Protection of Stratospheric Ozone: Minor Amendments to the Regulations Implementing the Allowance System for Controlling HCFC Production, Import and Export, 41163-41172 [E6-11532]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 71, Number 139 (Thursday, July 20, 2006)]
[Rules and Regulations]
[Pages 41163-41172]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11532]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2003-0130-FRL-8199-9]
RIN 2060-AL90


Protection of Stratospheric Ozone: Minor Amendments to the 
Regulations Implementing the Allowance System for Controlling HCFC 
Production, Import and Export

AGENCY: Environmental Protection Agency [EPA].

ACTION: Direct final rule.

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SUMMARY: EPA is taking direct final action to amend the current 
regulations governing the production and trade of certain ozone-
depleting substances to address issues concerning the export of 
previously imported material, heels, the exemption allowance petition 
process for HCFC-141b for military and space vehicle applications, and 
the definition for ``importer.'' We are making these minor adjustments 
to our regulations in response to requests from the regulated 
community, to ensure equitable treatment of stakeholders, and to reduce 
burden where the integrity of the requirements can still be 
sufficiently maintained.

DATES: This direct final rule is effective on October 18, 2006 without 
further notice unless EPA receives adverse comment by August 21, 2006, 
or by September 5, 2006 if a hearing is requested. If we receive 
adverse comment we will publish a timely withdrawal in the Federal 
Register informing the public that this rule, or an amendment paragraph 
or section of this rule, will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2003-0130, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     E-mail: a-and-r-Docket@epa.gov.
     Fax: 202-566-1741.

[[Page 41164]]

     Mail: Docket , Air and Radiation Docket and 
Information Center, U.S. Environmental Protection Agency, Mail code: 
6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
     Hand Delivery: Docket EPA-HQ-OAR-2003-0130, Air 
and Radiation Docket at EPA West, 1301 Constitution Avenue, NW., Room 
B108, Mail Code 6102T, Washington, DC 20460. Such deliveries are only 
accepted during the Docket's normal hours of operation, and special 
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2003-0130. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or e-mail. 
The www.regulations.gov Web site is an ``anonymous access'' system, 
which means EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov 
your e-mail address will be automatically captured and included as part 
of the comment that is placed in the public docket and made available 
on the Internet. If you submit an electronic comment, EPA recommends 
that you include your name and other contact information in the body of 
your comment and with any disk or CD-ROM you submit. If EPA cannot read 
your comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
information about EPA's public docket visit the EPA Docket Center 
homepage at https://www.epa.gov/epahome/dockets.htm.

FOR FURTHER INFORMATION CONTACT: Cindy Axinn Newberg, EPA, 
Stratospheric Protection Division, Office of Atmospheric Programs, 
Office of Air and Radiation (6205J), 1200 Pennsylvania Avenue, NW., 
Washington, DC 20460, (202) 343-9729, newberg.cindy@epa.gov.

SUPPLEMENTARY INFORMATION: (1) Under the Montreal Protocol on 
Substances that Deplete the Ozone Layer (Protocol), as amended, the 
U.S. and other industrialized countries that are Parties to the 
Protocol have agreed to limit production and consumption of 
hydrochlorofluorocarbons (HCFCs) and to phase out consumption in a 
step-wise fashion over time, culminating in a complete phaseout in 
2030. Title VI of the Clean Air Act Amendments of 1990 (CAAA) 
authorizes EPA to promulgate regulations to manage the consumption and 
production of HCFCs until the total phaseout in 2030. EPA promulgated 
final regulations establishing an allowance tracking system for HCFCs 
on January 21, 2003 (68 FR 2820). These regulations were amended on 
June 17, 2004 (69 FR 34024) to ensure U.S. compliance with the Montreal 
Protocol. This action amends aspects of the regulations that relate to 
exports of previously imported material, the import of HCFC heels, the 
HCFC-141b exemption allowance petition process, the definition of 
``importer,'' and other aspects of the regulations.
    EPA is publishing this rule without prior proposal because we view 
this as a non-controversial action and anticipate no adverse comment. 
However, in the ``Proposed Rules'' section of this Federal Register, we 
are publishing a separate document that will serve as the proposal to 
amend the current regulations if we receive adverse comment. This 
direct final rule will be effective on October 18, 2006 without further 
notice unless we receive adverse comment by August 21, 2006, or by 
September 5, 2006 if a hearing is requested. If we receive adverse 
comment, we will publish a timely withdrawal in the Federal Register 
informing the public that the rule, or particular provisions of the 
rule, will not take effect. We would address public comments in any 
subsequent final rule based on the proposed rule. We will not institute 
a second comment period on this action. Any parties interested in 
commenting must do so at this time.

(2) Abbreviations and Acronyms Used in This Document

Act--Clean Air Act Amendments of 1990
Article 2 countries--industrialized countries that are not parties 
operating under paragraph 1 of Article 5 of the Montreal Protocol
Article 5 countries--developing countries that satisfy certain 
conditions laid out in paragraph 1 of Article 5 of the Montreal 
Protocol
CAAA--Clean Air Act Amendments of 1990
Cap--limitation in level of production or consumption
CFC--chlorofluorocarbon
CFR--Code of Federal Regulations
EPA--Environmental Protection Agency
FDA--Food and Drug Administration
FR--Federal Register
HCFC--hydrochlorofluorocarbon
NASA--National Aeronautics and Space Administration
NODA--Notice of Data Availability
NPRM--Notice of Proposed Rulemaking
ODP--ozone depletion potential
ODS--ozone-depleting substance
Party--States and regional economic integration organizations that have 
consented to be bound by the Montreal Protocol on Substances that 
Deplete the Ozone Layer
Protocol--Montreal Protocol on Substances that Deplete the Ozone Layer
SBREFA--Small Business Regulatory Enforcement Fairness Act
SNAP--Significant New Alternatives Policy
UNEP--United Nations Environment Programme
U.S.--United States.

