42 USC 7675 - American innovation and manufacturing

View all text of Subchapter VII [§ 7675 - § 7675]

§ 7675. American innovation and manufacturing

(a) Short title

(b) DefinitionsIn this section:

(1) Administrator

(2) Allowance

(3) ConsumptionThe term “consumption”, with respect to a regulated substance, means a quantity equal to the difference between—

(A) a quantity equal to the sum of—

(i) the quantity of that regulated substance produced in the United States; and

(ii) the quantity of the regulated substance imported into the United States; and

(B) the quantity of the regulated substance exported from the United States.

(4) Consumption baseline

(5) Exchange value

(6) Import

(7) Produce

(A) In general

(B) ExclusionsThe term “produce” does not include—

(i) the manufacture of a regulated substance that is used and entirely consumed (except for trace quantities) in the manufacture of another chemical; or

(ii) the reclamation, reuse, or recycling of a regulated substance.

(8) Production baseline

(9) Reclaim; reclamationThe terms “reclaim” and “reclamation” mean—

(A) the reprocessing of a recovered regulated substance to at least the purity described in standard 700–2016 of the Air-Conditioning, Heating, and Refrigeration Institute (or an appropriate successor standard adopted by the Administrator); and

(B) the verification of the purity of that regulated substance using, at a minimum, the analytical methodology described in the standard referred to in subparagraph (A).

(10) RecoverThe term “recover” means the process by which a regulated substance is—

(A) removed, in any condition, from equipment; and

(B) stored in an external container, with or without testing or processing the regulated substance.

(11) Regulated substanceThe term “regulated substance” means—

(A) a substance listed in the table contained in subsection (c)(1); and

(B) a substance included as a regulated substance by the Administrator under subsection (c)(3).

(1) List of regulated substances

(2) ReviewThe Administrator may—

(A) review the exchange values listed in the table contained in paragraph (1) on a periodic basis; and

(B) subject to notice and opportunity for public comment, adjust the exchange values solely on the basis of—

(i) the best available science; and

(ii) other information consistent with widely used or commonly accepted existing exchange values.

(3) Other regulated substances

(A) In generalSubject to notice and opportunity for public comment, the Administrator may designate a substance not included in the table contained in paragraph (1) as a regulated substance if—

(i) the substance—(I) is a chemical substance that is a saturated hydrofluorocarbon; and(II) has an exchange value, as determined by the Administrator in accordance with the basis described in paragraph (2)(B), of greater than 53; and

(ii) the designation of the substance as a regulated substance would be consistent with the purposes of this section.

(B) Savings provision

(i) In general

(ii) Authority of Administrator

(d) Monitoring and reporting requirements

(1) Production, import, and export level reports

(A) In generalOn a periodic basis, to be determined by the Administrator, but not less frequently than annually, each person who, within the applicable reporting period, produces, imports, exports, destroys, transforms, uses as a process agent, or reclaims a regulated substance shall submit to the Administrator a report that describes, as applicable, the quantity of the regulated substance that the person—

(i) produced, imported, and exported;

(ii) reclaimed;

(iii) destroyed by a technology approved by the Administrator;

(iv) used and entirely consumed (except for trace quantities) in the manufacture of another chemical; or

(v) used as a process agent.

(B) Requirements

(i) Signed and attested

(ii) No further reports requiredA report under subparagraph (A) shall not be required from a person if the person—(I) permanently ceases production, importation, exportation, destruction, transformation, use as a process agent, or reclamation of all regulated substances; and(II) notifies the Administrator in writing that the requirement under subclause (I) has been met.

(iii) Baseline period

(2) Coordination

(e) Phase-down of production and consumption of regulated substances

(1) Baselines

(A) In generalSubject to subparagraph (D), the Administrator shall establish for the phase-down of regulated substances—

(i) a production baseline for the production of all regulated substances in the United States, as described in subparagraph (B); and

(ii) a consumption baseline for the consumption of all regulated substances in the United States, as described in subparagraph (C).

(B) Production baseline describedThe production baseline referred to in subparagraph (A)(i) is the quantity equal to the sum of—

(i) the average annual quantity of all regulated substances produced in the United States during the period—(I) beginning on January 1, 2011; and(II) ending on December 31, 2013; and

(ii) the quantity equal to the sum of—(I) 15 percent of the production level of hydrochlorofluorocarbons in calendar year 1989; and(II) 0.42 percent of the production level of chlorofluorocarbons in calendar year 1989.

(C) Consumption baseline describedThe consumption baseline referred to in subparagraph (A)(ii) is the quantity equal to the sum of—

(i) the average annual quantity of all regulated substances consumed in the United States during the period—(I) beginning on January 1, 2011; and(II) ending on December 31, 2013; and

(ii) the quantity equal to the sum of—(I) 15 percent of the consumption level of hydrochlorofluorocarbons in calendar year 1989; and(II) 0.42 percent of the consumption level of chlorofluorocarbons in calendar year 1989.

