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HR 3448 IH

To reduce emissions of ozone depleting substances in order to protect the climate and stratospheric ozone layer, and for other purposes.

August 3, 2007

Mr. WAXMAN introduced the following bill; which was referred to the Committee on Energy and Commerce

To reduce emissions of ozone depleting substances in order to protect the climate and stratospheric ozone layer, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Global Climate and Ozone Layer Protection Act of 2007'.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) Ozone depleting chemicals such as chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) threaten human health and the environment by both depleting the stratospheric ozone layer and contributing to global warming.

(2) The harms associated with global warming are serious and well recognized. These include the global retreat of mountain glaciers, reduction in snow cover extent, the earlier spring melting of rivers and lakes, the accelerated rise of sea levels, the extinction of up to 30 percent of the world's species, the increased frequency of cardio-respiratory and diarrhoeal diseases, and the increased intensity of hurricanes and typhoons.

(3) The harms associated with the depletion of the stratospheric ozone layer are also serious and well recognized. The thinning of the stratospheric ozone layer allows more harmful ultraviolet radiation to reach the surface of the Earth. This radiation can contribute to skin cancer, cataracts, and weakened immune systems in humans. It can also adversely affect agricultural crops and aquatic organisms, such as zooplankton and phytoplankton, with adverse consequences for aquatic ecosystems.

(4) September 2007 will be the 20th anniversary of the signing of the Montreal Protocol on Substances that Deplete the Ozone Layer, which set controls on the production and consumption of ozone depleting substances. The Protocol, which has been ratified by 191 countries, is widely regarded as the most successful international environmental treaty ever adopted. By 2005, the treaty had driven global production of ozone depleting substances down by approximately 95 percent from their 1990 levels.

(5) The Montreal Protocol currently requires developed countries to phase out the consumption of HCFCs by 2030 and developing countries to phase out the consumption of these chemicals by 2040.

(6) The Montreal Protocol has provided dramatic climate benefits. Between 1990 and 2010, the Montreal Protocol will have eliminated the equivalent of 11 billion tons of carbon dioxide per year. This is equivalent each year to over five times the reductions that are to be achieved under the Kyoto Protocol. This reduction will have the effect of delaying global warming impacts by seven to twelve years. Without the Montreal Protocol, the world would be approximately a decade further along the path to catastrophic climate change.

(7) The Montreal Protocol has the potential to provide additional significant climate benefits. Accelerating the phase-out of HCFCs in a way that supports climate change objectives could reduce emissions by the equivalent of approximately 25 billion tons of carbon dioxide between 2010 and 2050. Further substantial environmental benefits will accrue if CFCs and HCFCs contained in banks of existing equipment and products are recovered at equipment and product end-of-life and then recycled or destroyed. By accelerating the phase-out of ozone depleting HCFCs and recovering and destroying CFC and HCFC banks, the Parties to the Montreal Protocol could achieve an immediate reduction in emissions from both developed and developing countries, and further delay global warming impacts.

SEC. 3. SENSE OF CONGRESS REGARDING MONTREAL PROTOCOL NEGOTIATIONS.

It is the sense of Congress that the United States should negotiate with the other Parties to the Montreal Protocol at the earliest opportunity to--

(1) maximize the ability of the Montreal Protocol to mitigate global warming impacts, while ensuring continued protection of the ozone layer, by focusing on the climate impacts of ozone depleting substances and their substitutes, and on the energy efficiency of equipment in which such substances and their substitutes are used;

(2) accelerate the phase out of HCFCs by ten years for developed and developing countries or take alternative steps to achieve equivalent climate and ozone layer protection benefits;

(3) set interim HCFC reduction steps for developing countries so that a 65 percent reduction is mandated by 2020 and a 90 percent reduction is mandated by 2025;

(4) change the baseline date for developing countries from 2015 to 2010; and

(5) fully finance the Multilateral Fund consistent with past practice so that an accelerated phase out of HCFCs can be accomplished with maximum benefit for both ozone layer and climate protection.

SEC. 4. PRODUCTS CONTAINING HCFCS.

(a) Fire Suppression Agents- Section 605(a) of the Clean Air Act (42 U.S.C. 7671d(a)) is amended by striking `or' at the end of paragraph (2), striking the period at the end of paragraph (3) and inserting `; or' and adding the following new paragraph after paragraph (3):

`(4) the Administrator determines that the substance is used as a fire suppression agent for military, commercial aviation, industrial, space, or national security applications, and reduces overall risk to human health and the environment compared to alternatives.'.

