Federal Register / Vol. 76, No. 151 / Friday, August 5, 2011 / Rules and Regulations 47451 

XIII through XVI of Colorado’s 

Regulation No. 7, except for Colorado’s 

repeal of section II.D. EPA is 

disapproving Colorado’s repeal of 

Section II.D and Colorado’s revisions to 

Section XII of Regulation No. 7. EPA is 

not acting on the provisions in 

Regulation No. 7 that are designated 

‘‘State Only.’’ 

(i) Incorporation by reference. 

(A) 5 CCR 1001–5, Colorado 

Regulation No. 3, ‘‘Air Contaminant 

Emissions Notices,’’ Part A, 

‘‘Concerning General Provisions 

Applicable to Reporting and 

Permitting,’’ Sections II.D.1.m, II.D.1.ee, 

II.D.1.uu, II.D.1.ccc, II.D.1.ddd, 

II.D.1.uuu, and II.D.1.eeee, effective 

January 30, 2009. 

(B) 5 CCR 1001–5, Colorado 

Regulation No. 3, ‘‘Air Contaminant 

Emissions Notices,’’ Part B, ‘‘Concerning 

Construction Permits,’’ Sections II.D.1.k, 

l, m, and n, effective January 30, 2009. 

(C) Letter dated November 18, 2009 

from the Office of the Colorado Attorney 

General, signed by Jerry Goad, to Candy 

Herring, Office of the Colorado 

Secretary of State, regarding clerical 

errors in Regulation No. 7, and those 

portions of 5 CCR 1001–9, Colorado 

Regulation No. 7, ‘‘Control of Ozone Via 

Ozone Precursors (Emissions of Volatile 

Organic Compounds and Nitrogen 

Oxides),’’ Section II.C.1 that 

accompanied such letter, except for the 

following: the parenthetical phrase 

‘‘(State Only: Located in any Ozone 

Nonattainment Area or Attainment 

Maintenance Area)’’ at II.C.1; Section 

II.C.1.a.(v); Section II.C.1.c; and Section 

II.C.1.d. 

(D) 5 CCR 1001–9, Colorado 

Regulation No. 7, ‘‘Control of Ozone Via 

Ozone Precursors (Emissions of Volatile 

Organic Compounds and Nitrogen 

Oxides),’’ Sections I through XI and XIII 

through XVI, effective January 30, 2009, 

except for the following: Section I.A.1.b; 

Section I.B.1.b; Section I.B.2.b; Section 

I.B.2.d; Section II.A.12; Section II.C.1; 

and the repeal of Section II.D. 

■ 3. Section 52.350 is amended by 

adding paragraph (c) to read as follows: 

§ 52.350 Control strategy: ozone. 

* * * * * 

(c) Revisions to the Colorado State 

Implementation Plan for the 1997 8- 

hour ozone NAAQS entitled ‘‘Denver 

Metro Area & North Front Range 8–Hour 

Ozone Attainment Plan,’’ excluding the 

last paragraph on page IV–1, the first 

paragraph on page IV–2, the words 

‘‘federally enforceable’’ in the second to 

last paragraph on page V–6, and the 

reference to Attachment A in the Table 

of Contents and on page IV–3, as 

adopted by the Colorado Air Quality 

Control Commission on December 12, 

2008, and submitted by the Governor to 

EPA on June 18, 2009. 

[FR Doc. 2011–19807 Filed 8–4–11; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 82 

[EPA–HQ–OAR–2010–1040; FRL–9448–4] 

RIN 2060–AQ82 

Protection of Stratospheric Ozone: 

Adjustments to the Allowance System 

for Controlling HCFC Production, 

Import, and Export 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Interim final rule. 

SUMMARY: EPA is adjusting the 

allowance system controlling U.S. 

consumption and production of 

hydrochlorofluorocarbons (HCFCs) as a 

result of a recent court decision vacating 

a portion of the rule titled ‘‘Protection 

of Stratospheric Ozone: Adjustments to 

the Allowance System for Controlling 

HCFC Production, Import, and Export; 

Final Rule.’’ EPA interprets the court’s 

vacatur as applying to the part of the 

rule that establishes the company-bycompany baselines and calendar-year 

allowances for HCFC–22 and HCFC– 

142b. This action relieves the regulatory 

ban on production and consumption of 

these two chemicals following the 

court’s vacatur by establishing new 

company-by-company HCFC–22 and 

HCFC–142b baselines and allocating 

production and consumption 

allowances for 2011. 

DATES: This rule is effective August 5, 

2011. While the urgent need for 

certainty regarding the consumption 

allowance allocations in the 2011 

control period precludes the Agency 

from considering any adjustments to the 

consumption allowances allocated in 

this action, EPA will consider all 

written comments received by 

September 6, 2011 to determine whether 

to issue additional production 

allowances for the time period covered 

by this action. Commenters may also 

submit comments on the issues 

addressed in this action as they pertain 

to future control periods. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ– 

OAR–2010–1040, by one of the 

following methods: 

• http://www.regulations.gov: Follow 

the on-line instructions for submitting 

comments. 

• E-mail: a-and-r-docket@epa.gov. 

• Fax: 202–566–1741. 

• Mail: Docket # EPA–HQ–OAR– 

2010–1040, 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–2010–1040 Air and Radiation 

Docket at EPA West, 1301 Constitution 

Avenue NW., Room B108, Mail Code 

6102T, Washington, DC 20004. 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–2010– 

1040. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at http:// 

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 http:// 

www.regulations.gov or e-mail. The 

http://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 http:// 

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 http:// 

www.epa.gov/epahome/dockets.htm. 

FOR FURTHER INFORMATION CONTACT: 

Luke H. Hall-Jordan by telephone at 

(202) 343–9591, or by e-mail at halljordan.luke@epa.gov, or by mail at U.S. 

Environmental Protection Agency, 

Stratospheric Protection Division, 

Stratospheric Program Implementation 


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Branch (6205J), 1200 Pennsylvania 

Avenue, NW., Washington, DC 20460. 

You may also visit the Ozone Protection 

Web site of EPA’s Stratospheric 

Protection Division at http:// 

www.epa.gov/ozone/strathome.html for 

further information about EPA’s 

Stratospheric Ozone Protection 

regulations, the science of ozone layer 

depletion, and related topics. 

SUPPLEMENTARY INFORMATION: Acronyms 

and Abbreviations. The following 

acronyms and abbreviations are used in 

this document. 

APA—Administrative Procedure Act; 

CAA—Clean Air Act; 

CAAA—Clean Air Act Amendments of 

1990; 

CFC—Chlorofluorocarbon; 

CFR—Code of Federal Regulations; 

EPA—Environmental Protection 

Agency; 

FR—Federal Register; 

HCFC—Hydrochlorofluorocarbon; 

HVAC—Heating, Ventilating, and Air 

Conditioning; 

Montreal Protocol—Montreal Protocol 

on Substances that Deplete the Ozone 

Layer; 

MOP—Meeting of the Parties; 

MT—Metric Ton; 

ODP—Ozone Depletion Potential; 

ODS—Ozone-Depleting Substances; 

Party—States and regional economic 

integration organizations that have 

consented to be bound by the 

Montreal Protocol on Substances that 

Deplete the Ozone Layer. 

Organization of This Document. The 

following outline is provided to aid in 

locating information in this preamble. 

I. Regulated Entities 

II. Background 

A. How does the Montreal Protocol phase 

out HCFCs? 

B. How does the Clean Air Act phase out 

HCFCs? 

C. What sections of the Clean Air Act apply 

to this rulemaking? 

D. How does this action relate to the recent 

court decision? 

1. Addressing 2010 Allowances 

III. Justification for This Interim Final Rule 

IV. Summary of This Interim Final Action 

V. Allocation of Allowances for the 2011 

Control Period 

A. Baselines for HCFC–22 and HCFC–142b 

Allowances 

1. Adjusting the Baseline for InterCompany and Inter-Pollutant Transfers 

B. Factors for Considering Allocation 

Amounts for HCFC–22 and HCFC–142b 

1. The Importance of HCFC–22 Relative to 

HCFC–142b Servicing Needs for Existing 

Equipment 

2. Meeting Servicing Needs With Virgin 

and Recovered Material 

3. Annual Reduction in Allocated Amounts 

C. Allocations of HCFC–22 and HCFC– 

142b 

1. HCFC–22 Consumption Allowances for 

2011 

2. HCFC–22 Production Allowances for 

2011 

3. HCFC–142b Allowances for 2011 

4. How the Aggregate for HCFC–22 and 

HCFC–142b Translates Entity-by-Entity 

D. HCFC–141b, HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb 

Allowances 

E. Other HCFCs 

VI. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act (RFA) 

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. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

I. Regulated Entities 

This rule will affect the following 

categories: 

Category NAICS code SIC code Examples of regulated entities 

Industrial Gas Manufacturing ....................................... 325120 2869 Fluorinated hydrocarbon gases manufacturers and reclaimers. 

Other Chemical and Allied Products Merchant Wholesalers.422690 5169 Chemical gases and compressed gases merchant 

wholesalers. 

Air-Conditioning and Warm Air Heating Equipment 

and Commercial and Industrial Refrigeration Equipment Manufacturing.

333415 3585 Air-conditioning equipment and commercial and industrial refrigeration equipment manufacturers. 

Air-Conditioning Equipment and Supplies Merchant 

Wholesalers.

423730 5075 Air-conditioning (condensing unit, compressors) merchant wholesalers. 

Electrical and Electronic Appliance, Television, and 

Radio Set Merchant Wholesalers.

423620 5064 Air-conditioning (room units) merchant wholesalers. 

Plumbing, Heating, and Air-Conditioning Contractors 238220 1711, 7623 Central air-conditioning system and commercial refrigeration installation; HVAC contractors. 

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 could 

potentially 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 

EPA is undertaking this rulemaking as 

a result of the decision issued by the 

U.S. Court of Appeals for the District of 

Columbia Circuit (Court) in Arkema v. 

EPA (618 F.3d 1, DC Cir. 2010) 

regarding the December 15, 2009 final 

rule titled ‘‘Protection of Stratospheric 

Ozone: Adjustments to the Allowance 

System for Controlling HCFC 

Production, Import, and Export,’’ 

published at 74 FR 66413 (2009 Final 

Rule). Certain allowance holders 

affected by the 2009 Final Rule filed 

petitions for judicial review of the rule 

under section 307(b) of the Clean Air 

Act. Among other arguments, the 

petitioners contended that the rule was 

impermissibly retroactive because in 

setting the baselines for the new 

regulatory period, EPA did not take into 

account certain inter-pollutant baseline 

transfers that petitioners had performed 

during the prior regulatory period. 

The Court issued a decision on 

August 27, 2010, agreeing with 

petitioners that ‘‘the [2009] Final Rule 

unacceptably alters transactions the 

EPA approved under the 2003 Rule’’ 

(Arkema v. EPA, 618 F.3d at 3). The 

Court vacated the rule in part, ‘‘insofar 


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1Class I refers to the controlled substances listed 

in appendix A to 40 CFR part 82 subpart A. Class 

II refers to the controlled substances listed in 

appendix B to 40 CFR part 82 subpart A. 

2Under Article 2(9)(d) of the Montreal Protocol, 

an adjustment enters into force six months from the 

date the depositary (the Ozone Secretariat) 

circulates it to the Parties. The depositary accepts 

all notifications and documents related to the 

Protocol and examines whether all formal 

requirements are met. In accordance with the 

procedure in Article 2(9)(d), the depositary 

communicated the adjustment to all Parties on 

November 14, 2007. The adjustment entered into 

force and become binding for all Parties on May 14, 

2008. 

3Paragraphs 4–6 of adjusted Article 2F read as 

follows: 

‘‘4. Each Party shall ensure that for the twelvemonth period commencing on 1 January 2010, and 

in each twelve-month period thereafter, its 

calculated level of consumption of the controlled 

substances in Group I of Annex C does not exceed, 

annually, twenty-five percent of the sum referred to 

in paragraph 1 of this Article. Each Party producing 

one or more of these substances shall, for the same 

periods, ensure that its calculated level of 

production of the controlled substances in Group I 

of Annex C does not exceed, annually, twenty-five 

percent of the calculated level referred to in 

paragraph 2 of this Article. However, in order to 

satisfy the basic domestic needs of the Parties 

operating under paragraph 1 of Article 5, its 

calculated level of production may exceed that limit 

by up to ten percent of its calculated level of 

production of the controlled substances in Group I 

of Annex C as referred to in paragraph 2. 

5. Each Party shall ensure that for the twelvemonth period commencing on 1 January 2015, and 

in each twelve-month period thereafter, its 

calculated level of consumption of the controlled 

substances in Group I of Annex C does not exceed, 

annually, ten percent of the sum referred to in 

paragraph 1 of this Article. Each Party producing 

one or more of these substances shall, for the same 

periods, ensure that its calculated level of 

production of the controlled substances in Group I 

of Annex C does not exceed, annually, ten percent 

of the calculated level referred to in paragraph 2 of 

this Article. However, in order to satisfy the basic 

domestic needs of the Parties operating under 

paragraph 1 of Article 5, its calculated level of 

production may exceed that limit by up to ten 

percent of its calculated level of production of the 

controlled substances in Group I of Annex C as 

referred to in paragraph 2. 

6. Each Party shall ensure that for the twelvemonth period commencing on 1 January 2020, and 

in each twelve-month period thereafter, its 

Continued 

as it operates retroactively,’’ and 

remanded to EPA ‘‘for prompt 

resolution,’’ (618 F.3d at 10). The Court 

withheld the mandate for the decision 

pending the disposition of any petition 

for rehearing. EPA’s petition for 

rehearing was denied on January 21, 

2011. The mandate issued on February 

4, 2011. More detail is provided on the 

case and EPA’s interpretation of the 

Court’s decision in Section II.D. 