(D) Exchange values

(i) In general

(ii) ReviewThe Administrator may—(I) review the exchange values listed in the tables contained in clause (i) on a periodic basis; and(II) subject to notice and opportunity for public comment, adjust the exchange values solely on the basis of—(aa) the best available science; and(bb) other information consistent with widely used or commonly accepted existing exchange values.

(2) Production and consumption phase-down

(A) In generalDuring the period beginning on January 1 of each year listed in the table contained in subparagraph (C) and ending on December 31 of the year before the next year listed on that table, except as otherwise permitted under this section, no person shall—

(i) produce a quantity of a regulated substance without a corresponding quantity of production allowances, except as provided in paragraph (5);

(ii) consume a quantity of a regulated substance without a corresponding quantity of consumption allowances; or

(iii) hold, use, or transfer any production allowance or consumption allowance allocated under this section except in accordance with regulations promulgated by the Administrator pursuant to subsection (g).

(B) ComplianceFor each year listed on the table contained in subparagraph (C), the Administrator shall ensure that the annual quantity of all regulated substances produced or consumed in the United States does not exceed the product obtained by multiplying—

(i) the production baseline or consumption baseline, as applicable; and

(ii) the applicable percentage listed on the table contained in subparagraph (C).

(D) Allowances

(i) Quantity

(ii) Nature of allowances(I) In generalAn allowance allocated under this section—(aa) does not constitute a property right; and(bb) is a limited authorization for the production or consumption of a regulated substance under this section.(II) Savings provision

(3) Regulations regarding production and consumption of regulated substancesNot later than 270 days after December 27, 2020, which shall include a period of notice and opportunity for public comment, the Administrator shall issue a final rule—

(A) phasing down the production of regulated substances in the United States through an allowance allocation and trading program in accordance with this section; and

(B) phasing down the consumption of regulated substances in the United States through an allowance allocation and trading program in accordance with the schedule under paragraph (2)(C) (subject to the same exceptions and other requirements as are applicable to the phase-down of production of regulated substances under this section).

(4) Exceptions; essential uses

(A) Feedstocks and process agentsExcept for the reporting requirements described in subsection (d)(1), this section does not apply to—

(i) a regulated substance that is used and entirely consumed (except for trace quantities) in the manufacture of another chemical; or

(ii) a regulated substance that is used and not entirely consumed in the manufacture of another chemical, if the remaining amounts of the regulated substance are subsequently destroyed.

(B) Essential uses

(i) In generalBeginning on December 27, 2020, and subject to paragraphs (2) and (3) and clauses (ii) and (iii), the Administrator may, by rule, after considering technical achievability, commercial demands, affordability for residential and small business consumers, safety, and other relevant factors, including overall economic costs and environmental impacts compared to historical trends, allocate a quantity of allowances for a period of not more than 5 years for the production and consumption of a regulated substance exclusively for the use of the regulated substance in an application, if—(I) no safe or technically achievable substitute will be available during the applicable period for that application; and(II) the supply of the regulated substance that manufacturers or users of the regulated substance for that application are capable of securing from chemical manufacturers, as authorized under paragraph (2)(A), including any quantities of a regulated substance available from production or import, is insufficient to accommodate the application.

(ii) PetitionIf the Administrator receives a petition requesting the designation of an application as an essential use under clause (i), the Administrator shall—(I) not later than 180 days after the date on which the Administrator receives the petition—(aa) make the complete petition available to the public; and(bb) when making the petition available to the public under item (aa), propose and seek public comment on—(AA) a determination of whether to designate the application as an essential use; and(BB) if the Administrator proposes to designate the application as an essential use, making the requisite allocation of allowances; and(II) not later than 270 days after the date on which the Administrator receives the petition, take final action on the petition.

(iii) Limitation

(iv) Mandatory allocations(I) In generalNotwithstanding clause (i) and subject to clause (iii) and paragraphs (2) and (3), for the 5-year period beginning on December 27, 2020, the Administrator shall allocate the full quantity of allowances necessary, based on projected, current, and historical trends, for the production or consumption of a regulated substance for the exclusive use of the regulated substance in an application solely for—(aa) a propellant in metered-dose inhalers;(bb) defense sprays;(cc) structural composite preformed polyurethane foam for marine use and trailer use;(dd) the etching of semiconductor material or wafers and the cleaning of chemical vapor deposition chambers within the semiconductor manufacturing sector;(ee) mission-critical military end uses, such as armored vehicle engine and shipboard fire suppression systems and systems used in deployable and expeditionary applications; and(ff) onboard aerospace fire suppression.(II) Requirement

The allocation of allowances under subclause (I) shall be determined through a rulemaking.

