPCs adds needed regulatory flexibility for regulated entities, reduces compliance burdens, and helps to prevent disruptions to supply chains while still ensuring that compliant composite wood products enter the supply chain in a timely manner.

DATES:

This final rule is effective on October 25, 2017.

ADDRESSES:

The docket for this action, identified by docket identification (ID) number EPA-HQ-OPPT-2017-0244, is available at http://www.regulations.gov or at the Office of Pollution Prevention and Toxics Docket (OPPT Docket), Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPPT Docket is (202) 566-0280. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT:

For technical information contact: Erik Winchester, National Program Chemicals Division, Office of Pollution Prevention and Toxics, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone number: (202) 564-6450; email address: winchester.erik@epa.gov.

For general information contact: The TSCA-Hotline, ABVI-Goodwill, 422 South Clinton Ave., Rochester, NY 14620; telephone number: (202) 554-1404; email address: TSCA-Hotline@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Does this action apply to me?

You may be affected by this final rule if you manufacture (including import), sell, supply, offer for sale, test, or work with the certification of hardwood plywood, medium-density fiberboard, particleboard, and/or products containing these composite wood materials in the United States. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Veneer, plywood, and engineered wood product manufacturing (NAICS code 3212).
• Manufactured home (mobile home) manufacturing (NAICS code 321991).
• Prefabricated wood building manufacturing (NAICS code 321992).
• Furniture and related product manufacturing (NAICS code 337).
• Furniture merchant wholesalers (NAICS code 42321).
• Lumber, plywood, millwork, and wood panel merchant wholesalers (NAICS code 42331).
• Other construction material merchant wholesalers (NAICS code 423390), e.g., merchant wholesale distributors of manufactured homes (i.e., mobile homes) and/or prefabricated buildings.
• Furniture stores (NAICS code 4421).
• Building material and supplies dealers (NAICS code 4441).
• Manufactured (mobile) home dealers (NAICS code 45393).
• Motor home manufacturing (NAICS code 336213).
• Travel trailer and camper manufacturing (NAICS code 336214).
• Recreational vehicle (RV) dealers (NAICS code 441210).
• Recreational vehicle merchant wholesalers (NAICS code 423110).
• Engineering services (NAICS code 541330).
• Testing laboratories (NAICS code 541380).
• Administrative management and general management consulting services (NAICS code 541611).
• All other professional, scientific, and technical services (NAICS code 541990).
• All other support services (NAICS code 561990).
• Business associations (NAICS code 813910).
• Professional organizations (NAICS code 813920).

If you have any questions regarding the applicability of this action, please consult the technical person listed under FOR FURTHER INFORMATION CONTACT.

II. Background

A. What action is the agency taking?

EPA shares the concerns raised by industry stakeholders regarding the time needed to comply with provisions of the formaldehyde emission standards for composite wood products final rule (81 FR 89674, December 12, 2016) (FRL-9949-90), and, therefore, is extending several rule compliance dates. EPA also believes that CARB TPCs should be allotted the full two years granted by the December 12, 2016 final rule to operate under the transitional period as promulgated in § 770.7(d).

1. Direct Final Rule and Notice of Proposed Rulemaking. Given that EPA extended the effective date of the TSCA Title VI final rule from February 10, 2017 until May 22, 2017, the Agency issued a proposed (82 FR 23735) (FRL-9962-85) and direct final rule (82 FR 23769) (FRL-9962-86) on May 24, 2017 that regulated entities should have at least the same amount of time to comply with the various regulatory timeframes as initially allotted in the final rule. The two extensions to the final rule effective date (82 FR 8499, January 26, 2017 (FRL-9958-87) and 82 FR 14324, May 24, 2017 (FRL-9960-28-OP) resulted in delaying the ability of regulated entities to begin implementation activities to establish certification programs, certify composite wood products and distribute those products into supply chains, such that compliance would be achieved by the required dates. The Agency solicited public comment on this action by issuing a companion Notice of Proposed Rulemaking (82 FR 23769) (FRL-9962-85) with the direct final rule in the event EPA received adverse public comment. EPA did receive nine (9) comments from the public on this action, at least one of which the Agency considered to be adverse in nature with respect to the proposed extension of compliance dates. The direct final action was withdrawn on July 6, 2017, as published in the Federal Register (82 FR 31267) (FRL-9963-74).