A. How does the Montreal Protocol 

phase out HCFCs? 

The Montreal Protocol on Substances 

that Deplete the Ozone Layer is the 

international agreement aimed at 

reducing and eventually eliminating the 

production and consumption of 

stratospheric ozone-depleting 

substances (ODS). The U.S. was one of 

the original signatories to the 1987 

Montreal Protocol and the U.S. ratified 

the Protocol on April 12, 1988. Congress 

then enacted, and President George 

H.W. Bush signed into law, the Clean 

Air Act Amendments of 1990 (CAAA), 

which included Title VI on 

Stratospheric Ozone Protection, codified 

as 42 U.S.C. chapter 85, Subchapter VI, 

to ensure that the U.S. could satisfy its 

obligations under the Montreal Protocol. 

Title VI includes restrictions on 

production, consumption, and use of 

ODS that are subject to acceleration if 

‘‘the Montreal Protocol is modified to 

include a schedule to control or reduce 

production, consumption, or use * * * 

more rapidly than the applicable 

schedule’’ prescribed by the statute 

(CAA § 606). Both the Montreal Protocol 

and the Clean Air Act (CAA) define 

consumption as production plus 

imports minus exports. 

In 1990, as part of the London 

Amendment to the Montreal Protocol, 

the Parties identified HCFCs as 

‘‘transitional substances’’ to serve as 

temporary, lower ozone depletion 

potential (ODP) substitutes for CFCs and 

other ODS. EPA similarly viewed 

HCFCs as ‘‘important interim substitutes 

that will allow for the earliest possible 

phaseout of CFCs and other Class I 

substances’’ 1 (58 FR 65026). In 1992, 

through the Copenhagen Amendment to 

the Montreal Protocol, the Parties 

created a detailed phaseout schedule for 

HCFCs beginning with a cap on 

consumption for industrialized (Article 

2) Parties, a schedule to which the U.S. 

adheres. The consumption cap for each 

Article 2 Party was set at 3.1 percent 

(later tightened to 2.8 percent) of a 

Party’s CFC consumption in 1989, plus 

a Party’s consumption of HCFCs in 1989 

(weighted on an ODP basis). Based on 

this formula, the HCFC consumption 

cap for the U.S. was 15,240 ODPweighted metric tons (MT), effective 

January 1, 1996. This became the U.S. 

consumption baseline for HCFCs. 

The 1992 Copenhagen Amendment 

created a schedule with graduated 

reductions and the eventual phaseout of 

HCFC consumption (Copenhagen, 23–25 

November, 1992, Decision IV/4). Prior to 

a later adjustment in 2007, the schedule 

initially called for a 35 percent 

reduction of the consumption cap in 

2004, followed by a 65 percent 

reduction in 2010, a 90 percent 

reduction in 2015, a 99.5 percent 

reduction in 2020 (restricting the 

remaining 0.5 percent of baseline to the 

servicing of existing refrigeration and 

air-conditioning equipment), with a 

total phaseout in 2030. 

The Copenhagen Amendment did not 

cap HCFC production. In 1999, the 

Parties created a cap on production for 

Article 2 Parties through an amendment 

to the Montreal Protocol agreed by the 

Eleventh Meeting of the Parties (Beijing, 

29 November–3 December 1999, 

Decision XI/5). The cap on production 

was set at the average of: (a) 1989 HCFC 

production plus 2.8 percent of 1989 CFC 

production, and (b) 1989 HCFC 

consumption plus 2.8 percent of 1989 

CFC consumption. Based on this 

formula, the HCFC production cap for 

the U.S. was 15,537 ODP-weighted MT, 

effective January 1, 2004. This became 

the U.S. production baseline for HCFCs. 

To further protect human health and 

the environment, the Parties to the 

Montreal Protocol adjusted the Montreal 

Protocol’s phaseout schedule for HCFCs 

at the 19th Meeting of the Parties in 

September 2007. In accordance with 

Article 2(9)(d) of the Montreal Protocol, 

the adjustment to the phaseout schedule 

was effective on May 14, 2008.2

As a result of the 2007 Montreal 

Adjustment (reflected in Decision XIX/ 

6), the U.S. and other industrialized 

countries are obligated to reduce HCFC 

production and consumption 75 percent 

below the established baseline by 2010, 

rather than 65 percent as previously 

required. The other milestones remain 

the same. The adjustment also resulted 

in a phaseout schedule for HCFC 

production that parallels the 

consumption phaseout schedule. All 

production and consumption for Article 

2 Parties is phased out by 2030. 

Decision XIX/6 also adjusted the 

provisions for Parties operating under 

paragraph 1 of Article 5 (developing 

countries): (1) To set HCFC production 

and consumption baselines based on the 

average 2009–2010 production and 

consumption, respectively; (2) to freeze 

HCFC production and consumption at 

those baselines in 2013; and (3) to add 

stepwise reductions of 10 percent below 

baselines by 2015, 35 percent by 2020, 

67.5 percent by 2025, and 97.5 percent 

by 2030—allowing, between 2030 and 

2040, an annual average of no more than 

2.5 percent to be produced or imported 

solely for servicing existing airconditioning and refrigeration 

equipment. All production and 

consumption for Article 5 Parties will 

be phased out by 2040. 

In addition, Decision XIX/6 adjusted 

Article 2F to allow industrialized 

countries to produce ‘‘up to 10 percent 

of baseline levels’’ for export to Article 

5 countries ‘‘in order to satisfy basic 

domestic needs’’ until 2020.3 Paragraph 


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calculated level of consumption of the controlled 

substances in Group I of Annex C does not exceed 

zero. Each Party producing one or more of these 

substances shall, for the same periods, ensure that 

its calculated level of production of the controlled 

substances in Group I of Annex C does not exceed 

zero. However: 

i. Each Party may exceed that limit on 

consumption by up to zero point five percent of the 

sum referred to in paragraph 1 of this Article in any 

such twelve-month period ending before 1 January 

2030, provided that such consumption shall be 

restricted to the servicing of refrigeration and air 

conditioning equipment existing on 1 January 2020; 

ii. Each Party may exceed that limit on 

production by up to zero point five percent of the 

average referred to in paragraph 2 of this Article in 

any such twelve-month period ending before 1 

January 2030, provided that such production shall 

be restricted to the servicing of refrigeration and air 

conditioning equipment existing on 1 January 

2020.’’ 

14 of Decision XIX/6 notes that no later 

than 2015, the Parties would consider 

‘‘further reduction of production for 

basic domestic needs’’ in 2020 and 

beyond. Under paragraph 13 of Decision 

XIX/6, the Parties will review in 2015 

and 2025, respectively, the need for the 

‘‘servicing tails’’ for industrialized and 

developing countries. The term 

‘‘servicing tail’’ refers to an amount of 

HCFCs used to service existing 

equipment, such as certain types of airconditioning and refrigeration 

appliances. 

B. How does the Clean Air Act phase 

out HCFCs? 

The U.S. has chosen to implement the 

Montreal Protocol phaseout schedule on 

a chemical-by-chemical basis. In 1992, 

environmental and industry groups 

petitioned EPA to implement the 

required phaseout by eliminating the 

most ozone-depleting HCFCs first. 

Based on the available data at that time, 

EPA believed the U.S. could meet, and 

possibly exceed, the required Montreal 

Protocol reductions through a chemicalby-chemical phaseout that employed a 

‘‘worst-first’’ approach focusing on 

certain chemicals earlier than others. In 

1993, as authorized by section 606 of 

the CAA, the U.S. established a 

phaseout schedule that eliminated 

HCFC–141b first and would greatly 

restrict HCFC–142b and HCFC–22 next, 

followed by restrictions on all other 

HCFCs and ultimately a complete 

phaseout (58 FR 15014, March 18, 1993; 

58 FR 65018, December 10, 1993). 

On January 21, 2003 (68 FR 2820), 

EPA promulgated regulations (2003 

Final Rule) to ensure compliance with 

the first reduction milestone in the 

HCFC phaseout: the requirement that by 

January 1, 2004, the U.S. reduce HCFC 

consumption by 35 percent and freeze 

HCFC production. In the 2003 Final 

Rule, EPA established chemical-specific 

consumption and production baselines 

for HCFC–141b, HCFC–22, and HCFC– 

142b for the initial regulatory period 

ending December 31, 2009. Section 

601(2) states that EPA may select ‘‘a 

representative calendar year’’ to serve as 

the company baseline for HCFCs. In the 

2003 Final Rule, EPA concluded that 

because the entities eligible for 

allowances had differing production 

and import histories, no single year was 

representative for all companies. 

Therefore, EPA assigned an individual 

consumption baseline year to each 

company by selecting its highest ODPweighted consumption year from among 

the years 1994 through 1997. EPA 

assigned individual production baseline 

years in the same manner. EPA also 

provided an exception allowing new 

entrants provided that they began 

importing after the end of 1997 but 

before April 5, 1999, the date the 

advanced notice of proposed 

rulemaking was published. EPA 

believed that such small businesses 

might not have been aware of the 

impending rulemaking that would affect 

their ability to continue in the HCFC 

market. 

The 2003 Final Rule apportioned 

production and consumption baselines 

to each company in amounts equal to 

the amounts in the company’s highest 

‘‘production year’’ or ‘‘consumption 

year,’’ as described above. It completely 

phased out the production and import 

of HCFC–141b by granting 0 percent of 

that substance’s baseline for production 

and consumption in the table at 40 CFR 

82.16. EPA did, however, create a 

petition process to allow applicants to 

request very small amounts of HCFC– 

141b beyond the phaseout. The 2003 

Final Rule also granted 100 percent of 

the baselines for production and 

consumption of HCFC–22 and HCFC– 

142b for each of the years 2003 through 

2009. EPA was able to allocate 

allowances for HCFC–22 and HCFC– 

142b at 100 percent of baseline because, 

in light of the concurrent complete 

phaseout of HCFC–141b, the allocations 

for HCFC–22 and HCFC–142b, 

combined with projections for 

consumption of all other HCFCs, 

remained below the 2004 cap of 65 

percent of the U.S. baseline. 

EPA allocates allowances for specific 

years; they are valid between January 1 

and December 31 of a given control 

period (i.e., calendar year). Prior to 

December 15, 2009, EPA had not 

allocated any HCFC allowances for year 

2010 or beyond. The regulations at 

section 82.15(a) and (b) only addressed 

the production and import of HCFC–22 

and HCFC–142b for the years 2003– 

2009. Through the 2009 Final Rule (74 

FR 66412), EPA addressed the 

production and import of HCFC–22 and 

HCFC–142b for the 2010–2014 control 

periods. Absent the granting of 

calendar-year allowances, section 82.15 

would have prohibited the production 

and import of HCFC–22 and HCFC– 

142b after December 31, 2009. The 2009 

Final Rule allowed for continued 

production and consumption, at 

specified amounts, of HCFC–142b, 

HCFC–22, and other HCFCs not 

previously included in the allowance 

system, for the 2010–2014 control 

periods. 

In the U.S., an allowance is the unit 

of measure that controls production and 

consumption of ODS. EPA establishes 

company-by-company baselines (also 

known as ‘‘baseline allowances’’) and 

allocates calendar-year allowances equal 

to a percentage of the baseline for 

specified control periods. A calendaryear allowance represents the privilege 

granted to a company to produce or 

import one kilogram (not ODPweighted) of the specific substance. EPA 

allocates two types of calendar-year 

allowances—production allowances and 

consumption allowances. ‘‘Production 

allowance’’ and ‘‘consumption 

allowance’’ are defined at section 82.3. 

To produce an HCFC for which 

allowances have been allocated, an 

allowance holder must expend both 

production and consumption 

allowances. To import an HCFC for 

which allowances have been allocated, 

an allowance holder must expend 

consumption allowances. An allowance 

holder exporting HCFCs for which it has 

expended consumption allowances may 

obtain a refund of those consumption 

allowances upon submittal of proper 

documentation to EPA. 

Since EPA is implementing the 

phaseout on a chemical-by-chemical 

basis, it allocates and tracks production 

and consumption allowances on an 

absolute kilogram basis for each 

chemical. Upon EPA approval, an 

allowance holder may transfer calendaryear allowances of one type of HCFC for 

calendar-year allowances of another 

type of HCFC, with transactions 

weighted according to the ODP of the 

chemicals involved. Pursuant to section 

607 of the CAA, EPA applies an offset 

to each HCFC transfer by deducting 0.1 

percent from the transferor’s allowance 

balance. The offset benefits the ozone 

layer since it ‘‘results in greater total 

reductions in the production in each 

year of * * * class II substances than 

would occur in that year in the absence 

of such transactions’’ (42 U.S.C. 7671f). 

The U.S. remained comfortably below 

the aggregate HCFC cap through 2009. 

The 2003 Final Rule announced that 

EPA would allocate allowances for 


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2010–2014 in a subsequent action and 

that those allowances would be lower in 

aggregate than for 2003–2009, consistent 

with the next stepwise reduction for 

HCFCs under the Montreal Protocol. 

EPA stated its intention to determine 

the number of allowances that would be 

needed for HCFC–22 and HCFC–142b, 

bearing in mind that other HCFCs 

would also contribute to total HCFC 

consumption. EPA noted that it would 

likely achieve the 2010 reduction step 

by applying a percentage reduction to 

the HCFC–22 and HCFC–142b baselines. 

EPA subsequently monitored the market 

to estimate servicing needs and market 

adjustments in the use of HCFCs, 

including HCFCs for which EPA did not 

establish baselines in the 2003 Final 

Rule. 

