NASF Public Policy Update – February 2022

As this year’s NASF Washington Forum approaches, Congress last week advanced legislation to boost the domestic semiconductor industry and fund a wide range of supply chain, science and other initiatives to raise US global competitiveness.
New PFAS legislation is also emerging as the White House reviews EPA rules to make PFOS a hazardous substance subject to Superfund liability and clean up standards. In the states, California clarified its plans on phasing out hexavalent chromium.
Below is summary of key developments in Washington and the states that are impacting the surface finishing industry.
  • House Passes America COMPETES Act to Boost Semiconductors and Increase Economic Competitiveness with China – The House this month passed legislation that would, among other things, provide nearly $100 billion to fund the expansion of domestic semiconductor chip manufacturing and boost supply chain initiatives, reorient US trade policy toward China, and strengthen science research and development programs.
  • See You at the NASF Washington Forum, April 4-6 – This year’s Forum at the Ritz Carlton – Pentagon City will include a slate of timely topics and speakers, including Amy Walter of the Cook Political Report and PBS NewsHour. The event will include the release in Washington of the NASF Economic Impact Study of the US finishing industry. Registration for this year’s Washington Forum will open in the coming days.
  • Industry Urges Caution as White House Reviews EPA’s Proposed PFAS Superfund Clean Up Listing – Stakeholders urge the White House regulatory review office to cautiously review the proposed hazardous substance listing of PFOS and PFOA under CERCLA and to identify the potential negative impacts on Superfund cleanups.
  • Supreme Court Asked to Bring Clarity to the Murky Scope of the CWA Jurisdiction over “Waters of the US” – With all the regulatory changes over the past decade, there is a significant amount of confusion of what constitutes a water of the U.S. that is subject to jurisdiction under the Clean Water Act (CWA) and the Supreme Court review could provide some much-needed clarity.
  • Senate Initiates Plans for Bipartisan PFAS Bill, Building on EPA Efforts – Senate Democrats are focusing on a possible bipartisan bill to address PFAS issues.
  • California Clarifies Rule to Phase Out Hexavalent Chromium Processes – The California Air Resources Board (CARB) appears to be set on a rule phasing out hexavalent chromium plating and anodizing processes that could disrupt industry and critical supply chains.
A more detailed summary of these issues is provided below.
House Passes America COMPETES Act to Increase Competitiveness with China
The House this month passed legislation to increase U.S. technological and economic competitiveness with China. The America COMPETES Act would provide over $50 billion to fund the expansion of domestic semiconductor chip manufacturing, direct $45 billion for supply chain resiliency initiatives, reorient US trade policy toward China, and boost science research and development programs, among other things.
The 3000-page bill, which was approved by a nearly party line vote of 220-210, incorporates some provisions from the Senate’s bipartisan passage of the US Innovation and Competition Act (USICA) last summer.
The bills differ in important ways, from foreign policy and immigration to science and climate policy issues.
The Senate bill’s key provisions include:
  • Provide about $52 billion in emergency funding for semiconductor research and development.
  • Reauthorize programs at the National Science Foundation and NASA.
  • Authorize additional amounts for foreign military financing in the Indo-Pacific.
  • Direct the president to impose sanctions on China for various actions relating to “malign influence.”
  • Reauthorize federal manufacturing support programs.
  • Expand “Buy American” requirements and broaden programs to secure U.S. supply chains.
  • Impose rules on the federal procurement and use of artificial intelligence.
  • Expand federal support for STEM initiatives in higher education, as well as across research sectors.
  • Subject foreign donations to U.S. academic institutions to oversight by the Committee on Foreign Investment in the U.S.
  • Modify premerger notification fees paid to the Federal Trade Commission and index the amounts for inflation.
The House bill’s provisions include:
  • Provide more than $50 billion over five years for semiconductor research and development.
  • Authorize $45 billion over six years for a new Supply Chains for Critical Manufacturing Industries Fund.
  • Reauthorize programs at the National Science Foundation and create a new Science and Engineering Solutions Directorate.
  • Authorize funding for research and development programs at the Energy Department and for international efforts to address climate change.
  • Expand strategic stockpiles of medical supplies.