(b) Import Ban- Section 605 of the Clean Air Act (42 U.S.C. 7671d) is amended by inserting the following new subsection after subsection (b) and redesignating the suceeceding subsections accordingly:

`(c) Import Ban- It shall be unlawful for any person to import any product manufactured after January 1, 2010, containing any class II substance that has been phased out of production and consumption under regulations promulgated by the Administrator under this section for any purpose other than for use in a process resulting in its transformation, for use in a process resulting in its destruction, or under exceptions stated in subsection (d).'.

SEC. 5. DESTRUCTION OF BANKS OF OZONE DEPLETING SUBSTANCES.

Section 604 of the Clean Air Act (42 U.S.C. 7671c) is amended by adding the following new subsection at the end thereof:

`(i) Destruction of Banks- (1) Effective January 1, 2010, it shall be unlawful for any person to produce or import an amount of any class I substance otherwise permitted under subsections (e), (g), or (h)(6) unless the Administrator certifies that the person has destroyed or secured, and verified the destruction of three times this amount of class I or class II substances on an ozone depletion potential equivalent basis.

`(2) Effective January 1, 2012, and until December 31, 2014, it shall be unlawful for any person to produce or import an amount of any class II substance unless the Administrator certifies that the person has destroyed or secured, and verified the destruction of 1.2 times this amount of class I or class II substances on an ozone depletion potential equivalent basis.

`(3) Effective January 1, 2015, and until December 31, 2029, it shall be unlawful for any person to produce or import an amount of any class II substance unless the Administrator certifies that the person has destroyed or secured, and verified the destruction of two times this amount of class I or class II substances on an ozone depletion potential equivalent basis.

`(4) The Administrator shall, within 2 years after the enactment of this Act, but in no event later than December 31, 2009, promulgate regulations establishing standards and requirements for the certifications under paragraphs (1), (2) and (3). Such regulations must provide that--

`(A) in order for a person to receive certification from the Administrator for the destruction of a given quantity of any class I or class II substance pursuant to paragraphs (1), (2) and (3):

`(i) the production and consumption of such substances is controlled to a level of zero under the Clean Air Act without regard to amounts permitted under subsections (d), (e), (f), (g), or (h);

`(ii) such substance was not in possession of the federal government prior to destruction; and

`(iii) such substance was destroyed using a controlled process approved by the Parties to the Montreal Protocol;

`(B) certification can be received for the destruction of a given quantity of any class I or class II substance within or outside the United States;

`(C) once issued, certifications may be applied to any future production or import of a given quantity of any class I or class II substance.

`(5) If, after January 1, 2015, upon petition of any entity, the Administrator determines by clear and convincing evidence that it is technically and economically infeasible to obtain material for destruction, the Administrator may adjust the offset ratio downward or, if necessary, waive the requirements of paragraphs (1), (2), or (3). The Administrator shall issue a final decision on such petition within 90 days.'.

SEC. 6. SUBSTITUTES FOR CFC AND HCFC REFRIGERANTS.

(a) Definition- Section 608 of the Clean Air Act (42 U.S.C. 7671g) is amended by adding the following new subsection at the end thereof:

`(d) Definition- For the purposes of this section, the term `substitute' means any substance or chemical used in or for types of equipment, appliances, or processes previously relying on class I or class II substances.'.

(b) Regulations- Section 608(a) of the Clean Air Act (42 U.S.C. 7671g(a))is amended by inserting the following new paragraph after paragraph (2) and redesignating paragraph (3) as (4):

`(3) The Administrator shall, within 1 year after the enactment of this Act, promulgate regulations establishing standards and requirements regarding the sale, distribution or offer for sale and distribution in interstate commerce, use, and disposal of substitutes for class I and class II substances not covered by paragraph (1), including the use, recycling, and disposal of such substitutes during the maintenance, service, repair, or disposal of appliances and industrial process refrigeration equipment. Such standards and requirements shall become effective not later than 12 months after promulgation of the regulations.'.

(c) Safe Disposal- Section 608(b) of the Clean Air Act (42 U.S.C. 7671g(b)) is amended as follows:

(1) Inserting `and their substitutes' after `class I and II substances' in the matter preceding paragraph (1).