In the 2009 Final Rule, EPA 

determined both the estimated demand 

for HCFC–22 during the 2010–2014 

regulatory period and the percentage of 

that estimated demand for which it was 

appropriate to allocate allowances. As 

described in Section V.B. of this action, 

EPA determined that the percentage of 

the estimated demand allocated in the 

form of allowances should not remain 

constant from year to year but rather 

should decline on an annual basis. For 

2010, EPA allocated allowances equal to 

80 percent of the estimated demand for 

HCFC–22, concluding that reused, 

recycled, and reclaimed material could 

meet the remaining 20 percent. Under 

the 2009 Final Rule, the percentage of 

estimated demand for which there was 

no allocation, and therefore would need 

to be met through recycling and 

reclamation, rose from 20 percent in 

2010 to 29 percent in 2014 to ensure the 

U.S. market would have a viable 

reclamation industry and could meet 

the 2015 stepwise reduction under the 

Montreal Protocol. The determinations 

EPA made in the 2009 Final Rule 

regarding (1) The total estimated 

demand for HCFC–22 in 2010–2014 and 

(2) the percentage of that estimated 

demand that EPA would address 

through an allowance allocation were 

not at issue in the litigation and are 

unaffected by the Court’s decision. EPA 

is not revisiting either determination 

with respect to 2011 in this interim final 

action, but rather is relying on the 

existing record for the 2009 Final Rule. 

However, EPA welcomes comment on 

whether it should revisit these 

determinations in the future. EPA is also 

interested in comments on whether it 

could and should allocate a different 

percentage of baseline for calendar-year 

production than for calendar-year 

consumption, while still meeting U.S. 

obligations under the Montreal Protocol 

and complying with the CAA. 

C. What sections of the Clean Air Act 

apply to this rulemaking? 

Several sections of the CAA apply to 

this rulemaking. Section 605 of the CAA 

phases out production and consumption 

and restricts the use of HCFCs in 

accordance with the schedule set forth 

in that section. As discussed in the 2009 

Final Rule (74 FR 66416), section 606 

provides EPA authority to set a more 

stringent phaseout schedule than the 

schedule in section 605 based on an 

EPA determination regarding current 

scientific information or the availability 

of substitutes, or to conform to any 

acceleration under the Montreal 

Protocol. EPA previously set a more 

stringent schedule than the section 605 

schedule through a rule published 

December 10, 1993 (58 FR 65018). 

Through the 2009 Final Rule, EPA made 

a further adjustment to the section 605 

schedule based on the acceleration 

under the Montreal Protocol as agreed to 

at the Meeting of the Parties in 

September 2007. The more stringent 

schedule established in that rule is 

unaffected by the recent Court decision 

and is therefore still in effect. 

Section 606 provides authority for 

EPA to promulgate regulations that 

establish a schedule for production and 

consumption that is more stringent than 

what is set forth in section 605 if: ‘‘(1) 

Based on an assessment of credible 

current scientific information (including 

any assessment under the Montreal 

Protocol) regarding harmful effects on 

the stratospheric ozone layer associated 

with a class I or class II substance, the 

Administrator determines that such 

more stringent schedule may be 

necessary to protect human health and 

the environment against such effects, (2) 

based on the availability of substitutes 

for listed substances, the Administrator 

determines that such more stringent 

schedule is practicable, taking into 

account technological achievability, 

safety, and other relevant factors, or (3) 

the Montreal Protocol is modified to 

include a schedule to control or reduce 

production, consumption, or use of any 

substance more rapidly than the 

applicable schedule under this title.’’ It 

is only necessary to meet one of the 

three criteria. In the 2009 Final Rule, 

EPA determined that all three criteria 

had been met with respect to the 

schedule for phasing out production 

and consumption of HCFC–22 and 

HCFC–142b. 

As noted in the 2009 Final Rule, 

while section 606 is sufficient authority 

for establishing a more stringent 

schedule than the section 605 phaseout 

schedule, section 614(b) of the CAA 

provides that in the case of a conflict 

between the CAA and the Montreal 

Protocol, the more stringent provision 

shall govern. Thus, section 614(b) 

requires the Agency to establish 

phaseout schedules at least as stringent 

as the schedules contained in the 

Montreal Protocol. To meet the 2010 

stepdown requirement, EPA is 

continuing to allocate HCFC allowances 

at a level that will ensure the aggregate 

HCFC production and consumption will 

not exceed 25 percent of the U.S. 

baselines. For more discussion of this 

point, see 74 FR 66416. 

Finally, section 607 addresses 

transfers of allowances both between 

companies and chemicals. EPA is 

further clarifying its policy on interpollutant transfers in this action. 

D. How does this action relate to the 

recent court decision? 

Certain allowance holders affected by 

the 2009 Final Rule filed petitions for 

review in the U.S. Court of Appeals for 

the District of Columbia Circuit. Among 

other arguments, the petitioners, 

Arkema Inc., Solvay Fluorides, LLC, and 

Solvay Solexis, Inc., contended that the 

rule was impermissibly retroactive 

because in setting the baselines for the 

new regulatory period, EPA did not take 

into account certain inter-pollutant 

baseline transfers that petitioners had 

performed during the prior regulatory 

period. The transfers at issue occurred 

in 2008. Solvay Solexis, Inc. submitted 

two Class II Controlled Substance 

Transfer Forms for consumption 

allowance transfers to Solvay Fluorides, 

LLC on February 15, 2008, and March 

4, 2008. Arkema, Inc. submitted two 

Class II Controlled Substance Transfer 

Forms for consumption and production 

allowance transfers on April 18, 2008. 

Each company requested EPA’s 

approval to convert HCFC–142b 

allowances to HCFC–22 allowances, and 

checked a box on the EPA transfer form 

indicating that ‘‘baseline’’ allowances 

would be transferred. EPA sent nonobjection notices to both Solvay Solexis 

and Solvay Fluorides on February 21, 

2008 and March 20, 2008 and to 

Arkema, Inc. in April 2008. The transfer 

requests and EPA’s approvals were 

attached to petitioners’ court filings and 

are available in the docket for this 

action. 

In the Notice of Proposed Rulemaking 

titled ‘‘Protection of Stratospheric 

Ozone: Adjustments to the Allowance 

System for Controlling HCFC 

Production, Import, and Export,’’ 

published in the Federal Register at 73 

FR 78680 on December 23, 2008 (2008 

Proposed Rule), EPA requested 


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4The reason baseline and calendar-year 

allocations are inextricable is because calendar-year 

allocations are expressed as a percentage of 

baseline, and the percentage of baseline allocated 

for a specific substance varies depending on the 

sum of all company baselines for that substance. 

The process works as follows for each specific 

HCFC: First, all the company-specific baselines 

listed in the tables at 40 CFR 82.17 and 82.19 are 

added to determine the aggregate amount of 

baseline production and consumption, respectively. 

Second, EPA determines how many consumption 

allowances the market needs for a given year, taking 

into account recycled, reused, and reclaimed 

material, and divides that amount by the aggregate 

amount of baseline allowances. The resulting 

percentage listed in the table at section 82.16 

becomes what each company is allowed to consume 

in a given control period. For example, a company 

with 100,000 kg of HCFC–22 baseline allowances 

would multiply that number by the percentage 

allowed for 2011 (for example, 32 percent) to 

determine its calendar-year allowance is 32,000 kg. 

Historically and in this interim final rule, EPA has 

allocated the same percentage of baseline 

allowances for production as it does for 

consumption. 

5The companies’ allocations are inter-related 

because, as noted in footnote 4, the percentage of 

baseline allocated varies according to the sum of the 

company-specific baselines. 

comments on establishing baselines for 

the 2010–2014 regulatory period ‘‘with 

or without’’ taking into account baseline 

inter-pollutant transfers made during 

the 2003–2009 regulatory period (73 FR 

78687). The proposed regulatory text 

accounted for the inter-pollutant 

transfers discussed above. The increase 

in HCFC–22 baseline allowances for 

Arkema, Inc. and Solvay Fluorides, LLC 

presented in the 2008 Proposed Rule 

resulted in a larger amount of HCFC–22 

baseline allowances overall and 

therefore a lower percentage of HCFC– 

22 baselines allocated across the board 

in each control period. Specifically, the 

proposed shift resulted in a 16 percent 

decrease in market share for all other 

allowance holders, and increases for the 

petitioners: Arkema and Solvay. For 

more detail on the impact of these 

transfers, see Section V.C. of this 

preamble. 

In the 2009 Final Rule, after 

considering comments, EPA determined 

that allowing inter-pollutant transfers to 

carry forward from one regulatory 

period to the next could undermine the 

Agency’s chemical-by-chemical 

phaseout approach and could encourage 

market manipulation. For a more 

detailed discussion, see Section V.A.1. 

EPA also concluded that section 607 of 

the CAA was best read as limiting interpollutant transfers to those conducted 

on an annual basis. For these reasons, 

EPA did not take the 2008 interpollutant transfers into account in 

establishing the baselines for the 2009 

Final Rule covering 2010–2014. 

The Court issued a decision on 

August 27, 2010, agreeing with 

petitioners that ‘‘the [2009] Final Rule 

unacceptably alters transactions the 

EPA approved under the 2003 Rule’’ 

(Arkema v. EPA, 618 F.3d at 3). The 

Court vacated the rule in part, ‘‘insofar 

as it operates retroactively,’’ and 

remanded to EPA ‘‘for prompt 

resolution,’’ (618 F.3d at 10). The Court 

withheld the mandate for the decision 

pending the disposition of any petition 

for rehearing. On November 12, 2010, 

EPA filed a petition for rehearing, which 

was denied on January 21, 2011. The 

mandate issued on February 4, 2011. 

Because the Court vacated the rule 

only in part, without specifying which 

part or parts were vacated, EPA may 

adopt a reasonable interpretation of the 

vacatur’s extent. In doing so, EPA is 

relying on its expertise in administering 

the HCFC phaseout regulations under 

Title VI of the CAA. First, EPA notes 

that the rule contains elements that 

were not at issue in the litigation. EPA 

concludes that the vacatur has no effect 

on allowances for any substances other 

than HCFC–142b and HCFC–22, since 

the petitioners’ claims and the opinion 

itself discuss only those two substances. 

Similarly, EPA concludes that other 

discrete portions of the rule, such as the 

provisions on use and introduction into 

interstate commerce, are unaffected by 

the vacatur. 

The baselines for HCFC–142b and 

HCFC–22 were clearly at issue in the 

litigation and indeed are the focus of the 

Court’s opinion. The Court found that 

‘‘the Agency’s refusal to account for the 

Petitioners’ baseline transfers of interpollutant allowances in the Final Rule 

is impermissibly retroactive,’’ (618 F.3d 

at 9). Because baseline and calendar 

year allowances are inextricably 

linked,4 EPA has determined that the 

Court’s vacatur voids the HCFC–22 and 

HCFC–142b baselines in 40 CFR 82.17 

and 82.19 as well as the percentage of 

baseline allocated for those specific 

substances in 40 CFR 82.16 for all 

companies listed in those sections.5

This means that until EPA establishes 

new baselines and allocates new 

calendar-year allowances, production 

and import of these two substances is 

prohibited under 40 CFR 82.15. 

Recognizing this scenario, on January 

28, 2011, EPA sent letters to affected 

stakeholders informing them that the 

Agency would exercise enforcement 

discretion for a limited period provided 

their production and import did not 

exceed specified levels and provided 

that they adhered to additional 

conditions. 

In determining the meaning of the 

Court’s vacatur, EPA considered 

whether this interpretation was 

consistent with what the Court intended 

and a good fit for the specific 

circumstances, which include the goals 

and design of the HCFC allowance 

program and the basic structure of the 

2009 Final Rule. While this 

interpretation is appropriate in this 

instance, it is possible that another 

interpretation would be more 

appropriate in a case involving a 

program with different goals, design, or 

structure. 

In the 2009 Final Rule, EPA relied on 

its assessment of the amount of virgin 

and recovered HCFC–22 and HCFC– 

142b needed to service existing 

equipment and transition to the 2015 

stepdown under the Montreal Protocol. 

The Court did not take issue with this 

assessment. At this time, EPA has not 

received information indicating that 

demand will be higher than the 

Agency’s assessment predicted. On the 

contrary, EPA has heard from several 

anecdotal sources that the amount of 

actual market demand for HCFC–22 may 

in fact be lower than the amount 

identified in the Servicing Tail Report. 

However, since EPA does not have 

sufficient data to support this 

conclusion at this time, and recognizes 

the urgent need to act quickly to 

establish allowances for the 2011 

control period, the Agency is relying on 

the record for the 2009 Final Rule, 

which includes the Agency’s prior 

assessment of demand for HCFC–22 and 

HCFC–142b in 2011. Therefore, through 

this action, EPA is establishing new 

baselines for 2011 reflecting the court’s 

decision and allocating the percentage 

of baseline needed to ensure that the 

total allocation for 2011 remains the 

same as in the 2009 Final Rule. If 

sufficient information becomes available 

in future, EPA may adjust the aggregate 

allocation level for future control 

periods. 

1. Addressing 2010 Allowances 

EPA interprets the Court’s decision as 

applying, at a minimum, to the HCFC– 

22 and HCFC–142b baseline and 

calendar-year allowances for 2011– 

2014. EPA is not addressing 2010 

allowances in this action. The Agency 

plans to take comment in a future 

notice-and-comment rulemaking on 

whether the vacatur and remand should 

be interpreted as applying to the 2010 

allocations, and if so, how allowances in 

future control periods might be adjusted 

to reflect this. The 2011 control period 

is already well underway, and as 

discussed in the good cause finding in 

Section III, it is important that EPA 

establish a definitive 2011 allocation 

now to dispel confusion and allow 

normal business activities to proceed. In 

particular, EPA believes the urgent need 

for certainty regarding the consumption 


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allowance allocations in the 2011 

control period precludes the Agency 

from considering any adjustments 

during 2011. However, EPA intends to 

address this issue in detail in a separate 

notice-and-comment rulemaking with 

respect to future control periods. 