  • Impose additional sanctions for human rights violations against Uyghurs in China’s Xinjiang region and allow Hong Kong residents to apply for temporary protected status in the U.S.
  • Extend trade preference programs, authorize two more rounds of a miscellaneous tariff bill, and reauthorize Trade Adjustment Assistance programs.
  • Modify premerger notification fees paid to the Federal Trade Commission and index the amounts for inflation.
  • Create new visa categories for startup owners and workers.
In the coming months, Senate and House negotiators will attempt to reach a compromise bill through a conference committee that meets the approval of both chambers. House Republicans have leveled criticism of key aspects of the measure and have called it a weak response to China.
The Biden administration, including Department of Commerce Secretary Gina Raimondo, is urging congressional leaders to produce a final compromise measure by March 1 for the President’s State of the Union address. Due to major issues still to be worked out between the House and Senate, it’s unlikely a bill will be finalized soon.
NASF Washington Forum, April 4-6, 2022
The NASF Washington Forum for the surface finishing industry will be held April 4-6, 2022 at the Ritz Carlton – Pentagon City.
In addition to unveiling in Washington the new NASF Economic Impact Study Report for the US finishing industry, the Forum will include briefings and discussions with national and global experts on pertinent policy issues impacting finishing, including environmental regulatory and workplace issues, trade and US competitiveness, defense and supply chain developments and the 2022 midterm election outlook.
Program Highlights
The schedule includes a Welcome Reception on the evening of Monday, April 4, followed by the full day program and evening reception on Tuesday, April 5. Among the invited speakers are:
  • Amy Walter of the Cook Political Report and the PBS News Hour
  • Jake Sherman, Politico Senior Writer and Co-Founder of Punchbowl News
  • Jeff Weiss, Partner, Steptoe, Supply Chain Lead and Co-Lead for Trade Policy and former Senior Director, Office of US Trade Representative
  • Dr. Philip Flanders, US Environmental Protection Agency Office of Water
  • U.S. Department of Defense Offices of Corrosion Policy and Strategic Environmental Research
  • U.S. Department of Commerce Office of Materials Industries and Office of the Secretary
  • U.S. Chamber of Commerce, Vice-President for Employment Policy Marc Freedman will be back again
  • Motor Equipment Manufacturers Association
  • Alliance for Automotive Innovation
  • and others.
Attendees will have the option of arranging meetings with their members of Congress and staff on Wednesday, April 6. However, there are currently COVID-19 restrictions on accessing the Capitol and tighter entry and meeting protocols for meetings in House and Senate Office Buildings.
Registration and Hotel Reservations
Registration will open in the coming days and hotel reservations ($325 per night) can be made under the NASF room block by clicking here or contacting the Ritz Carlton-Pentagon City at (703) 415-5000. The reservation code for the room block is “NASF”, but no code is needed by using the link above. The cut-off date for reservations is March 11, 2022.
For questions on hotel and registration, please contact Alyson Corey, Manager for NASF Events, at [email protected] or (678) 303-2973.
Please join your industry colleagues at this significant and informative event. More information and future updates on the Washington Forum are available on the NASF website at:
If you have any additional questions on the program, please contact Christian Richter or Jeff Hannapel with NASF at [email protected] or [email protected].
Industry Urges Caution as White House Reviews EPA’s Proposed PFAS Superfund Listing
The White House Office of Management and Budget (OMB) is reviewing EPA’s draft proposed rule to designate perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as “hazardous substances” under Comprehensive Environmental Response, Compensation & Liability Act (CERCLA or the Superfund law).
Such a designation would set new precedent as EPA has never before designated a new chemical as a CERCLA hazardous substance, and would trigger a host of actions, from release reporting to cost recovery and contribution claims.
Meetings with Stakeholders
As part of its review, OMB officials are meeting with stakeholders to receive input on the rule. Industry groups are urging OMB to reconsider EPA’s plan to designate PFOS and PFOA as “hazardous substances” under the Superfund law.
Specifically, they have claimed that the listing will increase cleanup costs and delay cleanups without reducing human and environmental exposure to the chemicals. More specifically, they argue such a designation could cause delays to cleanups and redevelopment efforts as current cleanups and those that had already been completed could be re-opened to address potential PFAS releases.
