March 31, 2017
Mr. Earl Comstock
Director of Policy and Strategic Planning
Office of Policy and Strategic Planning
Department of Commerce
H.C. Hoover Building Rm. 5863
1401 Constitution Avenue NW
Washington, DC 20230
RE:

Notice, Request for Information: Impact of Federal Regulations on Domestic
Manufacturing (Docket No. 170302221–7221–01)

Dear Mr. Comstock:
On behalf of the NAM, thank you for the opportunity to identify high priority federal
regulations that are impacting manufacturers. The NAM is the nation’s largest industrial trade
association and voice for more than 12 million men and women who make things in America.
The NAM is committed to achieving a policy agenda that helps manufacturers grow and create
jobs.
The NAM welcomes the Administration’s efforts to reduce regulatory burdens. We are
providing information on federal regulations that have significant impacts on manufacturers in
the United States.
I.

Manufacturing in the United States

Manufacturing in the United States lost 2.3 million jobs in the last recession. Since then,
we have gained back 822,000 manufacturing jobs. Yet, manufacturing employment declined by
45,000 in 2016, with essentially stagnant production growth. On the positive side, signs indicate
that business leaders and consumers were more upbeat about activity in 2017, especially since
the election. To ensure that demand and output improve this year, the United States needs not
only improved economic conditions but also government policies more attuned to the realities of
global competition.
Manufacturing has the highest multiplier effect of any economic sector. For every $1.00
spent in manufacturing, another $1.81 are added to the economy. In addition, for every worker
in manufacturing, another four employees are hired elsewhere. In 2015, manufacturers in the
United States contributed $2.17 trillion to the economy (or 12 percent of GDP), and the average
manufacturing worker in the United States earned $81,289 annually, including pay and
benefits—27.4 percent more than the average nonfarm business worker.
Manufacturers believe regulation is critical to the protection of worker safety, public
health and our environment. We believe some critical objectives of government can only be
achieved through regulation, but our regulatory system is in need of considerable improvement
and reform. New regulations are too often poorly designed and analyzed and ineffectively
achieve their benefits. They are often unnecessarily complex and duplicative of other mandates.
Their critical inputs—scientific and other technical data—are sometimes unreliable and fail to
account for significant uncertainties. Regulations are allowed to accumulate without incentives
Leading Innovation. Creating Opportunity. Pursuing Progress.
733 10 Street NW, Suite 700, Washington, DC 20001  P 202•637•3000  F 202•637•3182  www.nam.org
th

 to reevaluate existing requirements and improve their effectiveness. In addition, regulations
many times are one-size-fits-all without the needed sensitivity to their impact on small
businesses. We can do better.
Manufacturers, particularly small manufacturers, know very well the importance of
allocating scarce resources effectively to achieve continued success, which includes increased
pay and benefits for employees. Every dollar that a company spends on complying with an
unnecessary and ineffective regulatory requirement is one less dollar that can be allocated
toward new equipment or to expand employee pay and benefits. Government-imposed
inefficiencies through poorly designed and inefficient regulations are more than numbers in an
annual report. They are manifested in real costs borne by the men and women who work hard
to provide for their families.
II.

Regulatory Burdens Imposed on Manufacturers

Since manufacturing is such a dynamic process, involving the transformation of raw
materials into finished products, it entails more environmental and safety regulations than other
businesses. The NAM issued a study1 on the expansive set of federal regulatory requirements
that are holding manufacturers back. Manufacturers face 297,696 restrictions on their
operations from federal regulations. Eighty-seven percent of manufacturers surveyed as part of
our study indicated that if compliance costs were reduced permanently and significantly, they
would invest the savings on hiring, increased salaries and wages, more research and
development or capital investment. Regulations impose real costs that impact a company’s
bottom line, so it is extremely important that our regulatory system be transformed so that we
are effectively protecting health and the environment while minimizing and seeking to eliminate
unnecessary burdens. Despite the acknowledgment of lawmakers of the problems with our
regulatory system, things are getting worse. Ninety-four percent of manufacturers surveyed said
the regulatory burden has gotten higher in the last five years, with 72 percent reporting that the
burden is “significantly higher.”
In September 2014, the NAM issued a report2 that showed the economic impact of
federal regulations. The report found that manufacturers in 2012 spent on average $19,564 per
employee to comply with regulations, nearly double the amount per employee for all U.S.
businesses (see Figure 1). The smallest manufacturers—those with fewer than 50 employees—
incurred regulatory costs of $34,671 per employee per year. This is more than triple that of the
average U.S. business.
The burden of environmental regulation falls disproportionately on manufacturers, and it
is heaviest on small manufacturers because their compliance costs often are not affected by
economies of scale (see Figure 2). Manufacturers recognize that regulations are necessary to
protect people’s health and safety, but we need a regulatory system that effectively meets its
objectives while supporting innovation and economic growth. In recent years, the scope and
complexity of federal rules have made it harder to do business and compete in an everchanging global economy. As a result, manufacturers are sensitive to regulatory measures that
rely on inadequate benefit and cost justifications.

NAM, “Holding Us Back: Regulation of the U.S. Manufacturing Sector” (January 2017) http://www.nam.org/Dataand-Reports/Reports/Holding-Us-Back--Regulation-of-the-U-S--Manufacturing-Sector/
2 NAM, “The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business” (September
2014), http://www.nam.org/Data-and-Reports/Cost-of-Federal-Regulations/Federal-Regulation-Full-Study.pdf.
1

2

 Figure 1: Regulatory Compliance Costs per Employee per Year, 2012 (in 2014 Dollars)

In October 2013, the Manufacturers Alliance for Productivity and Innovation (MAPI)
released an updated study3 that highlighted the regulatory burdens placed on manufacturers.
The study found that since 1981, the federal government has issued an average of just under
1.5 manufacturing-related regulations per week for more than 30 years. Individually and
cumulatively, these regulations include significant burdens imposed on manufacturers in the
United States and represent real compliance costs that affect our ability to expand and hire
workers.
Figure 2: Environmental Regulatory Compliance Costs per Employee per Year, 2012
(in 2014 Dollars)

Agencies are failing in their responsibility to conduct analysis that would better assist
them in understanding the true benefits and costs of their rules. Despite existing statutory
requirements and clear directives from current and past administrations to improve the quality of
regulations, manufacturers face an increasingly inefficient and complex myriad of regulations
that place unnecessary costs on the public. Our regulations should be designed to most
effectively meet regulatory objectives while minimizing unnecessary burdens.

3

MAPI, Growing Number of Federal Regulations Continue to Challenge Manufacturers (October 2013),
http://www.mapi.net/blog/2013/10/growing-number-federal-regulations-continue-challenge-manufacturers.

3

 Based on data from the Government Accountability Office (GAO),4 689 major new
regulations—defined as having an annual effect on the economy of at least $100 million—were
issued by President Obama’s administration. During President Obama’s two terms, a new major
regulation was issued every 4.24 days. Manufacturers and other regulated entities have
confronted nearly 25 more major regulations per year from the previous administration (82
major regulations per year) than during President Bush’s administration (62 major regulations
per year). Figure 3 shows the major regulations issued per year since the enactment of the
Congressional Review Act in 1996.
Figure 3: Major Regulations per Year, Through the End of the Obama Administration

These regulations include significant burdens imposed on manufacturers and other small
businesses and represent real compliance costs that affect our ability to expand and hire
workers. There is a failure within the federal government to truly understand the impact of
regulatory requirements, such as paperwork and recordkeeping, especially on manufacturers.
III.

Improving our Regulatory System

Manufacturing in America is gaining momentum, but it could be much stronger if federal
policies did not impede growth. If we are to succeed in creating a more competitive economy,
we must reform our regulatory system so that manufacturers can innovate and make better
products instead of spending hours and resources complying with inefficient, duplicative and
unnecessary regulations. Manufacturers are committed to commonsense regulatory reforms
that protect the environment and public health and safety as well as prioritize economic growth
and job creation.
Manufacturers support reform proposals that would fundamentally change the regulatory
process with the goal of improving the quality of rules that agencies issue. In addition to the
significant reforms already announced in your executive actions, the NAM recommends a

4

U.S. Government Accountability Office, Congressional Review Act Overview,
http://www.gao.gov/legal/congressional-review-act/overview.

4

 number of reforms outlined below that would improve the system through which modern
rulemaking is conducted.
a.

Streamline the Permitting Process

The United States lags behind other advanced economies in setting reasonable policies
and procedures that promote the expediency of project reviews while ensuring environmental
protections. The permitting process for a major project, whether an energy facility, a highway, a
multimodal project or a manufacturing plant, is extraordinarily complex. Getting a permit
requires navigating a tangled web of federal, state and even local laws and regulations, and a
misstep on any could cause significant delays.
The poster child for the broken permitting process is the National Environmental Policy
Act (NEPA), our nation’s bedrock environmental law. NEPA is the law that requires all major
projects with a federal nexus to submit a comprehensive review of their potential environmental
impacts prior to construction. NEPA is often the largest, costliest, most time-consuming
regulatory hurdle that project sponsors, developers, construction managers and engineers face
before they can build. Philip Howard’s 2015 report “Two Years, Not Ten Years Redefining
Infrastructure Approvals” explains that public project costs are increased by more $3.7 trillion
because of red tape. It is also a common target for abuse, as there are countless ways for
federal and state agencies and external actors to throw a wrench in the process and delay
completion of the review. The longer the delay, the more likely the developer walks away.
Project opponents do not often need a judgment on the merits of NEPA to win; the delay can be
enough.
A 2014 GAO report5 made several startling findings with respect to administration of
NEPA. GAO found:







The Administration lacked accurate data on the number or type of environmental reviews
conducted each year.
The Administration did not know how much it spent on environmental reviews, or how
much a typical environmental review costs.
The Administration had no idea how long a typical NEPA review takes. GAO’s best
guess was an analysis by the National Association of Environmental Professionals
(NAEP), which estimated that the average environmental impact statement (EIS) under
NEPA takes 4.6 years, the highest it has ever been. NAEP also estimated that the time
to complete an EIS increased by 34.2 days each year from 2000 through 2012.
No government-wide system exists to track NEPA litigation or its associated costs.
Delays sometimes occur because agencies assume they will be sued, and spend more
time making the review “litigation proof.” Yet there is no evidence that these efforts
actually improve the review document.

GAO’s report was one of many reports by government and third party groups that
highlighted the very serious problems with NEPA that needed attention. In 2015, Congress took
action. Title 41 of the “Fixing America’s Surface Transportation (FAST) Act,” more commonly
known as FAST-41, included several provisions aimed at streamlining NEPA and accelerating
project delivery. FAST-41 was passed by Congress and signed into law by President Obama in
2015. FAST-41 covers NEPA-eligible projects worth over $200 million for “renewable or
5

http://www.gao.gov/products/GAO-14-370.

5

 conventional energy production, electricity transmission, surface transportation, aviation, ports
and waterways, water resource projects, broadband, pipelines, [and] manufacturing.” For these
projects, FAST-41 creates a Federal Infrastructure Permitting Improvement Steering Council,
made up of over a dozen agencies with a chair appointed by the President, which has the
responsibility to catalog pending projects and the environmental reviews involved, generate
performance schedules for completion of environmental reviews, establish a lead agency to
coordinate reviews, improve coordination among agencies and create an online federal
permitting dashboard to track the status of environmental reviews for covered projects. FAST-41
also empowers the Council to work with states to resolve conflicts, requires federal agencies to
complete reviews concurrently (rather than sequentially) and shortens the statute of limitations
to sue on a final NEPA document from six years to two. The NAM supported FAST-41 and has
been engaged in its implementation.
The NAM was also very encouraged to see President Trump issue Executive Order
13755, “Expediting Environmental Reviews and Approvals for High Priority Infrastructure
Projects,” which grants the Chairman of the White House Council of Environmental Quality the
power to expedite procedures and deadlines for the completion of environmental reviews and
approvals for high-priority infrastructure projects. Implemented together and in concert,
Executive Order 13755 and FAST-41 could have a real, positive impact on manufacturers’
ability to deliver infrastructure projects in a reasonable timeframe.
In addition to these valuable reforms, there are several other ways the Administration
can streamline the permitting process for infrastructure and manufacturing facilities. The first is
to eliminate redundancies created by overlapping jurisdiction of federal agencies and programs.
For instance, the pipeline industry is subject to the following requirements for which shared
jurisdiction exists:







Environmental Protection Agency (EPA) and the Department of Transportation
Pipeline and Hazardous Materials Safety Administration (PHMSA): Regulating
storage tanks and spill response.
Transportation Security Administration and the U.S. Coast Guard: Security
requirements.
EPA and the Occupational Safety and Health Administration (OSHA): Worker safety.
PHMSA and OSHA: Safety within plants and labeling/placarding.
EPA and the U.S. Army Corps of Engineers (Corps): Water and wetlands.

The Administration can and should keep a close eye on how the two-year statute of
limitations in FAST-41 is working, with an eye toward shortening it. Because a lawsuit (even a
frivolous one) challenging a NEPA record effectively stops construction on a project, opponents
typically wait until the very last day possible to file suit. Two years is better than six, but a better
policy would be the 180-day statute of limitations established by Congress for federal highway
projects in 2005.
Also, the Administration should build on FAST-41 and explore ways to resolve
differences between federal and state agencies on overlapping or delegated responsibilities.
The Constitution Pipeline from Pennsylvania to New York was approved by the federal
government and Pennsylvania but remains stalled after the New York Department of
Environmental Conservation denied the project a water quality permit. In Washington State,
Millennium Bulk Terminals has been forced to undergo two concurrent environmental reviews

6

 with different scopes—one federal, one state—because the Army Corps and the Washington
Department of Ecology interpreted identical statutory language differently.
Similar to the advances in FAST-41, Congress addressed excessive port, waterways
and flood control infrastructure study costs and delay in the Water Resources Reform and
Development Act of 2014 (WRRDA-14). Essentially this legislation overhauled the Corps’
planning process by creating a strict three-year deadline and $3 million federal cost limit for
feasibility studies. It required different levels of Corps review to occur concurrently and
eliminated duplicative requirements, such as multiple cost-estimates and a reconnaissance
study. Finally, this legislation designated the Corps to be the lead agency coordinating reviews
for civil works projects and authorized the Corps to accept funds to expedite the processing of
permits within the regulatory program. Already, these reforms have yielded significant savings
for waterways infrastructure projects. These reforms should be considered a model for
streamlining the permitting process.
The Administration should enact reforms to the New Source Review (NSR) program, the
federal air permitting program under the Clean Air Act that is triggered for new facilities or
modifications to facilities. NSR should be streamlined and simplified to reduce the timeframe,
cost and overall burden of obtaining construction permits for new and modified facilities. It often
takes 12 to 18 months to obtain NSR permits, which ties up investment capital and delays the
economic benefits from expansion projects. The program requires expensive air modeling that
frequently delays projects and can cost $100,000 or more to complete. The EPA consistently
shifts policies as to whether a series of de minimis emissions increases over a period of time, or
a disparate grouping of smaller sources within a geographical area, can be aggregated into one
larger source that triggers NSR. To make matters more challenging, the modeling tools the EPA
utilizes continue to contain flaws, including overly conservative assumptions that make it
exceedingly difficult to demonstrate compliance with strict federal air quality standards. More
often than not, manufacturers avoid taking on new projects or making modifications—even
those that would modernize facilities and make them more efficient—for fear of triggering NSR.
The EPA should explore ways to raise thresholds for construction permits to alleviate
burdens for smaller projects. It should review and revise the existing modeling programs to
ensure that results reflect real-world conditions. It should reinstate either the 2006 aggregation
policy that only economically or technically dependent plant changes could be aggregated, or
the 2009 policy that sets a rebuttable presumption that changes more than three years apart
cannot be aggregated. The EPA should give facilities greater flexibility to initiate pre-project
activities that will not result in an actual emissions increases before requiring a final permit. It
should revise the definition of the term “commence construction” to allow construction activities
that do not generate emissions (e.g., civil works like pilings and foundations to support the
equipment) to take place before an air permit is in hand. The EPA should continue and expand
opportunities for innovative air quality permitting that include provisions for advance approval of
future manufacturing projects. Finally, it should work with Congress to explore commonsense
reforms to NSR—the Prevention of Significant Deterioration (PSD), Nonattainment New Source
Review (NNSR) and minor source programs—to reflect current the current state of technology
and the increasingly narrow opportunities for further improvements.
b.

