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NRCA submits comments to the Department of Commerce regarding permit streamlining and regulatory burdens

March 31, 2017

Mr. Carter Halfman
United States Department of Commerce
The Office of Policy and Strategic Planning
H.C. Hoover Building Rm. 5863
1401 Constitution Ave. NW
Washington, DC 20230

Response to President Trump's Memorandum from January 24, 2017 entitled "Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing"

Dear Mr. Halfman:

The National Roofing Contractors Association (NRCA) appreciates the opportunity to share the views of our manufacturer members on how the Trump Administration can help alleviate the permitting and regulatory burden placed on America's manufacturers.

Established in 1886, NRCA is one of the nation's oldest trade associations and the voice of the professional roofing industry worldwide. NRCA represents approximately 3,500 members, of which about 80 are manufacturers. These companies produce a wide variety of roofing products including membranes, shingles, polyiso insulation, waterproofing, tiles, coatings, adhesvises, sealants, fasteners, flashings, solar photovoltaic systems and much more. These members conduct operations in at least 30 states. Seventy five percent of these manufacturers have less than $50 million in sales annually while several produce over $1 billion.

NRCA manufacturer members are proud to produce roofing materials and supplies in the United States. They provide good paying jobs with opportunities for employees to grow within the industry. In recent years, NRCA members have voiced concern about the avalanche of new regulations they face from federal agencies. NRCA looks forward to working with you, other officials in the Trump Administration and Congress to streamline the permitting process and repeal and/or modify existing regulations that have been burdensome to our members.

Manufacturing Permitting Process

One of the most onerous parts of the permitting process for roofing manufacturers is the variability in the interpretation and enforcement among state, regional and local regulatory agencies. The amount of time to acquire a new permit is almost always a problem as it relates to the overall project schedule and commencement of construction. Agencies should look for opportunities to streamline and accelerate the time it takes to approve permits in order for companies to start construction.

While larger manufacturers have dedicated staff who handle new development and regulatory issues, many smaller manufacturers do not and that job most likely falls on the business owner. NRCA members typically have the best results when agencies meet with businesses early in the permitting process to fully discuss the scope of the project. This allows agencies and businesses to identify all the necessary procedures and processes that must be followed in order to meet the permitting requirements. Once defined and summarized, businesses can focus their time and resources on the most important needs.

From a site search and design/build prepective companies consider a number of issues. While federal permitting is a consideration, some other important factors may include:
  • Is the preferred location a sensititve wildlife habitat that could impact the company's ability to acquire approval to build?
  • What is the regional status in terms of air permitting requirements?
  • Is there a pool of qualified employees?
  • Will state or local governments offer any tax or regulatory benefits?
If companies decide to expand upon existing onsite operations their main concern is "attainment" status as it relates to air pollution and air permitting.

As the federal government considers models to improve business service operations in the manufacturing permitting process, NRCA would note that some of our members have had good experiences with the Puget Sound Clean Air Agency in Washington state and the Florida Department of Environmental Protection.

Waters of the United States Regulation

NRCA members are committed to being good partners with the community in which they operate. They believe in the need for clean water and clean air. However, some state and local governments greatly expand upon federal Clean Air Act and Clean Water Act requirements, causing manufacturers to seek other, more business-friendly locations within the United States to grow or establish new operations.

The Waters of the United States rule issued by the Enviornmental Protection Agency and Army Corps of Engineers vastly increased the jursidiction of the federal government over water and land areas. NRCA is concerned about the potential adverse impact this rule could have on new construction given that companies would have to go through intense permitting requirements. NRCA members are thankful that President Trump and the EPA have taken steps to unwind this rule. This will help roofing manufacturers that seek to expand their operations and reduce unnecessary delays in many construction projects.

Regulatory Burden

NRCA is pleased the Trump Administration has made reducing the regulatory burden on businesses a high priority. For years, the Obama Administration consistently refused to address the many concerns of NRCA members when issuing new regulations. We are ready to work with the Administration to ensure that both workers and the environment are protected while still giving businesses the freedom and flexibility to help grow their business and the economy.

Reforming the entire regulatory process is a top priority of NRCA. The Administrative Procedures Act, which governs how federal rules are made, has not been updated in over 70 years. The Regulatory Accountability Act, already passed by the House of Representatives, will institute badly needed reforms to the rulemaking process. Specifically it will increase public participation in shaping major regulations, including consideration of economic impacts, before they are formally proposed; improve agency cost/benefit analysis to minimize economic impacts of regulations; hold agencies accountable by providing for more on-the-record hearings; restrict agency use of interim final regulations before a regulation takes effect; and provide rigorous rules for agency use of guidance documents to prevent misuse by federal agencies. NRCA urges the Administration to fully support this legislation now being considered by the Senate.