The industry groups also asked OMB to consider the potential costs and impacts of the proposed listing, and convene a SBREFA panel to address small business impacts.
They suggested that EPA to conduct a gap analysis to examine what actions it could take under existing regulations to address PFOA and PFOS, study what additional entities would be affected by a designation, and the cost implications of such a designation, among other analyses.
Impacts and Litigation
The proposed designation could have significant implications throughout society and the economy because the scope of liability under CERCLA sweeps in multiple, disparate companies, local governments, family businesses, and other organizations potentially liable for a single site.
Complicated litigation to determine responsibilities can then take decades. In addition, uncertainty regarding applicable cleanup standards could increase cleanup costs and delay remediation efforts at Superfund sites.
Supporters of the hazardous substance designation (including state and local governments and environmental advocacy groups) say it would jumpstart the process of identifying and cleaning up PFAS-polluted communities.
They claim that without such a designation, EPA is limited to what it can do to address PFAS as “pollutants or contaminants.” The hazardous substance designation would also trigger reporting requirements for releases over a certain threshold, thereby prompting an investigation and potential cleanup.
Without the designation, EPA would not have notice of a release of PFAS and has no way to compel liable parties to pay for PFAS contamination. State regulatory officials also claim that the designation under CERCLA could boost regulators’ ability to bring sites that already have construction of their remedies in place, back for additional assessment and cleanup to address PFAS.
EPA under its PFAS Strategic Roadmap has said it plans to propose the rule by March. OMB reviews are generally intended to last 90 days, so EPA appears to be on track to issue the proposal in March 2022, unless OMB returns the rule to EPA for further review on costs and potential small business impacts.
The agency expects to issue a final rule in the summer of 2023.
The Supreme Court has agreed to hear the case of whether the U.S. Court of Appeals for the 9th Circuit set forth the proper test for determining whether wetlands are “waters of the United States” (WOTUS) under the Clean Water Act (CWA).
In reviewing the test that EPA and the Army Corps of Engineers use to define the scope of the CWA, the Court could bring clarity to the definition of WOTUS and impact whether the new proposed WOTUS rule from the Biden Administration is within the confines of the CWA.
Current Approach is Complicated and Inconsistent
In the key previous Supreme Court ruling on this matter over 15 years ago, Rapanos v. United States, the Court held that the CWA does not regulate all wetlands, but a majority of the justices at the time were unable to reach agreement on how to draw those limits.
Four of the justices said the CWA extends only to waters that are “relatively permanent, standing or continuously flowing” or to wetlands that are immediately adjacent to such waters.
One other justice agreed that the CWA does not regulate all wetlands, but offered a different definition of WOTUS, saying federal “jurisdiction over wetlands depends upon the existence of a significant nexus between the wetlands in question and navigable waters in the traditional sense.”
Federal courts have been inconsistent in applying either the “permanent, standing or continuously flowing” or “significant nexus” test to determine if a wetland is subject to CWA jurisdiction.
The petitioners in the case now before the Supreme Court, Sackett v. EPA, have argued that the “significant nexus” test applied by the 9th Circuit is no longer controlling law. They have asked the Supreme Court to clarify once and for all the appropriate test that should be applied to define the scope of the law.
Implications of the Conservative Majority
The Biden Administration and environmental advocate groups are concerned that the Court, with its new conservative majority, will narrow the scope of CWA jurisdiction over WOTUS by dismissing the “significant nexus” test in favor of the “permanent, standing or continuously flowing” test supported by four of the five justices who agreed that the CWA does not regulate all wetlands.
The Obama administration relied heavily on the “significant nexus” approach in crafting its WOTUS definition, while the Trump administration’s WOTUS rule primarily, although not exclusively, on the “permanent, standing or continuously flowing” approach.
EPA Proposal Aims at “Durable” Definition
The Biden administration in withdrawing the Trump-era rule, has proposed an interim definition that interprets WOTUS to mean the waters defined by the “1986 regulations,” and applicable Supreme Court decisions, including Rapanos, which as discussed above is not entirely clear.
EPA and the Corps have indicated that the proposal aims to create a “durable” WOTUS definition, but stakeholders have already expressed diametrically opposed views in public comments. There is no final date for finalizing the proposed interim WOTUS definition and the timing of the rulemaking to set a new permanent definition of WOTUS is also uncertain.
