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This was a big week in Massachusetts for the motor vehicle aftermarket. After months of wrangling, the state legislature finally passed a measure that will reconcile the two Right to Repair laws that were on the books in the state. Some may be asking, “Didn’t we already settle this issue back in 2012?” The answer is that while the people did vote overwhelmingly, 86-14 percent, to approve a Right to Repair law, that vote actually came after the legislature had already acted on Right to Repair legislation in July of that year. That bill was the result of an agreement reached at the last minute between the Massachusetts Right to Repair coalition, the vehicle manufacturers, and the new car dealers on Right to Repair. The result was two laws and the need to correct the issue, so that the people’s will for a competitive repair industry could be accomplished.
Like the ballot question, the bill enacted by the legislature ensures full access for the independent repair industry to all information, tools and software used by dealers to repair vehicles. The major differences include providing additional time for the manufacturers to comply with requirements that they make all of their diagnostic software available from a cloud using a standardized vehicle interface; different enforcement methodology; and the unfortunate exclusion of motorcycles and heavy duty vehicles from the bill (an action that the legislature took during consideration of the bill).
The final reconciliation bill that recently passed the legislature looks much like the bill that already passed the legislature, with the exception to the fact that heavy duty vehicles were added back into the bill due to the strong lobbying by the heavy duty aftermarket. The bill now goes to the governor, who has 10 days to sign it.
So with this battle nearing completion, what is next for Right to Repair? Working with the Coalition for Auto Repair Equality (CARE), AAIA has been meeting with the manufacturers in an attempt to develop a memorandum of understanding (MOU) that would implement the Massachusetts model around the country. Car companies have been reluctant to sign the document until work on the reconciliation measure was complete in the commonwealth. With that action nearly complete, AAIA and CARE would like an MOU approved as soon as possible so that car owners around the nation can benefit from the action in Massachusetts. Should that action not occur, AAIA is committed to moving state by state, to make sure all consumers have access to a competitive vehicle repair market. However, if we can achieve nationwide implementation of the Massachusetts bill without the cost and time of going through a state by state effort, this seems like the best course.
For now, we are focusing on encouraging the governor to sign the bill. After that, the ball will be in the car companies’ court as to whether we move forward together on implementing Right to Repair or the battles goes on the road to state capitals around the country. Let’s hope they choose the former.
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The recent government shutdown gave heavy-hitting trade association executives, along with former and current politicians, the opportunity to publicly admonish the current state of national politics, but some key government officials and industry groups took the time to shine the spotlight on what many in Washington, D.C. see as the next crucial step for Congress to take, properly funding the national transportation program.
On Oct. 21, Governor Bill Graves, now president of the American Trucking Association (ATA), told members at their annual meeting that recent political blockages were, “foolish, ill-advised, reckless and detrimental,” adding in a separate interview that, “our number-one issue is getting a package of infrastructure investment." Data shows that trucks carried 39 percent of all U.S. freight ton mileage, giving the ATA strong reasons for wanting a robust transportation program.
In 2012, Congress passed a national transportation bill that only funded the highway programs through fiscal year 2014. While that bill kept the U.S. Department of Transportation from shutting down entirely, the secretary at the time, Ray LaHood, recently called that bill “chintzy” and added, “The business community is fed up with the inaction of Congress when it comes to infrastructure. The business community knows that America has fallen way, way behind. There's a long, long list of bridges that need to be replaced or repaired. There's a long, long list of roads that need to be fixed up."
Chairman Bill Shuster, R-Pa., head of the House Transportation and Infrastructure Committee that will craft most of the next national infrastructure bill, is aware of the need for more and stable funding, but is also not blind to the political gauntlet he must face with such polarizing viewpoints present in Congress. Speaking on recent passage of the Water Resources Reform and Development Act of 2013, Shuster commented on the next transportation bill, stating, “It’s going to be tougher than this bill, but we’ve got to figure out how to move forward on that.”
There are several forces working against a smooth process for a transportation authorization bill. First, the vast divide that exists between the ideologies of Republicans and Democrats in present day Washington, D.C. keeps most members of Congress from being able to coalesce around a common breakfast order, let alone a package of varied funding solutions that needs to generate an estimated $550 billion per year to cover what experts say are our real infrastructure needs.
Second, it is no secret that there is a break in the Republican Party. The economic downturn created massive changes in Congress through stunning election results and the introduction of Tea Party-backed legislators. This puts Chairman Shuster in the position of needing to convince anti-spending conservatives within his own party that infrastructure is the one thing on which they need to find a way to spend money.