Streamline Regulations Through Sunsets and Retrospective Review

Executive Order 13771 has created strong incentives for agencies to begin a thoughtful
examination of existing regulations. Importantly, the regulatory cost cap and “one-in, two-out”

7

 requirement will create an opportunity for agencies to analyze, revise and improve techniques
and models used for predicting more accurate benefit and cost estimates for future regulations.
For an agency to truly understand the effectiveness of a regulation, it must define the
problem that the rule seeks to modify and establish a method for measuring its effectiveness
after implementation. In manufacturing, best practices include regular reprioritizations and
organized abandonment of less-useful methods, procedures and practices. The same mentality
should apply to regulating agencies: the identification of regulatory cost offsets should be the
beginning of a bottom-up analysis of how agencies use their regulations to accomplish their
objectives and force a fundamental rethinking of outdated methods.
To truly build a culture of continuous improvement and thoughtful retrospective review of
regulations, retrospective reviews must be made permanent in law. For these changes to
fundamentally reshape the way regulations are made in the future, a law requiring agencies to
conduct high-quality retrospective reviews of existing regulations through a regulatory budget or
sunsetting mechanism is necessary. Without an imperative to review old regulations, it will not
be done, and we will end up with the same accumulation of conflicting, outdated and often
ineffective regulations that build up over time.
c.

Increase Sensitivity to Small Business

The Regulatory Flexibility Act of 1980 (RFA) requires agencies to be sensitive to the
needs of small businesses when drafting regulations. Among a number of procedural
requirements, agencies must consider less costly alternatives for small businesses and prepare
a regulatory flexibility analysis when proposed and final rules are issued. The law was amended
in 1996 to require the EPA and OSHA to empanel a group of small business representatives to
help those agencies better consider a rule’s impact before it is proposed. In recognizing the
importance of this panel process, Congress expanded this requirement to include the Consumer
Financial Protection Bureau when it passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act.
The RFA’s requirements are especially important to improving the quality of regulations
and have saved billions of dollars in regulatory costs for small businesses. In January 2016, the
Small Business Administration’s (SBA) Office of Advocacy—an independent office helping
federal agencies implement the RFA’s provisions—issued its annual report indicating that it
helped save small businesses more than $1.6 billion in FY 2015 in first-year cost savings. Since
1998, the Office of Advocacy indicates that the RFA has yielded nearly $130 billion in savings
for small businesses. Imagine the positive impact on regulations if agencies were not able to
avoid the RFA’s requirements so easily.
Lawmakers have universally supported the RFA’s provisions, but Congress needs to
strengthen the law and close loopholes that agencies use to avoid its requirements.
Unfortunately, agencies are able to avoid many important RFA requirements—including holding
small business panels—by simply asserting that a rule will not impact small businesses
significantly. The law does not explicitly define a “significant economic impact on a substantial
number of small entities,” so agencies have great discretion in deciding when the RFA would
apply to a proposed or final rule. Furthermore, only a small number of regulations require small
business-oriented analysis because “indirect effects” cannot be considered. The law should be
amended to ensure that indirect effects are considered by agencies as Congress intended.

8

 d.

Support Centralized Review of Agencies’ Regulatory Activities

Presidential executive orders define the regulatory review responsibilities of the Office of
Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB).
OIRA reviews significant rules issued by executive branch agencies and the analyses used to
support those rules at both their draft and final stages. The office applies a critical screen to the
contents of regulation, agencies’ analytical rigor, legal requirements affecting the proposal and
an administration’s priorities and philosophy. Nowhere else in the government does this take
place. Despite its critical function, even as the size and scope of the government has increased,
OIRA has shrunk. In 1980, the office had 90 full-time equivalent employees; in 2015, there were
only 47.6 During this same time period, the number of staff at federal regulatory agencies—
excluding the Transportation Security Administration—rose 50 percent from 146,408 to
219,198.7
If we are to create a smart, effective and efficient regulatory system, it is imperative that
OIRA be given the resources it needs to review agency regulations and information collection
requests. By expanding OIRA’s ability to provide objective analysis, to conduct thoughtful
regulatory review and to work with regulating agencies, federal regulations will meet health,
safety and environmental objectives more effectively at a much lower cost to businesses and to
the federal government. A modest investment in this institution will pay back significant returns
to the entire economy.
e.

Strengthen and Codify Sound Regulatory Analysis

The complexity of rulemaking and its reliance on highly technical scientific information
has only increased since the passage of the Administrative Procedure Act (APA) in 1946. Our
administrative process has not kept up with those changes, and agency accountability is lacking
without meaningful judicial review. Moreover, the process by which the government relies on
complex, scientific information as the basis for rules should be improved and subject to judicial
review. Efforts to encourage peer review of significant data and to create consistent standards
for agency risk assessment should be part of that process.
The NAM supports legislative reforms to the APA to incorporate the principles and
procedures of Presidential executive orders into the core of how every rule is developed.
Manufacturers also support legislation that would improve the quality of information agencies
use to support their rulemakings. Agencies should use the best available science, better
calculate the benefits and costs of their rules, improve public participation and transparency,
use the least burdensome tools for achieving regulatory ends and specify performance
objectives rather than a particular method of compliance to improve the effectiveness of
regulatory measures.
Manufacturers and other businesses are often asked which regulation is the most
burdensome. It is a difficult question to answer because the cumulative costs of federal, state
and local regulations are extremely complex. Agencies must better consider the cumulative
effects of their regulations and requirements. Adherence by regulators to sound regulatory
principles is vital if we are to implement fundamental change to our regulatory system that
Dudley, Susan and Melinda Warren, “Regulators’ Budget from Eisenhower to Obama: An Analysis of the U.S.
Budget for Fiscal Years 1960 through 2017,” 2016. Accessed at
https://regulatorystudies.columbian.gwu.edu/regulators%E2%80%99-budget-eisenhower-obama.
7 Ibid.
6

9

 improves the effectiveness of rules in protecting health, safety and the environment while
minimizing the unnecessary burdens imposed on regulated entities. Regulatory reform
legislation is crucial to permanent improvements in the regulatory system.
f.

Hold Independent Regulatory Agencies Accountable

The Executive Office of the President does not currently exercise similar authority over
independent regulatory agencies, such as the Federal Communications Commission, the
Federal Trade Commission, the National Labor Relations Board, the Securities and Exchange
Commission and the Consumer Product Safety Commission, as the office does over other
agencies within the executive branch. Independent agencies are not required to comply with the
same regulatory principles outlined in executive orders and OMB guidance as executive branch
agencies and often fail to conduct any analysis to determine expected benefits and costs.
Independent regulatory agencies should be required to conduct cost-benefit analyses of
their significant rules and subject their analysis to third-party review through OIRA or some other
office. The Executive Office of the President should assert its authority over these agencies.
Consistency across the government in regulatory procedures and analysis would only improve
certainty and transparency of the process.
g.

Improve Regulatory Cooperation and Reduce Burdens Imposed by Conflicting
International Standards

As federal agencies seek to eliminate unnecessary regulations and improve the
business environment for manufacturers in the United States, the NAM also encourages
agencies to consider the potential costs and barriers presented by foreign standards, technical
regulations, certification regimes and customs rules that do not align with those in the U.S.
Efforts to tackle these market-distorting barriers should include not only efforts to require trading
partners to enforce fully all international commitments in these areas, but also use of all
available channels to promote harmonization or mutual respect of regulations, standards,
certification programs, and customs rules in ways that benefit manufacturers in the United
States. This includes urging those partners to adopt U.S.-supported international standards,
adherence to international schemes that allow for acceptance of test results to demonstrate
compliance in foreign markets and streamlined duty-preference certification requirements.
Burdensome and confusing country of origin certifications often deter companies from seeking
the preferential treatment that should be afforded to them.

h.

Enhance the Abilities of Institutions to Improve the Quality of Regulations

In addition to providing OIRA the resources it needs to improve the quality of regulations,
other offices within the federal government should be supported. As discussed above, the
SBA’s Office of Advocacy plays an important role in ensuring that agencies thoughtfully
consider small entities when promulgating regulations. When Congress created the office in
1976, it recognized the need for an independent body within the federal government to advocate
for those regulated entities most disproportionately impacted by federal rules. The Office of
Industry Analysis, within the Office of Manufacturing and Services at the Department of
Commerce’s International Trade Administration, was created in response to a 2003 executive

10

 branch initiative8 to improve the global competitiveness of the manufacturing sector in the
United States. The office’s original mission was to assess the cost competitiveness of American
industry and the impact of proposed regulations on economic growth and job creation. The
original mission of this office should be restored or this type of analysis should be established
elsewhere within the federal government. The offices help agencies write better, smarter and
more effective regulations.
IV.

Conclusion

Manufacturers look forward to a day when our regulatory system is a competitive
advantage for our country, instead of unnecessarily costly, inefficient, adversarial and a barrier
to business formation. To achieve those goals, the following list of regulatory burdens must be
addressed. We must also permanently reform our regulatory system to protect our country,
while being flexible, agile and innovative and while imposing only the burdens that are
necessary. Thank you for this opportunity.

U.S. Department of Commerce, “Manufacturing in America: A Comprehensive Strategy to Address the Challenges
to U.S. Manufacturers,” 2004. Accessed at https://www.nist.gov/document-11409.
8

11

 Appendix
Regulatory Challenges for Manufacturers
Below is a list of regulations identified by NAM members as having the most significant
impact on their businesses. These are regulations or restrictions that are in need of reform or
repeal. The list is organized alphabetically by agency and is not in order of priority.
Commodity Futures Trading Commission (CFTC)
Swap Dealer De Minimis Threshold. Many manufacturers use derivatives, or swaps, to
hedge commercial risk and mitigate against fluctuations in currency, interest rate valuations and
commodity prices. When the CFTC issued regulations for the derivatives market as part of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), they created
an $8 billion de minimis level of swaps activities for determining if an entity is a swap dealer.
Current CFTC rules will soon automatically lower this $8 billion de minimis level to $3 billion,
potentially sweeping in manufacturers to the swap dealer definition and subjecting them to
onerous and unnecessary new regulations and negatively impacting market liquidity.
Manufacturers believe the level should remain at $8 billion.
Consumer Product Safety Commission (CPSC)
Information Disclosure under Section 6(b) of the Consumer Product Safety Act. In
February 2014, the CPSC issued a proposed rule that would significantly alter its interpretation
of section 6(b) of the Consumer Product Safety Act (CPSA). The CPSA requires the CPSC to
“take reasonable steps to assure” that any disclosure of information relating to a consumer
product safety incident is accurate and fair. The Commission’s proposal would limit critically
important protections afforded to manufacturers from the disclosure of inaccurate information,
which can result in reputational harm. Importantly, the CPSC is proposing to exempt from
section 6(b) information that is publicly available, including information that is available on the
internet even if the information is inaccurate or unfair. The proposal would undermine a
successful and cooperative process that has been in place for more than 30 years.
Manufacturers urge the Commission to withdraw this proposed rule and work cooperatively with
industry to modernize section 6(b) regulations.
Mandatory Standard for Recreational Off-Highway Vehicles. In October 2014, the CPSC
proposed a mandatory standard for recreational off-highway vehicles (ROVs) despite admitting
that it had no evidence showing its proposed changes would improve safety. The proposal
violates statutory requirements that the agency defer to voluntary standards and, when issuing
mandatory standards, issue only performance-based criteria and not design mandates. If
finalized, the rule would negatively impact safety by limiting research and innovation and harm
consumer demand. The result of this agency action would be the loss of thousands of
manufacturing and retail jobs. Industry analysis has shown that at least 90 percent of serious
incidents with ROVs would not have been affected by the CPSC proposal, but were instead
caused by operator actions. The Commission recently dismissed a recommendation of its own
staff to withdraw the proposed rule. The CPSC should withdraw the rule completely.
Mandatory Standard for Table Saws. On January 18, 2017, the CPSC issued publicly a
briefing package for commissioners for the consideration of a mandatory standard for table
saws. The CPSC initiated rulemaking procedures in October 2011 after granting a petition to

12

 impose mandatory standards that could be achieved only through the use of one claimed
patented technology owned by the person who submitted the original petition in 2003. The
CPSC proposal would require the use of patented technology, creating a government-mandated
monopoly. Regulation should not be used to advantage one technology or one company over
another. The most popular table saw models can be purchased for several hundred dollars,
while the least expensive model on the market employing the technology the CPSC would
mandate is $1,300, resulting in an $875 million impact only for the benchtop category of table
saws. This would essentially eliminate or ban cost-effective models from the market,
significantly harming businesses that use the machines. Such a burden is not justifiable for doit-yourself or small contractor customers. The CPSC should not pick winners and losers through
a command-and-control regulatory regime. If finalized, the rule conflicts with both the statute
and the intent of the CPSA. The Commission should terminate this rulemaking.
Voluntary Remedial Actions and Guidelines for Voluntary Recall Notices. In November
2013, the CPSC issued a proposed rule that would place significant burdens on manufacturers
and retailers of consumer products and negatively impact the highly successful voluntary recall
process. The proposed rule would make voluntary corrective action plans and voluntary recalls
legally binding, increasing enforcement jeopardy and legal consequences in product liability,
other commercial contexts or in a civil penalty matter. The CPSC lacks the statutory authority to
proceed with binding regulations for voluntary programs. The success of our consumer product
recall system is based on a strong cooperative relationship between the CPSC and the
companies it regulates. The rule removes long-standing incentives for firms to proactively
cooperate with the CPSC and could seriously threaten the Fast-Track recall program, which the
CPSC itself highlights as a model of good governance and was implemented as a way to assist
small firms to issue effective recalls. Manufacturers, retailers and other stakeholders have
routinely asked the Commission to withdraw the proposed rule and work closely manufactures,
retailers, consumer groups and others to identify solutions for improving the effectiveness of
recalls. The CPSC should grant this request, withdraw the rule and formalize engagement with
stakeholders on ways to improve the recall process.
Standard for the Flammability of Mattresses and Mattress Pads. All mattresses sold in
the U.S. must meet two flammability standards enforced by the CPSC and contained in code at
16 CFR 1632 and 1633. 16 CFR 1632 standard was enacted in the 1970s and is a cigarette
ignition test. A new flammability requirement—16 CFR 1633, an open-flame test—took effect in
2007. The CPSC should examine the 1632 requirement to determine whether it should be
revoked or combined into 16 CFR 1633. Since both standards address flammability, eliminating
the redundant 1632 requirement would greatly reduce testing and compliance costs without
compromising safety. As requested previously by the mattress industry, the CPSC should
rescind 16 CFR 1632.
Council on Environmental Quality (CEQ)
National Environmental Policy Act (NEPA) Policies and Guidance. On August 1, 2016,
the Council on Environmental Quality (CEQ) issued final guidance on how agencies should
address climate change on a project-by-project basis while conducting NEPA environmental
reviews. The guidance suggests a number of subjective, unattainable alternatives to consider.
At a minimum the consideration of boundless alternatives to address climate change will add
delays to an already long NEPA environmental review process. The best outcome would be for
CEQ to replace the current NEPA guidance with a policy that is far more reasonable and does
not allow unnecessary project delays.