(3) Tips for Preparing Your Comments

    When submitting comments, remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

Table of Contents

I. Regulated Entities
II. Background
III. Direct Final Action
    A. Exports of Previously Imported HCFCs
    B. Heels
    C. HCFC-141b Exemption Allowance Petition Process
    D. Definition of Importer
    E. Minor Regulatory Corrections

[[Page 41165]]

    1. Allowance Requirements for Class II Controlled Substances 
with Lower Ozone Depletion Potentials
    2. Removal of Class II Controlled Substances From Sec.  
82.13(f)(2)
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Congressional Review Act

I. Regulated Entities

    These minor amendments to the HCFC allowance allocation system will 
affect the following categories:

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                  Category                     NAICS code       SIC code        Examples of regulated entities
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Chlorofluorocarbon gas manufacturing.......          325120            2869  Chlorodifluoromethane
                                                                              manufacturers;
                                                                              Dichlorofluoroethane
                                                                              manufacturers;
                                                                              Chlorodifluoroethane
                                                                              manufacturers.
Chlorofluorocarbon gas importers...........          325120            2869  Chlorodifluoromethane importers;
                                                                              Dichlorofluoroethane importers;
                                                                              Chlorodifluoroethane importers.
Chlorofluorocarbon gas exporters...........          325120            2869  Chlorodifluoromethane exporters;
                                                                              Dichlorofluoroethane exporters;
                                                                              Chlorodifluoroethane exporters.
Polystyrene Foam Product Manufacturing.....          326140            3086  Plastics foam Products (Polystyrene
                                                                              Foam Products).
Urethane and Other Foam Product (Except              326150            3086  Insulation and cushioning, foam
 Polystyrene) Manufacturing.                                                  plastics (except polystyrene)
                                                                              manufacturing.
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This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
potentially could be regulated by this action. Other types of entities 
not listed in this table could also be affected. To determine whether 
your facility, company, business organization, or other entity is 
regulated by this action, you should carefully examine these 
regulations. If you have questions regarding the applicability of this 
action to a particular entity, consult the person listed in the FOR 
FURTHER INFORMATION CONTACT section.

II. Background

    In 1990, as part of a resolution on ozone-depleting substances, the 
Parties to the Protocol identified hydrochlorofluorocarbons (HCFCs) as 
transitional substitutes for chlorofluorocarbons (CFCs) and other more 
destructive ozone-depleting substances (ODSs). In 1992, the Parties 
negotiated amendments to the Protocol (the ``Copenhagen Amendments'') 
that created a detailed phaseout schedule for HCFCs, with a cap on 
consumption for Article 2 (industrialized) countries like the U.S. The 
Protocol defines consumption as production plus imports minus exports. 
The consumption cap is derived from the formula of 2.8 percent of the 
Party's CFC consumption in 1989, plus the Party's consumption of HCFCs 
in 1989. Based on this formula, the consumption cap for the U.S. is 
15,240 ODP-weighted metric tons, effective January 1, 1996.
    In the Copenhagen Amendments, the Parties created a schedule with 
graduated reductions and the eventual phaseout of the consumption of 
HCFCs. The schedule calls for a 35 percent reduction of the cap on 
January 1, 2004, followed by a 65 percent reduction on January 1, 2010, 
a 90 percent reduction on January 1, 2015, a 99.5 percent reduction on 
January 1, 2020, and a total phaseout on January 1, 2030. As a 
signatory to the Copenhagen Amendments (the U.S. deposited its 
instrument of ratification on March 2, 1994), the U.S. must comply with 
this phaseout schedule under the Protocol.
    In 1992, EPA received petitions from environmental groups and 
industry asking the Agency to implement the phaseout by eliminating the 
most ozone-depleting substances first. Based on the available data at 
the time, EPA believed that the U.S. could meet, and possibly exceed, 
the Protocol schedule through a chemical-by-chemical phaseout. In 1993, 
as authorized by sections 605 and 606 of the CAAA, EPA established a 
regulatory phaseout schedule that links the phaseout of particular 
HCFCs to the phaseout steps under the Protocol (58 FR 65018, December 
10, 1993; 58 FR 15014, March 18, 1993). For example, under that 
schedule, HCFC-141b production and import ceased on January 1, 2003, 
apart from a few minor exceptions.
    In 1999, the Parties negotiated another amendment to the Protocol 
(the ``Beijing Amendment''), where they agreed to a cap on HCFC 
production for industrialized countries, effective January 1, 2004. 
This cap was derived from the average of the Party's consumption cap 
(2.8 percent of the Party's CFC consumption in 1989, plus the Party's 
HCFC consumption in 1989) and the result of the same formula for 
production (2.8 percent of the Party's CFC production in 1989, plus the 
Party's HCFC production in 1989). This formula results in a U.S. 
production cap of 15,537 ODP-weighted metric tons. The U.S. ratified 
the Beijing Amendment on October 1, 2003.
    To implement the Protocol, as amended by the Copenhagen and Beijing 
Amendments, EPA established an allowance system under Title VI of the 
CAAA to ensure that U.S. production and consumption of HCFCs would 
continue to stay under the production cap and conform to the 
consumption phaseout steps. This allowance system was published in the 
Federal Register on January 21, 2003 (68 FR 2820). The HCFC allowance 
system is part of EPA's program to phase out the production and 
consumption, and restrict the use, of HCFCs in accordance with section 
605 of the CAAA. EPA has accelerated certain aspects of the schedule 
contained in section 605 as authorized under section 606 of the CAAA.