III. Justification for This Interim Final 

Rule 

EPA is taking this action as an interim 

final rule without prior proposal and 

public comment because EPA finds that 

the good cause exemption from the 

notice-and-comment rulemaking 

requirement of the Administrative 

Procedure Act (APA), 5 U.S.C. 551 et 

seq., applies here. Section 307(d) of the 

CAA states that in the case of any rule 

to which section 307(d) applies, notice 

of proposed rulemaking must be 

published in the Federal Register (CAA 

§ 307(d)(3)). The promulgation or 

revision of regulations under Title VI of 

the CAA is generally subject to section 

307(d). However, section 307(d) does 

not apply to any rule referred to in 

subparagraphs (A) or (B) of section 

553(b) of the APA. Section 553(b)(B) of 

the APA, 5 U.S.C. 553(b)(B), provides 

that, when an agency for good cause 

finds that notice-and-comment public 

procedures are impracticable, 

unnecessary, or contrary to the public 

interest, the agency may issue a rule 

without providing notice and an 

opportunity for public comment. 

EPA has determined that there is good 

cause for making today’s rule final 

without prior proposal and opportunity 

for comment because such notice and 

opportunity for comment is 

unnecessary, impracticable, and 

contrary to the public interest. In 

reaching this determination, EPA 

considered several factors: (1) Taking 

interim final action for 2011 avoids 

regulatory confusion, disruption of 

normal business activities, and effects 

on consumers pending development of 

a notice-and-comment rulemaking (see, 

e.g., Brae Corp. v. United States, 740 

F.2d 1023 (DC Cir. 1984)); (2) the 

Agency is relying on the existing record 

from the 2009 Final Rule for this action 

(see, e.g., Chamber of Commerce v. SEC, 

443 F.3d 890 (DC Cir. 2006)); and (3) the 

rule’s duration is limited (see, e.g., 

Small Refiner Lead Phase-Down Task 

Force v. EPA, 705 F.2d 506 (DC Cir. 

1983)). 

First, it is in the public interest to 

dispel confusion, allow normal business 

activities to proceed, and avoid adverse 

effects on consumers. EPA has received 

numerous questions from industry 

about what, if any, allowances 

companies currently hold in light of the 

Court’s decision. The primary purpose 

of this interim final rule is to dispel 

confusion and provide regulatory 

certainty for the near term. EPA 

interprets the vacatur as voiding 

company baselines and calendar-year 

allowances for HCFC–22 and HCFC– 

142b, and because entities are 

prohibited from producing or importing 

HCFCs without allowances, quick action 

is necessary to ensure the continued 

production and import of those two 

HCFCs. This interim final action will 

provide industry with certainty for 

2011, and allow normal business 

operations to continue. It also gives EPA 

time to develop notice-and-comment 

rules that will cover subsequent control 

periods. 

This action will also avoid 

unintended consequences for 

consumers and businesses who own 

appliances containing HCFC–22 and/or 

HCFC–142b (e.g., refrigerators and air 

conditioners), as well as the businesses 

that service these appliances. Absent 

this rulemaking, there could be a 

shortage of these HCFCs. Consumers 

and businesses unable to service their 

existing HCFC–22 equipment with 

HCFCs would instead have to retrofit 

their existing appliances before the end 

of their useful life to use a refrigerant 

other than that which was intended for 

the appliance, or purchase new 

equipment to replace existing 

appliances. Not only would this be 

expensive and unexpected, especially 

for those who bought a new unit shortly 

before January 1, 2010, but the shortage 

could lead to improper retrofits that 

decrease a unit’s effectiveness and 

energy efficiency, cost the consumer 

more to operate, and result in further 

refrigerant emissions to the atmosphere. 

Considering the current state of the 

economy, shortages of HCFC–22 could 

lead appliance owners, who likely do 

not have the same level of experience as 

a licensed professional, to recharge their 

units on their own. Improper retrofits 

and recharging could raise the potential 

for mixing refrigerants, which could 

damage systems and increase the 

likelihood of mixed refrigerants being 

vented into the atmosphere, since 

mixtures may not work properly and 

likely could not be reclaimed. 

At worst, these scenarios could lead 

to an unanticipated changeover of 

significant quantities of equipment, 

which would be at odds with EPA’s goal 

of minimizing impacts to business and 

consumers by supporting a gradual 

turnover of the installed base of 

equipment as individual equipment 

reaches the end of its useful life, 

allowing existing equipment to continue 

to operate properly. In the preamble to 

the 2009 Final Rule, EPA stated: 

‘‘Congress intended to permit the 

continued use of previouslymanufactured appliances’’ (74 FR 

66438). EPA discussed this issue in 

detail at that time, in the context of the 

section 605(a) ban on the ‘‘use’’ of 

HCFCs (74 FR 66437–66438). In this 

action, the Agency is not revisiting its 

analysis or conclusions with respect to 

this issue. Accordingly, EPA is 

allocating production and consumption 

allowances for HCFC–22 and HCFC– 

142b in a way that avoids shortening the 

useful lifetime of appliances that were 

manufactured prior to the effective date 

of the use ban (January 1, 2010). 

Furthermore, a supply shortage could 

raise the price of affected gases, thereby 

increasing incentives for entities to 

illegally smuggle HCFC–22 into the 

country to meet the demand of 

consumers and businesses. There are 

numerous cases cited on the EPA Web 

site (http://www.epa.gov/ozone/enforce/ 

index.html) documenting the smuggling 

of CFCs and HCFCs. Not only would 

this hurt entities that are abiding by the 

law, it could even hurt consumers and 

businesses that unknowingly receive 

inferior material. For all these reasons, 

it is important that EPA take action 

quickly. Since it is impracticable to 

complete a notice-and-comment 

rulemaking prior to the 2011 summer 

season, when working air conditioners 

are most important, and delay would be 

contrary to the public interest, interim 

final action is necessary. 

The second reason for invoking the 

good cause exemption is that EPA is 

relying on the existing record for the 

2009 Final Rule, which is still 

applicable and sufficiently current for 

the purposes of this action. In this 

interim final rule, EPA is not revisiting 

the determination made in the 2009 

Final Rule regarding the total amount of 

HCFC production and import that the 

Agency will allow for 2011. EPA is 

simply addressing what share of that 

total amount should be allocated to 

particular companies. The 2008 

Proposed Rule (73 FR 78680) provided 

all interested parties an opportunity to 

comment on the total HCFC production 

and import amount for 2011. Thus, it is 

unnecessary to provide a second 

opportunity to comment on that amount 

prior to issuing this interim final rule. 

Third, this interim final rule only 

addresses 2011—the current control 

period—and is thus limited in duration. 

The specific duration is defined by the 

structure of the stratospheric ozone 

protection program, which operates in 

control periods that correspond to 

calendar years. Allowances are allocated 

for a specific control period. EPA 

intends to initiate a notice-andVerDate Mar<15>2010 14:55 Aug 04, 2011 Jkt 223001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 E:\FR\FM\05AUR1.SGM 05AUR1

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comment rulemaking or rulemakings as 

soon as possible to address subsequent 

control periods. 

For the reasons explained above, and 

given the Court’s statement that it was 

remanding to EPA ‘‘for prompt 

resolution,’’ notice and public 

procedure are impracticable, 

unnecessary, and contrary to the public 

interest. EPA finds that this constitutes 

good cause under 5 U.S.C. 553(b)(B). 

Nonetheless, EPA is providing 30 days 

for submission of public comments 

following this action. EPA will consider 

all written comments submitted in the 

allotted time period to determine 

whether to issue additional production 

allowances for 2011. 

Section 553(d) of the Administrative 

Procedure Act (APA), 5 U.S.C. chapter 

5, generally provides that rules may not 

take effect earlier than 30 days after they 

are published in the Federal Register. 

APA section 553(d) excepts from this 

provision any action that grants or 

recognizes an exemption or relieves a 

restriction. Since today’s action relieves 

a restriction from the regulatory ban on 

the production and consumption of 

HCFC–22 and HCFC–142b in the U.S., 

EPA is making this action effective 

immediately upon publication to ensure 

the availability of these HCFCs for 

servicing air conditioning and 

refrigeration equipment in 2011. 

IV. Summary of This Final Action 

In response to the Court’s decision, 

EPA is (1) Establishing 2011 companyby-company consumption and 

production baselines for HCFC–22 and 

HCFC–142b in the tables at 40 CFR 

82.17 and 82.19 in a manner that 

reflects the 2008 inter-pollutant baseline 

transfers and (2) allocating company-bycompany production and consumption 

allowances for these substances for 2011 

by establishing percentages of baseline 

in the table at section 82.16. EPA is also 

updating the tables at sections 82.17 and 

82.19 to reflect 2010 inter-company, 

single-pollutant baseline transfers and 

revising the list of allowance holders to 

update company names. These actions 

are consistent with actions taken in the 

2009 Final Rule. To reflect the court’s 

vacatur, EPA is removing the allocation 

percentages from the table at section 

82.16 for the years 2011–2014. In this 

rulemaking, EPA is adding an allocation 

percentage for 2011. In a separate 

notice-and-comment rulemaking or 

rulemakings, EPA will address the 

allocations for the control periods 2012– 

2014. All aspects of the 2009 Final Rule 

promulgated on December 15, 2009 (74 

FR 66412) that are not addressed in this 

interim final rule are unchanged. 

As a Party to the Montreal Protocol, 

and having ratified the Montreal 

Protocol and all of its amendments, the 

U.S. was required to decrease its 

amount of HCFC consumption and 

production to 25 percent of the U.S. 

baseline in 2010. The cap is the same for 

the years 2010–2014 before it drops 

down to 10 percent of baseline in 2015. 

Under the cap, the aggregate allowances 

for all U.S. HCFC consumption in 2011 

cannot exceed 3,810 ODP-weighted MT 

(25 percent of the aggregate U.S. 

consumption baseline) annually, and 

the aggregate allowances for all U.S. 

HCFC production in 2011 cannot exceed 

3,884.25 ODP-weighted MT (25 percent 

of the aggregate U.S. production 

baseline) annually. 

To stay below the cap set by the 

Montreal Protocol for the 2011 control 

period addressed in this rulemaking, 

EPA is using the historical production 

and consumption baselines as adjusted 

in the 2009 Final Rule, with further 

adjustments to reflect the 2008 interpollutant baseline transfers and intercompany, single-pollutant baseline 

transfers that occurred after issuance of 

the 2009 Final Rule. 

EPA determined in the 2009 Final 

Rule that for HCFC–22, it was necessary 

to allocate a percentage of baseline that 

would decrease on an annual basis to 

reflect a projected decrease in demand 

as well as to promote recycling and 

reclamation. EPA is not revisiting that 

determination in this rulemaking. EPA 

concluded in the 2009 Final Rule that 

this approach would help prevent 

shortages that might otherwise occur 

upon the stepdown in 2015. In this 

action, EPA is allocating 32.0 percent of 

baseline for HCFC–22 in 2011, which 

reflects an annual decline from the 2010 

amount. EPA is allocating 4.9 percent of 

baseline for HCFC–142b in 2011. The 

HCFC–142b number relates solely to the 

aggregate baselines for this substance 

and does not reflect an annual decline. 

The reasons for establishing these 

allocation percentages for 2011 are 

discussed in Section V. 

EPA’s allocations for both HCFC–22 

and HCFC–142b meet U.S. obligations 

under the Montreal Protocol and reflect 

the use restrictions under section 605(a) 

of the CAA while providing for 

servicing needs consistent with those 

restrictions. The allocations for HCFC– 

22 and HCFC–142b reflect EPA’s 

analysis of market data for these 

chemicals, as prepared in advance of the 

2009 Final Rule. The allocation levels 

for these HCFCs meet the demand for 

virgin material and avoid shortages 

during 2011. 

In this action, EPA is not changing the 

methodology used in the 2009 Final 

Rule to calculate the total number of 

calendar-year consumption and 

production allowances. While the 

number of total calendar-year 

consumption allowances is unchanged, 

the number of production allowances is 

slightly lower (less than two percent 

lower) than in the 2009 Final Rule due 

to the changes in aggregate baseline 

allowances. This is explained in more 

detail in Section V.C. The only other 

difference is in the distribution of those 

allowances. 

At this time, EPA is allocating a total 

of 2,504 ODP-weighted MT of HCFC–22 

and HCFC–142b calendar-year 

consumption allowances and 2,302 

ODP-weighted MT of HCFC–22 and 

HCFC–142b calendar-year production 

allowances for 2011. Both allocations 

remain below the limit established by 

the Montreal Protocol for the 2010–2014 

phasedown step of 75 percent below 

baseline. The difference between the 

cap and the total allocation reflects 

EPA’s estimate (developed for the 2009 

Final Rule) of the demand for HCFCs 

during these control periods. It also will 

accommodate minor adjustments in the 

market, particularly to allow potential 

market growth for other allowed HCFCs. 

As discussed in more detail in Section 

V.B.3. and in the preamble to the 2009 

Final Rule, it will also encourage greater 

reclamation of recovered refrigerant and 

thus facilitate preparation for the 2015 

step down in the consumption cap to 10 

percent of baseline. 