A recent report commissioned by the National Association of Manufacturers, The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business, estimated the economic costs of federal regulation at more than $2 trillion in 2012 (in 2014 dollars). The study also found that manufacturers bear a disproportionate share of the regulatory burden and that the heaviest burden is on small manufacturers. While the average U.S. company pays $9,991 per employee per year to comply with federal regulations, the average manufacturer pays nearly double that amount—$19,564 per employee per year. Moreover, small manufacturers (those with fewer than 50 employees) incur even greater regulatory costs of $34,671 per employee per year. NRCA urges the Administration to review and consider the recommendations in this report in future efforts to streamline and reduce the costs of regulations on manufacturers.

OSHA Silica Rule

NRCA is greatly concerned about the Occupational Safety and Health Administration's rule regarding chrystalline silica. NRCA opposed the rule when first proposed and provided detailed comments to the agency outlining the numerous concerns of our members. The regulation dramatically reduces the permissible exposure level (PEL) for silica in construction workplaces to 50 micrograms per cubic meter (from the current 250) and establishes an action level of 25 micrograms per cubic meter. To meet these much lower levels, new engineering controls and other measures will become necessary within the roofing industry.

In addition to impacting contractors, this regulation will also have a significant impact on roofing manufacturers. The Asphalt Roofing Manufacturers Association conducted thorough testing and analysis of how this rule would affect manufacturers and determined that compliance will require substantial new investments in capture vents, duct work, and dust collection systems with estimated initial costs of $2.1 million each per manufacturing line. In addition to these costs, manufacturers are concerned over the permitting process needed to make the necessary changes to comply with the National Ambient Air Quality Standards. Such permits are estimated to take up to 12 months, which would greatly hinder production of some products.

NRCA also questions whether compliance with the silica regulation is technologically feasible. For example, most commercial laboratories are not capable of measuring workplace silica levels with accuracy or consistency, making it nearly impossible for employers to determine if their operations are in compliance. Given the numerous problems with the rule NRCA has requested that the Administration review this regulation for possible repeal, revision or delay of the effective dates.

Withdraw the Overtime Rule

NRCA members are also concerned about the Department of Labor's overtime rule. The rule would more than double the salary threshold for workers who are eligible to collect overtime from $455 to $913 per week or $23,660 to $47,476 per year. It would also automatically increase the threshold every three years, tied to the 40th percentile of full-time salaried workers in the lowest wage region of the country. NRCA does not oppose a reasonable increase in the wage threshold, but more than doubling it is too much for our members to absorb, especially with such a short time to comply.

A federal judge has placed an injunction on the rule and with President Trump's executive order to freeze all regulations from going into effect business owners are currently in a holding pattern. NRCA requests that the DOL withdraw the current rule and work closely with all stakeholders to craft a more reasonable regulation. In doing so, a more realistic methodology should be used to find an appropriate wage threshold and should not include changes to the duties test or automatic wage threshold increases.

Environmental Laws

As mentioned earlier, the Clean Water Act and Clean Air Act do result in permitting problems for NRCA manufacturer members. As well, limits imposed on total suspended solids in storm water discharge included in the Clean Water Act are of great concern. The state implementation of the Resource Conservation and Recovery Act's requirements on residual and industrial waste have also proven burdensome to comply with. Members who produce adhesives, primers and sealants have strong concerns regarding the Environmental Protection Agency's limits of volatile organic compounds (VOCs) in their products and the fact that pentane is regulated as a VOC. This could hamper creation of new products in the roofing industry.

Simplification

NRCA applauds the Trump Administration efforts to reduce and simplify regulatory compliance for manufacturers. Businesses have been constrained by red tape for too long and are ready to help grow the economy with fewer regulatory burdens to contend with. Freezing regulations is a great first step the Administration has taken. NRCA members are excited about the future possibilities for deregulation.

As discussed before, state agencies are often an impediment to growth and timely permits. NRCA suggests that state agencies be evaluated and rated based on their permit application process. This would help businesses know what states and jurisdictions are best to build new plants and facilities. Another suggestion is to create an independent federal agency to arbitrate between state and local regulators and industry when the application of regulations is not clear. Some businesses don't know where to turn when state and local regulators are unwilling to work with them.

Conclusion

NRCA greatly appreciates your willingness to streamline the permitting process and reduce the regulatory burden on manufacturers in the roofing industry. We look forward to working with you to implement policies which protect workers and the environment while giving entrepreneurs the flexibility to grow their businesses and create high-paying jobs. If you have any questions or need more information on these issues, please contact NRCA's Washington, DC, office at 202-546-7584.

Sincerely,



Dennis Conway
Commercial Roofers Inc., Las Vegas, NV
Chairman of the Board, NRCA



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