III. Direct Final Action

    EPA is taking direct final action to promulgate various minor 
amendments to the existing regulations implementing the HCFC phaseout. 
The following sections discuss these changes individually and 
specifically.

[[Page 41166]]

A. Exports of Previously Imported HCFCs

    In accordance with 40 CFR 82.20(a), producers of class II 
controlled substances can request a ``refund'' of consumption 
allowances by submitting documentation demonstrating the export of 
controlled substances and complying with the recordkeeping and 
reporting requirements of Sec.  82.24. This provision, as it currently 
is promulgated, only explicitly addresses the ``refund'' of consumption 
allowances to producers of class II substances and does not address 
scenarios concerning importers of controlled substances choosing to 
request a similar refund. The current applicable provisions refer 
solely to class II controlled substances produced in the United States. 
EPA has received requests from importers seeking to export previously 
imported class II controlled substances and obtain refunds of 
consumption allowances in a manner similar to companies that have 
produced class II substances. These importers are concerned that 
domestic manufacturers have inadvertently been given an unfair 
advantage over importers.
    EPA does not believe there was any reason for limiting the refund 
of consumption allowances solely to companies that produce class II 
controlled substances in the United States. EPA notes that the current 
codified language does not prohibit the refund of consumption 
allowances to importers, but instead fails to address that particular 
scenario while addressing the scenario of domestically manufactured 
class II controlled substances. EPA has made a practice of considering 
importers' requests for refunds of consumption allowances consistently 
with requests from producers.\1\ To reflect this practice of equal 
treatment, EPA is amending Sec.  82.20(a) to refer to class II 
controlled substances that are both produced in and imported into the 
United States. EPA is also amending Sec. Sec.  82.20(a)(1)(x) and 
82.20(a)(2)(i)(B) to refer to importers as well as producers.
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    \1\ Docket EPA-OAR 2003-0130 contains letters issued by EPA.
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B. Heels

    As currently defined at Sec.  82.3, a Heel is:

    The amount of a controlled substance that remains in a container 
after it is discharged or off-loaded (that is no more than ten 
percent of the volume of the container) and that the person owning 
or operating the container certifies the residual amount will remain 
the container and be included in a future shipment, or be recovered 
for transformation, destruction or a non-emissive purpose.

As part of a larger discussion concerning heels in the January 21, 2003 
final rule (68 FR 2843), EPA received and addressed comments concerning 
whether the definition of heels applies to small containers or only to 
bulk shipments in larger containers, including but not limited to, rail 
cars. The comments received during the public comment period were 
placed in public docket A-98-33 which has been incorporated into OAR-
2003-0130. In the January 21, 2003 final rule, EPA clarified that the 
definition of heel did apply to small containers.
    Based on a review of these comments and subsequent information 
brought to EPA's attention, EPA no longer believes it is necessary to 
require that owners or operators of small containers and cylinders 
comply with the recordkeeping and reporting provisions. However, EPA 
currently does not limit the applicability of either the definition of 
heels or the recordkeeping and reporting provisions at Sec.  82.24(f) 
to larger bulk shipments. Neither the definition of heels nor the 
recordkeeping and reporting requirements refers to the size or type of 
the containers. The recordkeeping and reporting requirements state that 
any person who brings into the U.S. a container with a heel must 
indicate on a bill of lading that the class II controlled substance is 
a heel. Further, the person is required to report quarterly the 
quantity in kilograms brought into the U.S. and certify that the 
quantity is truly a heel by certifying it is no more than 10 percent 
the total volume of the container. In addition, the person must certify 
that the heel will either remain in the container and be included in a 
future shipment, be recovered and transformed, be recovered and 
destroyed, or be recovered for a non-emissive use. Any person who 
brings a container with a heel into the U.S. also must report on the 
final disposition of each shipment within 45 days of the end of the 
control period.
    Since the promulgation of the January 21, 2003 final rule, EPA has 
received new and compelling information regarding the general business 
practices for handling heels and also information concerning which 
containers are generally considered to carry heels of sufficient size 
to necessitate recordkeeping and reporting. In particular, EPA received 
and reviewed information from multiple sources regarding whether the 
heel recordkeeping and reporting (Sec.  82.24(f)) should apply to all 
sizes and types of containers and whether annual reports would be 
sufficient. EPA specifically reviewed information regarding business 
practices for managing heels from rail cars, tank trucks, ISO tanks, 
2,000-lb cylinders, and 125-lb cylinders. Based on the information that 
EPA has reviewed, it seems that generally smaller containers, including 
2,000-lb cylinders and 125-lb cylinders, are presumed empty and then 
refilled. The assumptions and practices for smaller containers differ 
from those for larger containers, such as rail cars, which are 
routinely weighed, after which any residual controlled substance that 
is still within the rail car is accounted. After extensive 
consideration, EPA stated in a letter contained in the docket for this 
rulemaking that ``EPA has decided to reduce the reporting burden by 
modifying the requirements for reporting of heels. These modifications 
will follow the normal rulemaking process * * * [and] will include a 
change in frequency of reporting and a limit in the types of containers 
subject to reporting.'' \2\ Therefore, consistent with previous 
communication, through this action, EPA is revising the recordkeeping 
and reporting burden by modifying the requirements for heels.
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    \2\ Letter signed by Drusilla Hufford, Director, Global Programs 
Division, May 10, 2004.
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    EPA is limiting the type of containers affected by the requirements 
and therefore subject to the recordkeeping and reporting requirements 
for heels. EPA is amending Sec.  82.24(f) to state that any person who 
brings into the U.S. rail cars, tank trucks, and ISO tanks containing a 
class II controlled substance that is a heel as defined in Sec. 82.3, 
must comply with recordkeeping and reporting requirements at Sec.  
82.24(f). EPA has determined that the recordkeeping and reporting 
requirements are unnecessary for smaller containers such as 2,000-lb 
and 125-lb cylinders because it would be impractical to recover heels 
from these smaller containers for emissive use. Such heels would be 
included in future shipments with or without a certification. For the 
same reason, it is unnecessary to require a report on the final 
disposition of such heels.
    EPA is also changing the reporting frequency for heels that are 
subject to the recordkeeping and reporting requirements. Section 
82.24(f)(2) currently requires quarterly reports of the quantity of 
heels brought into the U.S. and certification that the heels are truly 
heels, and that they will either remain in the container to be included 
in a future shipment, be recovered and