This action also clarifies EPA’s policy 

on inter-pollutant transfers for 2011 and 

all future control periods in Section 

V.A.1. 

V. Allocation of Allowances for the 

2011 Control Period 

A. Baselines for HCFC–22 and HCFC– 

142b Allowances 

In the 2009 Final Rule, EPA presented 

the allocation structure for HCFC–22 

and HCFC–142b for the control periods 

2010–2014: allocating a percentage of 

the baseline production and 

consumption allowances. The rationale 

for this system is discussed further at 74 

FR 66412. The Court found no fault 

with EPA’s framework for allocating 

HCFCs in the 2009 Final Rule, except 

the aspects of the rule they deemed to 

be retroactive, i.e., not taking into 

account inter-pollutant baseline 

transfers that occurred in the prior 

regulatory period in establishing 

company-specific baseline allowances. 

To address this, EPA is establishing 

HCFC–22 and HCFC–142b baseline 

allowances for 2011 that reflect past 

inter-pollutant baseline transfers 

deemed permanent by the Court. 


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1. Adjusting the Baseline for InterCompany and Inter-Pollutant Transfers 

Sections 607(b) and (c) of the CAA 

address inter-pollutant and intercompany transfers of allowances, 

respectively. Inter-pollutant transfers 

are the transfer of an allowance of one 

substance to an allowance of another 

substance on an ODP-weighted basis. 

Inter-company transfers are transfers of 

allowances for the same ODS from one 

company to another company. Section 

607(c) also authorizes inter-company 

transfers combined with inter-pollutant 

transfers, so long as the requirements of 

both are met. The corresponding 

regulatory provisions for HCFCs appear 

at 40 CFR 82.23. 

The 2009 Final Rule updated the 

baselines for HCFC–22 and HCFC–142b 

to reflect name changes and intercompany baseline transfers, i.e., 

transfers of baseline for a specific type 

of HCFC from one company to another. 

Doing so reflected the changes in the 

marketplace that had occurred since 

EPA promulgated the 2003 Final Rule. 

Inter-company baseline transfers 

provide a mechanism for new entrants 

to join the HCFC market and for other 

companies to expand their business. 

EPA recognizes that in some cases, 

entities are no longer actively involved 

in HCFC production, import, and/or 

export activities. EPA retained the 

baseline for such entities, noting that 

this had been a mechanism by which 

new entrants had entered the HCFC 

allowance system in the past. 

The 2009 Final Rule also addressed 

four inter-pollutant baseline transfers 

made during the prior regulatory period 

(see Section II.D. of this action for more 

detail). EPA had proposed to adjust the 

company baselines to reflect these four 

inter-pollutant baseline transfers in the 

2008 Proposed Rule. Eight commenters 

opposed, and two commenters 

supported, these proposed adjustments. 

At issue was whether the inter-pollutant 

baseline transfers should carry forward 

as part of the companies’ baseline 

allowances in the next regulatory 

period. 

After reviewing the comments, EPA 

concluded that adjusting the baselines 

to reflect inter-pollutant baseline 

transfers could create incentives for 

future manipulation of the allocation 

system in anticipation of future control 

periods. EPA remains concerned about 

the potential for such future 

manipulation if inter-pollutant baseline 

transfers during the current regulatory 

period are carried forward as a change 

in a company’s baseline for future 

regulatory periods. For example, in 2020 

EPA will no longer be issuing HCFC–22 

production or consumption allowances 

(see section 82.16(e)). EPA expects that 

companies with HCFC–22 allowances 

would no longer be in the HCFC market 

at that date if they did not hold 

allowances for other HCFCs that may 

still be produced after 2020. If EPA were 

to allow inter-pollutant baseline 

transfers that carried forward into the 

new regulatory period, companies with 

HCFC–22 baselines in 2019 could 

convert them all to baselines for HCFC– 

123. Perpetuating the HCFC–22 

baselines in a new form would be 

counter to the design of the chemicalby-chemical phaseout, under which the 

baseline allowances for a particular 

chemical are intended to drop out of the 

system upon the phase-out of that 

chemical. As another example, in 2015, 

a producer or importer that previously 

had not participated in the HCFC–123 

market could dominate that market by 

converting its HCFC–22 baseline in 

2014 to HCFC–123 baseline. Given the 

different ODPs of HCFC–22 and HCFC– 

123 (0.055 and 0.02, respectively), 

converting one baseline allowance of 

HCFC–22 would result in 2.75 baseline 

allowances of HCFC–123. Also, since 

companies hold many more HCFC–22 

baseline allowances than HCFC–123 

baseline allowances, converting those 

HCFC–22 baseline allowances would 

have an overwhelming effect on the 

current HCFC–123 baseline allowance 

holders and the overall market. EPA 

agrees with commenters on the 2008 

Proposed Rule that taking interpollutant baseline transfers into account 

in setting baselines could have the effect 

of moving the U.S. HCFC phasedown 

from a chemical-by-chemical phaseout, 

as established under the ‘‘worst-first’’ 

approach in the 1993 Final Rule, 

towards an ODP-weighted phasedown. 

Thus, there are important policy reasons 

going forward for not taking interpollutant transfers into account in 

establishing baselines for new 

regulatory periods. 

Some commenters on the 2008 

Proposed Rule stated that modifying the 

baselines by taking into account interpollutant transfers would be contrary to 

the CAA. One commenter argued that 

section 607 of the CAA allows EPA to 

approve inter-pollutant transfers of 

allowances only on a year-to-year basis. 

That commenter pointed to language in 

section 607(b) stating that EPA 

regulations are to permit ‘‘a production 

allowance for a substance for any year 

to be transferred for a production 

allowance for another substance for the 

same year on an ozone depletion 

weighted basis.’’ The commenter also 

discussed the legislative history of the 

1990 CAA Amendments. 

EPA does not agree with the 

commenter that the language of section 

607(b) is clear on its face. However, 

where the statutory language is 

ambiguous, EPA has discretion to 

choose a reasonable interpretation of 

that language. EPA determined in the 

2009 Final Rule that section 607(b) is 

best read as permitting only year-byyear inter-pollutant transfers. EPA 

continues to believe that this is the best 

interpretation of the statutory language. 

Section 607(b) states that EPA’s rules 

are to permit ‘‘a production allowance 

for a substance for any year to be 

transferred for a production allowance 

for another substance for the same 

year.’’ This language emphasizes the 

year-by-year nature of such transactions. 

No parallel language appears in section 

607(c). That section does, however, 

provide that any inter-pollutant 

transfers between two or more persons 

must meet the requirements of section 

607(b). 

As the Court noted, ‘‘the Agency is 

certainly entitled to * * * institute a 

program that forbids baseline interpollutant transfers in the future,’’ 

(Arkema v. EPA, 618 F.3d at 9). Hence, 

EPA concludes that requiring all interpollutant transfers to be conducted on a 

yearly—and thus temporary—basis 

going forward is the approach most 

consistent with the wording of section 

607(b). Further discussion of the reasons 

for limiting inter-pollutant transfers to 

those conducted on a calendar-year 

basis is available in the Response to 

Comments on the 2008 Proposed Rule 

(included in the docket for this 

rulemaking). 

Consistent with the Court’s decision 

regarding past inter-pollutant transfers 

(those conducted during the prior 

regulatory period), the baselines 

established in this action for 2011 take 

into account the 2008 inter-pollutant 

baseline transfers discussed earlier in 

this notice. EPA is clarifying, however, 

that it has not approved any interpollutant transfers of baseline 

allowances in the current regulatory 

period, and for the reasons given in the 

2009 Final Rule and in this action, in 

future EPA intends to approve interpollutant transfers only on a year-byyear basis. Thus, in the context of the 

protection of stratospheric ozone 

allowance system, companies should 

not expect that any inter-pollutant 

transfers they conduct will affect their 

baselines either in the current regulatory 

period or any future regulatory period. 

As it did in the 2009 Final Rule, EPA 

is adjusting baseline allowances to 

reflect inter-company, single-pollutant 


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baseline transfers that occurred since 

the last final rule was signed. 

In summary, this interim final rule 

reflects the changes in consumption and 

production baseline allowances from (1) 

The 2008 inter-pollutant transfers 

deemed permanent by the Court and (2) 

inter-company, single-pollutant baseline 

transfers that have occurred since the 

2009 Final Rule was signed, and (3) 

clarifies the types of inter-pollutant 

transfers that will be permitted in the 

future. The consumption and 

production baseline amounts for HCFC– 

22 and HCFC–142b for 2011 are shown 

below in Table 3. 

B. Factors for Considering Allocation 

Amounts for HCFC–22 and HCFC–142b 

In the 2009 Final Rule, EPA decided 

to allocate HCFC–22 and HCFC–142b 

allowances based on the projected 

servicing needs for those compounds, 

taking into account the amount of those 

needs that can be met through recycling 

and reclamation. EPA is not changing 

that approach in this interim final rule. 

However, the specific amounts allocated 

per company are different due to the 

changed baselines and the need to apply 

a different allocation percentage to 

company baselines in order to keep the 

aggregate amount allocated the same. 

Because it is necessary to promote use 

of reused, recycled, and reclaimed 

material in anticipation of the 2015 

phasedown step, EPA does not intend to 

allocate the difference between the 

consumption allocation authorized by 

the Parties to the Montreal Protocol and 

the consumption allocation authorized 

by this rule except under unforeseen 

extenuating circumstances. 

1. The Importance of HCFC–22 Relative 

to HCFC–142b Servicing Needs for 

Existing Equipment 

HCFC–22 is the most widely-used 

HCFC. The demand for its use in 

servicing existing equipment was the 

primary factor affecting EPA’s allocation 

of production and consumption 

allowances of HCFCs for the current 

regulatory period. Prior to issuing the 

2009 Final Rule, EPA issued and sought 

comment on three versions of a draft 

report analyzing servicing demand for 

the HCFC appliances in the U.S. 

refrigeration and air-conditioning sector 

projected to be in service from 2010– 

2019 (all versions available at Docket 

EPA–HQ–OAR–2008–0496: Published 

November 4, 2005 at 70 FR 67172; 

released at a stakeholder meeting on 

September 29, 2006; published 

December 23, 2008, with 2008 Proposed 

Rule). The Servicing Tail Report focuses 

on air-conditioning and refrigeration 

appliances because such equipment 

represents the bulk of the servicing 

need. In addition, the servicing 

exception to the use ban for HCFC–22 

and HCFC–142b pertains only to use as 

a refrigerant in such equipment. Under 

section 605(a) of the CAA and EPA’s 

implementing regulations, nearly all 

other uses of these two HCFCs were 

banned effective January 1, 2010. The 

projected servicing need for HCFC–22 in 

2011 is approximately 57,900 MT (3,185 

ODP-weighted MT), or approximately 

84 percent of the consumption cap for 

all HCFCs in 2011 under the Montreal 

Protocol, which is 3,810 ODP-weighted 

MT. HCFC–142b has primarily been 

used as a foam blowing agent, a use that 

was phased out in 2010. The projected 

servicing demand for existing 

refrigeration equipment containing 

HCFC–142b is extremely low: 

Approximately 100 MT (7 ODPweighted MT). EPA therefore focused 

the analysis on HCFC–22 because that 

compound is the predominant HCFC in 

the installed base of air-conditioning 

and refrigerant equipment for which 

servicing in the U.S. will likely 

continue. 

As discussed in the 2009 Final Rule, 

the majority of HCFC–22 equipment that 

is projected to be in use from this point 

onward will be air-conditioning 

applications, including window units, 

packaged terminal units, unitary airconditioning, chillers, dehumidifiers, 

water and ground source heat pumps, 

and motor vehicle air-conditioning in 

buses and trains. The report projected 

that approximately 145.6 million units 

of all such types of HCFC–22 airconditioning equipment were in use in 

2010, decreasing by about 41 percent in 

2015 and 86 percent in 2020. In 

addition, approximately 3.8 million 

units of HCFC–22 refrigeration 

equipment were in use in 2010. The 

installed base of HCFC–22 refrigeration 

equipment is projected to decrease from 

2010 levels by about 44 percent in 2015 

and 75 percent in 2020. For more on the 

Servicing Tail Report and the Vintaging 

Model, which was used to develop the 

report, see 74 FR 66424 and the 

Servicing Tail Report included in the 

docket. 

EPA estimates that the servicing need 

for HCFC–22 will continue to decrease 

each year, and consistent with the 2009 

Final Rule, this interim final rule 

accounts for this by allocating a smaller 

amount for 2011 than was allocated for 

2010. This approach is described in 

Section V.B.3. In this interim final 

action, EPA is maintaining the overall 

HCFC–22 allocation levels for 2011 that 

the Agency determined were 

appropriate in the 2009 Final Rule. 

EPA’s decision not to allocate above the 

need projected in the Servicing Tail 

Report is discussed in the preamble to 

the 2009 Final Rule. 

2. Meeting Servicing Needs With Virgin 

and Recovered Material 

In the 2009 Final Rule, the Agency 

recognized that servicing demand can 

be met with a combination of newlymanufactured or imported HCFCs 

(virgin HCFCs) and HCFCs that have 

been recovered and either reused, 

recycled or reclaimed. Therefore, EPA 

did not anticipate that virgin HCFC–22 

would need to be produced or imported 

to meet the entire HCFC–22 servicing 

demand (estimated to be 3,185 ODPweighted MT in 2011). The Servicing 

Tail Report analyzes various scenarios 

regarding reclamation. EPA continues to 

believe that reused, recycled, and 

reclaimed material can help meet 

HCFC–22 servicing needs and is 

therefore not changing course at this 

time. Should new data be presented, 

EPA reserves the option of increasing 

the amount of demand for servicing 

existing equipment that should be met 

by reused, recycled, and reclaimed 

material in future control periods. 