Third, the Senate is controlled by the Democrats and the House by the Republicans. This means having to merge two bills together in a conference that will more-than-likely approach transportation funding solutions using similar concepts, but having critical implementation differences. These differences could turn out to be non-starter negotiation points for either side. Several examples of these bipartisan congressional working groups coming together only to fail have come out of the recent budget and sequestration battles.
Fourth, no one from either political party in either chamber of Congress is willing to publicly say they support raising the federal gas tax. Everyone knows it needs to be done, but no one wants to be the elected official that raised taxes on struggling Americans and U.S. businesses in a still down economy. And who can blame them? Further, there are other issues to be piled on top of just these four so the pressures on legislators to work through these impediments are immense.
As the debate heats up in 2014, aftermarket businesses should stay connected to what is being said as far as transportation is concerned. Most members of Congress have not decided on what they believe is a final funding solution for repairing the nation’s crumbling infrastructure and therefore are open to hearing the views of key stakeholders and their constituents on the subject. Stay tuned to the Capital Report and other AAIA publications to follow this important issue.
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AAPEX is just over a week away and the excitement is building. I know everyone is busy during the show, but I would like to highlight some of the seminars, taking place as part of the AAPEX Learning Forum, that will address timely regulatory issues that could impact your company’s bottom line. These seminars include:
- The Affordable Care Act, otherwise known as ObamaCare will be discussed at Tuesday, November 5 seminar entitled “Confused About Healthcare Reform? What Employers Need to Know”. At this seminar, Speaker Kelly Davis, employee benefit specialist at CliftonLarsonAllen, will provide an overview of the law and focus on key issues that will impact companies and their employees. The session also will cover what employers need to do to comply with the new law. This session begins at 7:30am.
- On Wednesday, November 6, both AAIA and the Automotive Aftermarket Supply Association will sponsor a seminar on California’s Chemical Management Rules. Anyone who sells products in the State of California should be interested in actions that are taking place there to manage how toxic substances are managed. The seminar will feature former Director of the California Department of Toxic Substance Control, Maureen Gorsen, who will discuss newly finalized rules to implement the State’s Green Chemistry Initiative. This initiative could eventually force many companies to reformulate their products as the State seeks to eliminate the use of substances that are considered a threat to human health. The seminar also will include guidance from California legal experts on issues related to Prop 65, a law requiring companies to disclose the use of chemicals that are harmful to human health. The seminar begins at 11am.
- Thursday, November 7 will feature a seminar entitled “Wallet Flushing”, a term used by regulators to categorize automotive services or products that provide little or no benefit to the consumer and is sold without disclosing the facts. In this session, the Motorist Assurance Program provides information and guidance on how repair shops can better communicate with their customers about proper fluid exchange intervals and suggested maintenance services for their vehicles. Specifically, this seminar will attempt to help shops and companies that market these products to learn how to inspect and communicate in a manner that helps consumers understand and appreciate the benefits of your service offerings. This session begins at 7:30 am.
There is no fee to attend the seminars and they will all take place at the Venetian Hotel, Marco Polo Rooms 701-707. For additional information on all education offerings during AAPEX, go to: http://www.aapexshow.com/2013/public/Content.aspx?ID=2931&sortMenu=106001
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In early October, California Governor, Jerry Brown, finally reacted to the pressure from companies doing business in the state that were asking him to alleviate the ridiculous burden of frivolous lawsuits based on the state’s Proposition 65 (Prop 65). This seems to be a trend from certain political figures that are taking strong stances on behalf of industry in the face of several state and federal reforms of toxic substance programs.
Prop 65 was conceived in 1986 as a response to cleaning up drinking water in the state, but almost immediately created a honeypot for trial lawyers looking to catch businesses off guard. The original law required labeling notifications to employees and customers for possible exposures to chemicals named on a list created specifically for the new law. The law contained a provision that has been called the “bounty-hunter provision” which permitted private citizens to bring citizens lawsuits against companies that were alleged to have violated the law. The lawsuits are relatively inexpensive to bring by a citizens group and the law further provided that the group bringing the suit could also collect attorney’s fees. Companies were under pressure to settle the lawsuits even if they did no wrong in order to avoid a costly and publicly damaging legal battle. The citizens lawsuits were so easy and the profits to lawyers so plentiful, that the bounty provision created law firms that specialized in finding companies to target and then putting together front groups to file the lawsuit for the law firm.