Any final action by EPA and the Corps on this issue and clarity on the definition of WOTUS will most likely need to wait until the Supreme Court has issued its decision on which approach for defining WOTUS is controlling law.
A broader industry coalition will continue to work with regulatory officials and allies on this issue and NASF will provide periodic updates to members as new developments emerge. If you have any questions or would like additional information, please contact Jeff Hannapel with NASF at [email protected].
Senate Initiates Plans for Bipartisan PFAS Bill, Building on EPA Efforts
Senate Democrats on the Environment & Public Works (EPW) Committee have begun efforts to develop bipartisan legislation to address per- and polyfluoroalkyl substance (PFAS) with an aim of building on EPA’s ongoing efforts.
Staff has been gathering input from outside stakeholders as they work to craft a bipartisan PFAS bill that may set out less stringent requirements than the House bill that was passed last summer in order to win enough support in the evenly-divided Senate.
The effort follows through on Senate Democrats’ commitment to develop a legislative package to address PFAS contamination tiering off of EPA’s PFAS strategic roadmap of planned rulemakings and other actions.
Specifics are Unclear
EPW Democratic staff have been holding virtual meetings with outside groups to discuss possible PFAS legislation, but the specifics of a bill are unclear at this point. Industry representatives believe that the bill needs to have a strong bipartisan vote in committee and not attract numerous amendments on the floor.
The committee may be eyeing the end of February for producing a discussion draft bill, but it would be very ambitious for the committee to move to mark it up at a planned business meeting in March.
Critics claim that bipartisan PFAS legislation it is not needed now because EPA is finally moving on key measures to fulfill commitments in its PFAS Strategic Roadmap, including development of a PFAS drinking water standard, the proposed hazardous substance designation under CERCLA, and TSCA reporting requirements and test orders.
Supporters argue that the legislation is needed to ensure that EPA and other federal agencies follow through in a timely manner on these regulatory commitments.
The Policy Group will continue to work with allies and federal officials and provide updates to NASF members. If you have any questions or would like additional information on this issue, please contact Christian Richter or Jeff Hannapel with NASF at [email protected] or [email protected].
California Efforts Continue to Ban Hexavalent Chromium Plating
The California Air Resources Board (CARB) continues to advance a new rulemaking to transition hexavalent chromium plating to trivalent chromium for:
  • decorative chromium plating;
  • functional chromium plating; and
  • chromic acid anodizing.
CARB recently announced its intent to phase out hexavalent chromium for decorative chromium plating within two years.
In addition, CARB proposes to phase out hexavalent chromium for functional and chromic acid anodizing with in fifteen years. Prior to the fifteen-year deadline, CARB would impose additional pollution controls to reduce hexavalent chromium emissions (similar to those recently promulgated by the South Coast Air Quality management district for southern California.
CARB would also conduct periodic technology reviews for functional chromium plating and chromic acid anodizing to determine if trivalent chromium processes are available for these processes.
In addition, the rule would ban any new hexavalent chromium plating and anodizing facilities. Existing facilities may modify hexavalent chromium operations, but cannot increase the potential hexavalent chromium emissions from the facility.
Rationale for the Rule
All of these restrictions are being implemented despite the fact that hexavalent chromium air emissions from the surface finishing industry is approximately two pounds for the entire state of California and represent less than one percent of total hexavalent chromium emissions in the state.
CARB has requested additional information regarding the regulatory costs of this rule and its potential impact on the surface finishing industry and critical supply chains. CARB is in the process of developing draft regulatory language to share during a work group meeting in Spring 2022. The state is currently targeted the end of 2022 for a final rule.
Impacts and Outlook
If promulgated, this rule could have a significant adverse impact on platers in California and critical supply chains, particularly aerospace, automotive, and U.S. defense operations. NASF and its California leadership continue to claim that the state’s regulatory deadlines remain unrealistic.
NASF and its California Chapters continue outreach efforts to customers, CARB staff and Board members, California state legislators and regulatory officials regarding the potential negative impacts of this rule and the need to develop a rule that is protective of human health and the environment and is technologically feasible and economically sustainable.
If you have any questions or would like additional information on this issue, please contact Jeff Hannapel with NASF at [email protected].
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