Local and national paint and coatings manufacturers are up in arms over a fee proposed by local air quality regulators on most of their products.

On Friday, the South Coast Air Quality Management District is set to consider a fee of $246 per ton of emissions of smog-forming volatile organic compounds (VOCs) that would be levied on some 200 manufacturers of paints and coatings that distribute or sell products in the Southern California area. Agency officials said the fee is meant to recover the $4 million cost of an inspection and enforcement program that targets these architectural coatings.

But paint and coating makers aren't buying that. While not objecting to the concept of a fee, they said the proposed fee is too high just to recover inspection costs and instead see it as cover to dramatically expand the enforcement program.

"We're very concerned about the impacts this could have on our company and companies like ours who do a major share of their business within the South Coast Air Quality Management District," said Robert Wendoll, director of environmental affairs for Los Angeles-based paint maker Dunn Edwards Corp.

"Not only are the fees to recover the costs of the current program, but they also want to double the scope of the program and increase the overall cost," he said.

Wendoll said that since nearly half of Dunn Edwards' total sales volume is generated within the Los Angeles basin, the fee would make his company less competitive with larger national paint manufacturers that can spread the cost over their entire operations.

In background documents prepared for Friday's board meeting, agency executive officer Barry Wallerstein said that paints and coatings are "one of the largest controlled emitters of VOCs" in the L.A. basin and that companies that make paints and coatings must bear their fair share of the agency's costs.

Wallerstein noted that agency staff extended the rulemaking deadline four months to meet with the National Paint & Coatings Association and other companies in the industry.

He also said the inspection program needed to be expanded because the agency has only one full-time inspector for all paint and coatings manufacturers and distributors. "The current level of enforcement results in so few inspections and coating samples for analysis that they are considered to be statistically insignificant to ascertain a compliance rate."

Workers Comp Crackdown

The state Department of Industrial Relations last month announced a renewed crackdown on employers found not to be carrying workers compensation insurance.

While there have been periodic enforcement sweeps in the past, this time department director John Duncan said that his agency intends to "partner with other agencies to leverage our resources to seek out illegally operating employers and to level the playing field for those who follow the laws."

This could include matching data from the Employment Development Department, the Uninsured Employers Fund, the Department of Insurance or from other sources.

Under California law, all employers are required to purchase workers compensation insurance or file a certificate to self-insure. Senate Bill 869, signed into law by Gov. Arnold Schwarzenegger in 2007, authorizes the Department of Industrial Relations to use funds from the Workers Compensation Administration Revolving Fund to enforce the workers compensation coverage law.

Bill Update

Last week, the state Assembly passed a series of bills that could have sweeping impacts on employers or specific industries.

Chief among these is AB 2716, by Fiona Ma, D-San Francisco, which requires employers to give paid leave to employees who are sick or caring for a sick relative.

John Kabateck, state director for the National Federation of Independent Business, was critical of legislators who voted for the bill, which ironically passed on Small Business Day.

"Dozens of legislators voted against the interests of California's economic powerhouse small business by supporting a multibillion-dollar job-killing mandate, then walked across the street to proclaim their undying support for the very businesses they just crushed. To say the least we are very disappointed in their actions today," he said.

The Assembly also passed AB 2058, by Lloyd Levine, D-Van Nuys, which imposes a 25 cent-per-bag fee on retailers that cannot demonstrate they divert 70 percent of plastic bags from landfills.

Staff reporter Howard Fine can be reached at hfine@labusinessjournal.com or at (323) 549-5225, ext. 227.

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