For decades, businesses from across the spectrum demanded changes to the law, but no relief ever came. Suddenly in May 2013, Governor Brown issued a statement asking for many of the changes to be pushed through the California legislature this year. In essence, the changes adopted by the legislature would permit companies the chance to correct any non-compliance within 14 days and avoid any civil litigation, thus putting a damper on law firms targeting companies for quick hit lawsuits. It should be noted, that the business-friendly shift was made at lightning speed compared to the typical pace of moving a bill through any legislature indicating that even a normally liberal legislature could not tolerate the abuses that were occurring under the Prop 65 bounty provision.
While we may celebrate the major victory in the California Legislature, the industry must also be aware that there is a wave of chemical control program reform occurring around the country with some other elected officials attempting to support the interests of the business community at this same level. One of the major examples is the federal effort to reform the Toxic Substance Control Act (TSCA) overseen by the US Environmental Protection Agency (EPA).
In an effort to revamp a program that is more than 30-years old, Senator David Vitter (R-LA) has been strongly in favor of asking for confidential business information protections for chemical manufacturers and processors while also seeking a pre-emption standard that would create a uniform chemicals program, rather than a state-by-state patchwork mess. While Vitter is faced with powerful opposition from environmental groups and some colleagues in Congress, he continues to fight for a balance between the maximum public health level and healthy business-related laws and regulations.
These types of chemical program reviews are happening from California to Washington, DC and will only grow in number over the next few years. It is critical that businesses across the aftermarket remain vigilant in voicing their opinions and business needs to their elected officials in order to maintain a fair fight between us and environmental groups.
The changes to Prop 65 are a big win for chemical-intensive industries, like the automotive care and maintenance community, but that took nearly 30-years to achieve. TSCA reform and green chemistry legislation is happening now with potentially dire consequences for maintaining things like a competitive advantage through trade secrets.
An active role in the legislative and regulatory process through the AAIA is central to identifying and developing aftermarket-friendly elected officials so our industry can sustain itself through massive changes and make wins like the one on Prop 65 happen sooner rather than later.
Several resources are available through the AAIA, including personal contact with your government affairs department and the website. I encourage everyone, no matter your role in your company or your company’s position along the supply chain, to help move the entire industry forward on toxic substance legislation and other issues, by staying involved and staying active with your aftermarket trade association.
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With November quickly approaching, many of you are busy making final arrangements for AAPEX. In addition to finalizing booth details, travel itineraries and meeting times, you should also consider how you will protect your intellectual property (IP) during AAPEX.
IP protection is critical to the auto care industry and is therefore an important part of AAPEX itself. The organizers of AAPEX have a zero tolerance policy toward IP violations and will work with exhibitors to resolve legitimate claims of IP infringement. To provide a mechanism for exhibitors to lodge complaints about potential infringement of an exhibitor’s IP by another exhibitor at AAPEX, AAIA and its partners provide IP attorneys during the show. IP counsel will be available in the AAPEX IP Office in the Sands Expo Center Room 401 from 9 a.m. to 5 p.m., Monday, Nov. 4 – Thursday, Nov. 7 to receive and investigate complaints of IP infringement. AAPEX welcomes any exhibitor concerned about potential infringement to make use of this exhibitor service.
The key to adequately protecting your IP during the show is being able to support a complaint with adequate documentation explaining the ownership of the disputed or applicable rights. Thus, it is important to plan to bring copies or have access to registrations for IP, such as patents and trademarks, as well as any relevant marketing materials, contracts and other supporting documentation.
Upon receiving a complaint, IP counsel will conduct an initial review to determine whether a complaint is adequately documented and demonstrates a violation of the AAPEX IP Policy. When necessary, IP counsel may also conduct an investigation into the specific facts or circumstances to whatever extent is necessary in order to clarify, expand or corroborate the information provided by the complainant. This may include review of an exhibitor’s display and products, as well as documentation of the evidence through the taking of photographs, as well as contacting other individuals who may have knowledge of the facts and circumstances surrounding the complaint.
In circumstances where the evidence presented by the complaining party indicates a violation of the IP Policy or otherwise may be disruptive to the AAPEX show, IP counsel, in coordination with AAPEX management, may order the respondent exhibitor to remove products during the pendency of the investigation. Violating exhibitors face potentially severe consequences, which may include closing an exhibitor’s booth and a ban from future AAPEX shows, as well as the loss of seniority privileges.