13

 White House Memorandum on Incorporating Ecosystem Services into Federal Decision
Making (10/7/15). This memorandum directed all federal agencies to incorporate the value of
green infrastructure and ecosystem services into planning and decision making. This will make
development projects significantly more expensive and time-consuming, without producing
commensurate benefits. The NAM recommends the memo be reevaluated.
Customs & Border Protection (CBP)
Expansion of the Automated Commercial Environment (ACE) and International Trade
Data System (ITDS). CBP has nearly completed the deployment of the ACE as the federal
government’s “single window” to process imports and exports. CBP is working with agencies—
including the Department of Commerce, the Food and Drug Administration, the CPSC, the EPA
and others—to ensure that ACE is fully operational and achieving its intended benefits for both
shippers and agencies to reduce delay and red tape at the border while ensuring strong U.S.
government risk management. The NAM urges the Administration to support the trade
facilitation and risk management priorities that are embedded in ACE and to require CBP’s
partner agencies to utilize the system to maximize efficiency for shippers. Manufacturers also
encourage CBP and the U.S. Census Bureau to preserve—and potentially expand—postdeparture ACE filing for eligible companies. The NAM continues to urge that CBP to ensure that
post-departure filing (often referred to as “Option 4”) is retained for eligible companies and to
work collaboratively with exporters. The NAM has also encouraged CBP to consider carefully
the potentially negative impacts on exporters if they proceed with plans to require advance
electronic manifests in all modes of transportation. CBP is currently rolling out electronic export
manifest pilots for various modes, and manufacturers will continue to work closely with carriers
and other stakeholders to ensure a smooth transition that does not hinder exports.
Department of Agriculture (USDA)
Animal and Plant Health Inspection Service (APHIS): Importation of Wood Packaging
Material from Canada. In December 2010, APHIS issued a draft rule to amend import
regulations under the Plant Protection Act by removing the current exemption that allows North
American wood packaging material, such as wood pallets, to enter the United States from
Canada under a general permit. APHIS sought to justify the elimination of this exemption by
pointing to a 2009 pest risk analysis (PRA) that analyzed the movement of pests through wood
packaging material, but ignored the fact that none of the pests identified in that analysis were
indigenous to Canada or the United States. APHIS further relied upon a faulty assessment that
the economic impact was not significant. According to industry estimates, more than one million
pallets loaded with goods cross the U.S.-Canada border every day. The vast majority of the
$1.3 billion in manufactured and agricultural goods that crosses the U.S.-Canada border every
day is shipped on wood pallets. Despite strong industry objections, APHIS continued to push
this regulation to the final stage in the waning days of the last administration, with a planned
implementation date of May 2017. Eliminating this exemption would have a significant negative
impact on manufacturers in the United States by increasing shipping costs, as well as denying
the wood pallet industry a substantial market for their products. The rule, which uses pest risk
management as a key rationale, would also divert enforcement resources away from areas of
the North American border that serve as the main entry points for the pests actually identified in
the 2009 PRA. APHIS should withdraw this unnecessary proposed rule and preserve the
exemption that allows North American wood packaging material, such as wood pallets, to enter
the United States from Canada under a general permit.

14

 Food Safety and Inspection Service (FSIS): Hazard Analysis and Critical Control Points
(HACCP) Inspection Models Project (HIMP). FSIS has indicated that it will expand HIMP
through a Modernization of Pork Slaughter rule. This will increase efficiency and effectiveness of
the federal inspection process and allow for the rapid adoption of new food safety technologies.
The NAM urges the agency to move forward.
Grain Inspection Packers and Stockyards Administration (GIPSA): Scope of Sections
202(a) and (b) of the Packers and Stockyards Act. In December 2016, USDA’s GIPSA issued
an interim final rule on how the agency interprets subsections 202(a) and (b) of the Packers and
Stockyards Act, an interpretation inconsistent with considerable judicial precedent. The USDA
also issued a proposed rule that would identify certain activities that are “unfair, unjustly
discriminatory or deceptive practices or devices” by packers, swine contractors or live poultry
dealers. Both of these rules are an overreach by the previous Administration which not only
exceed congressional intent and defy judicial precedent, but would expose packers to broad
litigation risks and fundamentally upend the long standing marketing and contracting
relationships between packers and producers. The rules should be rescinded.
Department of Commerce
National Institute of Standards and Technology (NIST): Cybersecurity. The NAM and our
members have been active participants throughout the development and the current utilization
of the NIST “Framework for Improving Critical Infrastructure Security,” more commonly referred
to as the Framework. Manufacturers in the United States value the collaboration with the public
sector regarding our nation’s cybersecurity. The NAM applauds the leadership of NIST in the
area of cybersecurity and its commitment to working with industry on a voluntary system that
does not lead to any new or unnecessary burdensome regulations. As NIST continues to
examine and implement the current Framework in 2017 and beyond, manufacturers urge that
any action taken by NIST and any other federal agency involved in cybersecurity continue to
focus on these goals. It is critical to reduce the overlap of existing laws and regulations and
work toward regulatory harmony across all agencies. The NAM cautions against an
unwarranted expansion of the scope of the Framework and avoid the potential for an
environment that would lead to increased regulations or any disincentive for industry to continue
utilizing the Framework. Moving forward, a priority should be placed on assisting smaller firms
on how best to utilize the Framework while remaining acutely aware that new regulatory and
reporting requirements have a disproportionate financial and technical impact on these firms
with limited resources.
National Oceanic and Atmospheric Administration’s National Marine Fisheries Service
(NOAA Fisheries): Updated Acoustic Criteria for Level A Takes under the Marine Mammal
Protection Act. This NOAA Fisheries guidance, issued in August 2016, established new sound
thresholds that will limit or prevent seismic activity in the Gulf of Mexico, even though seismic
operations are essential to future energy exploration and development. While it is appropriate to
adopt reasonable measures that mitigate the potential risks of seismic activity, as responsible
companies already do, the new NOAA Fisheries criteria disregard key scientific data. The
guidance should be withdrawn and rewritten.
Department of Energy (DOE)
Efficiency Regulations and Energy Policy and Conservation Act (EPCA) Reform. The
EPCA is a four-decade-old statute that has not been adequately updated. The law requires
DOE to conduct regular reviews of the efficiency of appliances and equipment. In recent years

15

 DOE has used this as a license to require stricter and stricter standards on products that
generally operate at peak efficiency already. As a result, costs of these products are
skyrocketing and manufacturers are becoming less competitive. DOE also released new
efficiency regulations at such a pace that some manufacturers must comply with up to a dozen
evolving regulations and standards just governing the efficiency of a single product.
Manufacturers ultimately need legislative reforms to modernize the EPCA. In the meantime,
DOE should take steps to decrease the pace and stringency of its efficiency regulations.
Department of Health and Human Services
Reduce Health Insurance Compliance Burdens. Administrative cost increases have led
to premium increases. Prior to ACA, many health plans were regulated only on the state level
and now those employers are forced to comply with state regulations and the federal
government. Manufacturers urge a return to the pre-ACA method of health plan regulation.
Notice requirements to covered entities about non-discrimination compliance occurs with some
level of frequency between the employer and the employee. This practice should evolve to
become an annual activity during open season or in conjunction with documentation on benefit
and coverage requirements. Notifications concerning non-discrimination protections are
required to be communicated in writing in 15 languages, adding to the paperwork burden on
employers as a result of the ACA.
Health Resources and Service Administration (HRSA): Withdraw 340B Drug Pricing and
Civil Monetary Penalty Rule. The HRSA issued a final rule that became effective on March 6,
2017 but will not be enforced until April 1, 2017 on pharmaceutical “penny pricing” ceiling prices
for drugs covered under the 340B Medicaid drug discount program. The rule must be withdrawn
and reconsidered as the methodology to determine ceiling prices was flawed.
Department of Health and Human Services, Food and Drug Administration (FDA)
Current Good Manufacturing Practices (cGMPs). The FDA should update cGMPs to
account for modern manufacturing processes, including distributed manufacturing enabled by
the Internet of Things (IoT), Industry 4.0, and other major industrial revolutions. Changes to the
regulations governing industries like medical and aerospace will be necessary so that these
mainstays of high value and high tech employment are not left behind. Without modern
regulatory frameworks that support innovation and advanced, integrated manufacturing, we will
be placed at a competitive disadvantage as the rest of the world moves to Industry 4.0
frameworks. Updated cGMPs will help keep manufacturing competitive, local and cost-effective
and will create new high-value jobs managing the infrastructure necessary to keep Industry 4.0
systems running.
Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic
Act. In May 2016, the FDA issued its “deeming regulation,” which extended the agency’s
authority to regulate tobacco products to include non-traditional products such as e-vapor.
Unfortunately, the FDA failed to change the predicate date for covered products from February
15, 2007, meaning an entire class of products—products which have been in commerce for
years—will need to be removed from the marketplace while these companies seek pre-market
approval. The FDA should use its regulatory authority to align the predicate date with the
regulation and delay the pre-market applicant filing deadlines for newly regulated products. If
the agency fails to make these commonsense changes, thousands of manufacturers and
retailers could be forced out of business. The FDA’s regulation will impose unnecessary
burdens and avoidable costs that will harm our economy, eliminate jobs and impair innovations

16

 in reduced-risk products for consumers. Moreover, FDA regulations require a company to go
through a completely new, expensive and extremely lengthy application process for the most
minor changes in an innovative and less harmful novel tobacco product. This is unnecessary
from a public health standpoint and could prevent consumer access to less harmful products.
Food Safety Modernization Act (FSMA) regulations. The FDA has recently finalized all of
the major regulations required by FSMA. Manufacturers encourage the agency to engage in
active cooperation with industry to ensure that regulations and associated guidance are
systemically updated to minimize unnecessary regulatory burdens. As manufacturing and
agricultural processing continually evolves, the FDA should ensure that regulatory requirements
are up to date. The thousands of pages of new regulations are confusing and difficult to
interpret, and a misinterpretation can easily cause significant harm to a company. Three
important areas for which system updating is necessary include Supply Chain Notification,
Intentional Adulteration and Preventive Controls for Human Recordkeeping. Moreover, many
agriculture processing companies sell secondary products (e.g., germ, feed, meal) from facilities
which were not designed to handle these ingredients to the same standards as ingredients
intended for human consumption. Current regulations will require manufacturers to retrofit
facilities to comply with requirements targeting facilities that primarily produce human food.
When no hazards are present, such requirements are unnecessary and will result in lost jobs
and lost opportunities for manufacturers.
Preemption of California’s Proposition 65. The FDA should assert implied preemption
over California’s Proposition 65 (the Safe Drinking Water and Toxic Enforcement Act of 1986)
with respect to food warnings and tolerances and conflicts with the Federal Food, Drug and
Cosmetic Act. The U.S. Department of Agriculture (USDA) already has labeling preemption
under the Meat and Poultry Inspection Acts. There are numerous examples (e.g., the safety of
BPA, Acrylamide in foods) where Prop. 65 activities have conflicted with FDA science. A
national food labeling system would ease market access and reduce regulatory costs and
compliance.
Product Testing Standards. There is a major disparity in the allowable amounts of
certain ingredients standards between state standards—particularly California—and federal
FDA standards. Certain state standards conflict with federal standards, which creates
tremendous costs for manufacturers. Manufacturers must meet the strictest standards, which
can often change, in order to be able to sell a product nationally. Greater federal guidance in
ingredient standards would allow all manufacturers to sell into one national marketplace.
Regulations on the definition of slack-fill. The FDA has defined slack-fill as the difference
between the volume of a container and the amount of product within that container. Businesses
are vulnerable to litigation from opportunistic lawyers on a variety of issues, including slack-fill.
Class actions allege violations of federal and state laws. Having clearer federal slack-fill
definitions would provide certainty regarding compliance and limit subjective litigation regarding
slack-fill.
Tobacco Product Standard for N-Nitrosonornicotine Level in Finished Smokeless
Tobacco Products. Issued on the last day of the previous Administration, the FDA has proposed
a compliance standard for smokeless tobacco products that is unachievable. If finalized, this
rule would eliminate most U.S. manufactured smokeless tobacco products, creating a
devastating economic effect on manufacturers and their suppliers, especially farmers. The
agency should withdraw the proposed standard. Should the FDA want to pursue a product