3. Annual Reduction in Allocated 

Amounts 

As explained in the preamble to the 

2009 Final Rule, without year-to-year 

reductions in the allocations for virgin 

HCFC–22, the HCFC–22 market could 

be oversaturated, and the contribution 

of reused, recycled, and reclaimed 

refrigerant would decrease, both in the 

total number of kilograms and as the 

proportion of overall need. 

EPA is particularly concerned with 

encouraging a smooth transition to the 

2015 stepdown. At that date, the U.S. 

must meet a 90 percent reduction below 

the baseline for all HCFCs, which is 

equivalent to 1,524 ODP-weighted MT. 

EPA’s Servicing Tail Report shows that 

even a 20 percent recovery rate would 

be insufficient to meet the demand for 

HCFC–22 in 2015. As shown in Table 4– 

5 in the report, demand for HCFC–22 in 

2015 is projected to be 38,800 MT while 

the cap for all HCFCs equates to 27,709 

MT of HCFC–22 (assuming no allocation 

for any other HCFCs). A 20 percent 

recovery rate would allow for the 

additional use of 8,800 MT but would 

still leave a shortfall of 2,291 MT in 

2015. In developing the 2009 Final Rule, 

EPA calculated that to meet the total 

demand in 2015, the recovery rate 

would have to increase to 26 percent 

(representing 29 percent of total 

servicing demand). 

In the 2009 Final Rule, EPA 

determined that it was desirable to 

institute a year-by-year reduction for the 


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period 2010–2014. The Agency is 

maintaining that policy in this interim 

final action for 2011. A smooth 

transition for stakeholders—including 

continued availability of needed 

material for approved uses—has 

historically been an essential aspect of 

U.S. success in implementing the 

Montreal Protocol and CAA 

requirements. To ease the transition to 

2015 and avoid disruptions to the 

market and shortages in HCFC–22 at 

that date, it is necessary to take steps 

now to foster the development of a 

robust recovery and recycling industry 

in the U.S. 

EPA determined in the 2009 Final 

Rule the level of allocation that would 

meet the servicing demand over 2010– 

2014. In this interim final action, EPA 

is maintaining the overall HCFC–22 

allocation levels for 2011 that the 

Agency determined were appropriate in 

the 2009 Final Rule. Since EPA is not 

banning the use of existing HCFC–22 

appliances manufactured prior to 

January 1, 2010, reused, recycled, and 

reclaimed HCFC–22 will become more 

valuable as the phaseout progresses. The 

demand for HCFC–22 to service existing 

equipment will provide an economic 

incentive to increase the quantities of 

recovered HCFC–22 available for reuse, 

recycling, and reclamation. The docket 

for the 2009 Final Rule (EPA–HQ–OAR– 

2008–0496) provides further 

information on EPA’s assumptions 

regarding the availability of reused, 

recycled and reclaimed HCFC–22 to 

meet servicing demand. 

Because the primary benefit of 

annually reducing the allocation is to 

ensure demand in 2015 is met through 

greater recovery and reclamation, EPA 

continues to believe that it is 

appropriate to base the allocation on 

that goal. In developing the 2009 Final 

Rule, EPA estimated demand in 2015 for 

HCFC–22 would be 38,800 MT. Were 

the allocations to consist entirely of 

HCFC–22, the cap would limit the 2015 

HCFC–22 allocation to only 27,709 MT, 

a difference of 11,091 MT that would 

have to be made up with recovered 

material. Furthermore, it is likely that 

the allocation in 2015 will not consist 

entirely of HCFC–22, as EPA will need 

to reserve room under the cap for other 

HCFCs. In the 2009 Final Rule, EPA 

determined it was appropriate to 

establish an annual step-down such that 

the amount of total demand to be met 

from recovered HCFC–22 would equal 

12,500 MT each year. This is 

approximately the amount EPA 

projected would be needed to meet the 

servicing demand in 2015. EPA is 

retaining this approach for 2011 in the 

interim final rule. Under this approach, 

the allocations equal approximately 

45,400 MT in 2011. These values, 

shown in the table below, are derived by 

subtracting 12,500 MT from the 

estimated demand each year. EPA will 

not issue HCFC–22 and HCFC–142b 

allowances for 2012 or later until a 

future rulemaking. Consistent with the 

2009 Final Rule, EPA plans to reduce 

the allocation amount annually in future 

rulemakings to reflect the declining 

servicing demand. 

2010 2011 

Estimated Demand (MT) .. 62,500 57,900 

Total Allocation (MT) ........ 50,000 45,400 

Recovered Amount (MT) .. 12,500 12,500 

As the total demand decreases, 

maintaining the supply of recovered 

HCFCs at a constant level results in 

recovered material comprising a greater 

proportion of the total demand each 

year. Under this approach, the 

percentage of the total demand to be met 

with recovered material will rise from 

20 percent of total demand in 2010 to 

21.6 percent in 2011, though the total 

amount of recovered material needed 

remains at 12,500 MT for both years. 

EPA still believes this is appropriate as 

it facilitates meeting the demand in 

2015, of which at least 29 percent must 

be met with recovered material, but 

takes comment on whether demand for 

HCFC–22 has changed since the 2009 

Final Rule was published. Additionally, 

EPA is taking comment on whether 

there is surplus HCFC–22 on the U.S. 

market. In particular, EPA is interested 

in learning more about: (1) The current 

amount of recovered HCFC–22 that is 

available for reclamation or reuse in 

another HCFC–22 system; (2) the 

amount of surplus HCFC–22 (virgin and 

reclaimed) in inventory; and (3) the 

amount of recovered HCFC–22 abroad 

awaiting import into the U.S. for 

reclamation and/or reuse. If new 

information shows a different amount of 

HCFC–22 should be allocated in future 

control periods to encourage 

reclamation and ensure a smooth 

transition, EPA will explore options to 

address this in a later proposed rule. 

C. Allocations of HCFC–22 and HCFC– 

142b 

EPA is revising the tables in 40 CFR 

82 that together specify the production 

and consumption allowances available 

to allowance holders during specified 

control periods. The tables at sections 

82.17 and 82.19 apportion baseline 

production allowances and baseline 

consumption allowances, respectively, 

to individual companies for individual 

HCFCs during a particular regulatory 

period. Complementing these tables, the 

table at section 82.16 lists the 

percentage of baseline allocated to 

allowance holders for specific control 

periods. In the interim final rule, EPA 

is retaining this framework of 

complementary tables, revising them to 

reflect the Court’s vacatur, responding 

to the Court’s remand by making 

adjustments to the previous baselines 

consistent with the Court’s ruling, and 

granting percentages of baselines in a 

manner that achieves the 2010 phaseout 

step and lays the groundwork for the 

next phaseout step in 2015. 

In the 2009 Final Rule, the percent 

allocation for HCFC–22 for 2011 was 

38.0 percent of baseline. In the interim 

final rule, the value is 32.0 percent. The 

percent allocation for HCFC–142b for 

2011 was 0.47 percent of baseline in the 

2009 Final Rule and is 4.9 percent of 

baseline in this interim final rule. These 

changes do not reflect a change in the 

total consumption allocation amounts 

for each substance, as the total 

allocation for HCFC–22 in 2011 remains 

approximately 45,400 MT (the same as 

the 2009 Final Rule), and the total 

allocation for HCFC–142b in 2011 

remains at approximately 100 MT. 

Using the same percentage of baseline to 

allocate production allowances as 

consumption allowances, the total 

HCFC–22 production allocation is 

smaller than in the 2009 final rule by 

less than two percent. The lower 

amount is due to the change in company 

baselines to reflect the Court’s decision 

on the 2008 inter-pollutant baseline 

transfers, and not a change in the 

methodology used to determine 

allowances. More information is 

available on this subject in Section 

V.C.2. 

The 2009 Final Rule, which did not 

treat the 2008 transfers of HCFC–142b to 

HCFC–22 baseline allowances as 

carrying forward into the next 

regulatory period, had a total HCFC–22 

consumption baseline of 119,384 MT. In 

this interim final rule, EPA is reflecting 

the baseline transfers in section 82.19 in 

accordance with the Court’s decision. 

As a result, the aggregate HCFC–22 

consumption baseline has increased to 

141,865 MT. Since the aggregate HCFC– 

22 baseline is now higher due to the 

increase in the number of HCFC–22 

baseline allowances for Arkema, Inc. 

and Solvay Fluorides, LLC, EPA is 

allocating a smaller percentage of the 

company-specific baselines than in the 

2009 Final Rule to achieve the same 

total number of allowances. Thus, 

45,400 MT of HCFC–22 consumption 

(the aggregate allocation amount in 

2011) is equal to 38.0 percent of 119,384 

MT (baseline) of HCFC–22 in the 2009 


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Final Rule, and 32.0 percent of 141,865 

MT (baseline) in this interim final rule. 

The aggregate HCFC–22 production 

baseline is also increasing from 110,619 

MT in the 2009 Final Rule to 129,093 

MT in this interim final rule to reflect 

Arkema, Inc.’s transfer of HCFC–142b 

baseline production allowances to 

HCFC–22 baseline production 

allowances. 

The opposite is true for HCFC–142b, 

which had a larger aggregate 

consumption baseline in the proposed 

rule (21,089 MT), but now has a smaller 

baseline (2,047 MT) since EPA is 

accounting for inter-pollutant transfers 

from HCFC–142b to HCFC–22. Thus, 

100 MT of HCFC–142b consumption 

allowances (the aggregate allocation 

amount in 2011) are equal to 0.47 

percent of 21,089 MT of HCFC–142b in 

the 2009 Final Rule, and 4.9 percent of 

2,047 MT in this interim final rule. 

Aggregate HCFC–142b baseline 

production allowances are decreasing 

from 25,090 MT in the 2009 Final Rule 

to 9,444 MT in this interim final rule to 

reflect Arkema, Inc.’s transfer of HCFC– 

142b baseline production allowances. 

EPA is removing the vacated text 

relating to HCFC–22 and HCFC–142b 

from the tables in sections 82.16, 82.17, 

and 82.19; adding new production and 

consumption baselines for those 

substances for 2011 to the tables at 

sections 82.17 and 82.19; and adding 

new specified percentages of baseline 

for those substances to the table in 

section 82.16 for the 2011 control 

period. 

TABLE 1—PHASEOUT SCHEDULE FOR CLASS II CONTROLLED SUBSTANCES IN 40 CFR 82.16 

Control period Percent of 

HCFC–141b 

Percent of 

HCFC–22 

Percent of 

HCFC–142b 

Percent of 

HCFC–123 

Percent of 

HCFC–124 

Percent of 

HCFC–225ca 

Percent of 

HCFC–225cb 

2003 ......................... 0 100 100 ........................ ........................ ........................ ........................

2004 ......................... 0 100 100 ........................ ........................ ........................ ........................

2005 ......................... 0 100 100 ........................ ........................ ........................ ........................

2006 ......................... 0 100 100 ........................ ........................ ........................ ........................

2007 ......................... 0 100 100 ........................ ........................ ........................ ........................

2008 ......................... 0 100 100 ........................ ........................ ........................ ........................

2009 ......................... 0 100 100 ........................ ........................ ........................ ........................

2010 ......................... 0 41 .9 0 .47 125 125 125 125 

2011 ......................... 0 32 .0 4 .9 125 125 125 125 

2012 ......................... 0 .......................... .......................... 125 125 125 125 

2013 ......................... 0 .......................... .......................... 125 125 125 125 

2014 ......................... 0 .......................... .......................... 125 125 125 125 

Consistent with the 2009 Final Rule, 

EPA is allocating different baseline 

percentages for HCFC–22 and HCFC– 

142b because EPA projects that the 

needs will differ for servicing airconditioning and refrigeration 

appliances during the 2011 control 

period. As discussed in Section V.B.1., 

the analysis prepared for the 2009 Final 

Rule showed there will be a 

significantly greater need for HCFC–22 

than for HCFC–142b during 2011. Based 

on the Servicing Tail Report and 

reporting information already required 

by EPA regulations, the needs for 

individual HCFCs are not uniform. EPA 

determined in the 2009 Final Rule that 

allocating the same percentage of 

baseline for HCFC–22 and HCFC–142b 

would result in too few allowances for 

HCFC–22 and too many allowances for 

HCFC–142b. While annual interpollutant transfers in accordance with 

section 82.23(b) could be used to 

transfer allowances of one HCFC for 

another on a temporary basis, EPA 

continues to believe it is not appropriate 

to rely on such transfers as a mechanism 

for large-scale corrections. Instead, EPA 

anticipates that the continued 

availability of annual, temporary interpollutant transfers will permit the 

market to self-correct for unforeseen 

changes in demand and allow entities to 

consider a range of options for their 

allowances. EPA seeks to avoid 

unnecessary disruptions in the 

marketplace and to promote a smooth 

transition for society. 

1. HCFC–22 Consumption Allowances 

for 2011 

For 2011, EPA is allocating HCFC–22 

consumption allowances to meet about 

78 percent of the servicing need, 

assuming the remainder will be met by 

recovered HCFC–22 that is either 

reused, recycled, or reclaimed. This 

translates into approximately 45,400 MT 

(2,497 ODP-weighted MT), or 66 percent 

of the total HCFC consumption cap for 

the 2011 control period. 