AAIA urges all AAPEX exhibitors to develop year-round protection and enforcement programs for their IP and to utilize the IP Review Process to protect their intellectual property during AAPEX. AAIA also recommends that exhibitors consult with an attorney experienced in the field of preserving and protecting IP. More information on the AAPEX IP Policy is available here: http://www.aapexshow.com/2013/public/Content.aspx?ID=3089&sortMenu=103007.
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There is a surreal feeling in the nation’s capital this week as Congress decided last week to shut the federal government down due to the continued strong opposition to the Affordable Care Act (ACA). The newspapers and television news are focused on the closing of many of our tourist sites and national parks; and of course, the furlough of many federal workers. For many of my neighbors, it was a day off to enjoy the great fall weather we are experiencing in Washington, although most federal employees I talked to found the entire situation frustrating. For AAIA, the traffic was a little lighter for the staff (although not as light as we thought it would be), and we acknowledged the fact that meetings and phone calls with federal officials were not going to occur any time soon.
The truth is that short term, the shutdown of the federal government is not going to be the end of the world. If a Continuing Resolution is enacted soon, life will be back to “normal” here relatively quickly. The problem is that there appears to be no end in sight to the funding issue and the long-term impact on the economy of a closing could be huge. While initially the furloughing of the nearly 800,000 federal workers (less now with the Department of Defense calling back a large number of its workers late last week) and the closing of offices, parks and museums may cost the U.S. about $300 million a day in lost economic output, according to IHS Inc., a market research firm, that cost will multiply over time as consumers and businesses defer spending. IHS further estimates that predicted 2.2 percent annualized growth in the fourth quarter will be reduced to .2 percentage point in a weeklong shutdown. Further, although the last shutdown in 1995 did not have a huge negative impact on the economy, our current economy is not even close to being as solid as it was back then, making us more vulnerable to the economic costs of the shutdown.
As bad as a shutdown is for the economy, failure to raise the debt ceiling before the Treasury runs out of borrowing authority could be much worse. While no one really knows the full impact of the federal government defaulting on its loan obligations, the last time we almost got there in 2011 was a disaster for the stock market. The Dow Jones Industrial Average dropped more than 700 points in the month preceding the approval by Congress of a bill to increase the debt ceiling. Such a drop right now, not only could wipe out the tepid recovery, but possibly send us into another recession or worse.
AAIA has joined most of the major business groups in Washington, including the U.S. Chamber and the National Association of Manufacturers, in calling for Congress to resolve the current budget crisis. We strongly believe that efforts need to be made to bring the budget deficits under control and it is important to address problems with ACA; but that it is critical that such action be done in a responsible manner, which means not shutting down the federal government and certainly not preventing an increase in the debt ceiling.
Clearly, the nation faces some major fiscal issues that need to be addressed. However, if the economy goes into another tailspin as a result of efforts attempting to solve those issues, than we will have new and bigger issues to contend with. Our leaders in Washington need to look at the bigger picture and find a way to resolve their differences. Our members and their customers’ economic future are clearly on the line if they don’t.
Intellectual property rights (IPR) theft is one of the many challenges AAIA members can face in the global marketplace. When counterfeiters sell products using our members’ brand names, they steal income from legitimate companies, cause consumers to question the reliability of aftermarket products and threaten consumer safety. They also threaten the flow of legitimate trade, as counterfeiting cases raise the level of scrutiny on aftermarket products, causing additional burdens and delays. Thus, although relatively small in scope when considering the size and importance of the aftermarket, IPR protection is an issue we must all be aware of and can play a role in addressing.
AAIA supports continued efforts by Congress and the administration to improve IP enforcement at home and abroad. As such, AAIA recently participated in an informal roundtable discussion hosted by the National IPR Coordination Center, in partnership with U.S. Customs and Border Protection’s (CBP) Automotive Center of Excellence (CEE). The discussion focused on the enhancement of substantive enforcement protocols for combating IP theft in the automotive industry. The small gathering presented a unique opportunity to meet with the Detroit based CBP-CEE leadership and other Intellectual Property Rights enforcement officials.
The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. The IPR Center works closely with CBP’s Automotive CEE, a central point of contact for inquiries and resolution of issues regarding automotive-related imports.
AAIA’s goal for participating in the discussion is to explore ways to enhance direct connectivity for AAIA members to these key groups. The IPR enforcement officials want to hear directly from industry so that they can more strategically target IPR infringers and ensure that legitimate trade flows freely and efficiently. With limited resources and expertise, their best weapon is the intelligence, feedback and guidance they receive from industry representatives. AAIA will continue to work with these government partners and keep its members updated on their initiatives.