(v) Review(I) In general(II) Extension

(5) Domestic manufacturingNotwithstanding paragraph (2)(A)(i), the Administrator may, by rule, authorize a person to produce a regulated substance in excess of the number of production allowances held by that person, subject to the conditions that—

(A) the authorization is—

(i) for a renewable period of not more than 5 years; and

(ii) subject to notice and opportunity for public comment; and

(B) the production—

(i) is at a facility located in the United States;

(ii) is solely for export to, and use in, a foreign country that is not subject to the prohibition in subsection (j)(1); and

(iii) would not violate paragraph (2)(B).

(f) Accelerated schedule

(1) In general

(2) RequirementsAny regulations promulgated under this subsection—

(A) shall—

(i) apply uniformly to the allocation of production and consumption allowances for regulated substances, in accordance with subsection (e)(3);

(ii) ensure that there will be sufficient quantities of regulated substances, including substances available from reclaiming, prior production, or prior import, to meet the needs for—(I) applications that receive an allocation under clause (i) of subsection (e)(4)(B); and(II) all applications that receive a mandatory allocation under items (aa) through (ff) of clause (iv)(I) of that subsection; and

(iii) foster continued reclamation of and transition from regulated substances; and

(B) shall not set the level of production allowances or consumption allowances below the percentage of the consumption baseline that is actually consumed during the calendar year prior to the year during which the Administrator makes a final determination with respect to the applicable proposal described in paragraph (3)(C)(iii)(I).

(3) Petition

(A) In general

(B) RequirementA petition submitted under subparagraph (A) shall—

(i) be made at such time, in such manner, and containing such information as the Administrator shall require; and

(ii) include a showing by the petitioner that there are data to support the petition.

(i) In generalIf the Administrator receives a petition under subparagraph (A), the Administrator shall—(I) not later than 180 days after the date on which the Administrator receives the petition—(aa) make the complete petition available to the public; and(bb) when making the petition available to the public under item (aa), propose and seek public comment on the proposal of the Administrator to grant or deny the petition; and(II) not later than 270 days after the date on which the Administrator receives the petition, take final action on the petition.

(ii) Factors for determinationIn making a determination to grant or deny a petition submitted under subparagraph (A), the Administrator shall, to the extent practicable, factor in—(I) the best available data;(II) the availability of substitutes for uses of the regulated substance that is the subject of the petition, taking into account technological achievability, commercial demands, affordability for residential and small business consumers, safety, consumer costs, building codes, appliance efficiency standards, contractor training costs, and other relevant factors, including the quantities of regulated substances available from reclaiming, prior production, or prior import;(III) overall economic costs and environmental impacts, as compared to historical trends; and(IV) the remaining phase-down period for regulated substances under the final rule issued under subsection (e)(3), if applicable.

(iii) RegulationsAfter receiving public comment with respect to the proposal under clause (i)(I)(bb), if the Administrator makes a final determination to grant a petition under subparagraph (A), the final regulations with respect to the petition shall—(I) be promulgated by not later than 1 year after the date on which the Administrator makes the proposal to grant the petition under that clause; and(II) meet the requirements of paragraph (2).

(D) Publication

(E) Insufficient information

(4) Date of effectiveness

(5) Review

(A) In general

(B) Public availability

(6) Savings provision

(g) Exchange authority

(1) TransfersNot later than 270 days after December 27, 2020, which shall include a period of notice and opportunity for public comment, the Administrator shall promulgate a final regulation that governs the transfer of allowances for the production of regulated substances under subsection (e)(3)(A) that uses—

(A) the applicable exchange values described in the table contained in subsection (c)(1); or

(B) the exchange value described in the rule designating the substance as a regulated substance under subsection (c)(3).

(2) RequirementsThe final rule promulgated pursuant to paragraph (1) shall—

(A) ensure that the transfers under this subsection will result in greater total reductions in the production of regulated substances in each year than would occur during the year in the absence of the transfers;

(B) permit 2 or more persons to transfer production allowances if the transferor of the allowances will be subject, under the final rule, to an enforceable and quantifiable reduction in annual production that—

(i) exceeds the reduction otherwise applicable to the transferor under this section;

(ii) exceeds the quantity of production represented by the production allowances transferred to the transferee; and

(iii) would not have occurred in the absence of the transaction; and

(C) provide for the trading of consumption allowances in the same manner as is applicable under this subsection to the trading of production allowances.