[[Page 41167]]

transformed, be recovered and destroyed, or be recovered for a non-
emissive use. In addition, under Sec.  82.24(f)(3), any person who 
brings a container with a heel into the U.S. must report on the final 
disposition of each shipment within 45 days of the end of the control 
period--thus on an annual basis. Since these regulations took effect 
EPA has received new and compelling information from several sources 
regarding the practical implementation of these requirements. After 
reviewing information with regard to the management of heels, EPA has 
concluded that decreasing the reporting frequency will lessen the 
burden to the regulated community while still maintaining the integrity 
of the allowance system. By changing the regulations to require a 
single annual report, EPA is eliminating the need for four separate 
quarterly reports followed by an annual report. Furthermore, EPA is 
establishing the same date for the annual report requirements under 
paragraphs (f)(2) and (f)(3) to permit companies to file this 
information together, thus lessening the overall regulatory burden.
    EPA is also amending the definition of Heel at Sec.  82.3, to now 
read that a Heel is:

    The amount of a controlled substance that remains in a container 
after it is discharged or off-loaded (that is no more than ten 
percent of the volume of the container).

    EPA believes it is necessary to amend the definition to decouple 
the definition of a Heel from the recordkeeping and reporting 
requirements.
    EPA is amending the requirements so that companies that will 
continue to be subject to the provisions will report the same 
information currently required under Sec.  82.24(f) and in particular, 
the information required under paragraphs (f)(2) and (f)(3) on an 
annual basis, within 30 days after the end of the control period, 
rather than reporting the information required under (f)(2) on a 
quarterly basis and information required under (f)(3) on an annual 
basis. EPA is modifying the date of submission of the annual report 
from 45 days after the end of the control period to 30 days after the 
end of the control period to be consistent with other annual reporting 
requirements required under Sec.  82.24. EPA believes a consistent 
requirement will ease the burden to those that must submit annual 
reports. EPA believes that the removal of the quarterly reporting 
requirements and the change to 30 days after the end of the control 
period will result in a net reduction of burden to the regulated 
entities that are required to submit annual reports for heels.

C. HCFC-141b Exemption Allowance Petition Process

    The final rule published on January 21, 2003 (68 FR 2820) 
established the HCFC-141b exemption allowance petition process for all 
formulators \3\ of HCFC-141b. The July 20, 2001 notice of proposed 
rulemaking (66 FR 38063) proposed a petition process solely for space 
vehicle \4\ and defense applications requiring new production of HCFC-
141b after 2003. In response to comments received from spray foam 
formulators, the final rule opened this process up to all formulators 
of HCFC-141b. At the time of the final rule, those spray foam 
formulators, citing technical constraints with alternatives to HCFC-
141b, suggested that those constraints could impede their transition 
from HCFC-141b to non-ODS alternatives. Two commenters recommended that 
EPA allow any entity to petition the Agency for HCFC-141b allowances 
beyond January 1, 2003. EPA could then, on a case-by-case basis, 
evaluate the petitioner's assertions that no viable alternatives are 
available to meet the needs of that specific petitioner. As stated 
above, EPA agreed with those commenters and established a petition 
process for all formulators of HCFC-141b to provide relief to any 
entity that did not have access to HCFC-141b while it was developing 
alternatives. Since the petition process was established in 2003, the 
majority of the initial petitioners (spray foam formulators) achieved 
significant progress in their transition to alternatives. Most firms 
now market foam systems containing non-ODS alternatives. Acknowledging 
this progress, in a separate but related rulemaking EPA published a 
final rule on September 30, 2004, stating that under the Significant 
New Alternatives Policy (SNAP) program, HCFC-141b would be unacceptable 
for use as a foam blowing agent starting January 1, 2005, with some 
minor exceptions (69 FR 58269). EPA did not receive any petitions for 
HCFC-141b from spray foam formulators for the 2005 control period and 
does not expect to receive any in the future.
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    \3\ According to 40 CFR 82.3, a formulator is an entity that 
distributes a class II controlled substance or blends of a class II 
controlled substance to persons who use the controlled substance for 
a specific application identified in the formulator's petition for 
HCFC-141b exemption allowances.
    \4\ Section 82.3 defines a space vehicle as a ``man-made device, 
either manned or unmanned, designed for operation beyond earth's 
atmosphere. This definition includes integral equipment such as 
models, mock-ups, prototypes, molds, jigs, tooling, hardware 
jackets, and test coupons. Also included is auxiliary equipment 
associated with tests, transport, and storage, which through 
contamination can compromise the space vehicle performance.''
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    Since 2003, EPA has received and approved petitions for space 
vehicle and defense applications (the approval letters can be found in 
Air Docket A-98-33, IV-G-26-34). As in the comments on the July 20, 
2001, NPRM, information in petitions from the National Aeronautics and 
Space Administration (NASA) and Department of Defense (DOD) contractors 
(including contractors for the U.S. Air Force and the U.S. Department 
of the Navy) suggests that specific foam applications will continue to 
require new production of HCFC-141b due to their highly specialized 
technical nature and the unavailability of qualified alternatives. 
Depending on the length and/or the technical requirements of the 
applications, those petitioners expect to require new production of 
HCFC-141b until at least 2009, if not until 2015, when use of class II 
controlled substances (which include HCFC-141b) will be largely 
prohibited in accordance with section 605 of the Clean Air Act \5\.
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    \5\ Section 605(a) of the Clean Air Act states that ``Effective 
January 1, 2015, it shall be unlawful for any person to introduce 
into interstate commerce or use any class II substance unless such 
substance--
    (1) Has been used, recovered, and recycled;
    (2) Is used and entirely consumed (except for trace quantities) 
in the production of other chemicals; or
    (3) Is used as a refrigerant in appliances manufactured prior to 
January 1, 2020.''
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    EPA is eliminating the requirement that space vehicle and defense 
entities with previously approved HCFC-141b exemptions submit an annual 
renewal petition for HCFC-141b exemption allowances as long as the 
needed amounts do not increase significantly. The Agency has sufficient 
information from the petitioners mentioned above whose requests were 
approved regarding the quantities of HCFC-141b required, the technical 
constraints associated with alternatives, and the scope of the 
projects/applications potentially employing HCFC-141b until 2015 (see 
the documents cited above from A-98-33 as well as IV-D-12, IV-D-16 and 
IV-D-28). Because of this, it is reasonable to eliminate the 
requirement to submit annual petitions for space vehicle and defense 
applications under Sec.  82.16(h), while retaining the petition process 
for new petitioners who believe they meet the criteria for an 
exemption, and for those instances where an entity's space vehicle or 
defense needs will exceed that entity's previously approved amount by 
greater than ten percent. If