AAIA encourages its members to become familiar with the resources the IPR Center and the CEE offer. Members interested in learning more should contact Andres Castrillon at email@example.com or by phone at 301-654-6664. Members can also visit the following websites for additional information:
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Studious readers of AAIA’s weekly Capital Report may recall a story or two about a “simple” regulatory change by the New York Department of Environmental Conservation (NYDEC). In August 2012, the government affairs team was approached by several manufacturers of aftermarket catalytic converters (ACCs). They were concerned about NYDEC’s impending regulatory change that would adopt the California Air Resources Board (CARB) standards and approval process for certification of ACCs. The NYDEC had set an implementation date of June 1, 2013, for the new regulation, and the manufacturers’ experience in their current dealings with CARB and the California market had them worried about several practical matters, including availability of product, messaging to distributors, repair shops and consumers (significant increase in pricing), and the ability of CARB to adjust accordingly to the new demand for certification.
It should be noted here that the CARB certification process is extremely convoluted and involves assigning test vehicles for pre-determined applications, and is based not only on make, model and engine size, but also engine family designation. Once the precious metal loading in that ACC has been satisfactorily tested and approved, CARB grants an Executive Order (EO) for that particular application. Finally, the EO number must then appear on a metal plate attached to the body of the catalytic converter, available for verification (more on that later).
From the beginning, neither AAIA nor any of the manufacturers opposed the promulgation of new more effective ACC certification standards, but were concerned about the June 1 implementation date. Following a series of conference calls and meetings with the ACC manufacturers, the Retail Council of New York and the NYDEC, the state granted a delay, by means of issuing a letter that stated the regulation adopting the CARB standards for ACCs would not be enforced until Jan. 1, 2014.
As far outcomes go, this had to be considered very favorable, as the extra six months was, and continues to be, crucial to manufacturer inventory adjustments and communication with their distribution network. Additionally, the NYDEC agreed to the creation of a stake-holders workgroup to address messaging and outreach. However, real-world concerns about enforcement and the availability of CARB certified converters remain for the manufacturers, and the severity and complexity of the regulation’s impact on the installers and consumers will only be known as the date draws nearer.
But this issue does not begin and end with New York state. What is also of major concern to ACC manufacturers, and will be for many distributors and installers, is the reality that Massachusetts and Maine had previously adopted the CARB ACC standards, but have thankfully delayed implementation, with Maine declaring Jan. 1, 2015, as their new implementation date. AAIA is also aware of several other state environmental agencies that have acknowledged similar plans.
The reasons for all this regulatory activity around ACCs can be placed right at the door of the U.S. Environmental Protection Agency (EPA), as they have not promulgated new ACC standards since the regulation’s introduction in 1986. As most of you know, vehicle emissions technology has made tremendous progress since that time; and states attempting to reduce emissions in order to meet federal air quality standards have simply become frustrated with EPA’s lack of progress.
EPA claims that they lack the resources to adopt a new ACC certification standard, claiming that regulatory efforts to promulgate a Tier III Fuel Standards has demanded the attention of their now limited staff (sequestration, anyone?).
An adoption by states of a new federal standard that is more practical than the CARB program (which will be left in place for California) would still result in more effective emissions reductions, but would also streamline the certification requirements for ACCs, increasing the availability to consumers of lower cost converters to consumers, many of whom now are forced to purchase expensive OE catalytic converters when a CARB-certified ACC converter is unavailable.
AAIA has already formally written several states and EPA, explaining our position that this new standard would be the best possible path forward for our industry. We have also written and met with the Ozone Transport Commission (OTC), an organization of East Coast and Mid-Atlantic states created under the Clean Air Act, to advise EPA on development and implementation of regional solutions to ground-level ozone pollution.
Finally, AAIA’s government affairs staff has begun lobbying members of Congress, asking them to assist us in persuading the EPA to begin this initiative. As always, members of Congress like hearing from their constituents on any given issue, and if aftermarket catalytic converters are part of your business, please feel free to call or email us at AAIA and we’ll help you contact your representative.
The AAIA letters to the OTC and the EPA can be viewed here:
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I want to congratulate the newest recipients of the AAIA Ambassador’s Award. Corey Bartlett from the Automotive Parts Headquarters and Tom Perry of MMM-Marketing LLC were both presented with the prestigious award during Fall Leadership Days last week in Dallas, Texas. The Ambassador’s Award is presented to AAIA members that have given more than $3,000 to the Automotive Aftermarket Political Action Committee (AAPAC) since its inception. Recipients of this award, and there are 20 of them, represent individuals that have shown a strong commitment to the AAPAC and the AAIA government affairs program.