17

 standard, the agency should work with industry and initiate an Advance Notice of Proposed
Rulemaking.
Department of Homeland Security
U.S. Coast Guard (USCG) Regulatory Framework for Ballast Water. Duplicative
regulations and patchwork state regulations of discharged ballast water from shipping vessels
make compliance with the myriad regulations impossible and result in costly fines and fees as
installing duplicative multimillion-dollar shipboard water treatment systems is unfeasible. Current
USCG regulations for ballast water reporting should be revised to eliminate requirements that
add no environmental value such as reporting of transits in which no ballast water is discharged
and reporting of discharges of potable water.
U.S. Customs and Immigration Service (USCIS): Immigration. There are a number of
positive immigration regulations that have been finalized over the past few years. The NAM
advocates for reforms to the immigration system that would make it more secure and believes
improvements are needed to address the inefficiencies and inconsistencies in the system. For
example, the NAM sees value in greater consistency in L-1 adjudications by USCIS. Variations
in treatment make it challenging to manage career opportunities for international company
leaders. Manufacturers desire policies for an employment-based immigration system that are
predictable and consistent, serving the needs of manufacturers. The NAM has articulated
support for the following: 1) H-4 Spouse which allows for certain spouses of H-1B holders to
have employment authorization; 2) F1 Program/STEM-OPT which allows greater flexibility
under the Optional Practical Training Program (OPT) for potential employees who are graduates
of American college and universities with STEM skills and awaiting an H-1B and 3)
administrative improvements for job changers who have been in the H-1B line for an extended
period time.
Department of the Interior (DOI)
Offshore Oil and Gas Exploration and Production. In December, President Obama used
Section 12(a) of the Outer Continental Shelf (OCS) Lands Act of 1953 to permanently remove
certain areas of the Arctic and Atlantic Oceans from potential oil and natural gas exploration and
production in the future. This action is in addition to the Interior Department’s 2017-2022 Outer
Continental Shelf Oil and Gas leasing program, which would keep all areas of the Atlantic and
Pacific Coasts off limits for exploration and production. The five year final plan does permit
continued availability of resources from the Gulf of Mexico and one lease sale in Alaska. Both of
these actions should be revisited so that more OCS areas are available for oil and gas
exploration and production.
Moratorium on Leasing of Federal Coal. In January 2016, DOI announced a moratorium
on the leasing of coal on federal lands while it considered updates to the process by which the
federal government would lease coal. Coal powers a major portion of manufacturers’ electricity
needs and manufacturers use 43 million short tons of coal per year for non-electric generation
purposes. The coal leasing moratorium runs counter to a true “all of the above” energy policy
and should be ended immediately.
Bureau of Land Management (BLM): Venting and Flaring Rule (Methane Rule). The
Methane Rule would require additional and costly measures for oil and gas activities on federal
and Native American lands, in some cases limiting access to critical energy resources. The

18

 costs of this rule will be borne not only by the directly regulated companies, but by energy users
like manufacturers. This rule should be rescinded.
Fish and Wildlife Service (FWS): Endangered Species Act (ESA). The avalanche of ESA
listings in recent years has created a web of confusing and often conflicting rules and species
preservation measures that impose on the legal use of privately owned land while doing little to
rehabilitate species. The timber industry in the Pacific Northwest was decimated by the
designation of the Spotted Owl as an endangered species. Multiple species of bats are currently
being considered for endangered status which would similarly impact the manufacturing in the
middle and eastern U.S. Many of the listings were agreed to via settlement agreements with
environmental groups over the past decade, who sued to list over a thousand separate species.
The NAM recommends the FWS take stronger steps to defend itself in “mass listing” actions
and avoid potential “sue and settle” arrangements that take away discretion from FWS officials.
NAM also recommends the Administration engage with Congress to enact meaningful reforms
to the ESA to update this outdated law.
FWS: Habitat Conservation Plans (HCPs). For years, many manufacturing sectors have
initiated voluntary habitat conservation plan processes. Some of the greatest concerns from
manufacturers are that the process is too costly and inefficient and that results are uncertain.
Despite the goals to fix these wrongs, on June 28, 2016, FWS published a 391-page draft HCP
Planning Handbook which only further complicates these issues. While the handbook should
provide guidelines for developing and processing HCPs subject to the existing statutory and
regulatory requirements, the draft handbook ostensibly creates a series of obstacles that the
applicant must successfully traverse to avoid a denial of application. Further, the handbook
attempts to impose mitigation requirements that mandate a “net benefit” goal and a “no net loss”
standard. This is an untenable situation and has severely impacted manufacturers and has
significantly devalued private property. The handbook should be withdrawn and rewritten.
Office of Natural Resources Revenue (ONRR): Consolidated Federal Oil & Gas and
Federal & Indian Coal Valuation. Published in July 2016, this rule creates uncertainty and
imposes unsupported limits regarding the valuation of oil and gas production for royalty
purposes. Most significantly, it allowes ONRR to challenge payors’ calculations of value and
deductions. It also establishes inapporpriate limits on deductions, including the elimination of a
significant deduction for subsea transportation of production. The rule is positive in that it allows
lessors to elect a simplified “index price” calculation in certain cases, but the implementation of
that option is highly flawed. The desired outcome for the rule would be an improved “index
price” option and elimination of other aspects of the rule. The NAM recomends reconsidering
this rule after better understanding the business and regulatory structures lessors face and the
unique constraints of each of the resources.
Department of Labor (DOL)
Mine Safety and Health Administration (MSHA): Metal/Nonmetal Examination Rule. On
January 17, MSHA finalized a rule mandating certain examinations of working places in metal
and nonmetal (MNM) mines. This rule, however, would result in a less safe environment for
employees. MSHA also underestimated the costs for employers to fully comply with the rule.
The NAM requests this rule be modified or rescinded.
Wage and Hour Division: Defining and Delimiting the Exemptions for Executive,
Administrative, Professional, Outside Sales and Computer Employees. On May 23, 2016, the
DOL finalized its increase of the minimum salary threshold from $23,440 to $47,776 for

19

 employees to be exempted from overtime pay pursuant to the Fair Labor Standards Act. Of
significant concern to manufacturers, particularly small firms, is a provision that would
automatically tie future salary threshold increases to the Consumer Price Index. Under certain
estimates, the minimum salary threshold could be $70,000 in 2020. In November 2016, a
federal judge issued a nationwide injunction preventing the implementation of the rule, asserting
that the Department likely exceeded its statutory authority. The Administration should rescind
the existing rule and issue a new rule based upon past formulas and industry input to
appropriately adjust the salary threshold for exempt employees.
Wage and Hour Division: Independent Contractors. During President Obama’s
Administration, the Wage and Hour Administrator issued an “administrator's interpretation”
stating that most working individuals should be classified as employees under the Fair Labor
Standards Act, rather than an as independent contractors. The Administrator further stated that
“employees improperly labeled as independent contractors may miss out on things like
minimum wage and overtime pay,” and added that “correct classification has ‘critical
implications’ for the legal protections workers receive, particularly low-wage workers.” The
Department of Labor should rescind this interpretation and, based on industry input, should
issue new guidance on a consolidated definition of independent contractors.
Wage and Hour Division: Family Medical Leave Act (FMLA) Regulations. The
Department of Labor should reexamine portions of the FMLA regulations that are burdensome
to employers, such as taking incremental leave as few as one hour, and whether certifications
by a doctor for absences should be more frequent than six months in order to prevent fraud.
Wage and Hour Division: The Davis-Bacon Act of 1931 established the requirement for
paying the local prevailing wages for laborers performing work on contracts and subcontracts for
federally-funded or assisted contracts in excess of $2,000 for the construction, alteration, or
repairs of public buildings or public works. The wage rates are not always realistic for the
particular geographic region, especially in more rural areas where rates reflect a metropolitan
area hundreds of miles away. The Administration should rely on more accurate wage
determinations made by state officials.
Department of Labor, Occupational Safety and Health Administration (OSHA)
Clarification of Employer's Continuing Obligation to Make and Maintain an Accurate
Record of Each Recordable Injury and Illness (Volks Rule). On December 16, 2016, OSHA
issued a new rule extending the statute of limitations to five years for when the agency may cite
an employer for failing to make and keep accurate injury and illness logs. Under the
Occupational Safety and Health Act, employers are required to record and maintain a log of
workplace injuries and illnesses, and the law explicitly states employers can be cited for recordkeeping violations within six months of the injury or illness occurring. Two federal courts have
rejected OSHA’s attempt to extend this statute of limitations to five years. The Volks rule does
nothing to improve the health and safety of workers, but rather, focuses on penalizing
paperwork errors and completely ignoring congressional intent. This rule should be rescinded.
Combustible Dust. OSHA has long considered a combustible dust rulemaking. The
substance, however, is very hard to define as it is dependent on a variable of circumstances to
occur. Such a rulemaking is unnecessary as current OSHA guidance to inspectors from April
2015 accurately reflects conditions within a facility and the risks that combustible dust may
pose. The NAM encourages the agency to abandon a rulemaking initiative.

20

 Globally Harmonized Hazard Communications Standard: In 2012, OSHA issued a final
rule to align the workplace hazard communication standard (HCS) in the U.S. with the Globally
Harmonized System (GHS). Companies who first ship a product do not necessarily know with
certainty how the products will be processed by other downstream customers and therefore, the
first shipment should not be required to provide a warning label unless they are shipping a
material that is itself a hazard. The current regulation, however, requires even at the first
shipment, when the material is not known to be hazardous, must contain the warning label.
Employers find this to be burdensome, costly and confusing. The regulation, therefore, should
be amended to eliminate confusion and so that a warning label is only required when it is certain
a substance is actually present in the current form in which it will be shipped.
Improve Tracking Workplace Injuries and Illnesses. On May 12, 2016, OSHA published
its final rule changing reporting requirements for employer injury and illness logs and permitting
the agency to publish the information on its publicly accessible website. The statute does not
authorize OSHA to make the information publicly available. The rule presents privacy issues for
employees as the information contained in injury and illness logs includes personally identifiable
information, as well as other private information about individual employees. Despite lacking
statutory authority, OSHA’s update would place companies in enforcement jeopardy if the
agency determines that a requirement such as additional training or even reflective clothing is
an “adverse action” in response to an employee injury report. The rule does nothing to enhance
the safety and health of the workforce, therefore, the Administration should rescind this rule.
National Recognized Testing Laboratories (NRTL) Program. Under the current NRTL
system there is no requirement that each NRTL-approved body recognizes the testing results,
certifications and audits from another approve laboratory. As a result, employers must obtain
multiple approvals and testing, resulting in higher cost and significant delay in products reaching
the market. There should be universally recognized standard so that one stamp from any of the
NRTLs is then recognized/acknowledged by all others.
Occupational Exposure to Beryllium. In January, OSHA issued a final rule on beryllium
exposure. This rulemaking was initiated 10 years ago and was a collaborative effort by a major
manufacturer of beryllium alloy components and a union. During the proposed rulemaking
stage, stakeholders realized there were substantive changes that neither the manufacturer nor
the union requested and in addition, brought new industries within the scope of the rule like the
construction and maritime industries. Various industries appealed to the Office of Management
and Budget to take these provisions out of the rule, but to no avail, the rule was finalized with no
changes. This rule should be rescinded or amended to reflect the agreement reached by
industry and the union.
Occupational Exposure to Crystalline Silica. OSHA finalized the crystalline silica rule on
March 25, 2016, reducing by half the permissible exposure limits for crystalline silica and
mandating extensive and costly engineering controls. It also will require employers to provide
exposure monitoring, medical surveillance, work area restrictions, clean rooms and
recordkeeping. The proposal is based on outdated data and would impact 534,000 businesses
and 2.2 million workers. The costs ($5.5 billion annually) of this proposal could far exceed its
benefits. The regulation could force manufacturers to shut their doors. The Administration,
should therefore, rescind this rule.
Outdated Standard for Containerized and Flammable or Combustible Liquids. OSHA’s
existing standard for the containerized storage of flammable/combustible liquids is based on the
National Fire Protection Association (NFPA) standard issued in 1969. NFPA has updated this

21

 original standard 15 times; however, OSHA has failed to do the same. As such, OSHA’s
standard fails to realize any new advancements in research and technology. In addition there is
a confusing disconnect between OSHA and Department of Transportation (DOT) regulations for
businesses who manufacture, ship and store these products. Business may be compliant with
the DOT regulations for shipping the substances, but could be out of compliance with OSHA
when storing them. Due to the standard being so outdated, it also poses a risk to lives, and to
safety of property and the environment. OSHA needs to update this standard and work with the
DOT so that both sets of regulations are harmonized.
Standards Improvement Project Phase IV (SIP-IV). Last year OSHA published a request
for information (RFI) to “remove or revise outdated, duplicative, unnecessary and inconsistent
requirements in OSHA’s health and safety standards.” This proposal contained over 14 different
proposals, each of which should have its own separate rulemaking efforts. If OSHA continues to
pursue this initiative, the NAM recommends the agency consider issuing separate rulemaking
updates to the various standards rather than combining everything in one rulemaking.
Manufacturers have particular concern with proposed changes to the Lock-Out-Tag-Out (LOTO)
standard. OSHA’s proposed change would drastically change the meaning and scope of LOTO
standard and would impose significant new and unnecessary burdens on employers. Such a
significant change to this standard is not appropriate under the SIP process and consequently
should be removed from consideration at this time.
Department of Transportation (DOT)
Procedures for Considering Environmental Impacts. This order details steps for the
various Operating Administrations (OA) in the DOT to follow when National Environmental
Policy Act (NEPA) review is necessary. This is a major rulemaking that will have significant
impact on the environmental review process for transportation projects. Since DOT only
provided a 21-day review period, this rule did not receive proper vetting when proposed. In
addition, the proposed order undermines the use of categorical exclusions which allow for
expedited environmental reviews of certain projects, again, in complete defiance of
congressional intent. This last-minute order should be rescinded.
Build America Bureau: Railroad Rehabilitation and Improvement Financing (RRIF). The
Build America Bureau should expedite reviews of RRIF applications to spur infrastructure
investment. Examples of projects that should be reviewed include loan applications from the
Terminal Railroad Association of St. Louis and the Palmetto Railway.
Bureau of Transportation Statistics (BTS): Port Metrics. Section 6018 of the Fixing
America's Surface Transportation Act required the development of nationally consistent
measures of performance of the nation’s largest ports. In December 2016, the BTS released
their first annual report as part of the Port Performance Freight Statistics program.
Unfortunately, this report failed to include metrics for factors outside of the port’s control such as
chassis availability. Metrics that accurately describe port performance are critical to determining
the strengths and weakness that impact the efficient movement of freight through our nation’s
ports and they should be included in the next report.
Federal Aviation Administration (FAA): Aircraft System Certification Reform.
Improvements to the FAA’s certification process for aircraft design and modifications are critical
and should not be delayed. As aviation technology advances and manufacturing becomes more
innovative, red tape and bureaucratic inefficiencies pose a risk to our globally competitive and
enviable position in this sector. The FAA international certification process must not encumber,

22

 but strengthen American exports of aerospace products, which grew its annual trade surplus to
a record $82.5 billion in 2015. Internally, FAA should ensure that enforcement of certification
processes is uniformly conducted between different regions and divisions. Additionally, aircraft
certification standard SAE ARP 474 should be revisited.
FHWA: Future freight increases. In addition to addressing aging infrastructure, the
FHWA should consider strategies to alleviate congestion given increased future freight
estimates. This should include ensuring the necessary data is available to make informed
decisions on trailer configurations that would alleviate congestion, reduce environmental impact
and potentially decrease the traffic of heavy vehicles on local roads since the 2015 MAP-21
mandated study on truck size and weight. The study failed to make recommendations due to a
shortage of necessary data. Specifically, DOT should consider collection of data for cost-benefit
and safety analysis of 91,000 pound vehicles that have a sixth-axle and increasing twin trailers
lengths from 28 to 33 feet.
FHWA: Workplace Safety. MAP-21 directed the FHWA to draft regulations to require
states, at a minimum, to use positive protective measures to separate workers from motorized
traffic under the following circumstances: where conditions offer workers no means of escape
(e.g., tunnels and bridges); in stationary work zones lasting two weeks or more and when the
project design speed is 45 mph or greater; and, when the nature of the work requires workers to
be less than one lane-width from the edge of an open travel lane. This is an important safety
initiative required by DOT. However, DOT has yet to draft these regulations and should
complete them quickly.
Federal Motor Carrier Safety Administration (FMCSA): Electronic Logging Device. As
FMCSA considers modifications to rules finalized by the previous administration, the agency
should identify ways to minimize unnecessary burdens with excessive cost implications that
pertain to the final electronic logging device rule. For example, exemptions should be
considered for certain goods such as livestock.
FMCSA: Hours of Service. FMCSA should review hours of service provisions beyond the
34-hour restart, such as the mandatory 30-minute break within the first eight hours of driving
and expanding from to 75 miles to 150 miles the allowance for construction industry truck
drivers to reset their on-duty time clocks after a 24-hour rest period. Construction industry
drivers operate under unique circumstances including: seasonal limits on when work can be
done, materials that must be put in place within tight time limits or be lost forever, drivers
spending much of their time not actually driving but waiting to pick up or deliver materials and
drivers being under constant supervision as they return continuously to the job site or the source
of the materials. Finally, truck parking facilities should be expanded for drivers to safely meet
federal rest requirements.
Federal Railroad Administration (FRA): Electronically Controlled Pneumatic Brakes. The
Pipeline and Hazardous Materials Safety Administration (PHMSA) and FRA issued a final rule
mandating that trains hauling certain hazardous materials must install a braking system known
as electronically controlled pneumatic brakes, which the industry has tested for many years in
actual revenue service and largely rejected as unreliable. The U.S. Government Accountability
Office has criticized the lack of transparency in the agency’s decision-making, and the National
Academy of Sciences recently identified weaknesses and gaps in FRA's analysis and modeling
of the technology. This rule would impose a specific solution on the railroad industry that has
been shown to provide minimal safety gains at great cost while negatively impacting rail
operations. This rule should be rescinded.

