ASA and HARDI Oppose Proposed BAAQMD Rule 9-6 Amendments

Associations warn amendments would expose confidential business information and unfairly shift regulatory burdens onto California distributors.

The American Supply Association (ASA) and Heating, Air-conditioning & Refrigeration Distributors International (HARDI) have submitted joint comments opposing proposed amendments to the Bay Area Air Quality Management District's (BAAQMD) Rule 9-6, which regulates building appliances, including water heaters.

In a letter to BAAQMD, both associations expressed concerns that the proposal would place significant new compliance responsibilities on distributors while exposing confidential business information through broad audit provisions. ASA and HARDI urged the district to reconsider the amendments and instead address underlying issues with the rule's zero-NOx water heater requirements.

Concerns over unlimited audit authority and confidential business information

A primary concern centers on proposed recordkeeping and audit requirements that would require water heater distributors to maintain transaction records and provide them to BAAQMD upon request. According to ASA and HARDI, the proposed language contains no meaningful limits on the frequency, scope, or justification for such audits.

The associations argue that the proposal effectively grants regulators unrestricted access to distributor records without requiring cause or clearly defining which transactions may be subject to review. They contend that such authority exceeds what is necessary to achieve compliance objectives and raises legitimate concerns about government access to private business information

The comment letter also highlights concerns that distributors would be required to disclose highly sensitive business data, including customer information and pricing details. ASA and HARDI noted that these records represent some of a distributor's most valuable assets and could create competitive risks if improperly disclosed or handled.

The associations emphasized that the proposed amendments contain no clear safeguards governing how audited information would be stored, shared, or used by the district. Without explicit protections, distributors could face potential exposure of customer relationships, pricing strategies, and other proprietary business information.

ASA and HARDI further warned that the collection of company-specific pricing data could create unnecessary antitrust concerns, particularly in the absence of detailed data-use restrictions and confidentiality protections.

Impact on distributor-contractor relationships

Beyond data privacy concerns, the associations argue that the proposal would fundamentally alter the relationship between distributors and their contractor customers. The amendments would require distributors to verify exemption certificates for certain noncompliant NOx water heater sales, effectively placing distributors in an enforcement role on behalf of BAAQMD.

ASA and HARDI contend that distributors are not regulators and should not be responsible for policing customer purchases. They warn that contractors denied access to equipment because of exemption issues may blame distributors rather than the regulatory process, potentially damaging long-standing business relationships and disrupting normal sales operations.

The associations also argue that BAAQMD's proposed delays and exemptions for zero-NOx water heaters demonstrate that the market is not yet prepared for a full transition to those technologies. According to the letter, if the market were fully ready, regulators would not need to create exemptions or implementation delays.

Instead, ASA and HARDI contend that the amendments simply shift the burdens created by the rule from consumers and contractors to distributors. The groups maintain that the better solution is to revisit the underlying zero-NOx requirements rather than introduce additional compliance mechanisms for distributors.  

Continued advocacy

ASA and HARDI have reiterated their opposition to the proposed amendments and urged BAAQMD to reject provisions that would grant broad access to confidential business information, create new compliance responsibilities for distributors, and risk disruption throughout the supply chain. At the same time, both associations also offered to continue discussions with district officials regarding their concerns and potential alternatives.

As regulatory activity surrounding building appliance standards continues to evolve, ASA remains committed to protecting distributor interests, preserving confidential business information, and ensuring that compliance obligations are appropriately assigned throughout the supply chain.

By Steve Rossi