(2) Inserting `, or substitutes for such substances,' after `class I or class II substances' in paragraph (1).

(3) Inserting `, or a substitute for such substance,' after `class I or class II substance' in paragraphs (2), and (3).

(d) Small Containers- Section 609(e) of such Act (42 U.S.C. 7671g(e)) is amended as follows:

(1) Inserting `and Their Substitutes' at the end of the paragraph heading.

(2) Inserting `(1)' before `Effective 2 years'.

(3) Adding the following at the end thereof:

`(2) Effective January 1, 2010, it shall be unlawful for any person to sell or distribute, or offer for sale or distribution, in interstate commerce to any person (other than a person performing service for consideration on motor vehicle air-conditioning systems in compliance with this section) any substitute that is suitable for use in a motor vehicle air-conditioning system and that is in a container which contains less than 20 pounds of such substitute.'.

SEC. 7. REFRIGERANT ENVIRONMENTAL MANAGEMENT COUNCIL.

(a) Definitions- For the purposes of this section:

(1) The terms `recover,' `recycle,' and `reclaim' have the meanings provided in 40 CFR 82.152.

(2) The term `destruction' has the meaning provided in 40 CFR 82.3.

(3) The term `virgin refrigerants' means newly produced refrigerants in an originally sealed original container.

(4) The term `chlorofluorocarbons' means the many various halocarbon compounds consisting of carbon, chlorine, and fluorine used widely as refrigerants and controlled by the Montreal Protocol.

(5) The term `hydrochlorofluorocarbons' means halogenated compounds containing carbon, hydrogen, chlorine and fluorine used widely as a refrigerants and controlled by the Montreal Protocol.

(6) The term `hydrofluorocarbons' means halogenated hydrocarbons in which the molecule contains hydrogen, fluorine, and carbon but is absent of chlorine used widely as refrigerants.

(7) The term `fluorocarbons' means chlorofluorocarbons, hydrochlorofluorocarbons or hydrofluorocarbons.

(8) The term `certified reclaimer' means entities certified by the U.S. Environmental Protection Agency to reclaim used refrigerant for the purposes of resale to a new owner.

(9) The term `certified destruction process operator' means destruction process operators certified by the U.S. Environmental Protection Agency.

(10) The term `original refrigerant equipment' means air conditioning and refrigeration products that rely on refrigerants to operate, including motor vehicle air conditioning systems.

(11) The term `Administrator' means the Administrator of the U.S. Environmental Protection Agency.

(12) The term `Secretary' means the U.S. Secretary of Commerce.

(13) The term `Council' means the Refrigerant Environmental Management Council.

(14) The term `Board' means the Board of Directors of the Refrigerant Environmental Management Council.

(b) Establishment-

(1) ESTABLISHMENT OF NONPROFIT ORGANIZATION- The Refrigerant Environmental Management Council is hereby established as a non-profit entity organized under the District of Columbia Nonprofit Corporation Act to address the emissions of fluorocarbon refrigerants in an economical, efficient, and effective manner. The Council shall not be an agency or establishment of the United States Government. The purpose of the Council shall be to lead industry in recovery, reclamation, and destruction of fluorocarbon refrigerants, thereby reducing emissions of these compounds.

(2) GOVERNANCE- The Council shall be governed by a Board of Directors representing the air conditioning, refrigeration, and related industries, government agencies, and independent entities or persons as stated in subsection (c).

(c) Refrigerant Environmental Management Council-

(1) BOARD COMPOSITION- The Council's Board of Directors shall consist of 21 members, with 3 members representing refrigerant producers and importers, 4 members representing original refrigerant equipment manufacturers, 3 members representing reclaimers, destruction process operators, distributors, wholesalers, contractors or technicians, 3 employees of the U.S. Environmental Protection Agency, 3 employees of the U.S. Department of Commerce, and 5 public members representing non-industry, non-government stakeholders. The industry members shall be full-time employees or owners of businesses in the industry. Only one person at a time from any company or its affiliate may serve on the Board. Vacancies in unfinished terms of Board members shall be filled in the same manner as were the original appointments.

(2) ESTABLISHMENT- Within 90 days of the enactment of this Act--

(A) the following representative industry organizations may appoint the industry members of the Board of Directors: Air-Conditioning and Refrigeration Institute; Heating, Air conditioning & Refrigeration Distributors International; and Alliance for Responsible Atmospheric Policy;

(B) the Administrator shall appoint 3 EPA employees and 5 public members to sit on the Board; and

(C) the Secretary shall appoint 3 Department of Commerce employees to sit on the Board.