23

 FRA: Train Crew Staffing. FRA issued a notice of proposed rulemaking that would
mandate a minimum of two persons must be in the locomotive cab for railroad operations,
despite the absence of any sound science that suggests a safety gain would result. Freight
railroads currently operate with two person crews in keeping with collectively bargained work
arrangements. This command-and-control approach makes more difficult a glide path to
technological innovation allowing railroads to gain necessary efficiencies to compete in the
marketplace, at a time when policy makers are encouraging and incentivizing such
advancements on the nation's roadways. FRA should withdraw its proposal and work with
industry stakeholders to craft a non-prescriptive rule that promotes technology and innovation.
FRA: Minimum Training Standards. Part 243 of the Minimum Training Standards
regulation is an overly burdensome regulation that will stifle hiring and innovation while
providing no measurable safety benefit. It goes far beyond Congressional intent of “minimum”
training standards. It should be delayed for three years while better analysis can be undergone,
specifically on the impact to small businesses.
FRA: Wheel Impact Load Detectors (WILDs) Safety Advisory 2015-01. On April 17,
2015, FRA published Safety Advisory 2015-01, recommending that railroads install Wheel
Impact Load Detectors (“WILDs”) and adjust existing industry standards for actions to be taken
when wayside WILDs detect an impact above a certain threshold, measured in kips, for an
affected train. The problem is that industry research and experience shows that kip levels by
themselves do not predict broken wheels. There could be a relationship between broken wheels
and the presence of high kip readings in combination with other factors, including car weight
and the combination of kip levels and rim thickness. FRA should withdraw this misguided safety
advisory, as mandatory removal of wheels purely due to “high” kip levels would result in no
significant safety benefit.
FRA: Positive Train Control (PTC) Hours of Service (HOS) Informal Industry Guidance.
On September 29, 2016, FRA issued to the Association of American Railroads (AAR) an
informal interpretation of the applicability of the HOS laws (49 U.S.C. 21101-21109) to work
related to PTC. The problem is that the informal interpretation differs greatly from FRA’s
longstanding interpretation regarding the applicability of the HOS limitations to signal
employees. The longstanding interpretation applied the HOS laws to work that could reasonably
be expected to affect the safe functioning of signal systems; FRA’s revised guidance would
vastly expand the applicability of the HOS, sweeping in previously uncovered activities, such as
communications-related work. This expansion does not address a safety concern, would be
extremely expensive to the rail industry, and is not practical. FRA should withdraw the
September 2016 informal interpretation.
FRA: Cab Signal System Requirements. 49 CFR 235 requires FRA approval before
discontinuing a signal system. 49 CFR 236.1021(c) provides that in lieu of applying for
permission to remove a signal system pursuant to Part 235, a railroad can seek FRA permission
to remove a signal system by submitting to FRA an amendment to a PTC plan. In 2011, AAR
requested that FRA automatically permit railroads to discontinue cab signal systems where PTC
is installed. FRA refused to give railroads that automatic right and implied it would disapprove
such a request if made on a case-by-case basis. A PTC system is completely redundant of cab
signal functionality and therefore renders the cab signal system unnecessary and obsolete.
Where PTC is installed, cab signal systems should not be required by rule.

24

 National Highway Traffic Safety Administration (NHTSA). Outdated Safety Standards.
Outdated safety standards fail to account for technological advancement in the products which
they oversee and result in testing and compliance costs that have no actual bearing on products
safety initiatives. For example, the Bead and Plunger Energy Testing Standards (Federal Motor
Vehicle Safety Standards Nos. 109 and 119) were initiated in the 1960s and based on tire
construction at that time. They are no longer relevant to tire products in 2017 and should be
withdrawn.
NHTSA: Federal Automated Vehicle Policy. The NAM appreciates the Federal
Automated Vehicle Policy (the Policy) developed by NHTSA through its outreach to industry,
and intent to establish a framework on how best to foster the growth and benefits of highly
autonomous vehicles (HAVs). Coordination between the public and private sector will be critical
to maintain America’s innovation edge in HAV technology. The widespread deployment and
adoption of HAVs has the potential to significantly reduce the more than 35,000 traffic fatalities
that occur every year on America’s roads. HAVs may also improve quality of life. Widespread
adoption and deployment of this new driving technology holds the promise to reduce congestion
and therefore potentially reduce emissions. In the manufacturing sector, HAVs may positively
impact our fleets, our workforce, and our productivity. These potential benefits may be delayed if
an unnecessary new regulatory structure is created to oversee HAV development and
deployment. The NAM appreciates that the Policy is voluntary, which, at this juncture, is crucial
to fostering innovation. In addition, it is critical that any policies implemented on HAVs are
coordinated across the entire government to eliminate confusing and conflicting guidance from
other agencies engaging on this and related issues.
Pipeline and Hazardous Materials Safety Administration (PHMSA). Transportation of
Lithium Batteries. Section 828 of the FAA Modernization and Reform Act of 2012 (Pub. Law
112-95) prohibits the Secretary of Transportation from issuing or enforcing any regulation or
other requirement regarding the transportation by aircraft of lithium ion and lithium metal
batteries that is more stringent than the requirements of internationally-adopted regulations.9
Maintaining harmonization as required by law would halt the nonstop rulemaking processes that
has plagued impacted industries over the last 15 years. The FAA and PHMSA should be
directed to encourage enforcement of international transport regulations. The lack of
enforcement and compliance with the lithium battery dangerous goods transport regulations at
some points of foreign origin poses significant safety issues for U.S. carriers operating out of
certain regions. Regulatory inefficiencies and confusion adversely impact safety and
international commerce. Harmonization with international standards will deliver regulatory
certainty, greater efficiencies in the logistics supply chain and improved safety of lithium battery
shipments.
PHMSA: Dangerous Goods Regulations. The DOT should continue to adopt United
Nations dangerous goods model regulations as PHMSA has done for many years. It is vital to
American businesses to continue this harmonized framework for transportation of dangerous
goods. The DOT should immediately approve the HM-215N Final Rule. Additionally, PHMSA
should aim to harmonize HM-251 with Transport Canada as rail movements of these hazardous
materials frequently cross into both nations.
PHMSA: Hazardous Materials Regulations for Packaged Pharmaceuticals. DOT
regulates the shipment of waste “packaged pharmaceuticals” for patient use in some cases
simply because US EPA rules call them “hazardous waste.” These shipments could be
9

International Civil Aviation Organization, Technical Instructions for the Safe Transport of Dangerous Goods by Air.

25

 simplified and burdens reduced by eliminating the application of 49 CFR requirements to
“hazardous waste” shipments if the material would not be classified hazardous material if it were
not “hazardous waste.” This would reduce the packaging burden for the small injectable vial
waste that manufacturers are required to ship in “combination packaging” that meets DOT
requirements or use the “lab pack” exception (i.e., surround the inner packages with adsorbent
material, etc.). Packaging used to originally ship these vials should provide adequate safety.
This could be achieved by removing the proper shipping name “hazardous waste liquid” and
“hazardous waste solid” from the 172.101 table (or providing an exception).
Environmental Protection Agency (EPA)
Air Permitting and Regulatory Reform. The EPA’s increasingly strict air standards have
been coupled with implementation policies and statutory interpretations that have unnecessarily
limited flexibility in permitting, making construction of new facilities exceedingly difficult. There
are several policies that the EPA should review that if improved would ensure new projects can
get built without having to sacrifice environmental protection. Some of the areas that need to be
reformed include, the New Source Review (NSR) permitting process, the treatment of emissions
during startup, shutdown and malfunction (SSM) events, better and more timely guidance to
states when a federal standard changes, the inappropriate aggregation of minor sources under
the Clean Air Act (CAA), the “once in, always in” treatment of facilities for Maximum Achievable
Control Technology (MACT) and New Source Performance Standards (NSPS) rules, and the
overly conservative and unrealistic assumptions used in modelling by the agency for permitting
decisions.
Best Available Technology (BAT) Economically Achievable. The Clean Water Act (CWA)
was designed to be implemented in a manner that protects human health and the environment
while avoiding costly treatments and other restrictions on industrial discharges that result in
little, if any, additional benefit to the quality of U.S. waters. BAT limitations should be required
only where there is a significant toxics problem. “Significant toxics problem” should be defined
where present limitations are not protecting receiving waters and where further abatement of
toxics would have a measurable, positive effect on receiving waters. Additional requirements for
non-conventional pollutants should not be applied unless required to meet water quality
standards.
Centralized Waste Treatment (CWT) Study. The EPA announced its intention to launch
a study of CWT facilities that accept oil and gas extraction wastewater to examine whether
current regulations provide adequate controls for treating wastewater. The EPA indicated the
CWT study will target offsite CWT facilities. At this time, the effort will not target onsite treatment
systems at exploration and production sites, nor will the study affect offsite facilities that do not
discharge to a “water of the United States” (e.g., recycling and reuse facilities). However, the
CWT study will look at all CWTs accepting oil and natural gas wastes, both from conventional
and unconventional operations. EPA should work constructively with the oil and gas industry
and state regulators to ensure that the study is done properly.
Comprehensive Environmental Response Compensation & Liability Act (CERCLA)
Implementation. The current regulatory requirements under CERCLA do not allow contaminated
properties to be resolved in an efficient manner. Despite completing the remediation activities,
the property owners are often unable to get clearance from the regulatory agencies in a timely
manner to sell or develop their properties. The EPA should interpret regulatory requirements
under the Superfund program in a manner that would speed the remediation of these sites while
reducing costs, while still ensuring the necessary environmental protections.

26

 Cost of Control Manual. In late 2016, the EPA proposed edits to its Cost of Control
manual for volatile organic compounds (VOCs). Despite acknowledging that cost estimates in
the manual for control equipment such as regenerative thermal oxidizers are based on quotes
from equipment vendors provided almost 30 years ago, EPA asserted that these 30-year-old
equipment costs can be scaled to current prices using cost index ratios. The NAM recommends
the EPA gather current equipment cost data from vendors or from other reliable sources and
update the outdated portions of the Cost of Control manual accordingly.
CERCLA 108(b) Proposed Rule for Hard Rock Mining Sector. The proposed rule, written
under CERCLA section 108(b) could require billions of dollars of additional financial assurances
for miners of things like gold, silver, iron and copper—critical materials for countless
manufactured products. This would represent billions of dollars that cannot be used for research
and development, investing in new processes and projects or used to spur economic growth
and create new jobs. Moreover, according to the EPA, this will be just the first of several policies
potentially tying up huge amounts of capital for chemical manufacturers, the petroleum industry
and electric utilities. EPA should first request an extension to the December 1, 2017, courtordered deadline for the final rule. Given the numerous overlapping requirements from existing
state and federal programs, EPA should give consideration to requiring no additional financial
assurances for the hard rock mining sector, or the other sectors currently under consideration
for CERCLA 108(b) requirements.
Control of Emissions of Air Pollution from Nonroad Diesel Engines and Fuel, Tier 4. In
June 2004, the EPA published its final rule on emission standards for nonroad diesel engines,
with the goal of reducing emissions from these sources by more than 90 percent. In June 2013,
the EPA issued a direct final rule to assist in the transitioning to Tier 4 standards, but withdrew
provisions of the rule due to adverse public comment. The updated final rule was published in
February 2014. The rule’s aggressive compliance timelines have been very difficult to meet, and
are causing manufacturers to divert much-needed research and development (R&D) resources
toward developing compliance technologies to meet the new Tier 4 standard. In industries such
as farm and construction equipment, where manufacturers must continually develop new
products for ever-changing customer needs, any decrease in R&D spending is potentially very
damaging. Complicating this situation is the requirement to recertify engines and vehicles each
and every year, even if there is no change to the engine nor change in the standards. This is
called Model Year certification. Almost every other major market in the world (EU, China, Brazil,
India) requires certification once to the standard, known as Type Approval. The EPA should
modify its rule and certification regime to match type approval regimes to allow scarce R&D
resources to be focused on product innovation. The EPA should seek input from manufacturers
on the Tier 4 program and implementation changes that will allow scarce R&D resources to be
focused on product innovation.
Carbon Neutrality of Biomass. The EPA has created substantial regulatory uncertainty
and confusion by its policy shift regarding the carbon neutrality of biomass. Forest biomass
energy should be considered carbon neutral as long as forest carbon stocks are stable or rising
on a broad geographical scale. The EPA also should recognize the forest products industry’s
use of forest products manufacturing residuals for energy as carbon neutral regardless of forest
carbon stocks because they would emit greenhouse gases anyway if not used for energy.
Clean Power Plan. The final rule would fundamentally shift how electricity is generated
and consumed in this country, effectively picking winners and losers in terms of both
technologies and fuels. The rule also represents an attempt to vastly expand the EPA’s