EPA considered all of the public comments submitted in response to the provisions outlined in the direct final rule and companion proposal. Due to the adverse comments, EPA was compelled to withdraw the direct final rule (82 FR 31267) (FRL-9963-74). The Agency then proceeded with the notice of proposed rulemaking (82 FR 23769) (FRL-9962-85) and is now issuing this final rule and a Response to Comments document which addresses the comments received.

2. Stakeholder Feedback Since the December 12, 2016 Final Rule. Since publication of the December 12, 2016 final rule, the Agency has engaged the composite wood product industry stakeholders, other related regulated entities, and the larger public through webinar presentations, trade group meetings, conference presentations, and teleconferences to discuss and support implementation of the December 12, 2016 final rule. Through this stakeholder outreach, the Agency received both formal and informal feedback regarding compliance challenges faced by regulated entities, including the final rule's compliance dates. In addition, the Agency received several unsolicited letters and general correspondence from composite wood product industry stakeholders requesting that the Agency amend specific provisions of the December 12, 2016 final rule. Written inquiries and correspondence from Hooker Furniture, Composite Panel Association, American Home Furnishings Alliance (AHFA), and a consortium of trade associations including AHFA, Kitchen Cabinet Manufacturers, International Wood Products Association, Recreation Vehicle Industry Association, National Retail Foundation, and Retail Industry Leaders Association are included in the supporting documents section of the public docket for this action. Industry concerns included challenges in meeting the compliance dates due to the complexities of the domestic and imported composite wood product supply chains, import certification requirements, non-complying lot notification requirements, prohibition on early labeling, and laminated product provisions of the final rule.

Since publication of the direct final action, the Agency has been contacted by multiple stakeholders, national trade associations, and other regulated entities who overwhelmingly confirm that regulated entities will require additional time to comply with the TSCA Title VI emission standards compliance date due to supply chain, global business, and factory supply logistics. National groups representing importers and importers themselves have noted that there will be significant logistical hurdles with sourcing compliant composite wood panels for fabrication of finished goods and component parts before the manufactured-by date that the Agency had not considered in choosing the proposed March 22, 2018 compliance date in the direct final rule. Several commenters suggested extending the compliance date for the emission standards, recordkeeping, and labeling requirements in order to allow adequate time for the production and integration of TSCA Title VI certified composite wood products into the domestic and import supply chains. The supply chain begins with the production of panels, then fabrication of component parts and finished goods to ultimately having compliant products available for sale to consumers. Commenters suggested extensions ranging from a compliance date of December 12, 2018 to July 22, 2019. Commenters also noted that EPA had not fully understood or considered the logistical hurdles that regulated entities face to comply with the rule requirements. Commenters noted that extending the compliance date further than what was proposed on May 24, 2017 (82 FR 23769), will help ensure that an adequate supply of certified composite wood products enter the supply chain. The earliest some regulated entities communicated being able to import TSCA Title VI compliant component parts and finished goods is approximately May 2018. One commenter also noted that achieving full compliance with all of their imported products as TSCA Title VI compliant could take until July 2019, given the anticipated inventory of non-TSCA Title VI certified panels and finished goods currently in their inventory and the time needed to obtain compliant panels to fabricate and sell compliant component parts and finished goods.

Other commenters did not support any further extension of the compliance dates as they noted that further delay would be a hindrance to the health benefits from reduced formaldehyde emissions in the home environment, and stated that extending the compliance date defeated the purpose of establishing a compliance date in the final rule. Some commenters supported the compliance date extension as proposed stating that it would restore the December 12, 2016, final rule's regulatory timeframe. A full response to comments received during the public comment period is included in the Response to Comments document in the supporting documents section of the public docket for this action.