(3) REPRESENTATION- In selecting the members of the Board appointed pursuant to subparagraph (2)(a), due regard shall be given to selecting members that are representative of the industry and diverse geographic regions of the country, including representation of--

(A) refrigerant producers and importers;

(B) original refrigerant equipment manufacturers; and

(C) large and small companies among reclaimers, destruction process operators, distributors, wholesalers, contractors, or technicians.

(4) COMPENSATION- Board members shall receive no compensation for their services. Board members shall be reimbursed for reasonable expenses related to their participation in Council meetings.

(5) TERMS- Board members shall serve terms of 3 years and may serve not more than 2 full consecutive terms, except that government board members may serve any number of consecutive terms. Industry and public Board Members filling unexpired terms may serve not more than a total of 7 consecutive years. Former Board members may be returned to the Board if they have not been members for a period of 2 years. Initial appointments to the Board shall be for terms of 1, 2, and 3 years, staggered to provide for the selection of 7 members each year.

(6) ADMINISTRATION- The Board shall select from among the members appointed pursuant to subparagraph (2)(a) a Chairman and other officers as necessary, may establish committees and subcommittees, and shall adopt rules and bylaws for the conduct of business and the implementation of this Act and shall hire appropriate administrative staff to operate and conduct Council business. The Council shall establish procedures for the solicitation of industry, nongovernmental, and government comment and recommendations on any significant plans, programs, and projects.

(7) ADMINISTRATION EXPENSES- The administrative expenses of operating the Council shall not exceed 10 percent of the funds collected in any fiscal year.

(8) REIMBURSEMENT- The Council shall annually reimburse the Administrator for costs incurred by the Federal Government relating to the Council, except that such reimbursement for any fiscal year shall not exceed the amount that the Administrator determines is the average annual budget for this program to the Administrator and to the Congress.

(9) BUDGET- Before August 1 each year, the Council shall publish for public review and comment a budget plan for the next calendar year, including the probable costs of all programs, projects, and contracts and a recommended rate of assessment sufficient to cover such costs. Following this review and comment, the Council shall submit the budget to the Administrator. The Administrator may recommend programs and activities the Administrator considers appropriate.

(10) RECORDS; AUDITS- The Council shall keep minutes, books, and records that clearly reflect all of the acts and transactions of the Council and make public such information. The books of the Council shall be audited by a certified public accountant at least once each fiscal year and at such other times as the Council may designate. Copies of such audit shall be provided to all Board members, the Administrator, the Secretary, the House of Representatives Committee on Energy and Commerce, and the Senate Committee on Environment and Public Works. The Administrator shall receive notes of meetings and may require reports on the activities of the Council, as well as reports on compliance, violations, and complaints regarding the implementation of this Act.

(11) MINUTES- The minutes of all meetings of the Board shall be made available to and readily accessible by the public.

(12) ANNUAL REPORT- Each year, the Council shall prepare and make publicly available a report that includes an identification and description of all programs and projects undertaken by the Council during the previous year as well as those planned for the coming year. Such report shall detail the allocation or planned allocation of Council resources for each program and project. Such report shall also include estimates of the quantities and types of substances recycled and destroyed as a result of the incentives provided under subsection (e)(1).

(d) Levies-

(1) LEVY- The Council shall have authority to institute and collect a per pound levy, equally applied, on the domestic production of all virgin HCFC and HFC refrigerants, the import of all HCFC and HFC refrigerants, and on the import of all HCFC and HFC refrigerants contained in equipment. The levy shall be collected at the first point of sale in the United States.

(2) AMOUNT- The Board shall set the initial levy at thirty cents per pound of refrigerant. Thereafter, annual levies shall be sufficient to cover the costs of the plans and programs developed by the Council. Any change in the levy amount must be approved by a two-thirds vote of the Board. In no case may the levy be raised by more than ten cents per pound of refrigerant in any one year.

(3) OWNERSHIP- The domestic producers of virgin HCFC and HFC refrigerants, and the importers of all HCFC and HFC refrigerants, and the importers of all HCFC and HFC refrigerants contained in equipment at the time of the first point of sale in the United States, shall pay the levy based on the pounds of refrigerants produced or imported. Levies collected are payable to the Council on a monthly basis by the 25th of the month following the month of such collection. Virgin refrigerants exported from the United States to another country and refrigerants reclaimed in the United States are not subject to the levy.