(h) Management of regulated substances

(1) In generalFor purposes of maximizing reclaiming and minimizing the release of a regulated substance from equipment and ensuring the safety of technicians and consumers, the Administrator shall promulgate regulations to control, where appropriate, any practice, process, or activity regarding the servicing, repair, disposal, or installation of equipment (including requiring, where appropriate, that any such servicing, repair, disposal, or installation be performed by a trained technician meeting minimum standards, as determined by the Administrator) that involves—

(A) a regulated substance;

(B) a substitute for a regulated substance;

(D) the reclaiming of a substitute for a regulated substance used as a refrigerant.

(2) Reclaiming

(A) In general

(B) Recovery

(3) CoordinationIn promulgating regulations to carry out this subsection, the Administrator may coordinate those regulations with any other regulations promulgated by the Administrator that involve—

(A) the same or a similar practice, process, or activity regarding the servicing, repair, disposal, or installation of equipment; or

(B) reclaiming.

(4) Inapplicability

(5) Small business grants

(A) Definition of small business concern

(B) Establishment

(D) Authorization of appropriations

(i) Technology transitions

(1) Authority

(2) Negotiated rulemaking

(A) Consideration required

(B) Negotiated rulemakings

(3) Petitions

(A) In general

(B) Response

(i) Explanation

(ii) Final rule

(iii) Publication of petitions

(4) Factors for determinationIn carrying out a rulemaking using the procedure described in paragraph (2) or making a determination to grant or deny a petition submitted under paragraph (3), the Administrator shall, to the extent practicable, factor in—

(A) the best available data;

(B) the availability of substitutes for use of the regulated substance that is the subject of the rulemaking or petition, as applicable, in a sector or subsector, taking into account technological achievability, commercial demands, affordability for residential and small business consumers, safety, consumer costs, building codes, appliance efficiency standards, contractor training costs, and other relevant factors, including the quantities of regulated substances available from reclaiming, prior production, or prior import;

(D) the remaining phase-down period for regulated substances under the final rule issued under subsection (e)(3), if applicable.

(5) EvaluationIn carrying out this subsection, the Administrator shall—

(A) evaluate substitutes for regulated substances in a sector or subsector, taking into account technological achievability, commercial demands, safety, overall economic costs and environmental impacts, and other relevant factors; and

(B) make the evaluation under subparagraph (A) available to the public, including the factors associated with the safety of those substitutes.

(6) Effective date of rules

(7) Applicability

(A) Definition of retrofitIn this paragraph, the term “retrofit” means to upgrade existing equipment where the regulated substance is changed, which—

(i) includes the conversion of equipment to achieve system compatibility; and

(ii) may include changes in lubricants, gaskets, filters, driers, valves, o-rings, or equipment components for that purpose.

(B) Applicability of rulesA rule promulgated under this subsection shall not apply to—

(i) an essential use under clause (i) or (iv) of subsection (e)(4)(B), including any use for which the production or consumption of the regulated substance is extended under clause (v)(II) of that subsection; or

(ii) except for a retrofit application, equipment in existence in a sector or subsector before December 27, 2020.

(j) International cooperation

(1) In general

(2) TransfersPursuant to paragraph (1), a person in the United States may engage in a trade or transfer of a production allowance—

(A) to a person in a foreign country if, at the time of the transfer, the Administrator revises the number of allowances for production under subsection (e)(2), as applicable, for the United States such that the aggregate national production of the regulated substance to be traded under the revised production limits is equal to the least of—

(i) the maximum production level permitted for the applicable regulated substance in the year of the transfer under this section, less the production allowances transferred;

(ii) the maximum production level permitted for the applicable regulated substances in the transfer year under applicable law, less the production allowances transferred; and

(iii) the average of the actual national production level of the applicable regulated substances for the 3-year period ending on the date of the transfer, less the production allowances transferred; or

(B) from a person in a foreign country if, at the time of the trade or transfer, the Administrator finds that the foreign country has revised the domestic production limits of the regulated substance in the same manner as provided with respect to transfers by a person in United 2

2 So in original. Probably should be preceded by “the”.

States under this subsection.

(3) Effect of transfers on production limitsThe Administrator may—

(A) reduce the production limits established under subsection (e)(2)(B) as required as a prerequisite to a transfer described in paragraph (2)(A); or

(B) increase the production limits established under subsection (e)(2)(B) to reflect production allowances acquired under a trade or transfer described in paragraph (2)(B).

(4) RegulationsThe Administrator shall—

(A) not later than 1 year after December 27, 2020, promulgate a final rule to carry out this subsection; and

(B) not less frequently than annually, review and, if necessary, revise the final rule promulgated pursuant to subparagraph (A).

(k) Relationship to other law

(1) Implementation

(A) Rulemakings

(B) Delegation

(2) Preemption

(A) In general

(B) Extension

(i) In general

(ii) Limitation

(Pub. L. 116–260, div. S, § 103, Dec. 27, 2020, 134 Stat. 2255.)