After considering the public comments both supportive and non-supportive of extending the compliance dates, the agency believes that the December 12, 2018 compliance date for the emission standards provides a balanced and reasoned timeline for importers, distributors, and regulated entities to establish compliant supply chains and comply with the TSCA Title VI final rule. Additionally, the agency believes extending this compliance date reflects the Congressional intent under TSCA Title VI that the agency implement provisions to ensure compliance with the formaldehyde emission standards as soon as possible while enabling regulated entities to achieve compliance. The Agency does not believe that the extension provided for the emissions compliance date would result in any significant increases in health risk, in part because on July 11, 2017, EPA published a direct final rule that allows voluntary early labeling of compliant composite wood products after August 25, 2017, which facilitates TSCA Title VI compliant products entering commerce sooner than under the original December 12, 2017, compliance date for the emission standards, recordkeeping, and labeling requirements. Moreover, CARB compliant composite wood panels, component parts, and finished goods, which are subject to identical formaldehyde emission standards as TSCA Title VI, make up the majority of composite wood products already in the domestic supply chains and that will continue during the additional time provided to comply with TSCA. The Agency also believes that the extended compliance dates proposed for import certification, laminated products, and the CARB TPC transitional period are adequate. EPA received no adverse comments on these dates, which are being finalized as proposed. As such, this final rule will extend the December 12, 2018, compliance date for import certification provisions until March 22, 2019; and extend the December 12, 2023, compliance date for provisions applicable to producers of laminated products until March 22, 2024. Additionally, this final action will extend the transitional period during which the CARB TPCs may certify composite wood products under TSCA Title VI without an accreditation issued by an EPA TSCA Title VI Accreditation Body so long as the TPC remains approved by CARB, is recognized by EPA, and complies with all aspects of the December 12, 2016, final rule until March 22, 2019.

3. Final Rule. EPA is publishing this final rule to provide regulated entities with the time needed to ensure certified composite wood products enter the supply chains. EPA is extending the compliance dates for the December 12, 2016, final rule by: Extending the December 12, 2017, date for emission standards, recordkeeping, and labeling provisions, until December 12, 2018; extending the December 12, 2018 date for import certification provisions until March 22, 2019; and extending the December 12, 2023 compliance date for provisions applicable to producers of laminated products until March 22, 2024. Additionally, this final rule will extend the CARB TPC transitional period under § 770.7(d), which is currently set to end December 12, 2018, until March 22, 2019 to be consistent with the regulatory timeframe of the December 12, 2016 final rule.

The Agency believes that this final rule balances the further extended compliance dates commenters noted would be needed, and the proposed compliance dates in the May 24, 2017 (82 FR 23735), direct final rule that several trade groups concurred with in their public comments. EPA has begun recognizing TPCs and Accreditation Bodies to the TSCA Title VI program since the May 22, 2017, effective date of the December 12, 2016, final rule and anticipates that panel producers and TPCs will work together to provide compliant products for further downstream distribution and fabrication into component parts and finished goods so that those composite wood products will be compliant by or before December 12, 2018.

As previously noted, this final rule establishes a compliance date of December 12, 2018, for the emission standards, recordkeeping, and labeling provisions. Beginning this date, all imported panels and component parts or finished goods subject to the rule must comply with 40 CFR part 770. Existing stock of non-certified panels manufactured in the United States or imported into the United States before the manufactured-by date may continue to be distributed in commerce and integrated further into component parts and finished goods until that stock is depleted, providing documentation is kept regarding the date of manufacture or import. Further, existing stock of component parts and finished goods that contain non-certified panels manufactured internationally and subsequently imported into the United States before the manufactured-by date may continue to be distributed into commerce and integrated into finished goods until that stock is depleted, providing documentation is kept regarding the date of manufacture or import.

EPA notes that it has previously referred to the compliance date for the emission standards, recordkeeping, and labeling provisions as the “manufactured-by date” for composite wood products. To clarify, the “manufactured-by date” in this context refers to the compliance date for the emission standards, recordkeeping, and labeling provisions. Additionally, EPA has also described the compliance date for the provisions applicable specifically to producers of laminated products, finalized in this rule to be March 22, 2024, as the “manufactured-by date” for laminated products. To clarify, the “manufactured-by date” in this context refers to the compliance date for the provisions applicable specifically to producers of laminated products.

In addition, to clarify EPA's original intent regarding the compliance dates referenced in the December 12, 2016, final rule, and to better align with the final rule's preamble discussion the Agency has amended the text preceding the compliance dates from “after” to “beginning,” as proposed. EPA intends regulated entities to begin complying with the referenced rule requirements as of the dates listed in the final rule. EPA did not receive adverse comment on this aspect of the proposal.