(4) ALTERNATIVE COLLECTION RULES- The Board may establish an alternative means of collecting the levy if another means is found to be more efficient and effective. The Board may establish a late payment charge and a rate of interest to be imposed on any person who fails to remit or pay to the Council any amount due under this Act.

(5) INVESTMENT OF FUNDS- Pending disbursement pursuant to a program, plan, or project, the Council may invest funds collected through levies, and any other funds received by the Council, only in obligations of the United States or any agency thereof, in general obligations of any State or any political subdivision thereof, in any interest-bearing account or certificate of deposit of a bank that is a member of the Federal Reserve System, or in obligations fully guaranteed as to principal and interest by the United States. Funds shall only be disbursed for operating expenses, reimbursements to the U.S. Environmental Protection Agency, programs approved by the Board, and the provision of incentive payments under subsection (e).

(e) Disbursements-

(1) INCENTIVE- The Council shall have authority to provide incentive payments, per pound of reclaimed and destroyed CFCs, HCFCs, and HFCs, to entities that document that CFCs, HCFCs, and HFCs have been reclaimed or destroyed by certified processes. The initial incentive shall be $1.00 per pound. Any change in the incentive amount must be approved by a two-thirds vote of the Board.

(2) DOCUMENTING PROCEDURES- The Council shall establish procedures to document that CFCs, HCFCs, and HFCs have been reclaimed or destroyed. In establishing these procedures, the Council shall consider regulations concerning reclamation and destruction processes promulgated by the Administrator of the Environmental Protection Agency under section 608 of the Clean Air Act (42 U.S.C. 7671g).

(f) Compliance-

(1) It shall be unlawful to sell virgin HCFC and HFC refrigerants, all imported HCFC and HFC refrigerants, and imported equipment containing HCFC and HFC refrigerants in the United States on which the levy has not been paid.

(2) The Council may bring suit in Federal court to compel compliance with a levy assessed by the Council under this Act. A successful action for compliance under this section may also require payment by the defendant of the costs incurred by the Council in bringing such action.

(3) All refrigerant producers, importers, equipment importers, and certified reclaimers and destruction process operators shall file annual reports with the Administrator. The reports shall contain, at a minimum, the amount of refrigerants manufactured, imported, exported, reclaimed, and destroyed, and the amount of refrigerants contained in imported equipment.

(g) Penalties- In the case of any person who sells refrigerants on which a levy has not been paid, the Administrator is authorized to take any of the actions provided for in section 113 of the Clean Air Act (42 U.S.C. 7413).

(h) Lobbying Restrictions- No funds collected by the Council shall be used in any manner for influencing legislation or elections, except that the Council may recommend to the Administrator in writing changes in this Act or other statutes that would further the purposes of this Act.

(i) Pricing- In all cases, the price of refrigerants shall be determined by market forces. Consistent with the antitrust laws, the Council may take no action, nor may any provision of this Act be interpreted as establishing an agreement to pass along to consumers the cost of the levy provided for in subsection (d).

(j) Reports- Within 2 years after the date of enactment of this Act, and at least once every 2 years thereafter, the Secretary and the Administrator shall jointly prepare and submit to the House of Representatives Committee on Energy and Commerce and the Senate Committee on Environment and Public Works a report examining whether operation of the Council, in conjunction with the cumulative effects of market changes and Federal programs, (1) has had an effect on refrigerant consumers and (2) has had an effect on ozone layer depletion and climate change. The Secretary and Administrator shall consider and, to the extent practicable, shall include in the report submissions by refrigerant users, distributors and consumers, and shall consider whether there have been long-term and short-term effects on refrigerant prices as a result of Council activities and Federal programs. To the extent that the report demonstrates that there has been an adverse effect, the Secretary and Administrator shall include recommendations for correcting the situation.

SEC. 8. SUNWISE PROGRAM.

The Administrator of the Environmental Protection Agency is authorized to carry out the mission and activities of the SunWise Program to raise awareness of ozone layer depletion and the potential health risks of overexposure to ultraviolet radiation as well as measures that can be taken to avoid such overexposure. There is authorized to be appropriated $5 million for fiscal year 2009 and $5 million for each of the next 5 years to carry out this section.