I should also congratulate all of the supporters of AAPAC. With their help, the association has doubled the size of AAPAC since 2011. The commitment of our members to AAPAC has permitted us to support candidates for Congress that are either strong supporters of the automotive aftermarket or are in key positions of leadership. Having a strong PAC makes our legislative team more effective in moving the association’s legislative agenda, whether it’s passage of Right to Repair, tax reform or of e-fairness legislation.
I understand the difficulty that members of our industry experience in giving to the PAC. The money must come from the individual employee of an AAIA member and cannot be corporate funds. In today’s economy, that is not always easy. However, the fact that so many of the employees of our members and the AAIA staff give generously to the PAC indicate their strong commitment to the future of the association and our industry. The AAIA government affairs staff appreciates the support we have received from the membership, whether it’s a member of the 365 Club (a dollar a day) or someone who has given the legal maximum of $5,000. They are all important components in making our PAC a more powerful tool for our government affairs program.
However, we have to be realistic, and while AAPAC continues to grow, it has a long way to go to compare with the political action committees supported by our competitors on Capitol Hill. The National Automotive Dealers Association currently has a PAC that raised a whopping $4,736,578 in the last fundraising cycle, while AAPAC raised about $78,000. We may never reach the numbers generated by the dealers, but clearly our PAC still needs to grow if it is to gain some clout on Capitol Hill.
If you are interested in learning more about AAPAC, go to http://aaia.aristotle.com/Pages/WhatIsAPAC.aspx.
On Aug. 15, the National Association of Manufacturers (NAM), AAIA and 11 other organizations moved to intervene in a suit brought by the Sierra Club against the U.S. Environmental Protection Agency (EPA). The Sierra Club and other environmental groups are attempting to force EPA to complete its review and revision of the national ambient air quality standard (NAAQS) for ozone. The agency had tightened the standard to 75 parts per billion in March 2008 and the Sierra Club wants EPA to further lower the standard by September 2014. It is expected that EPA will attempt to reduce the standard to between 60 and 70 ppm as part of its next rulemaking. This reduction would come just as EPA is in the process of implementing the 2008 standard.
AAIA and NAM are intervening to prevent EPA from issuing a more stringent ozone standard without a thoughtful and thorough review of the evidence. As NAM stated when the motion was filed: “Forcing EPA to act hurriedly would frustrate the development of sound scientific support on the need for NAAQS revisions. The truncated timetable would further reduce the time that industry and the public will have to weigh-in on the new standard.”
The revision of the NAAQS is a big deal for our industry. Under the Clean Air Act, EPA must establish a standard for ozone and other pollutants that provides protection for public health. EPA is further required to review the standard every five years. However, enforcement of the NAAQS is up to the states, which are required to develop and obtain approval from EPA for State Implementation Plans (SIP). SIPs establish which measures a state will adopt in order to meet the NAAQS. The development and EPA approval process is extremely complex; in a nutshell, an area that fails to meet the NAAQS is deemed in non-attainment and must implement SIP-specified air pollution measures approved by EPA as sufficient for the area to achieve attainment. Therefore, if the NAAQS for ozone is lowered, it means that additional localities around the country could be put into non-attainment and forced to adopt control strategies that will result in a reduction of the emissions of pollutants that create ozone. Further, areas that are already in non-attainment could be forced to further regulate sources of emissions in order to meet the seemingly impossible task of an area achieving attainment of a lower standard.
The bottom line is that the new standard will force additional and costly control measures on industry. These control measures could mandate huge investments by companies in pollution abatement, as well as additional restrictions on automotive chemicals and appearance products that contain volatile organic compounds (VOC), which cause ozone.
The lawsuit by the environmental groups was filed in the U.S. District Court for Northern California, which will now rule on whether to permit us to intervene in the case, which is by no means a slam dunk. In addition, it is likely that EPA and the environmental groups will attempt to settle the lawsuit. Such settlement talks would occur behind closed doors and could establish a timetable for a NAAQS rulemaking that could have serious impacts on industry. If the court permits us to intervene, it will mean that industry will have a seat at the table for these negotiations.
Clearly, there is a lot riding on EPA’s NAAQS rulemaking and AAIA feels that it is critical that the process be transparent, and permit sufficient time for all of the pertinent data to be reviewed before a decision is made on a standard that could impose severe economic costs on our industry, as well as the U.S. economy.