### Original SBA Suggested Preamble Language

The Role of Economic Concerns for the “Availability” Determination under Clean Air Act Section 612 (c ) In the 2004 case, Honeywell International v. EPA , 374 F.3d 1363 (D. C. Cir 2004), the court invited EPA to clarify

its views on whether economic considerations play a role under Clean Air Section 612 (c). In the 2002 final rule, EPA noted that it would allow continued use of HCFC

- 22 and HCFC

- 142b , stating that "there would be significant impact on small busin esses" if EPA had delisted these chemicals b ecause switching to the alternatives "would be difficult and prohibitively costly.” 67 Fed. Reg. 47703, 47706

- 09. (July 22,2002). The court overturned the EPA rule change because the agency failed to explain it s position on the relevance of cost considerations in section 612 determinations. EPA now interprets the section 612 (c ) as permitting the agency to consider both technical concerns and practical and economic concerns, such as those cited in the Honeyw ell decision. As in the Honey

well case, EPA may

allow the continuance of existing acceptable uses even where a new substitute would be technicall y available, but prohibitively expensive for small businesses for certain specific end uses. The transition cost to adopt a substitute chemical could be so expensive that a small manufacturer would not be able to recover its research and development costs to reformulate a small production line, although it may be practicable for larger production lines. EPA re quests comment on the EPA interpretation of this provision. In addition, the agency

requests information about the technical and cost constraints on individuals businesses for specific end uses, with the supporting factual information.

------------------ --------------------------------------------------------------- LANGUAGE From 2005 Foam Proposal

- November 4, 2005 The decision to grandfather is based on the criteria established in Sierra Club v. EPA (719 F.2D 436 (DC CIR. 1983)). The criteria EPA e xamines to judge the appropriateness of grandfathering includes: (1) Is the new rule an abrupt departure from Agency practice, (2) what is the extent the interested parties relied on the previous rule, (3) **what is the burden of the new rule on the interest**  **ed parties** and (4) what is the statutory interest in making the new rule effective immediately , as opposed to grandfathering interested parties (59 FR 13057). **[bold added]** From 1994 SNAP Final RUL E: EPA included consideration of “economic burden” in man y sections of this final rule. EPA can decide to cite the 1994 grandfathering discussion, using the same language as the November 4, 2005 proposal above, which is similar to the 1994 version below:

### March 18, 1994 SNAP Framework Rule:

59 Fed Reg. 13057 **Grandfathering of Unacceptable Substitutes** EPA is authorized to permit the continuation of activities otherwise restricted where the balance of equities supports such grandfathering. Consequently, where appropriate, EPA may grandfather the p roduction and use of particular substitutes by setting the effective date of unacceptability listings in the future. The United States District Court for the District of Columbia Circuit has established a four

- part test to judge the appropriateness of Agency grandfathering (see Sierra Club v. EPA, 719 F.2d 436 (DC Cir. 1983)). This test involves balancing the results of four analyses, including whether the new rule represents an abrupt departure from p reviously established practice, the **[*13058]** extent to which a party relied on the previous rule, **the degree of burden which application of the new rule would impose on**  **the party** , and the statutory interest in applying the new rule immediately. In each rulemaking listing a substitute as unacceptable where grandfathering seems appropriate, EPA will conduct these four analyses and w eigh their results. Where the balance of equities favors grandfathering, EPA will set a delayed effective date for such listin gs. Setting future effective dates to ban the sale and distribution of specific substitutes will allow the Agency to avoid penalizing those who in specific applications may have already invested in good faith in alternatives the SNAP program determines to be unacceptable. For example, the Agency in this final rule finds unacceptable the use of HCFC

- 141b in solvent applications. New information on stratospheric ozone depletion has increased concern over possible adverse human health and environmental effe cts, and the Agency’s unacceptable determination in the case of HCFC

- 141b reflects these concerns. 

### One example of several in this 1994 rule applying the use of Sierra Club test

– for metals cleaning in this situation: 59 Fed Reg. 13096 Metals cleaning. (a) HCFC

- 141b and its blends. HCFC

- 141b and its blends are unacceptable as substitutes for CFC

- 113 and MCF in metals cleaning, with acceptability subject to narrow ed use limitations to be granted by EPA, if necessary, as CFC

- 113 replacements after the effe ctive date of this listing. The effective date for this listing is 30 days after the date of the final rule for uses of HCFC

- 141b and its blends in new equipment (including retrofits made after the effective date) and as of January 1, 1996, for uses of HCF C

- 141b and its blends in existing equipment. For purposes of this SNAP determination, 2 existing equipment 2 is defined to include equipment that companies have shown a clear intention to use and have purchased before the effective date of the SNAP determination, even if that equipment has not yet been installed. As discussed earlier in this action in Section VI.B., the Agency is authorized to grandfather existing uses from a prohibition where appropriate under the four

- part test established in Sierra Club v. EPA, supra. The Agency has conducted the four analyses required under this test, and has concluded that the balance of equities favors a grandfathering period of tw o y ears for uses of HCFC

- 141b in existing equipment in this application. The prohibition set forth in this action clearly represents a departure from previously established practice, as use of thesubstitute wa s allowed previously. Existing users of HCFC

- 141b w ho switched from class I substances into this solvent invested in this substitute on the assumption that it would be a sufficient improvement over the class I use. **Prohibiting their use of the substitute immediately would**  **im pose a severe economic burden on these users. These factors taken together outweigh**  **any statutory interest in applying the new rule immediately to existing users.** This is especially true since the restriction applies immediately to new equipment using H CFC

- 141b, which creates no incentive for continued investment in equipment using HCFC

- 141b in this application. **{Bolded added} Conclusion: EPA can use the text from** **1994 or 2005 (proposal or final) to characterize Sierra Club case, and can employ the ter**  **ms “econom ic burden” or “burden” and that would satisfy us. I will look for the 2006**  **final rule now to see what was used.** 

### LANGUAGE From 2005 Foam Proposal

- November 4, 2005

– 1994 SNAP Sierra Club test still intact: The decision to grandfather i s based on the criteria established in Sierra Club v. EPA (719 F.2D 436 (DC CIR. 1983)). The criteria EPA examines to judge the appropriateness of grandfathering includes: (1) Is the new rule an abrupt departure from Agency practice, (2) what is the extent the interested parties relied on the previous rule, (3) **what is the burden of the new rule on the interested parties**  and (4) what is the statutory interest in making the new rule effective immediately , as opposed to grandfathering interested parties (59 FR 13057). **[bold added]**

**Alternative Suggested Language: Copied Directly from 1994 SNAP Fram**  **ework:** EPA is authorized to permit the continuation of activities otherwise restricted where the balance of equities supports such grandfathering. Consequently, where appropriate, EPA may grandfather the production and use of particular substitutes by setting the effective date of unacceptability listings in the future. The United States District Court for the District of Columbia Circuit has established a four

- part test to judge the appropriateness of Agency grandfathering (see Sierra Club v. EPA, 719 F.2d 436 (DC Cir. 1983)). This test involves balancing the results of four analyses, including whether the new rule represents an abrupt departure from previously established practice, the **[*13058]** extent to which a party relied on the previous rule, **the degree of burden which application of the new rule would impose on**  **the party** , and the statutory interest in applying the new rule immediately. In each rulemaking li sting a substitute as unacceptable where grandfathering seems appropriate, EPA will conduct these four analyses and w eigh their results. Where the balance of equities favors grandfathering, EPA will set a delayed effective date for such listings. [remove bolding] Added Sentence: EPA requests comment on the applicability of the Sierra Club test to this proposal in determining the length of the appropriate grandfathering of existing uses.