27

 traditional authority to regulate specific source categories by setting reduction requirements that
reach into the entire electricity supply-and-demand chain. The requirements will be substantial,
potentially costing billions of dollars per year to comply. Some studies estimate that compliance
with the rule would cost well over $300 billion and cause double-digit electricity price increases
for ratepayers in most states. Manufacturers are concerned about these potential costs and
reliability challenges as electric power fleets are overhauled in compliance with the regulations.
Manufacturers are also keenly aware that the EPA is using this regulation as a model for future
direct regulations on other manufacturing sectors—meaning manufacturers could potentially be
hit twice by GHG regulations. The EPA should begin the process of withdrawing this rule and
replacing it with a rule consistent with the statute.
Emission Standards for Industrial, Commercial and Institutional Boilers and Process
Heaters (Boiler MACT). The U.S. Court of Appeals for the District of Columbia has directed the
EPA to revise certain standards of the Boiler MACT rule to account for additional “best
performing” boilers while upholding the core framework and methodology of the rule. It is time
for the EPA to conclude this 20-year rulemaking and provide regulatory certainty to
manufacturers. Within the next six months, the EPA should propose revisions to the Boiler
MACT emission limits that are cost-effective and meet the court obligations.
Enforcement and Remediation Settlements. The NAM recommends revising the terms
and conditions in the EPA’s standard Administrative Orders which would provide for fair dispute
resolution opportunities, more flexible and efficient settlement and remediation options, and
improved, science based methodologies for determining environmental harm and associated
penalties.
Formaldehyde Emission Standards for Composite Wood Products. This rule, finalized in
December 2016, gave no credit or recognition to the value-added process of finished furniture.
The EPA has discretion to exempt laminated products based on published, available and
relevant information asserting such an exemption is justified. Industry stakeholders submitted
data that suggest an exemption is warranted and should be included in the final rule.
Integrated Risk Information System (IRIS). IRIS is a program under EPA’s Office of
Research and Development with the responsibility to generate chemical-specific risk
assessments. Often, manufacturers have criticized IRIS for using outdated scientific information
in their assessments that result in unreasonably stringent regulatory standards. The NAM
recommends the EPA reform the program to ensure that IRIS assessments must be
transparent, peer reviewed, subject to robust public comment and, when appropriate, subject to
enhanced scientific analysis and methods. IRIS must rely on the best available scientific
information regarding hazard and exposure, employ consistent and objective methods and
models, utilize transparent procedures for evaluating data quality and be uninfluenced by policy.
Public involvement should begin at the problem formulation stage.
Lead Repair, Renovation and Painting Rule. The EPA issued new requirements on firms
performing renovation, repair and painting projects in homes built before 1978. In doing so, the
EPA ignored many of industry’s concerns and rushed to finalize a rule before a reliable lead
testing apparatus was available, among other problems. NAM members are complying with this
rule but continue to struggle with it. Manufacturers strongly support lead paint protections and
recommend only that the EPA perform a retrospective review of the rule and, if justified, make
changes.

28

 National Ambient Air Quality Standards (NAAQS). Every five years, the EPA must
decide whether NAAQS are sufficiently protective of public health. As NAAQS (for particulate
matter, ozone, sulfur dioxide, carbon monoxide, lead and nitrogen oxides) have dropped closer
to background levels, it is becoming increasingly difficult to pass the test and get an approved
permit. Regulated industries are approaching a permitting gridlock. EPA should establish a new
permitting process and adjust its modeling criteria to be more reflective of actual impacts. The
challenges with the ever-tightening NAAQS is exacerbated by a lack of (or inappropriate)
emission measurement methods, poor estimates of emissions, use of unrealistic air dispersion
models and several rigid permitting policies.
NAAQS for Ozone. The 2015 ozone regulation could be one of the most expensive
regulations ever issued by the U.S. government. The previous standard of 75 parts per billion
(ppb), the most stringent standard ever, was never even fully implemented, while emissions are
as low as they have been in decades and air quality continues to improve. The EPA itself
admitted that implementation of the previous standard of 75 ppb, when combined with the
dozens of other regulations on the books that will reduce ozone precursor emissions from
stationary and mobile sources, will drive ozone reductions below 75 ppb (and close to 70 ppb,
the current standard set in 2015) by 2025. The massive costs of a stricter standard are simply
not necessary. EPA should ensure that states and manufacturers are not forced to
simultaneously comply with the 2008 ozone standards and 2015 ozone standards. EPA should
also change its policies to more appropriately account for background ozone and exceptional
events outside the control of manufacturers and state regulators.
National Emissions Standards for Hazardous Air Pollutants (NESHAP). National
standards establishing limits on hazardous air pollutants are important and supported by
manufacturers. However, some of the standards, residual risk and technology reviews (RTRs)
and other policies adopted in recent years have exceeded congressional authority and
implemented requirements that provide unnecessary regulation burdens. For example, the
NESHAP 6X regulations requires ongoing, indefinite and quarterly visual emissions monitoring
for welding operations and for abrasive blasting operations, even after months or years of “zero
visible emissions” have been recorded. For one manufacturer, this means having a dedicated
employee climb on the roof of eight different manufacturing plants at the required interval
(daily/weekly/monthly/quarterly) to do multiple 15-minute observations on each roof, and
perform visual emissions of the on-site sandblasting booth at the required interval, only to
document that zero visible emissions occurred at every observed location during every
monitoring event. Since 2011, this manufacturer has made over 700 visual observations
consuming over 1,000 man-hours to comply with this regulation, despite having not once
observed a “visible emission” at any of the plants. Additional concerns have been raised by
manufacturers with regards to the EPA’s Brick MACT, Reciprocating Internal Combustion
Engines (RICE) MACT and Plywood and Composite Wood Product MACT, amongst other
industry specific MACT regulations.
National Pollutant Discharge Elimination System (NPDES) Permits. Pipelines require a
NPDES permit to discharge hydrostatic test water to waters of the U.S. after using the water to
test even new pipelines. Some EPA regions have been slow to issue general NPDES permits
that could authorize the discharge of hydrostatic test water following submittal of a Notice of
Intent to be covered by the terms of the general NPDES permit. Yet, other EPA regions have
issued such general permits. As a result, companies must undertake the time and expense of
preparing an application for each location where a discharge is expected to occur and wait until
the EPA reviews and issues individual NPDES permits. If the location of the discharge moves
beyond a short distance, the company has to file an application to amend and wait for the

29

 amended NPDES permit to be issued. Issuance typically takes a few to several months. The
NAM recommends streamlining this process and seeking opportunities to harmonize regions.
New Source Performance Standards (NSPS) for GHG Emissions from New, Modified,
and Reconstructed Stationary Sources: Electric Utility Generating Units. In its final rule, the EPA
inappropriately concluded that carbon capture and sequestration (CCS) was “adequately
demonstrated” for utility-scale applications and its utilization is the basis for the mandated
standard for all new coal-fired power plants. As a matter of fact, CCS had not been adequately
demonstrated at the utility scale—making a standard that requires it for all new coal plants an
effective ban on those plants. A regulation on new plants requiring technologies that are not
commercially available would set a damaging precedent for future rules on existing plants, as
well as future regulations for other manufacturing sectors. NAM recommends that EPA
reconsider the NSPS for New, Modified and Reconstructed Stationary Sources and issue a new
standard of performance that is more realistic and has been adequately demonstrated.
Nonpoint Source Pollution. The relationships between and relative impacts of point and
nonpoint sources differ regionally, and sometimes locally, making it difficult to establish a
uniform program. A balanced approach to point and nonpoint problems that focuses on the
water quality of the watershed in question is needed. More extensive treatment should not be
required of any dischargers if such treatment will have no appreciable impact on the quality of
the receiving waters. The NAM recommends improving capabilities for assessing the nation's
water quality that aid in determining the relative impact of point and nonpoint sources on water
quality and the ability of waters to meet their designated uses. Conclusions derived from the
data can then be used to better allocate the nation's resources in achieving our water quality
goals. Effective management of nonpoint sources of water pollution should be achieved through
state and regionally developed programs. The EPA should provide technical assistance, but
should not attempt to assume the role of developing a uniform federal nonpoint program or of
directly regulating nonpoint sources.
Pretreatment Standards. The CWA requires the establishment of pretreatment standards
by the EPA for pollutants that interfere with, pass through or otherwise are incompatible with a
Publicly Owned Treatment Works (POTW), as well as for those pollutants that prevent sludge
use or disposal by such works. The NAM supports pretreatment of industrial inputs to POTWs
where it is demonstrably required to prevent discharges that would violate the POTW’s permit or
prevent the generation of sludge that would not meet regulatory standards. The NAM also
supports equitable user charges that are based on the true cost of treating a company's actual
wastewater. The NAM further supports pre-treatment programs that incorporate the flexibility
needed to respond to local conditions in cost effective ways that meet the goals of the CWA.
POTW authorities should be allowed to implement their own pretreatment programs, which
would include the establishment of local pretreatment standards as necessary to meet
established permit conditions. Authorized states should be the primary enforcers of POTW
permits. Only after a state and POTW have failed to initiate action within a reasonable time after
violation of the POTW's permit should the EPA become involved. Administratively continued
permits should remain under the authorization of the state and no attempt by the EPA should be
made to interfere with that authority.
Public Disclosure Requirements in Regulations, Permitting & Reporting to Protect
Confidential Business Information. The EPA and State agencies require companies to provide
extensive facility-internal confidential and trade secret information during permitting and
reporting, with their presumption being that much of this information is suitable for public
disclosure. This often leads to project delays to negotiate the boundaries of confidential

30

 information, with at least some intellectual property often being compromised, resulting in
damages to US manufacturing and competitiveness. The EPA should revise all regulations and
guidance to ensure federal, state and local agencies: (1) clearly define "emission data" so that it
does not require companies to disclose trade secrets and Confidential Business Information,
such as capacity and throughput (i.e., 40 CFR Chapter I, Subchapter A [2.301(a)(2)(i)(B]); (2)
broadly adopt the TSCA Reform Act approach of pre-designating all data requests into three
categories: "Always Confidential", "Never Confidential", "Confidential if Substantiated”; and (3)
never require electronic submission of, nor retain in their files or data storage, company
information that is pre-designated as "Always Confidential" and "Confidential if Substantiated"
(including trade secrets).
Regional Haze (RH). States have been working to implement the RH program under the
CAA based on EPA guidance to improve visibility, especially in National Parks. The statute
gives states the primary role for implementing air quality programs, including for regional haze.
Recently, environmental non-governmental organizations have sued the EPA for failing to act
on state RH proposals. As a result, the EPA is now reconsidering state judgments in Texas,
Oklahoma and Arkansas by issuing Federal Implementation Plans (FIPs) that could result in
billions of additional expenses for an imperceptible visibility improvement. EPA should leave
states to implement the Regional Haze program unless there are egregious oversights by
states. Recent EPA amendments to the program have made it even more cumbersome.
Research & Development Regulatory Barriers. Although some EPA regulations explicitly
exempt Research and Development (R&D) activities, many regulations do not, even though
they were designed and intended only for full-scale manufacturing. The costs and operational
burdens of requiring R&D activities to meet manufacturing regulatory requirements far outweigh
any de minimis environmental benefits (including instances of no environmental benefit). The
EPA should regulate R&D differently from manufacturing, given the unique nature of such
operations (i.e., R&D is experimental, short duration, focused on innovation and development
rather than manufacturing products for sale). They should adopt one definition for R&D and
exempt R&D from Clean Air Act Section 111, 112, and other manufacturing-focused EPA
regulations. Until such regulations are revised, the EPA should create model permit terms
regarding R&D, and issue guidance on R&D exemptions for a range of areas, including but not
limited to: permitting, air quality modeling, risk assessments and regulatory requirements.
Resource Conservation and Recovery Act (RCRA) Issues. The EPA should consider
reviewing several of its RCRA Subtitle C determinations to ensure that the classification is
appropriate for that category of waste. Where a waste is inappropriately classified as
hazardous, regulations unnecessarily discourage reuse, recycling and reclamation and create
other barriers for manufacturers. Additionally, the EPA should review existing and proposed
policies that may unnecessarily implement duplicative requirements for products and wastes
that are already being regulated by other agencies or statutes. There is currently a pending rule
for the pharmaceuticals industry that should be reviewed, for example.
Risk Management Plan Rule Amendments (RMP Rule). Issued in late 2016, the RMP
Rule imposes new disclosure requirements on more than 10,000 facilities, potentially exposing
sensitive business and security data. Additionally, the rule opens the door to frivolous lawsuits
and requirements that are intended to dictate manufacturers’ formulas and processes. This is an
unnecessary regulation and will cost manufacturers of all sizes and in many industries valuable
time and substantial resources to comply. The EPA should withdraw the rule.

31

 Sector-Specific Compliance Alternative Approaches. The EPA should streamline specific
NSPS and NESHAP regulations to eliminate redundant requirements, conflicts between rules,
and undue complexity, resulting in practical and understandable regulations without reduced
protection of the environment. For example, the agency should streamline and simplify eight
existing NESHAP and NSPS coating regulations (e.g., 40 CFR. Part 60, Subpart RR; 40 CFR.
Part 63, Subpart JJJJ).
Selenium Criteria. The EPA continues to develop more stringent water quality criteria for
selenium that will be the basis for state water quality standards and also federal effluent limit
guidelines. There are currently no proven treatment technologies for selenium and the ones that
are being proposed are not cost-effective. The NAM recommends EPA postpone more stringent
selenium water quality regulations until such time as cost-effective and proven technologies are
developed.
Spill Prevention, Control and Countermeasure Plans (SPCC). When lined surface
impoundments are used to hold treated produced water until the water is reused for a
company’s subsequent operations in the immediate area, there is confusion as to whether the
impoundments should be included in SPCC plans. EPA guidance (in form of preamble language
and guidance documents) suggests that treated produced water must be included in SPCC
plans and that the capacity of the produced water container is to be treated as oil for purposes
of the regulation unless there is “no oil.” The EPA has suggested that there is no amount of
treatment that would satisfy EPA that a produced water container is not oil. In 2009, the EPA
indicated that even 1 mg/L can be harmful. In 2008, the administration exempted produced
water containers from SPCC plans. The NAM recommends EPA establish an analytical method
and detection limit for such that if concentration of oil is non-detect, then there is “no oil” and the
impoundment would not be subject to the SPCC plan requirements.
Stormwater Management. Most manufacturers operate under multi-sector general
permits and must implement best management practices (BMPs) to meet stormwater
benchmark concentration levels. If a benchmark level is exceeded, facilities must review their
BMPs and determine if additional BMPs must be implemented of if other corrective measures
are needed. Many of the benchmark concentration levels have been set so low that it may not
be possible for all operations to meet the benchmarks. In fact, many are so low that nearly all
residential and commercial stormwater discharges would exceed them. As a result, many
manufacturers could face unnecessary enforcement issues, even though their stormwater
discharges are effectively controlled with BMPs. The NAM recommends flexibility in and for
enforcing permit levels based upon technology and process-specific limitations.
Testing and Diagnostics Requirements for Heavy-Duty On Road Engines. The EPA and
California require manufacturers of engines for heavy duty trucks to equip their engines with
complex and costly software and emissions sensor systems and undergo a variety of emissions
testing. There are several requirements that are becoming increasingly costly, while less
expensive and more efficient alternatives are available. The EPA should initiate a process to
streamline these requirements and eliminate those that are duplicative and unnecessary.
Toxic Substances Control Act (TSCA) Regulations. The regulation of toxic substances
should be administered in a manner that protects health and the environment while avoiding
unnecessary adverse economic impacts on business enterprises. It is of the utmost importance
that barriers to innovation and new product development be minimized. The LCSA made
comprehensive improvements to TSCA, the nation’s primary chemicals management law. One
of few recent examples of consensus legislation to reform an outdated regulation, the LCSA is

32

 having a stabilizing effect on the chemicals industry by creating a predictable and rational
regulatory framework where one did not previously exist. The alternative was to rely on 1975era technology while facing a 50-state patchwork of regulations. The reformed TSCA was
intended to allow manufacturers to continue to innovate and deliver specialty products. The
NAM recommends the implementing regulations under the LCSA receive priority funding.
Further, it is critical to ensure EPA implementation of the TSCA reform bill is consistent with
congressional intent and efficiently implemented to encourage continued innovation in chemical
manufacturing. In implementing the LCSA, the EPA should identify chemicals as “low priority”
when exposures are low as required by law. In addition, the EPA should consider the best
available science and the weight of the scientific evidence in conducting reviews for priority
chemicals.
Water Reuse. The NAM recommends the EPA aid and assist states in the development
of water conservation and water reuse programs that better protect indirect water storage
(groundwater and surface water storage) and for direct water reuse (wastewater treated final
effluent to potable water); provide a uniform and streamlined approach for states to implement
water reuse programs; and promote and provide technology incentives for manufacturers
(advanced water treatment approaches, membrane biological reactors, UV oxidation, smart
pressure membranes).
Worker Protection Standard (WPS). On November 2, 2015, EPA revised WPS
rules. The previous WPS regulations were sufficient and the new rules only add extra burdens
and costs to businesses. For example, the new WPS rules require that there be a 100-ft zone
around pesticide application equipment in which no one but the applicator can be present. This
is a de facto “buffer zone” which directly conflicts with existing pesticide labels in which there are
already these protective zones newly implemented. When fully implemented, the new WPS will
reduce a grower’s ability to effectively treat all of his/her crop production land. In some areas, a
significant portion of the available land will not be able to receive pest control practices and
these areas will be less productive. The NAM recommends the elimination of the duplicative and
confusing WPS and a default back to the previous WPS rules that were in effect prior to
November 2015.
Equal Employment Opportunity Commission (EEOC)
Employment Information Report (EEO-1) Form Change. The form change by the EEOC
requires all employers with 100 or more employees to submit employee compensation data
based on sex, race and ethnicity, categorized in 12 pay bands and 10 job categories. The
expanded recordkeeping requirements—the EEO-1 Report would expand from 180 data cells to
approximately 3,600—put a company at risk of publicly disclosing employees’ private
information. OMB should rescind its approval of the information collection request.
Federal Communications Commission (FCC)
Deployment of Next-Generation Wireless Broadband Networks. Wireless providers in
the U.S. will spend billions of dollars to deploy next generation broadband networks, including
for improved 4G service and for the advanced 5G wireless services that are in development.
This next generation wireless infrastructure investment will support new innovations in wireless
technology that will help maintain the U.S.’s global leadership in wireless technology and drive
future economic growth in our manufacturing sector. Unfortunately, numerous outdated local
laws and regulations are inhibiting the deployment of current next generation wireless
infrastructure projects, and this problem will quickly become acute as 5G deployment begins.

33

 Next generation communications networks, including 5G, will require wireless providers to
strategically place thousands of small antennas (called “small cells”) throughout communities on
existing infrastructure, such as light posts, utility poles, and buildings. However in many cases,
local laws, processes, and siting requirements unnecessarily slow down or prevent wireless
providers’ ability to deploy this infrastructure by making it difficult to get the necessary approvals
to build out. Similarly, wireless carriers need reasonable access to the public Rights of Way
(“ROW”) and utility and light poles in order to place small cell facilities on existing infrastructure.
To address these challenges, the federal government should intervene to ensure that
manufacturers are able to reap the benefits of next generation wireless broadband networks
without delay. Doing so will help stimulate the economy by encouraging private investment in
digital infrastructure.
Protecting the Privacy of Customers of Broadband and Other Telecommunications
Services. The FCC’s broadband privacy rules have the stated intent to protect the privacy of
customers of broadband and other telecommunications services at a time when all companies
are already subject to a robust privacy protection regime currently enforced by the Federal
Trade Commission. The creation of a new and duplicative regulatory regime will lead to an
undue burden on our nation’s telecommunications providers. It will take away critical resources
that would otherwise be applied to further investment in our nation’s broadband infrastructure on
which manufacturers depend to fuel their innovation pipeline. The FCC should rescind these
rules.
Protecting and Promoting the Open Internet. The internet has propelled considerable
advances in manufacturing and the Internet of Things (IoT), the interconnectivity of devices of
all kinds, has the potential to reshape the manufacturing industry. The wireless and wired
broadband infrastructure in the United States on which it runs is the envy of the world and has
been constantly improved, enhanced and made more efficient by waves of new investment.
This success story is possible because of limited regulation that is market-based and procompetition, but any new regulation of the open internet by the FCC will curtail investment in our
telecommunications infrastructure and therefore will hinder innovation, which drives
opportunities for manufacturers. The internet should remain open from unnecessary regulation
that will restrict innovation for manufacturers and the public.
Updating Technology and Services. The manufacturing sector has derived tremendous
benefits from our nation’s telecommunications innovations. From the cost-savings of Internet
Protocol-based communications to just-in-time manufacturing, high-speed broadband access
has allowed even the smallest of businesses to operate on a global scale. These manufacturers
rely on the robust and modern telecommunications network that has been fueled by private
investment. When telecommunications providers upgrade their networks, they are often
currently required to get permission from the FCC before they discontinue old wireline
technologies or services. This process slows providers’ ability to invest in newer networks and
hampers innovation as a result. The requirement to get FCC approval before removing older
technologies and upgrading to newer ones should be eliminated.
Federal Energy Regulatory Commission (FERC)
Fragmented Permitting. Currently, transmission planning is done at the state,
independent system operator (ISO) or utility level. Cost-allocation and transmission-project
approval authority ultimately rests with state public-utility commissions. States also have primary
siting authority. FERC has backstop siting authority, which has been challenged in the
courts. This often results in significant permitting delays for interstate transmission projects

34

 (which often take two to three times longer to permit than power plants) and sub-optimal
outcomes for the nation as a whole. The NAM recommends the Administration study FERC
permitting and causes for delay and make recommendations to Congress on legislative fixes to
streamline FERC permitting.
Lead Agency Role. Under the Natural Gas Act, FERC is the lead federal agency for
siting interstate natural gas pipelines. Other federal agencies (e.g., resource agencies like the
Army Corps of Engineers and Fish and Wildlife Service) have their own federal mandates, but
these mandates should not be allowed to determine the siting, only the practicable and
reasonable conditions that should apply. Direction to this effect from the White House would
significantly improve the multi-agency permitting process. Likewise, some states are acting
under delegated federal authority—notably, water quality certifications under the CWA—to bar
pipelines, stopping projects that have received or would receive approval from FERC. The effect
is that some states are abusing their delegated federal authority to usurp FERC’s primary role in
siting interstate natural gas pipelines. The NAM recommends actions to reinforce FERC’s lead
agency role.
National Labor Relations Board (NLRB)
Ambush Elections. On April 14, 2015, the NLRB’s “ambush elections” rule became
effective. The rule shortens the time in which a union election can take place to as little as 14
days and limits allowable evidence in pre-election hearings. Business owners would effectively
be stripped of legal rights ensuring a fair election, and those who lack resources, or in-house
legal expertise, will be left scrambling to hastily navigate and understand complex labor
processes. The rule also requires all employers to turn over their employees’ personal e-mail
addresses and home and personal cell phone numbers to union organizers. Employees have no
say in whether their personal information can be disclosed, and the recipient of the personal
information has no substantive legal responsibility to safeguard and protect workers’ sensitive
information. The rule also provides no restriction on how the private information can be used,
and employees have no legal recourse to hold accountable an outside group that compromises
this important private information. This rule should be rescinded.
Joint-Employer Standard, Browning-Ferris Industries of California, Inc. (362 NLRB No.
186). On August 27, 2015, the NLRB issued a decision in the Browning-Ferris Industries, Inc.
case, which redefines the 30-year-old joint-employer standard, calling into question what type of
relationship one employer has with another. Manufacturers who contract out for any product or
service with another company could find themselves in a joint-employer relationship triggering
responsibility for collective bargaining agreements and other parts of the National Labor
Relations Act. The previous standard is one that all industries understood and had been
operating with for more than 30 years. The decision should be reversed.
Specialty Healthcare & Rehabilitation Center of Mobile (357 NLRB 934, 940). In 2011,
the NLRB’s decision in the Specialty Healthcare case overturned 70 years of labor law
regarding the standard for an appropriate size of a collective-bargaining unit. Under the new
standard, as few as two people can now form a “micro-union” in one facility or location. The
Specialty Healthcare decision will unnecessarily divide employees and hinder a manufacturer’s
ability to manage operations effectively. One micro-union could shut down production and/or
operations at any given time. The decision in the case has been cited as a precedent in several
cases of union organizers seeking to limit the size of the collective-bargaining unit to increase
their likelihood of success. In order for businesses to continue to run efficiently and effectively,
the old standard should be reinstituted. This decision should be overturned.

35

 Pension Benefit Guaranty Corporation (PBGC)
Multiemployer Pension Plan System. Section 4224 of the Employee Retirement Income
Security Act of 1974 allows multiemployer pension plans to adopt alternative rules regarding the
collection of withdrawal liability (essentially a penalty when an employer in a multiemployer
pension plan exits the plan). To stem the tide of exiting employers, some multiemployer plans
have approached the PBGC with creative solutions to help the underfunded plans that would
allow employers to continue as plan contributors but without the risk of worsening liability, and
even the potential of reducing the liability, in consideration of remaining contributors for a
substantial period of time. PBGC is slow to act in response to these requests or simply denies
these alternative proposals. PBGC should be encouraged to grant expedited approvals for
multiemployer plan solutions.
Securities and Exchange Commission (SEC)
Burdens Imposed on a Public Company: From Sarbanes-Oxley to Dodd-Frank, it is more
costly and burdensome now than ever before being a public company. Small and medium sized
manufacturers have felt the burden through additional man hours needed to comply, as well as
added costs. One small manufacturers describes how the company’s fees escalated as a result
of both laws: in 2004, the company’s audit fees ranged from $400,000-500,000 and now they
are over $1 million. Others have felt a negative impact on their ability to access capital due to
the regulations, including “know your customer” requirements and capital requirements that
Dodd-Frank has issues on banks. The SEC should consider the costs and burdens that
disclosures and filing requirements have on public companies as well as the indirect impact that
bank capital requirements have on manufacturers’ ability to access capital. The SEC should
consider rescinding or amending existing rules that unnecessarily burden public companies,
particularly small and medium manufacturers, without a corresponding benefit.
CEO Pay Ratio. In August 2015, the SEC finalized rules to implement the pay ratio
disclosure provision required by Section 953(b) of the Dodd-Frank Act. Under the SEC rule,
public companies must regularly disclose the ratio of employees’ median pay to the
compensation of a company’s chief executive. The idea that a single statistic like the pay ratio,
could be an indicator of a company’s approach to compensation practices, business strategy, or
hundreds of other decisions that comprise a company’s business plan is false and overly
simplistic. In addition, complying with the pay ratio requirement will cost manufacturers
hundreds of millions of dollars – in one example alone, the company expects to spend $18
million to be able to track the data necessary for calculating the median employee -- without
providing any additional shareholder value. The NAM raised these concerns with the proposed
rule in 2013 and again in July 2015. Companies already are incurring additional and significant
costs in preparation for complying with the rule, which becomes effective in 2018. The SEC
currently is soliciting public comment and the NAM strongly supports reconsideration of this rule
by the SEC.
Clawback Proposed Rule. The SEC proposed rules in July 2015 to implement Section
954 of the Dodd-Frank Act requiring the recovery of erroneously awarded compensation, also
known as the clawback provision. Under the proposal, public companies must develop,
disclose, and implement policies to recover incentive-based compensation of current and former
executive officers that is found to be paid in error after an accounting restatement of a
company’s financials. There are several problems with the proposal, including the overly broad
application of the clawback requirement, which captures all executives regardless of fault and

36

 will result in situations where executives with only a limited role in the company’s financials may
have to return compensation as a result of a reporting error. This overly broad proposed rule
should not be finalized as proposed. If the SEC does move forward with implementing the
clawback requirement in the Dodd-Frank Act, the rule should be targeted toward the executives
that were at fault for the mistake.
Conflict Minerals. In August 2012, the SEC issued its final Conflict Minerals Rule in
accordance with Section 1502 of the Dodd-Frank Act. The rule places highly costly,
burdensome and impracticable requirements on issuers to report on the presence and sourcing
of certain minerals that may or may not come from the Democratic Republic of the Congo
(DRC) or an adjoining country (so-called “conflict minerals”). In developing the rule, the SEC
dismissed less costly regulatory alternatives and other options to reduce burdens on issuers,
and small and medium-sized businesses that may be suppliers to issuers. The U.S. and foreign
governments have also failed to put in place the necessary infrastructure to trace the origin of
minerals, making it nearly impossible for companies to know if their products contain conflict
minerals. In April 2014, the U.S. Court of Appeals for the District of Columbia Circuit upheld the
majority of the rule but ruled in favor of the NAM, which was joined by the Business Roundtable
and the U.S. Chamber of Commerce, on an important First Amendment objection to the
requirement that companies make misleading and stigmatizing public statements unfairly linking
their products to human rights abuses. A month later, the SEC issued a partial stay of the
portion of the rule that requires issuers to disclose that any of their products have not been
found to be “DRC conflict free," but denied the NAM’s request that the entire rule be stayed as it
continues to require burdensome and costly requirements on issuers and, effectively, their
suppliers. In August 2015, U.S. Court of Appeals for the District of Colombia Circuit once again
ruled in the NAM’s favor, but the SEC continues to require reporting, which is made additionally
burdensome by the ambiguity in the SEC’s guidelines. Continued application of the rule despite
the First Amendment failure of the underlying statute and the ambiguity in the SEC’s guidance
imposed substantial cost burdens on companies, particularly small- and medium-sized
companies that supply large publicly-traded companies and are asked by those issuers to
conduct due diligence required by the rule. These smaller companies do not have the resources
to comply with the SEC’s overly burdensome regulation. The NAM urges the SEC to suspend
the rule.
Pay Versus Performance Proposed Rule. In May 2015, the SEC proposed its “pay
versus performance” rule required by the Dodd-Frank Act to require companies to disclose the
relationship between executive pay and a company’s financial performance. The rule would add
an additional and duplicative layer of disclosure and burden to manufacturers without providing
any significant benefit to shareholders. The regulation is overly prescriptive, imposing a onesize-fits-all measurement of executive compensation and performance without providing the
flexibility needed for companies to present the information that would be most useful to their
shareholders and investors. The rule should not be finalized.
Regulation S-K Disclosure Concept Release. Manufacturers that are public companies
face an overwhelming amount of disclosures required by statute as well as the SEC. If the SEC
continues with its efforts to review the disclosure requirements and to consider ways to improve
the requirements for the benefit of investors and registrants, the NAM urges the SEC against
any additional disclosure requirements that do not fall under what is material or necessary for
investors to make investment decisions. Specifically, the NAM opposes any further mandatory
reporting on the following fronts: environmental and sustainability reporting; political spending;
cybersecurity; intellectual property assets; or additional risk factor disclosures. Such
requirements would only advance special interest efforts to force public companies to disclose

37

 information important to them, but not helpful for the reasonable investor to make investment
decisions.
Shareholder Proposal and Proxy Voting Process Reforms. An increasing number of
manufacturers are facing unreasonable proposals from activist shareholders. These groups of
investors are threatening major changes through the proxy voting process, in some cases even
pressuring manufacturing companies that have been around for hundreds of years to break
apart. The rise of these types of activist shareholder activities has a direct negative impact on
the future growth of these manufacturing companies. The NAM believes the Rule 14a-8
shareholder proposal process is due for targeted reforms. For example, the current ownership
threshold (shareholders holding at least $2,000 of company stock for one year) over which a
shareholder may submit a proposal for inclusion in the company’s proxy statement for action at
the annual shareholder meeting is too low and should be increased. Additionally, under SEC
rules, a public company can exclude a shareholder proposal from its proxy materials, meaning a
vote would not be held on the proposal, if the proposal does not meet certain requirements. In
recent years, the SEC guidance has limited companies’ abilities to exclude proposals from the
proxy. The SEC should instead strengthen these exceptions so that public companies can focus
resources on growing the business, creating long term value for shareholders.
Department of the Treasury, Internal Revenue Service (IRS)
Section 2704 Minority Interests Regulations (Estate, Gift, and Generation-skipping
Transfer Taxes: Restrictions on Liquidation of an Interest). In August 2016, the IRS released
proposed regulations that would reduce the valuation discounts for minority shares in family
owned businesses and would result in making it more difficult and costly for families to keep
businesses closely held into future generations. These regulations are still in proposed form and
should be withdrawn by the Administration. As the proposal was overly broad and discriminated
against family-owned business they should not be pursued in the future.
Section 385 Regulations (Treatment of Certain Interests in Corporations as Stock or
Indebtedness). In October 2016, Treasury and the IRS issued the final Section 385 regulations,
which impose a significant and unnecessary compliance burden on many manufacturers. The
rules also will make internal cash management for businesses more expensive, particularly for
non-U.S. headquartered companies. The regulations should be withdrawn.
Tax treatment of Independent Contractors. The Treasury and the IRS should restore an
October 3, 1985, Private Letter Ruling (8607001) that treats route ownership as an investment
of facilities with respect to the drivers who are independent contractors. Since that Private Letter
Ruling was withdrawn in 1988 and again in 1991, food distributors and other manufacturers
have faced questions about whether their agent-drivers, acting as independent contractors,
should be classified as statutory employees. This has caused litigation at the state level, and
has increased adverse IRS determinations for more than two decades, costing impacted
companies hundreds of millions of dollars.
Reduce Health Insurance Compliance Burdens. While some reporting may be
necessary, the ongoing submissions to the IRS associated with the Affordable Care Act (ACA)
requirements are burdensome and costly. Reporting requirements 1094-C and 1095-C have
been raised as particularly burdensome and costly to manufacturers. Human Resources
departments have been diverting precious resources and time to ACA compliance measures
that have no tax consequences.

38

 Multiple Agencies
USDA & DOI: Timber Harvests & Sales on Federal Lands. Reducing barriers to
harvesting timber on federal lands, if done properly, will support the U.S. forest products
industry, improve forest health, and generate adequate funds to run the programs and make a
profit. The NAM recommends reasonable reforms to environmental protection programs to
streamline permitting processes and legal challenges for forest management programs, to
ensure certainty and reliable time frames for decision making. The agencies should utilize
private sector resources to expedite timber sales at every opportunity including maintenance
and expansion of Good Neighbor Authority and Stewardship Contracting Programs. There also
should be a prioritized implementation of streamlined permitting under the Healthy Forests
Restoration Act to reduce a landscape's susceptibility to insect infestations or disease and
support for additional authority for categorical exclusions in three key areas: critical response
actions, salvage operations, and for meeting forest plan goals for early successional forests.
The U.S. Forest Service should fill vacancies with trained foresters with actual experience
managing forests in a sustainable manner and a balanced view between timber production and
appropriate preservation. Finally, there should be a separating of fire suppression dollars from
pro-active forest management programs and the elimination of “borrowing” funds from
management programs to pay for underfunded fire suppression activities.
Departments of Commerce, State and Defense: Export Controls. U.S. exports are
subject to the Export Administration Regulations (EAR), administered by the Commerce
Department, and the International Traffic in Arms Regulations (ITAR), administered by the State
Department. Over the past few years, U.S. export control regulations underwent the first major
revision since they were implemented during the Cold War. These initial steps to modernize the
export control system prioritized the coordination of interagency enforcement measures and
updated definitions for specific items and technologies on the United States Munitions List
(USML) and the Commerce Control List (CCL), but the previous Administration failed to make
important systemic changes that would remove unnecessary, duplicative and time-consuming
licensing procedures that continue to limit manufacturers in the United States from being
competitive and reliable suppliers to trusted allies and partners, undermining the U.S.
manufacturing base. The NAM encourages the Administration to modernize fully the U.S. export
control system so that it is able to respond quickly and effectively to evolving security risks and,
consistent with that goal, to promote our nation’s continued technological leadership and
expand U.S. exports to allies and trusted partners. Under the status quo, even European allies
and other close partners avoid buying U.S. technologies because of the ITAR restrictions that
apply to foreign customers. Specifically, the Departments of State, Commerce and Defense
should collaborate to simplify encryption controls and establish an effective program license that
dramatically reduces the number of licenses for manufacturers that support U.S. government
defense and security programs with allies overseas. The NAM urges the creation of an intracompany transfer license exception that allows trusted companies to exchange technology
freely within their own organizations, protected by internal compliance processes and
intellectual property controls. The NAM also urges the Administration to negotiate new
multilateral controls on intrusion and surveillance items, consolidate the licensing jurisdiction for
technologies subject to the EAR, and revise the ITAR to promote collaboration between
commercial companies and government agencies.
DOE & FERC: Streamlining Export Approvals. Currently, export of liquefied natural gas
(LNG) to Free Trade Agreement (FTA) countries is fast-tracked, but exports to non-FTA
countries takes a long time in part because DOE will not act on an application until after FERC
has completed its review. The nation’s vast reserves of natural gas warrant a broad export

39

 policy, especially with key allies around the globe where energy security is essential—and the
majority of these allies are non-FTA countries. The Administration should rebalance the
priorities to allow streamlined LNG export permitting.
DOE and the Nuclear Regulatory Commission: Nuclear Licensing. Nuclear energy is an
emissions-free source of affordable, reliable baseload power. Several new technologies, such
as small modular reactors (SMRs), show tremendous promise. Existing plants are increasingly
at risk of becoming uncompetitive due to a variety of market and regulatory factors, and new
technologies must navigate a robust regulatory process that makes it extremely difficult to
commercialize new products quickly. The NAM recommends agencies take steps to expedite
the licensing process for new technologies and examine fee structures and other regulatory
burdens on existing plants that could be eased to keep these plants competitive.
DOI FWS and NOAA Fisheries: Critical Habitat. In February 2016, FWS and NOAA
Fisheries issued a final rule on critical habitat designation procedures that does not require the
presence of physical or biological habitat features. The rule also lowers the threshold for an
action to “appreciably diminish” critical habitat and includes alterations that preclude or delay the
development of features that do not currently exist. The rule also incorporates a recovery
standard which will result in higher mitigation ratios. The designation of critical habitats under
the ESA has the potential to affect our access to the two principle inputs to our manufacturing
process: wood fiber and water. Revisions to the ESA habitat designation process should be
made that reflect a science-based, common-sense approach to protecting endangered species
that also balances the need for continued economic growth. Revisions to the regulation should
be made to allow for a reasonable approach to the designation of critical habitats that would
replace the final rule on Critical Habitat Designation Procedures.
EPA and the Army Corps of Engineers: Definition of “Waters of the United States.” On
May 27, 2015, the EPA and Army Corps of Engineers finalized a rule to greatly extend federal
jurisdiction of CWA programs well beyond traditional navigable waters to ephemeral tributaries,
flood plains, adjacent features and vaguely defined “other waters.” The rule gives federal
agencies direct authority over land-use decisions that Congress had intentionally reserved to
the states. Its vague definitions subjects countless ordinary commercial, industrial and even
recreational and residential activities to new layers of federal requirements under the CWA. For
manufacturers, the uncertainty of whether a pond, ditch or other low-lying or wet area near their
property is now subject to federal CWA permitting requirements, which can introduce new
upfront costs, project delays and threats of litigation. Revisions to the definition to limit the
federal jurisdiction to its proper CWA limits should be made.
EPA and DOI: Hydraulic Fracturing Regulations. On April 13, 2012, President Obama
issued an Executive Order declaring that “states are the primary regulators of onshore oil and
gas activities,” and seeking to consolidate and coordinate the ten federal agencies currently
considering regulation or oversight of hydraulic fracturing (fracking). Despite this decree, federal
agencies are actively seeking to assert their regulatory authority over the hydraulic fracturing
process on both public and private lands. In March 2015, the BLM issued its final rule that
impacts fracking operations on federal and tribal lands, providing for inspections and requiring
the public disclosure of fluids used. In April 2012, the EPA issued a final regulation under the
CAA on hydraulic fracturing emissions and the capture of natural gas. In February 2014, the
EPA issued guidance asserting authority under the SDWA over the use of diesel fuels in
fracking. Onshore natural gas exploration is already highly regulated at the federal level through
the SDWA, the CWA, the CAA, NEPA, the Emergency Planning and Community Right-to-Know
Act and the Comprehensive Environmental Response, Compensation and Liability Act. States

40

 have long been the primary regulators of hydraulic fracturing, and the NAM believes states
should remain in that role and is concerned that federal regulations could harm any potential
gains resulting from increased exploration of shale oil and gas. Where there is a perceived
deficiency in any one state’s regulatory mechanisms, the federal government should work with
the state to fill in the gaps rather than imposing one-size-fits-all federal rules on states where no
deficiencies exist.
EPA, DOI and DOE: SDWA Study. Several federal agencies and numerous state
agencies are evaluating the potential for linkages between produced water disposal and
seismicity. This issue continues to draw attention and may lead to additional regulatory
initiatives under the SDWA. Most action, currently, is taking place at the state regulatory level,
and the NAM recommends the EPA work more closely with states that exercise primacy over
related SDWA programs. The NAM is concerned that some of these studies could conflict and
may lack objectivity. Closer coordination among the federal agencies involved in these studies
and the state agencies investigating the issue will yield a more reliable result.
EPA and DOT: Fuel Economy and GHG Emissions Standards for Light-Duty Vehicles.
The EPA, National Highway Traffic Safety Administration (NHTSA) and the California Air
Resources Board (CARB) manage a regulatory program of fuel economy and GHG regulations
on light-duty vehicle manufacturers, using authority under the CAA, Corporate Average Fuel
Economy (CAFE) and California’s Zero Emissions Vehicle (ZEV) statute. The current regulatory
structure stretches to 2025. While these programs were intended to form “One National
Program,” in practice manufacturers are forced to comply with a patchwork of requirements.
Recently, the EPA made a decision to rush a mid-term evaluation of the requirements for model
year 2022-2025 vehicles, cutting short the technical review and opportunity for stakeholder
input. In the immediate term, it is important the mid-term evaluation process be reopened and
set back on its original timeline.
Federal Acquisition Regulatory (FAR) Council Rule/DOL Guidance: Fair Pay and Safe
Workplaces (Contractor Blacklisting, Implementation of Executive Order 13673). The executive
order and subsequent rule and guidance, which were published on August 25, 2016, could bar
federal contractors from new work if there has been even an allegation of a labor law violation in
the past three years. It would apply to contracts valued at $500,000 or more, and the final rule
expanded the proposed reporting requirements to include subcontractors, which would impact
small business. In October 2016, a nationwide injunction affected the majority of the rule. The
ruling strongly affirms the NAM’s arguments related to the First Amendment; due process;
constitutional, arbitrary and capricious concerns; and other concerns raised in the complaint.
The congressional resolution of disapproval should be signed and the DOL guidance should be
withdrawn.
FDA and USDA: Nutrition facts panel and disclosure of ingredients derived from
genetically modified organisms (GMO). In May 2016, FDA issued new food labeling
requirements for the nutrition facts panel. The agency exceeded its statutory authority when it
mandated that “added sugars” be included on the list of nutrients declared on nutrition labels.
The FDA provided insufficient rationale for how such a requirement would “assist consumers in
maintaining healthy dietary practices,” as the agency purports. Changes to nutrition labeling
requirements must be based on sound science and the process for adding new requirements
must comply with established government guidance. Changes to packaging cost food and
beverage manufacturers hundreds of thousands, if not millions, of dollars. Shortly after the new
FDA requirements are effective in July 2018, USDA’s GMO labeling requirements will follow. If
FDA and USDA do not cooperate and align requirement and timelines, the result will be

41

 massive inefficiencies, logistical and capacity challenges and an increase in more than $1 billion
in costs from having to update packaging twice in a narrow timeframe. Compliance with the new
FDA regulations should be coordinated with USDA regulations so that the deadline for
complying with both is the same, and manufacturers only have to change their packaging once.
FDA and FSIS: Alignment and cooperation concerning food inspections. The FDA and
FSIS should be directed to end “dual inspections” of facilities that make foods under the
jurisdiction of both agencies, designating FSIS to be the responsible agency when dual
jurisdiction exists. The agencies previously engaged in efforts to address this issue but never
completed the work. In addition, ending the practice of dual inspections would end duplicative
inspections and better allocate taxpayer resources to advance food safety, and make it easier
for companies to operate.
Interagency Working Group: Social Cost of Carbon and Methane. The previous
Administration’s Social Cost of Carbon and Methane estimates raised numerous concerns
during several rulemakings. The process for developing the social cost of carbon estimates was
not transparent and failed to comply with OMB guidelines and information quality obligations.
Many of the inputs to the models were not subject to peer review, and the interagency working
group that developed the new estimates failed to disclose and quantify key uncertainties to
inform decision makers and the public. Despite wide public concern over the new estimates,
agencies are using them to justify the costs of many of the costliest federal regulations. The
guidance should be withdrawn and not used until a more robust, transparent and inclusive
process has taken place.

42