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l , OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon technician which fan-belt to take, because it saves a "double trip" from the maintenance shop to the area being maintained if the fan belt needs replacing. This type of "working smarter" and operational efficiency is typical in industry, however, a discrete audit trail would have to be created that breaks out tasks that only deal with Indoor Air Quality from the rest of maintenance work in order to prove that we operate our HVAC systems in a responsible manner to regulators and litigators. RJR will develop a separate "audit system" rather than submit` E,:isting documentation for review for two reasons. First, the current format is not easy for regulators to use. Second, we do not wish to provide information about non- HVAC maintenance operations to regulators: As our economy barrels from the industrial age to the information age, where employees are responsible for their own work and performance, the real burden of enforcement falls on the individual worker. In the case of RJR, all the empowered maintenance and operations workers know that the paper work required by this regulation is meaningless and that it is just another piece of the regulatory burden that is crushing our national economy and driving down their real wages. They understand that employers, who are not currently providing good indoor air quality, will probably not change their ways and that employers like RJR who do the right thing will continue to struggle in the world market-place under the crushing US burden of regulation. G17421REG•AFFlIAQI0SHA1PHG3.DOC/ BGL 10 of 10 8/30/95 4:35 PM

OSHA - POST HEARING COMMENTS APPENDIX A SPEAKER: Hoy Bohanon INTRODUCTION During RJR's testimony, there were numerous questions about Business Paper #6, "Bstimated Cost of Compliance with OSHA Proposed Regulations ". The following appendix include the text of Business Paper #6, followed by a detailed explanation of assumptions. G{7/7JiEGAFFW0105HA1PHGAPP.DGCI BGL I of 13 8/30/95 3:37 PM

OSHA Proposed Rule on Indoor Air Quality fL J. RPynolds Toba<xo Company CpMPUANOE TASKS .T~A.SK COMMENTS . ~- w_lReg&txu5~D4p•16o9e by au employees (LRFCQRDKEEPtNG Investigate new computer programs 1. Matntain mahntenanoe reoords. a. Retain reoord of inediation measures , 2. Maintain written ptan and reoords 8. Mairttaln writben feooafs of oomplaints and resolution 4. Retain reoords for at least8 years . 5. Reconis to be available to empioyees to examine ~ RJR FAGLRIES PUWNING 917991BARRY106HA-1JClS 814104 4:10 PM

, OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon ( Among other things, the OSHA proposed rule falls to consider several important issues: • The proposed regulation simply does not recognize the differences between company-owned and leased facilities. • OSHA's cost analysis fails to consider the number of leased facilities this proposed regulation will impact nationwide. • When considering multi-tenant office buildings with the vast number of distinct leases between landlords and tenants, administrative costs of the proposed rule will be greater than OSHA's estimate. • Other than litigation, there Is no prescribed means for settling disputes between landlords and tenants regarding administration and responsibility for indoor air quality programs under current leases. • There is no way for tenants, in non-industrial, multi-tenant buildings, to address indoor air quality problems caused by other tenants. The lack of consideration of the regulation on leased facilities clearly shows that regulators have not considered the full implications of their recommendations. This proposed OSHA regulation is a classic example of why regulation adds cost without value to American business, thereby compromising national competitiveness in the world-wide marketplace. 3. OSHA's analysis of productivity Improvements that would result from IAQ improvements Is seriously flawed. Evidence Indicates that productivity would decrease, rather than Increase, If the proposed rule takes effect. I • Studies have shown no connection between Improved air quality and Increased productivity. Dr. Ralph Goldman showed there is no correlation between improved comfort and productivity improvement in his paper "Productivity in the United States: A question of Capacity or Motivation?" published in the ASHRAE Transactions 1994. In his paper he stated, "In the 1970's (ASHRAE) supported a series of studies on the effects of climate control on productivity In a variety of settings. The results showed little relationship between improved comfort and increased productivity." G17421REG-AFFUA0IGSHAV'HC3.DOCf BGL 3 of 10 8/30/95 4:35 PM

OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon These post-hearing comments are submitted by Mr. Hoy Bohanon to (1) address questions that were raised during his testimony from January 17 through 19, 1995, and (2) to address a number of other issues that are raised by the proposed rule. During R.J. Reynolds efforts to answer these questions, a number of important points that OSHA should carefully consider became clear: 1. The proposed rule is unnecessary because good indoor air quality can be provided through market forces, rather than through regulation. 2. OSHA fails to consider the impact of the proposed rule on leased facilities. Among other things, the proposed rule puts employers In the untenable position of having responsibility for IAQ without having authority to control it. 3. OSHA's analysis of productivity improvements that would result from IAQ improvements is seriously flawed. Evidence indicates that productivity would decrease, rather than Increase, if the proposed rule takes effect. 4. OSHA and the Private Sector assess productivity in markedly different ways. As a result, the proposed rule raises serious questions about whether the "benefits" are actually worth the "cost." 5. IAQ regulation will increase "lost time" and "lost work-days" due to employee complaints for which the cause will not always be clear and observable to, or correctable by, the employer. 6. It will be extremely difficult to fairly enforce the proposed rule. IAQ complaints will undoubtedly generate costs to employers for paperwork-related citations, where IAQ problems might not actually exist. In addition, these post-hearing comments answer some specific questions about R.J. Reynolds testimony and provide a detailed look at RJR's operations that elucidates a number of points that have relevance -- in terms of operational problems and economic impact --- to other companies and industries. Specifically, these comments discuss: A. RJR's continuing commitment to good indoor air quality. B. The detailed impact of the proposed rule on companies, such as R.J. Reynolds Tobacco Company, that have employees working in a variety of facility types and diverse work settings. C. The potential difficulties and costs involved in providing an adequate audit trail for compliance with the proposed rule for companies with computerized maintenance systems. G:1742UtEG-AFF1IA0105HAWHC.3.DOG BGL I of 10 8/30N5 4:35 PM

OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon dioxide levels return to normal. The employee is still dis-satisfied because their symptoms have not diminished. It could be that psycho-social factors are influencing the employee. The employee is screaming that the air is preventing them from doing their job. What should the employer do? The second illustration is exactly the same as the first, except all tests show that the indoor air is in compliance with all specifications. The individual who instigated the investigations is not satisfied. Soon other employees begin complaining of the same symptoms. Keeping in mind that Dr. Gots stated that 70 percent of the IAQ cases he investigated involved a "non-problem" or non- identifiable problem, what should an employer to do? 6. It will be extremely difficult to fairly enforce the proposed rule. IAQ complaints will undoubtedly generate costs to employers for paperwork-reiated citations, where IAQ problems might not actually exist. On-the-job injuries are readily recognizable by hourly workers, corporate staff, medical and safety staff, regulators and so on. Poor indoor air quality effects each employee differently. Where indoor air quality differs from other OSHA regulations is that, each employee has a different perception of the quality of the air, and perceptions are influenced by factors like job stress, job satisfaction, ergonomics and work area lighting.. (list provided by Dr. Ronald E. Gots, M.D. Ph.D. and Edward Sowinski, Ph.D. in the article "Putting lndoorAir Quality In Its Place" published In Occupational Hazards, October 1992. A cure for poor Indoor air quality on the job is to send the employee home. IAQ regulation will no doubt increase productive time lost from work, . One person sifting next to another, with same air quality will have different reactions to the air. The Building Owners and Managers Association (BOMA) number one tenant complaint is that the air is too hot or cold. With IAQ regulation, one person will go home because of a headache. How will that affect LTA ? . How many excused absences does OSHA project under the proposed rule? How will work absences due to poor IAQ be tabulated? . What will be the impact of lost work time, due to IAQ, on productivity? Has this been factored into the appropriate cost/ benefit analysis? Dr. Ronald Gots, in the aforementioned article says in 70 percent of IAQ cases he has investigated, the indoor air concerns involved either a "non-problem" or "nonidentifiabie" problem.. Gots went on to state that people dissatisfied with their jobs or suffering from stress, perceive that there is something wrong with G:V421REG-AFFUAQIGSHAPHC3.DOG BGL 7 of 10 8/30/95 4:35 PM

OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon the air. So there you have it. We have a regulation requiring massive record keeping for indoor air, where major symptoms are lethargy or headaches, and even though a national expert finds either a non-problem or a non-identifiable problem, we as facility managers will be required to "fix the problem", send employees home with full pay, or no doubt face fines. INFORMATION AFsdUT R.J. REYNOLDS' OPERATIONS A. RJR's continuing commitment to good Indoor air quality. Over the years, RJR has shown a continued commitment to providing a good work environment for employees, starting with the Reynolds Building, which was named "Building of the Year" by the National Association of Architects in 1929. In fact, RJR has received seven architectural and engineering awards for various renovations of the Reynolds Building. RJR's commitment to providing a good work environment extends to indoor air quality. RJR has always complied with, or exceeded, ASHRAE standards that applied during design or construction of our facilities. Our qualified personnel have always provided adequate ventilation, maintained our operating systems and have been respectful of occupant needs during renovations. RJR engineers have been leaders in the field of indoor air quality, publishing many articles in professional publications, as well as speaking to various professional groups across the nation. One article "Operations and Maintenance Procedures and Resultant Air Quality for One 630,000-ft2 Office Building" by H.R. Bohanon, P.E. and S. C. Curl, P.E., and published in the conference proceedings of IAQ 93, organized by American Society of Heating, Refrigerating and Air-Conditioning Engineers is one example of a publication by company employees. This article was submitted as part of RJR's Comments addressing the proposed rules. During RJR's testimony, an assumption of parameters of the test of the 630,000 ft2 office building, was not fully understood by OSHA's staff. RJR would like to clarify that the slab to slab height of the building in question is 14'-0". B. The detailed impact of the proposed rule on companies, such as R.J. Reynolds Tobacco Company, that have employees working in a variety of facility types and diverse work settings. R. J. Reynolds Tobacco Company (RJR) owns and operates manufacturing, processing, storage, distribution and office buildings in North Carolina. There are also regional and local sales offices throughout the country, which are wholly leased. The 372 RJR-owned facilities plus the 171 Field Sales facilities represent a total of 543 facilities operated in the United States. All Field Sales G1742YtEG-AFFUAG1oSHA+PHG9.DGG BGL 8 of 10 8/30/95 4:35 PM

OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon GENERAL ISSUES 1. The proposed rule is unnecessary because good indoor air quality can be provided through market forces, rather than through regulation. Good Indoor Air Quality is good facility management. Companies who do not provide good IAQ, risk losing workers or tenants, as IAQ is factored into an individual's assessment of a total compensation. Companies in leased space have the free market to aid them in obtaining good indoor air'y`uaiity. HVAC service levels typically have been spelled out in leases. If a tenant does not like the product, he or she can relocate to a new, leased facility. In the recent buyers market, that featured free rent of a year or more, along with developers buying out previous leases, a tenant could relocate virtually at will. Now that IAQ is an issue, lease provisions can fairly address the issue to the market place. The free market works. Burdensome indoor air quality regulations are not needed. a recent IFMA survey showed 75% of facility manager listed indoor air quality as a major concern. RJR and many facility managers are already providing good indoor air quality. Good indoor air quality can be provided through market forces rather than through regulation. 2. OSHA faiis to consider the Impact of the proposed rule on leased facilities. Among other things, the proposed rule puts employers In the untenable position of having responsibility for IAQ without having authority to control it. In RJR's Business Paper # 6 - "Estimated Cost of Compliance with OSHA Proposed Regulations" the initial and on-going financial impact of the proposed rule on RJR's operations was shown. Cost impact of compliance, implementation, smoking lounge construction , employee Information, record keeping and other procedures was noted. In Business Paper # 6, which is attached to this document in Appendix A, the analysis considers only costs associated with the 372 company-owned facilities in North Carolina. Programs to address the proposed OSHA Indoor Air Quality requirements at Field Sales facilities are excluded, because each of the 171 Field Sales managers would have to negotiate program administrative accountability with his or her specific landlord. Existing leases do not mention indoor air quality. Property owners typically feel indoor air quality should be the responsibility of the tenant. As, a tenant, RJR feels that indoor air quality should be the responsibility of the landlord, because tenants have no access to, or control of, building ventilation equipment. A lease is a contract. between a building owner and a tenant. Usable space, cleaning, ventilation, security and other services are provided by the landlord in exchange for rent. No where, in RJR contracts with landlords, is a level of indoor air quality stipulated. G174YIREG•AFnIA010SHAWHF8A0G 8GL 2 of 10 8/30/95 4:35 PM

OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon • Regulation of indoor Air Quality will result in decreased productivity At RJR, good IAQ is assured by providing ventilation as prescribed in the ASHRAE 62-1989 standard and executed through sound maintenance procedures. Regulation will not improve the air quality or productivity at RJR. In fact, for RJR and all companies that already provide good IAQ to their employees, regulation will have a negative impact on productivity due to the increased, non-value-added paperwork required for compliance. This cost for RJR is shown in Business Paper #6. A recent survey conducted by the International Facility Managers Association, "Environmental Issues in the Workplace" (5,997 surveys mailed, 1,794 responses) showed that air quality was a high priority for respondents (75%). 72% used various methods to monitor or reduce indoor air poilution. For the majority of facility managers, who provide good indoor air quality, regulation will only increase paper work and will have a negative impact on productivity. They will spend less time providing good indoor air quality, and more time filling out the paperwork to prove to the government that they are indeed providing good indoor air quality. There is no way to prove that good indoor air quality will decrease building operating cost or increase corporate output. It might improve an individual's perceived job performance, but there is no way to translate that perception to the bottom iine. . Productivity In knowledge (professionals, scientists , managers) and service work (i.e. the office environment effected by the proposed OSHA regulations) Is different from productivity in the industriai environment where workers move and make things. In the industrial environment, for example, a worker shoveling sand can move more sand, while working in an air conditioned building, than in the hot sun. Additionally, productivity can be increased by substituting capital for labor. A back hoe, for example, can dig a ditch faster and cheaper than a.man with a shovel. Additive productivity math similar to the above industrial example does not work in knowledge and service work. Elimination of thousands of headaches per year, due to better air quality, might enable some clerical workers doing repetitive work to file more folders or type more letters each year. However, if corporations don't lay off a number of workers corresponding to this increased ability to file and type, then there is no true gain in productivity because there is no corresponding decrease in cost. For the majority of workers in the service and knowledge sector, real gains in productivity come from working smarter - that is rethinking and reworking how work is accomplished so &V74zFtDc•nrFUnrnosw,wHC3.oocr BcL 4 of 10 s/3o/95 4:35 PM

f OSHA - POST HEARING COMMENTS SPEAKER: Hoy Bohanon that significantly fewer people can accomplish the primary objective of a task or process. Gains in US corporate productivity today are coming through "Re-engineering" a popular description for the process of re-inventing how work is accomplished, which usually results in the need for far fewer people (and results in the continual waves of high- profile and continuing corporate down-sizings). 4. OSHA and the Private Sector assess productivity In markedly different ways. As a result, the proposed rule raises serious questions about whether the "benefits" are actually worth the "cost." OSHA and the Private Sector have vastly different perspectives on productivity, leading to significantly different assumptions about the impact of good indoor air quality and program administration on worker productivity. Different assumptions about productivity will lead to different assumptions about cost savings, which might then lead to different conclusions about the cost versus benefit of the proposed regulation. Measuring overall productivity - output versus input - for manufacturing operations is fairly straight-forward because the American accounting system is set up to support industrial management. All costs like labor, materials, depreciation and overhead can be allocated to each widget to calculate unit cost, one measure of product productivity. While overall system productivity is relatively easy to calculate for industrial operations, the same cannot be said for service jobs. Does the addition of a corporate staff person, focusing on long- rage planning, increase or decrease productivity? When measured in the short term for individual product line productivity, the answer will be different than when viewed in the long-term, using corporate earnings growth as a measure. Experts from many fields will agree on one thing - its relatively easy to measure productivity gains, however, its difficult to accurately attribute those gains to any particular action. The Hawthorne experiments (1924-1932) at a Chicago General Electric plant showed rising rates of production due to unwanted influences of the experimental operations team. Since that time, American business has been skeptical of productivity improvement claims that are attributed to any particular factor. Workplace leadership, small group influences, social reinforcement, cooperation, individual attitude and motivation all play a factor in individual and group productivity. Attributing productivity gains of office workers due to good indoor air quality is like attributing increased sales of soap to the shade of red on the wrapper. Many factors go into a purchase decision, and its hard to measure the influence the of each, but more straight-forward to measure overall results - i.e. increased sales. G1742UtEG-AFPUA010SHAtPHG3.DOG BGL 5 of 10 8/30/95 4:35 PM