2. HCFC–22 Production Allowances for 

2011 

For purposes of the 2011 interim final 

rule, EPA is not revisiting its 

determination in the 2009 Final Rule to 

use the same percentages for production 

and consumption allocations—deriving 

the percentages based on estimated need 

for each individual HCFC. Therefore, 

this rule allocates 41,310 MT (2,272 

ODP-weighted MT of the 3,884.25 ODPweighted metric ton production cap) to 

HCFC–22 production in 2011. The 2011 

aggregate allocation is 1.7 percent lower 

than the amount allocated in the 2009 

Final Rule (41,310 MT in this Interim 

Final Rule vs. 42,035 MT in the 2009 

Final Rule) because the aggregate 

amount of baseline production 

allowances in this rulemaking did not 

increase by the same relative amount as 

aggregate baseline consumption 

allowances. Because Solvay did not 

transfer its HCFC–142b production 

allowances to HCFC–22 production 

allowances, consumption allowances 

are 18.8 percent higher in this rule, 

while production allowances are only 

16.7 percent higher. The memo to the 

docket for this rulemaking (EPA–HQ– 

OAR–2010–1040) titled ‘‘HCFC–22 and 

HCFC–142b Allocation Adjustments: 

2009 Final Rule vs. 2011 Interim Final 

Rule,’’ discusses the slight differences in 

allocation amounts in more detail. 

While some allowance holders have 

encouraged EPA to increase the number 

of production allowances allocated in 

2011, EPA is not allocating additional 

production allowances in this interim 

final rule for several reasons. First, EPA 

is relying on the existing record for the 

2009 Final Rule, in which the Agency 

determined it was appropriate to 

allocate production and consumption 

allowances at the same percentage of 

baseline. EPA believes it is important to 

obtain public comment on this issue 

before changing course. Second, in the 

2009 Final Rule, EPA stated that 

allocating the same percentage of 

baseline for production and 

consumption was ‘‘consistent with 

section 605(c) of the Clean Air Act, 

which requires that the phaseout 


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schedule for HCFC consumption be the 

same as that for HCFC production’’ (74 

FR 66429). EPA has given further 

thought to this provision and is seeking 

public comment on its interpretation 

before any changes in policy. Third, 

EPA has not previously taken comment 

on whether there would be 

environmental implications associated 

with such a change. Given these three 

considerations, EPA believes it would 

not be appropriate to increase the 

production amount without providing 

notice and an opportunity to comment. 

While this interim final rule contains 

the same allocation percentages for 

production and consumption, EPA 

welcomes comment on whether it 

should use different percentages to 

allocate HCFC–22 production and 

consumption allowances in 2011 and/or 

future control periods. From a policy 

perspective, EPA is interested in 

comments on whether an increase in the 

total number of HCFC–22 production 

allowances would result in greater total 

HCFC production, either in the U.S. or 

globally. EPA notes that production of 1 

kilogram of an HCFC requires both a 

production allowance and a 

consumption allowance (82.15(a)(1),(2)). 

Thus, an increase in production 

allowances without a corresponding 

increase in consumption allowances 

does not automatically result in greater 

production. The most likely scenario is 

that an increase in production 

allowances would result in greater U.S. 

production for export. This is because as 

stated in § 82.20(a), ‘‘A person may 

obtain at any time during the control 

period * * * 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 * * * when that 

quantity of class II controlled substance 

was produced in the U.S. * * * with 

expended consumption allowances.’’ In 

effect, current EPA regulations allow 

exporters to receive a refund of one 

consumption allowance for each 

kilogram they export if they show one 

consumption and one production 

allowance were expended for the 

material exported. Therefore, EPA 

would not expect an increase in 

production allowances to result in 

greater amounts of HCFCs being used in 

the U.S. EPA welcomes comment on 

whether an increase in the level of 

production allowances would result in 

more U.S. production, either for 

domestic use or for export, and whether 

any additional U.S. production for 

export would result in greater 

worldwide production of HCFCs. 

From a legal perspective, EPA is 

interested in comments on whether 

section 605(c) would preclude 

allocating a different percentage of 

baseline for production than for 

consumption. Section 605(c) states that 

EPA must ‘‘promulgate regulations 

phasing out the production * * * of 

class II substances in accordance with 

[section 605],’’ subject to any 

acceleration under section 606. It 

further states that EPA must 

‘‘promulgate regulations to insure that 

the consumption of class II substances 

in the United States is phased out and 

terminated in accordance with the same 

schedule * * * as is applicable to the 

phase-out and termination of 

production of class II substances under 

[Title VI].’’ EPA is considering three 

possible interpretations of the term 

‘‘schedule’’ as referenced in section 

605(c): (1) The schedule that appears on 

the face of section 605, which contains 

no deadlines until 2015; (2) the 

schedule that appears on the face of 

section 605, as accelerated under 

section 606; and (3) the specific 

allocation percentages or amounts 

established by EPA through rulemaking 

for each control period. EPA believes 

that the second interpretation is the 

most consistent with the statutory 

language and purpose. 

In past actions, the Agency has 

accelerated the initial schedule in 

section 605 to reflect modifications to 

the Montreal Protocol phaseout 

schedule for HCFCs. Under the 2007 

Montreal Adjustment (reflected in 

Decision XIX/6), the U.S. is obligated to 

reduce HCFC production and 

consumption 75 percent below its 

aggregate baseline by 2010. EPA is not 

proposing to increase production to an 

amount that would be inconsistent with 

that obligation. Instead, EPA is taking 

comment on whether to allow 

production to increase relative to 

consumption, without encroaching on 

the cap. Specifically, EPA is taking 

comment on whether to issue additional 

production allowances in the amount of 

7,746 MT when compared to this 

interim final rule. 

If EPA were to decide to increase 

production allowances in 2011, its 

preferred approach would be to 

decouple the percentage of baseline 

allocated for production from the 

percentage of baseline allocated for 

consumption. EPA would effectuate this 

change in its regulations by replacing 

the table at 40 CFR 82.16 with two 

tables. One would allocate 32 percent of 

baseline for consumption allowances in 

2011. The other would allocate 38 

percent of baseline for production 

allowances in 2011. This approach 

would still provide the petitioners in 

Arkema v. EPA the benefit of their 2008 

baseline transfers while giving other 

companies with production baselines 

approximately the same number of 

production allowances as they received 

in the 2009 Final Rule. Compared to the 

2009 Final Rule, the net result would be 

7,020 MT (386 ODP-weighted MT) 

additional HCFC–22 production 

allowed in 2011 for a total of 49,055 MT 

(2,698 ODP-weighted MT). Under this 

scenario, the U.S. would be 1,021 ODPweighted MT below the production cap 

and in compliance with its obligations 

under the Montreal Protocol. EPA is 

seeking comment on whether this 

increase would hinder the transition to 

the 2015 phaseout step, under which 

the U.S. is obligated to reduce HCFC 

production and consumption 90 percent 

below its aggregate baseline. EPA’s 

preference is to continue to use the 

same percentages for production and 

consumption allocations. This is 

because EPA is concerned this action 

could increase U.S. production of 

HCFCs, might decrease the U.S.’s ability 

to transition to the 2015 stepdown 

under the Montreal Protocol, and 

potentially increase global production of 

HCFCs. Nevertheless, the Agency 

welcomes comment on this option for 

increasing 2011 and/or future HCFC–22 

production allowances. After reviewing 

comments, EPA may either issue a 

supplemental allocation of production 

allowances for 2011 or leave the 2011 

production allocation in this interim 

final rule unchanged. 

3. HCFC–142b Allowances for 2011 

Establishing HCFC–142b baseline 

allowances that take into account the 

2008 inter-pollutant transfers discussed 

in Section II.D. results in 2,047 MT of 

aggregate baseline consumption 

allowances and 9,444 MT of aggregate 

baseline production allowances. 

Consistent with the 2009 Final Rule, 

EPA is allocating 100 percent of the 

projected servicing need for HCFC–142b 

identified in that rule: 100 MT (7 ODPweighted MT) of consumption. To get to 

that level of consumption, EPA is 

allocating 4.9 percent of the aggregate 

consumption baseline, as reflected in 

the table at section 82.16. The aggregate 

allocation number for consumption is 

the same as in the 2009 Final Rule. 

Using the same percentage (4.9 

percent), EPA is allocating 463 MT (30.1 

ODP-weighted MT) of HCFC–142b 

production allowances for 2011. The 

2011 aggregate allocation for production 

is higher than the amount allocated in 

the 2009 Final Rule (463 MT in this 

interim final rule vs. 118 MT in the 

2009 Final Rule). The allocated amount 

is 292 percent higher than in the 2009 

Final Rule because the aggregate amount 


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of baseline HCFC–142b consumption 

allowances in this rulemaking decreased 

by a significantly larger amount than 

aggregate baseline HCFC–142b 

production allowances. Baseline 

consumption allowances are 90.3 

percent lower in this rule, while 

baseline production allowances are only 

62.4 percent lower. This occurred 

because Solvay did not transfer its 

HCFC–142b production allowances to 

HCFC–22 production allowances. This 

higher amount of calendar-year 

production does not affect the U.S.’s 

ability to meet its obligations under the 

Montreal Protocol. The memo to the 

docket for this rulemaking (EPA–HQ– 

OAR–2010–1040) titled ‘‘HCFC–22 and 

HCFC–142b Allocation Adjustments: 

2009 Final Rule vs. 2011 Interim Final 

Rule,’’ discusses the differences in exact 

allocation amounts in more detail. 

4. How the Aggregate for HCFC–22 and 

HCFC–142b Translates Entity-by-Entity 

EPA is allocating (1) approximately 

45,400 MT of HCFC–22 consumption 

allowances, (2) 41,310 MT of HCFC–22 

production allowances, (3) 

approximately 100 MT of HCFC–142b 

consumption allowances, and (4) 463 

MT of HCFC–142b production 

allowances for 2011. However, EPA 

actually allocates allowances to 

individual companies (i.e., legal 

entities). 

Company-specific production and 

consumption baselines (also referred to 

as ‘‘baseline allowances’’) for HCFC– 

142b and HCFC–22 are listed at sections 

82.17 and 82.19, respectively. The 

percentage of baseline each entity will 

receive in 2011 appears at section 

82.16(a), as shown in Table 1 above. 

Allowances allocated for individual 

control periods are called ‘‘calendaryear allowances’’ to distinguish them 

from the baseline production or 

consumption. For 2011, EPA is 

apportioning production and 

consumption baselines for HCFC–22 

and HCFC–142b on the same basis as in 

the 2009 Final Rule, except that EPA is 

making adjustments to reflect (1) The 

2008 inter-pollutant transfers of baseline 

allowances deemed permanent by the 

Court, (2) inter-company, singlepollutant transfers of baseline 

allowances that occurred in 2010, and 

(3) changes in company names that 

occurred after the 2009 Final Rule was 

signed. Applying the approach 

described above, EPA is apportioning 

production and consumption baselines 

for HCFC–22 and HCFC–142b to the 

following entities in the following 

amounts: 

TABLE 2—BASELINE PRODUCTION ALLOWANCES OF HCFC–22 AND HCFC–142B IN 40 CFR 82.17 

Person Controlled substance Allowances 

(kg) 

Arkema ......................................................................................................................... HCFC–22 .................................................. 46,692,336 

HCFC–142b .............................................. 484,369 

DuPont .......................................................................................................................... HCFC–22 .................................................. 42,638,049 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 37,378,252 

HCFC–142b .............................................. 2,417,534 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,383,835 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 6,541,764 

TABLE 3—BASELINE CONSUMPTION ALLOWANCES OF HCFC–22 AND HCFC–142B IN 40 CFR 82.19 

Person Controlled substance Allowances 

(kg) 

ABCO Refrigeration Supply ......................................................................................... HCFC–22 .................................................. 279,366 

Altair Partners ............................................................................................................... HCFC–22 .................................................. 302,011 

Arkema ......................................................................................................................... HCFC–22 .................................................. 48,637,642 

HCFC–142b .............................................. 483,827 

Carrier Corporation ....................................................................................................... HCFC–22 .................................................. 54,088 

Coolgas Investment Property ....................................................................................... HCFC–22 .................................................. 1,040,458 

DuPont .......................................................................................................................... HCFC–22 .................................................. 38,814,862 

HCFC–142b .............................................. 52,797 

H.G. Refrigeration Supply ............................................................................................ HCFC–22 .................................................. 40,068 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 35,392,492 

HCFC–142b .............................................. 1,315,819 

Mexichem Fluor Inc ...................................................................................................... HCFC–22 .................................................. 2,546,305 

Kivlan & Company ........................................................................................................ HCFC–22 .................................................. 2,081,018 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,541,545 

Mondy Global ............................................................................................................... HCFC–22 .................................................. 281,824 

National Refrigerants .................................................................................................... HCFC–22 .................................................. 5,528,316 

Refricenter of Miami ..................................................................................................... HCFC–22 .................................................. 381,293 

Refricentro .................................................................................................................... HCFC–22 .................................................. 45,979 

R-Lines ......................................................................................................................... HCFC–22 .................................................. 63,172 

Saez Distributors .......................................................................................................... HCFC–22 .................................................. 37,936 

Solvay Fluorides ........................................................................................................... HCFC–22 .................................................. 3,781,691 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 194,536 

USA Refrigerants ......................................................................................................... HCFC–22 .................................................. 14,865 


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D. HCFC–141b, HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb 

Allowances 

Other than adjustments for intercompany, single-pollutant transfers of 

baseline allowances, baselines and 

percentages of baseline allocated as 

calendar-year allowances for HCFC– 

141b, HCFC–123, HCFC–124, HCFC– 

225ca, and HCFC–225cb are unchanged 

from the 2009 Final Rule. In the case of 

HCFC–141b, EPA is continuing to 

allocate 0 percent of baseline for U.S. 

consumption and production, consistent 

with 40 CFR 82.16(b). 