[[Page 41168]]

the entity's needs exceed that threshold, then the entity must submit a 
new petition in accordance with the requirements at Sec.  82.16(h)(1). 
Given the relatively small quantities of HCFC-141b that have been 
approved on an annual basis under the exemption program, ten percent 
represents an extremely small fraction of the HCFC-141b baseline (less 
than 0.01 percent).
    In order to effectively manage and address U.S. space vehicle and 
defense needs, the Agency requests that any users of HCFC-141b in those 
applications that have not previously petitioned for HCFC-141b 
exemption allowances but that plan to seek new production of HCFC-141b 
in 2007 and beyond under this provision notify EPA of their 
application, technical constraints, and required quantities of HCFC-
141b. We further clarify that the entity's previously approved amount, 
for the purposes of determining an amount that is ten percent greater, 
refers solely to amounts for which the entity did submit a petition in 
accordance with Sec.  82.16(h)(1)-(4).
    Furthermore, in order to ensure that the regulations continue to 
conform to section 603 of the Clean Air Act and to monitor U.S. 
compliance with the Montreal Protocol production and consumption caps, 
EPA will maintain the reporting and recordkeeping requirements as 
detailed in Sec.  82.24. These include the requirement in Sec.  
82.24(g)(1) that entities allocated HCFC-141b exemption allowances 
report biannually the quantity of HCFC-141b that was received as well 
as the requirements in Sec.  82.24(b)(1)(xi) and Sec.  82.24(c)(1)(xi) 
that producers and importers report for each quarter the quantity of 
HCFC-141b that was produced and/or imported for these exempted 
applications.
    In 2005, EPA also received and approved a petition for HCFC-141b 
exemption allowances where the HCFC-141b was to be used for baseline 
comparison in a laboratory during product development for HCFC-141b 
foam for comparative analysis of all new alternative formulations. If 
EPA develops a separate proposal to address continued production of 
HCFC-141b for this type of laboratory and product development use, as 
part of that proposed rulemaking, EPA will request and consider 
comments concerning the potential need for ongoing exemption allowances 
for comparative analysis. Since this action pertains only to use of 
HCFC-141b for space vehicle and military applications, EPA will not 
consider comments on use of HCFC-141b for comparative analysis during 
product development to be within the scope of this direct final rule.

D. Definition of Importer

    The current definition of ``importer'' at Sec.  82.3, as published 
in the Federal Register on August 4, 1998 (63 FR 41625), reads:

    Importer means the importer of record listed on U.S. Customs 
Service forms for imported controlled substances, used controlled 
substances or controlled products.

In the August 4, 1998 Federal Register notice, EPA stated that it was 
simplifying the definition of ``importer'' ``for enforcement purposes'' 
and that work with an inter-agency taskforce of other federal agencies 
to enforce against the illegal import of banned class I controlled 
substances was a factor in the decision to amend the definition. EPA 
was responding to members of the taskforce that had ``discovered 
difficulties in working with the definition of importer listed in the 
May 10, 1995 final rule (60 FR 24988) in building cases against illegal 
importers due to ambiguities about who ultimately is responsible.'' In 
an effort to eliminate ambiguity EPA promulgated the definition above 
amending the May 10, 1995, definition. However, as a practical matter, 
given the enforcement experience since the promulgation of the 1998 
definition above, EPA believes it is better to return to the more 
encompassing previous definition, modified to indicate that the 
importer of record is, as stated in the 1998 definition, the person 
listed on U.S. Customs documentation. Therefore, through this action, 
EPA is promulgating a revised definition for ``importer'' that is based 
on the May 10, 1995, definition with clarifying language regarding what 
is meant by ``importer of record.'' With this change, the ``importer'' 
of a controlled substance includes, but is not limited to, the 
``importer of record.'' The revised definition will read:

    Any person who imports a controlled substance or a controlled 
product into the United States. ``Importer'' includes the person 
primarily liable for the payment of any duties on the merchandise or 
an authorized agent acting on his or her behalf. The term also 
includes, as appropriate:
    (1) The consignee;
    (2) The importer of record (listed on U.S. Customs Service forms 
for imported controlled substances, used controlled substances or 
controlled products);
    (3) The actual owner; or
    (4) The transferee, if the right to draw merchandise in a bonded 
warehouse has been transferred.