EPA is also proceeding with amending subparagraph § 770.15(e) to clarify that TPCs receive recognition after they apply to EPA, not after the conclusion of the transitional period as the codified text currently reads. EPA did not receive adverse comment on this aspect of the proposal. As such, the Agency is finalizing this amendment as proposed.

Additionally, EPA is clarifying § 770.2(d) to note that existing CARB-approved TPCs that enter the TSCA Title VI program under the reciprocity provisions of the final rule must be EPA-recognized before they may begin certifying products as TSCA Title VI compliant. EPA notes that this requirement is already explicitly stated in § 770.7(d), and that this editorial clarification is solely intended to resolve any ambiguity to be interpreted between the two aforementioned codified sections of the regulatory text. EPA did not receive adverse comment on this aspect of the proposal.

B. What is the agency's authority for taking this action?

These regulations are established under authority of Section 601 of TSCA, 15 U.S.C. 2697.

III. Statutory and Executive Order Reviews

Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/lawsregulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

This action has been determined to be a significant regulatory action under Executive Order 12866 (58 FR 51735, October 4, 1993) and was submitted to the Office of Management and Budget (OMB) for review under Executive Orders and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB review have been reflected in the docket for this action.

B. Executive Order 13771: Reducing Regulation and Controlling Regulatory Costs

This action is considered an Executive Order 13771 (82 FR 9339, February 3, 2017) deregulatory action. This action provides regulatory relief by extending the compliance date for certain provisions of the formaldehyde emission standards for composite wood products final rule.

C. Paperwork Reduction Act (PRA)

This action does not impose any new information collection burden under the PRA because it does not create any new reporting or recordkeeping obligations. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2070-0185 (EPA ICR Number 2446.02).

D. Regulatory Flexibility Act (RFA)

The Agency certifies that this action will not have a significant economic impact on a substantial number of small entities under the RFA, 5 U.S.C. 601 et seq. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to the rule. This rule extends, in response to two delays of the rule effective date and public comment, the compliance dates and transitional period for CARB TPCs to provide the time needed to achieve compliance post-effective date. This will reduce the burden on TPCs, panel producers, fabricators, importers, distributors, and retailers, because shortening of the compliance period by even a few months makes it more difficult for some of them to establish business relationships, certify product, and distribute certified product into commerce to downstream entities before the original compliance date. EPA therefore concludes that this action will relieve or have no net regulatory burden for directly regulated small entities.

E. Unfunded Mandates Reform Act (UMRA)

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.

F. Executive Order 13132: Federalism

This action does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This action does not have tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This final rule will not impose substantial direct compliance costs on Indian tribal governments.

H. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997), as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of Executive Order 13045 has the potential to influence the regulation. As addressed in Unit II.A., this action would not materially alter the final rule as published, and will allow regulated entities additional time to establish their supply-chain and certification programs under the final rule, post effective date.

I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution or use of energy.

J. National Technology Transfer and Advancement Act (NTTAA)

This final rule does not involve technical standards. As such, NTTAA section 12(d), 15 U.S.C. 272 note, does not apply to this action.

K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

EPA has determined that the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). As addressed in Unit II.A., this action would not materially alter the final rule as published, and will allow regulated entities additional time to establish their supply-chain and certification programs under the final rule, post effective date.

IV. Congressional Review Act (CRA)

This action is subject to the CRA, 5 U.S.C. 801 et seq., and EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 770

• Environmental protection
• Formaldehyde
• Incorporation by reference
• Reporting and recordkeeping requirements
• Third-party certification
• Toxic substances
• Wood

Therefore, 40 CFR chapter I, subchapter R, is amended as follows:

PART 770—FORMALDEHYDE STANDARDS FOR COMPOSITE WOOD PRODUCTS

1. The authority citation for part 770 continues to read as follows:

Authority: 15 U.S.C. 2697.

2. Revise § 770.2 to read as follows:

3. In § 770.3 the term “laminated product producer” is revised to read as follows:

4. In § 770.7, paragraph (d)(1) introductory text is revised to read as follows:

5. In § 770.10, paragraph (a) is revised to read as follows:

6. In § 770.12, paragraph (a) is revised to read as follows:

7. In § 770.15, paragraph (a) and (e) are revised to read as follows:

8. In § 770.30, paragraphs (b) introductory text, (c), and (d) are revised to read as follows: