The National Association of Home Builders (NAHB) fears that fuzzy language in a proposed rule involving formaldehyde could leave builders and remodelers open to severe penalties that were intended for firms that create rather than merely install the products.

The NAHB sought to avoid those traps by asking in a May 23 letter to the Environmental Protection Agency (EPA) for better definitions regarding what constitutes a “major modification” made to a cabinet or other composite wood and laminated veneer products for which the EPA is trying to limit formaldehyde emissions. That “major modification” phrase appears just once and without further explanation in the EPA’s proposed rule governing formaldehyde emissions in composite wood products (CWP), but it triggers a key difference in how a CWP user is treated.

The proposed rule regards builders and remodelers as a “retailer” if, say, they buy kitchen cabinets with composite wood products from a supplier and install them in a home. But if builders or remodelers make a “major modification” to the cabinet, they get reclassified as a “fabricator” and are required to keep and report at least three years’ worth of detailed records on CWP purchases. Fabricators also are subject to third-party certification and testing requirements. Failure abide by those rules can result in penalties of up to $37,500 per day.

“NAHB members regularly work with thousands of composite wood products that may be covered by the proposed rule,” the association’s comment letter said. “The uncertainty of the proposed regulation’s applicability to home builders and remodelers who regularly install CWP products, combined with the duplicative recordkeeping requirements could impose significant and unnecessary regulatory burdens upon NAHB members.”

All this came about because the federal government enacted a law in 2010 setting limits on how much formaldehyde can be emitted from CWP. Exposure to formaldehyde can irritate the skin, eyes, nose, and throat, as well as lead to breathing problems and even some forms of cancer. The colorless gas is used in resins to make some composite wood products, so it has been a particular problem for the housing industry; in 2012, a $42.6 million class action settlement was reached between companies that made FEMA trailers for Hurricane Katrina victims and residents who complained those trailers exposed them to formaldehyde fumes.

As often happens, regulators in California enacted formaldehyde emission standards before the federal government did, and cabinet makers already abide by California law. The EPA’s proposed rule generally tracks California’s, but in some cases it can be tougher. For instance, California requires only two years of recordkeeping, while the EPA proposal calls for three. And California defines an additional group of people—“installer”—who aren’t in the EPA plan.

As a result, NAHB and cabinet manufacturers—groups not known for loving California regs—have found themselves in the unusual position of urging Washington to align itself with the Golden State.

But above all, NAHB said it wants “a bright line rule or clear distinctions to help regulated entities, including home builders and remodelers, understand which activities would subject them to the regulations. … EPA should revise the proposed definitions of fabricator and retailer to specifically exempt home builders, remodelers, and other contractors from EPA’s proposed recordkeeping and reporting requirements. This is because these entities are only the end users of the CWP product and are at the end of the supply chain.”

“This proposed regulation could potentially mean that every remodeler who customizes even one cabinet has to keep records for years, not unlike the EPA lead paint rule," said Robert Criner, deputy chairman of NAHB Remodelers.