Returning to the May 10, 1995, definition with the additional text 
clarifying ``importer of record'' better defines the universe of those 
that could be considered to be the ``importer'' of controlled 
substances.

E. Minor Regulatory Corrections

1. Allowance Requirements for Class II Substances With Lower Ozone 
Depleting Potentials
    The regulations published on January 21, 2003 (68 FR 2820) 
establish an allowance system for class II controlled substances. The 
regulations include mechanisms for distribution and tracking of 
allowances for HCFC-22, HCFC-142b, and HCFC-141b. EPA recognizes there 
are many other class II controlled substances that are subject to 
regulations promulgated under 40 CFR part 82. However, at this time 
manufacturers, importers and exporters of these other class II 
controlled substances, including but not limited to HCFC-225ca and 
HCFC-252, are not required to hold allowances to produce, import, or 
export these substances. The reasons for this appear in the preamble to 
the January 21, 2003 rule (68 FR 2823). When EPA apportions baseline 
production and consumption allowances for these other class II 
controlled substances, EPA intends to also establish a process under 
which the Agency would approve petitions for import of used class II 
controlled substances, similar to the petition process that currently 
exists for those class II controlled substances for which baseline 
production and consumption allowances have been apportioned.
    As currently written, the prohibitions on production and import at 
Sec.  82.15(a) and (b) do not specifically limit themselves to those 
class II controlled substances for which allowances have been 
distributed. While restricting trade in these other HCFCs was not the 
intent of the January 21, 2003, final rule, and the allowance 
requirements have not been interpreted by EPA to extend to these other 
class II substances, EPA is concerned that it is possible for such an 
interpretation to be made. Therefore, through this action, EPA is 
amending the affected paragraphs in Sec.  82.15 to clarify that the 
prohibitions apply only to those class II controlled substances for 
which EPA has distributed production and consumption allowances.
2. Removal of Class II Controlled Substances From Sec.  82.13(f)(2)
    Prior to the promulgation of the January 21, 2003 requirements for 
recordkeeping and reporting for class II substances at Sec.  82.24 (68 
FR 2820), EPA regulations already contained a select

[[Page 41169]]

number of requirements for class II recordkeeping and reporting at 
Sec.  82.13. As a result of the reorganization of the recordkeeping and 
reporting requirements that occurred in the January 21, 2003 
rulemaking, Sec.  82.13 generally houses the recordkeeping and 
reporting requirements for class I substances while Sec.  82.24 houses 
the recordkeeping and reporting requirements for class II substances. 
The January 21, 2003 rulemaking moved most of the recordkeeping and 
reporting provisions pertaining to class II substances from Sec.  82.13 
to Sec.  82.24, and established additional recordkeeping and reporting 
requirements specifically for the class II allowance system at Sec.  
82.24. Through an oversight, however, Sec.  82.13(f)(2), which is a 
recordkeeping provision for producers, continued to refer to class II 
substances. The recordkeeping provisions at Sec.  82.24(b)(2) render 
the provisions concerning class II substances at Sec.  82.13(f)(2) 
duplicative. Therefore, this action removes class II substances from 
Sec.  82.13(f)(2).

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether this regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines a ``significant'' regulatory action 
as one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal government or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Mmaterially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This rule is not a ``significant regulatory action'' within the 
meaning of the Executive Order.

B. Paperwork Reduction Act

    This action includes only minor changes in the information 
collection burden. While some minor additional requirements exist, EPA 
is relieving the industry of other burdens and streamlining 
requirements. The Office of Management and Budget (OMB) has previously 
approved the information collection requirements contained in the 
existing regulations under the provisions of the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-
0498 (EPA ICR No. 2014.02). A copy of the OMB approved Information 
Collection Request (ICR) may be obtained from The Collection Strategies 
Division; U.S. Environmental Protection Agency (2822T); 1200 
Pennsylvania Ave., NW., Washington, DC 20460 or by calling (202) 566-
1672. Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information. An agency may not 
conduct or sponsor, and a person is not required to respond to a 
collection of information unless it displays a currently valid OMB 
control number. The OMB control numbers for EPA's regulations in 40 CFR 
are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the NAICS codes below (2) a small governmental jurisdiction that is 
a government of a city, county, town, school district or special 
district with a population of less than 50,000; and (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.

----------------------------------------------------------------------------------------------------------------
                                                                                                    NAICS small
                                                                                                   business size
                                                                                                   standard  (in
                            Category                                NAICS code       SIC code        number of
                                                                                                   employees or
                                                                                                    millions of
                                                                                                     dollars)
----------------------------------------------------------------------------------------------------------------
1. Chemical and Allied Products, NEC............................          424690            5169             100
2. Chlorofluorocarbon gas exporters.............................          325120            2869             100
----------------------------------------------------------------------------------------------------------------

    After considering the economic impacts of today's direct final rule 
on small entities, I certify that this action will not have a 
significant economic impact on a substantial number of small entities. 
This direct final rule will not impose any requirements on small 
entities. None of the entities affected by this rule are considered 
small as defined by the size standards listed above.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local and tribal 
government and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures by State, local and tribal governments, in 
the aggregate, or by the private sector, of $100 million

[[Page 41170]]

or more in any one year. If a written statement is required under 
section 202, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule, unless the Agency explains 
why this alternative is not selected or the selection of this 
alternative is inconsistent with law.
    Section 203 of the UMRA requires the Agency to establish a plan for 
obtaining input from and informing, educating, and advising any small 
governments that may be significantly or uniquely affected by the rule. 
Section 204 of the UMRA requires the Agency to develop a process to 
allow elected state, local, and tribal government officials to provide 
input in the development of any proposal containing a significant 
Federal intergovernmental mandate.
    EPA has determined that this direct final rule does not contain a 
Federal mandate that may result in expenditures of $100 million or more 
by State, local and tribal governments, in the aggregate, or by the 
private sector, in any one year. Viewed as a whole, all of today's 
amendments do not create a Federal mandate resulting in costs of $100 
million or more in any one year for State, local and tribal 
governments, in the aggregate, or for the private sector. Thus, today's 
direct final rule is not subject to the requirements of sections 202 
and 205 of the UMRA. EPA has also determined that this rule contains no 
regulatory requirements that might significantly or uniquely affect 
small governments; therefore, EPA is not required to develop a plan 
with regard to small governments under section 203. Finally, because 
this direct final rule does not contain a significant intergovernmental 
mandate, the Agency is not required to develop a process to obtain 
input from elected state, local, and tribal officials under section 
204.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This direct final rule does not have federalism implications. It 
will not have substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government, as specified in Executive Order 13132. Today's action is 
expected to primarily affect producers, importers and exporters of 
HCFCs. Thus, Executive Order 13132 does not apply to this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This rule does not have 
tribal implications, as specified in Executive Order 13175. Today's 
direct final rule does not significantly or uniquely affect the 
communities of Indian tribal governments. It does not impose any 
enforceable duties on communities of Indian tribal governments. Thus, 
Executive Order 13175 does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health & Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    While this direct final rule is not subject to the Executive Order 
because it is not economically significant as defined in E.O. 12866, we 
nonetheless have reason to believe that the environmental health or 
safety risk addressed by the underlying regulations may have a 
disproportionate effect on children. Depletion of stratospheric ozone 
results in greater transmission of the sun's ultraviolet (UV) radiation 
to the earth's surface. The following studies describe the effects on 
children of excessive exposure to UV radiation: (1) Westerdahl J, 
Olsson H, Ingvar C. ``At what age do sunburn episodes play a crucial 
role for the development of malignant melanoma,'' Eur J Cancer 1994: 
30A: 1647-54; (2) Elwood JM Japson J. ``Melanoma and sun exposure: an 
overview of published studies,'' Int J Cancer 1997; 73:198-203; (3) 
Armstrong BK, ``Melanoma: childhood or lifelong sun exposure,'' In: 
Grobb JJ, Stern RS Mackie RM, Weinstock WA, eds. ``Epidemiology, causes 
and prevention of skin diseases,'' 1st ed. London, England: Blackwell 
Science, 1997: 63-6; (4) Whieman D., Green A. ``Melanoma and Sunburn,'' 
Cancer Causes Control, 1994: 5:564-72; (5) Heenan, PJ. ``Does 
intermittent sun exposure cause basal cell carcinoma? A case control 
study in Western Australia,'' Int J Cancer 1995; 60: 489-94; (6) 
Gallagher, RP, Hill, GB, Bajdik, CD, et al. ``Sunlight exposure, 
pigmentary factors, and risk of nonmelanocytic skin cancer I, Basal 
cell carcinoma.'' Arch Dermatol 1995; 131: 157-63; (7) Armstrong, DK. 
``How sun exposure causes skin cancer: an epidemiological 
perspective,'' Prevention of Skin Cancer. 2004. 89-116.
    This direct final rule is making minor changes to the existing 
regulatory regime for the class II controlled substances. Theses minor 
changes are not expected to increase the impacts on children's health 
from stratospheric ozone depletion.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 F.R. 28355 (May 22, 2001)) because it is not 
a significant regulatory action under Executive Order 12866.

I. The National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs

[[Page 41171]]

EPA to provide Congress, through OMB, explanations when the Agency 
decides not to use available and applicable voluntary consensus 
standards. This rulemaking does not involve technical standards. 
Therefore, EPA did not consider the use of any voluntary consensus 
standards.

J. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective October 18, 2006.

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Chemicals, Chlorofluorocarbons, Exports, 
Hydrochlorofluorocarbons, Imports, Reporting and recordkeeping 
requirements.

    Dated: July 13, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons stated in the preamble, 40 CFR part 82 is amended as 
follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

0
1. The authority citation for part 82 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

Subpart A--Production and Consumption Controls

0
2. Amend Sec.  82.3 by revising the definitions of ``Heel'' and 
``Importer'' to read as follows:


Sec.  82.3  Definitions for class I and class II controlled substances.

* * * * *
    Heel means the amount of a controlled substance that remains in a 
container after it is discharged or off-loaded (that is no more than 
ten percent of the volume of the container).
* * * * *
    Importer means any person who imports a controlled substance or a 
controlled product into the United States. ``Importer'' includes the 
person primarily liable for the payment of any duties on the 
merchandise or an authorized agent acting on his or her behalf. The 
term also includes, as appropriate:
    (1) The consignee;
    (2) The importer of record (listed on U.S. Customs Service forms 
for imported controlled substances, used controlled substances or 
controlled products);
    (3) The actual owner; or
    (4) The transferee, if the right to draw merchandise in a bonded 
warehouse has been transferred.
* * * * *

0
3. Amend Sec.  82.13 by revising paragraph (f)(2) introductory text to 
read as follows:


Sec.  82.13  Recordkeeping and reporting requirements for class I 
controlled substances.

* * * * *
    (f) * * *
    (2) Every producer of a class I controlled substance during a 
control period must maintain the following records:
* * * * *

0
4. Amend Sec.  82.15 by revising paragraphs (a)(1) and (b) to read as 
follows:


Sec.  82.15  Prohibitions for class II controlled substances.

    (a) Production. (1) Effective January 21, 2003, no person may 
produce class II controlled substances for which EPA has apportioned 
baseline production and consumption allowances, in excess of the 
quantity of unexpended production allowances, unexpended Article 5 
allowances, unexpended export production allowances, or conferred 
unexpended HCFC-141b exemption allowances held by that person for that 
substance under the authority of this subpart at that time in that 
control period, unless the substances are transformed or destroyed 
domestically or by a person of another Party, or unless they are 
produced using an exemption granted in paragraph (f) of this section. 
Every kilogram of excess production constitutes a separate violation of 
this subpart.
* * * * *
    (b) Import. (1) Effective January 21, 2003, no person may import 
class II controlled substances (other than transhipments, heels or used 
class II controlled substances) for which EPA has apportioned baseline 
production and consumption allowances , in excess of the quantity of 
unexpended consumption allowances, or conferred unexpended HCFC-141b 
exemption allowances held by that person under the authority of this 
subpart at that time in that control period, unless the substances are 
for use in a process resulting in their transformation or their 
destruction, or unless they are produced using an exemption granted in 
paragraph (f) of this section. Every kilogram of excess import 
constitutes a separate violation of this subpart.
    (2) Effective January 21, 2003, no person may import, at any time 
in any control period, a used class II controlled substance for which 
EPA has apportioned baseline production and consumption allowances, 
without having submitted a petition to the Administrator and received a 
non-objection notice in accordance with Sec.  82.24(c)(3) and (4). A 
person issued a non-objection notice for the import of an individual 
shipment of used class II controlled substances may not transfer or 
confer the right to import, and may not import any more than the exact 
quantity (in kilograms) of the used class II controlled substance 
stated in the non-objection notice. Every kilogram of import of used 
class II controlled substance in excess of the quantity stated in the 
non-objection notice issued by the Administrator in accordance with 
Sec.  82.24(c)(3) and (4) constitutes a separate violation of this 
subpart.
* * * * *

0
5. Amend Sec.  82.16 by revising paragraph (h)(1) introductory text and 
by adding paragraphs (h)(7) and (h)(8) to read as follows:


Sec.  82.16  Phaseout schedule of class II controlled substances.

* * * * *
    (h) * * *
    (1) Effective January 21, 2003, a formulator of HCFC-141b, an 
agency, department, or instrumentality of the U.S., or a non-
governmental space vehicle entity, may petition EPA for HCFC-141b 
exemption allowances for the production or import of HCFC-141b after 
the phaseout date, in accordance with this section. Except as provided 
in paragraphs (h)(4) and (7) of this section, a petitioner must submit 
the following information to the Director of EPA's Office of 
Atmospheric Programs no later than April 21, 2003, for the 2003 control 
period; and, for any subsequent control period, no later than October 
31st of the year preceding the control period for

[[Page 41172]]

which the HCFC-141b exemption allowances are requested:
* * * * *
    (7) A formulator for, or an agency, department, or instrumentality 
of the U.S., or a non-governmental space vehicle entity that has 
previously petitioned for and been granted HCFC-141b exemption 
allowances under paragraphs (h)(1) through (4) of this section is 
granted, on January 1 of each control period beginning January 1, 2007, 
HCFC-141b exemption allowances equivalent to 10% more than the highest 
amount previously granted under paragraphs (h)(1) through (4) of this 
section to that petitioner for space vehicle uses or defense 
applications.
    (8) A formulator for, or an agency, department, or instrumentality 
of the U.S.; or a non-governmental space vehicle entity that has 
previously petitioned for and been granted HCFC-141b exemption 
allowances under paragraphs (h)(1) through (4) of this section but now 
seeks to obtain allowances in addition to those granted under paragraph 
(h)(7) of this section must submit a new petition in accordance with 
paragraph (h)(1) of this section.

0
6. Amend Sec.  82.20 by revising paragraphs (a) introductory text, 
(a)(1)(x), and (a)(2)(i)(B) to read as follows:


Sec.  82.20  Availability of consumption allowances in addition to 
baseline consumption allowances for class II controlled substances.

    (a) A person may obtain at any time during the control period, in 
accordance with the provisions of this section, consumption allowances 
equivalent to the quantity of class II controlled substances that the 
person exported from the U.S. and its territories to a foreign state, 
in accordance with this section, when that quantity of class II 
controlled substance was produced in the U.S. or imported into the U.S. 
with expended consumption allowances.
    (1) * * *
    (x) A written statement from the producer that the class II 
controlled substances were produced with expended allowances or a 
written statement from the importer that the class II controlled 
substances were imported with expended allowances.
    (2) * * *
    (i) * * *
    (B) The consumption allowances will be granted to the person the 
exporter indicates, whether it is the producer, the importer, or the 
exporter.
* * * * *

0
7. Amend Sec.  82.24 as follows:
0
a. Revise paragraphs (c)(1)(vi), (c)(2)(ii), (c)(3) introductory text.
0
b. Revise paragraphs (f) introductory text, (f)(1), (f)(2) introductory 
text, and (f)(3).


Sec.  82.24  Recordkeeping and reporting requirements for class II 
controlled substances.

* * * * *
    (c) * * *
    (1) * * *
    (vi) For substances for which EPA has apportioned baseline 
production and consumption allowances, the importer's total sum of 
expended and unexpended consumption allowances by chemical as of the 
end of that quarter;
* * * * *
    (2) * * *
    (ii) The quantity (in kilograms) of those class II controlled 
substances imported that are used and the information provided with the 
petition where a petition is required under paragraph (c)(3) of this 
section;
* * * * *
    (3) Petition to import used class II controlled substances and 
transhipment-Importers. For each individual shipment over 5 pounds of a 
used class II controlled substance as defined in Sec.  82.3 for which 
EPA has apportioned