E. Other HCFCs 

As a result of EPA’s allocation 

process, which is largely based on 

projected demand for HCFC–22 and 

HCFC–142b, minus an amount of 

HCFC–22 that is assumed to be reused, 

recycled, or reclaimed, the total 

allocation is lower than the aggregate 

HCFC cap under the Montreal Protocol. 

EPA recognizes that there could be some 

additional need for HCFCs not 

specifically included in this rule. While 

some niche applications in the U.S. use 

other HCFCs, such as HCFC–21, EPA is 

not aware of additional need for 

production or import of these 

substances at this time, as adequate 

amounts appear to be in inventory. 

However, EPA is not foreclosing the 

possibility of additional production or 

import for these niche uses. Also, some 

amount of HCFC–141b will likely 

continue to be produced or imported via 

the petition process during 2011. EPA 

believes there is sufficient room under 

the cap for such continued production 

and import. The current regulations at 

40 CFR 82.15 ban the production and 

import of class II substances for which 

EPA has apportioned baseline 

production and consumption 

allowances in excess of allowances held 

by the producer or importer, but do not 

ban the production and import of class 

II substances for which EPA has not 

apportioned baseline production and 

consumption allowances. This rule does 

not alter the current regulations in that 

respect. The producer or importer of an 

HCFC that is not subject to the 

allowance system would be required to 

report to EPA consistent with the 

existing recordkeeping and reporting 

requirements. If necessary, EPA could 

amend the regulations to set and 

apportion baselines and issue 

allowances for these HCFCs. Therefore, 

retaining room under the cap provides 

the benefit of accounting for 

unanticipated growth in HCFCs that do 

not have allocations or other unforeseen 

events. However, EPA is not reserving 

room under the cap for the abovedescribed reasons. EPA is allocating 

allowances based on modeled demand 

for virgin and recovered material in 

preparation for the next major stepdown 

period under the Montreal Protocol in 

2015. 

VI. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

Under Executive Order (EO) 12866 

(58 FR 51735, October 4, 1993), this 

action is a ‘‘significant regulatory 

action’’ since it raises ‘‘novel legal or 

policy issues.’’ Accordingly, EPA 

submitted this action to the Office of 

Management and Budget (OMB) for 

review under Executive Orders 12866 

and 13563 (76 FR 3821, January 21, 

2011) and any changes made in 

response to OMB recommendations 

have been documented in the docket for 

this action. 

EPA did not conduct a specific 

analysis of the benefits and costs 

associated with this action. Many 

previous analyses provide a wealth of 

information on the costs and benefits of 

the U.S. HCFC phaseout including: 

• The 1993 Addendum to the 1992 

Phaseout Regulatory Impact Analysis: 

Accelerating the Phaseout of CFCs, 

Halons, Methyl Chloroform, Carbon 

Tetrachloride, and HCFCs. 

• The 1999 Report Costs and Benefits 

of the HCFC Allowance Allocation 

System. 

• The 2000 Memorandum Cost/ 

Benefit Comparison of the HCFC 

Allowance Allocation System. 

• The 2005 Memorandum 

Recommended Scenarios for HCFC 

Phaseout Costs Estimation. 

• The 2006 ICR Reporting and 

Recordkeeping Requirements of the 

HCFC Allowance System. 

• The 2007 Memorandum 

Preliminary Estimates of the 

Incremental Cost of the HCFC Phaseout 

in Article 5 Countries. 

• The 2007 Memorandum Revised 

Ozone and Climate Benefits Associated 

with the 2010 HCFC Production and 

Consumption Stepwise Reductions and 

a Ban on HCFC Pre-charged Imports. 

A memorandum summarizing these 

analyses is available in the docket. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. EPA 

already requires recordkeeping and 

reporting for HCFCs, and this action 

does not amend those provisions. The 

Office of Management and Budget 

(OMB) has previously approved the 

information collection requirements 

contained in the existing regulations at 

40 CFR part 82, subpart A under the 

provisions of the Paperwork Reduction 

Act, 44 U.S.C. 3501 et seq. and has 

assigned OMB control number 2060– 

0498. The OMB control numbers for 

EPA’s regulations in 40 CFR are listed 

in 40 CFR part 9. 

C. Regulatory Flexibility Act (RFA) 

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. Because this rule is not 

subject to notice-and-comment 

rulemaking requirements, the RFA does 

not apply and the Agency is not 

required to conduct a regulatory 

flexibility analysis. 

Nevertheless, in the spirit of the RFA, 

we have considered the economic 

impacts of this interim final rule on 

small entities. For purposes of assessing 

the impacts of this rule on small 

entities, a small entity is defined as: (1) 

A small business as defined by the 

Small Business Administration’s (SBA) 

regulations at 13 CFR 121.201; (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-forprofit enterprise which is independently 

owned and operated and is not 

dominant in its field. 

This action will affect the following 

categories: 

Category NAICS code SIC code Examples of regulated 

entities 

Industrial Gas Manufacturing ....................................... 325120 2869 Fluorinated hydrocarbon gases manufacturers and reclaimers. 


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Category NAICS code SIC code Examples of regulated 

entities 

Other Chemical and Allied Products Merchant Wholesalers.422690 5169 Chemical gases and compressed gases merchant 

wholesalers. 

Air-Conditioning and Warm Air Heating Equipment 

and Commercial and Industrial Refrigeration Equipment Manufacturing.

333415 3585 Air-conditioning equipment and commercial and industrial refrigeration equipment manufacturers. 

Air-Conditioning Equipment and Supplies Merchant 

Wholesalers.

423730 5075 Air-conditioning (condensing unit, compressors) merchant wholesalers. 

Electrical and Electronic Appliance, Television, and 

Radio Set Merchant Wholesalers.

423620 5064 Air-conditioning (room units) merchant wholesalers. 

Plumbing, Heating, and Air-Conditioning Contractors 238220 1711, 7623 Central air-conditioning system and commercial refrigeration installation; HVAC contractors. 

After considering the economic 

impacts of this interim final rule on 

small entities, I certify this action will 

not have a significant economic impact 

on a substantial number of small entities 

as it relieves a regulatory ban on 

production and consumption that 

would otherwise apply in the wake of 

the Court’s vacatur. EPA is continuing 

to allocate production and consumption 

allowances using the same approach 

described in the 2009 Final Rule with 

adjustments to reflect (1) 2008 interpollutant transfers of baseline 

allowances deemed permanent by the 

Court, (2) inter-company, singlepollutant transfers of baseline 

allowances that occurred in 2010, and 

(3) changes in company names that 

occurred after the 2009 Final Rule was 

signed. EPA is not modifying the 

recordkeeping or reporting provisions 

and thus is not increasing the burden to 

small businesses. 

D. Unfunded Mandates Reform Act 

This action contains no Federal 

mandates under the provisions of Title 

II of the Unfunded Mandates Reform 

Act of 1995 (UMRA), 2 U.S.C. 1531– 

1538 for State, local, or tribal 

governments or the private sector. First, 

UMRA does not apply to rules that are 

necessary for the implementation of 

international treaty obligations. This 

rule implements the 2010 milestone for 

the phaseout of HCFCs under the 

Montreal Protocol. Second, this action 

relieves the regulatory ban on 

production and consumption that 

would otherwise apply. This action will 

not have any significant direct impacts 

or State, local and tribal governments or 

private sector entities. Therefore, this 

rule is not subject to the requirements 

of sections 202 or 205 of UMRA. 

This rule is also not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. This 

action apportions production and 

consumption allowances and 

establishes baselines for private entities, 

not small governments. 

E. Executive Order 13132: Federalism 

Executive Order 13132, titled 

‘‘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 action does not have federalism 

implications. It does 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. This action is 

expected to primarily affect producers, 

importers, and exporters of HCFCs. 

Thus, the requirements of section 6 of 

the Executive Order do not apply. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have tribal 

implications, as specified in Executive 

Order 13175 (65 FR 67249, November 9, 

2000). This action 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 action. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

This action is not subject to EO 13045 

(62 FR 19885, April 23, 1997) because 

it is not economically significant as 

defined in EO 12866. The Agency 

nonetheless has reason to believe that 

the environmental health or safety risk 

addressed by this action 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 of excessive exposure to UV 

radiation on children: (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) Whiteman 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 action implements the U.S. 

commitment to reduce the total basket 

of HCFCs produced and imported to a 

level that is 75 percent below the 

respective baselines. While on an ODPweighted basis, this is not as large a step 

as previous actions, such as the 1996 

Class I phaseout, it is one of the most 

significant remaining actions the U.S. 

can take to complete the overall 

phaseout of ODS and further decrease 


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impacts on children’s health from 

stratospheric ozone depletion. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not a ‘‘significant 

energy action’’ as defined in Executive 

Order 13211 (66 FR 28355 (May 22, 

2001)), because it is not likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy. 

The rule issues allowances for the 

production and consumption of HCFCs. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Public Law No. 

104–113, 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 EPA to 

provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. This 

action does not involve technical 

standards. Therefore, EPA did not 

consider the use of any voluntary 

consensus standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order (EO) 12898 (59 FR 

7629 (Feb. 16, 1994)) establishes federal 

executive policy on environmental 

justice. Its main provision directs 

federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the U.S. 

EPA has determined that this action 

will not have disproportionately high 

and adverse human health or 

environmental effects on minority or 

low-income populations because the 

2010 phaseout step increases the level 

of environmental protection for all 

affected populations without having any 

disproportionately high and adverse 

human health or environmental effects 

on any population, including any 

minority or low-income population. 

This action continues the 

implementation of the U.S. commitment 

to reduce the total basket of HCFCs 

produced and imported to a level that 

is 75 percent below the respective 

baselines. While on an ODP-weighted 

basis, this is not as large a step as 

previous actions, such as the 1996 Class 

I phaseout, it is one of the most 

significant remaining actions the U.S. 

can take to complete the overall 

phaseout of ODS and further lessen the 

adverse human health effects for the 

entire population. 

K. The 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 U.S.. 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 U.S. 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 

August 5, 2011. 

List of Subjects in 40 CFR Part 82 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Chemicals, 

Exports, Hydrochlorofluorocarbons, 

Imports. 

Dated: July 29, 2011. 

Lisa P. Jackson, 

Administrator. 

40 CFR part 82 is amended to read as 

follows: 

PART 82—PROTECTION OF 

STRATOSPHERIC OZONE 

■ 1. The authority citation for part 82 

continues to read as follows: 

Authority: 42 U.S.C. 7414, 7601, 7671– 

7671q. 

■ 2. Revise § 82.16(a) to read as follows: 

§ 82.16 Phaseout schedule of class II 

controlled substances. 

(a) In each control period as indicated 

in the following table, each person is 

granted the specified percentage of 

baseline production allowances and 

baseline consumption allowances for 

the specified class II controlled 

substances apportioned under §§ 82.17 

and 82.19: 

Control period Percent of 

HCFC–141b 

Percent of 

HCFC–22 

Percent of 

HCFC–142b 

Percent of 

HCFC–123 

Percent of 

HCFC–124 

Percent of 

HCFC–225ca 

Percent of 

HCFC–225cb 

2003 ......................... 0 100 100 ........................ ........................ ........................ ........................

2004 ......................... 0 100 100 ........................ ........................ ........................ ........................

2005 ......................... 0 100 100 ........................ ........................ ........................ ........................

2006 ......................... 0 100 100 ........................ ........................ ........................ ........................

2007 ......................... 0 100 100 ........................ ........................ ........................ ........................

2008 ......................... 0 100 100 ........................ ........................ ........................ ........................

2009 ......................... 0 100 100 ........................ ........................ ........................ ........................

2010 ......................... 0 41 .9 0 .47 125 125 125 125 

2011 ......................... 0 32 .0 4 .9 125 125 125 125 

2012 ......................... 0 .......................... .......................... 125 125 125 125 

2013 ......................... 0 .......................... .......................... 125 125 125 125 

2014 ......................... 0 .......................... .......................... 125 125 125 125 

* * * * * 

3. Revise § 82.17 to read as follows: 

§ 82.17 Apportionment of baseline 

production allowances for class II 

controlled substances. 

The following persons are 

apportioned baseline production 

allowances for HCFC–22, HCFC–141b, 

HCFC–142b, HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb, as set 

forth in the following table: 


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47468 Federal Register / Vol. 76, No. 151 / Friday, August 5, 2011 / Rules and Regulations 

Person Controlled substance Allowances 

(kg) 

AGC Chemicals Americas ............................................................................................ HCFC–225ca ............................................ 266,608 

HCFC–225cb ............................................ 373,952 

Arkema ......................................................................................................................... HCFC–22 .................................................. 46,692,336 

HCFC–141b .............................................. 24,647,925 

HCFC–142b .............................................. 484,369 

DuPont .......................................................................................................................... HCFC–22 .................................................. 42,638,049 

HCFC–124 ................................................ 2,269,210 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 37,378,252 

HCFC–141b .............................................. 28,705,200 

HCFC–142b .............................................. 2,417,534 

HCFC–124 ................................................ 1,759,681 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,383,835 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 6,541,764 

3. Section 82.19 is revised to read as 

follows: 

§ 82.19 Apportionment of baseline 

consumption allowances for class II 

controlled substances. 

The following persons are 

apportioned baseline consumption 

allowances for HCFC–22, HCFC–141b, 

HCFC–142b, HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb, as set 

forth in the following table: 

Person Controlled substance Allowances 

(kg) 

ABCO Refrigeration Supply ......................................................................................... HCFC–22 .................................................. 279,366 

AGC Chemicals Americas ............................................................................................ HCFC–225ca ............................................ 285,328 

HCFC–225cb ............................................ 286,832 

Altair Partners ............................................................................................................... HCFC–22 .................................................. 302,011 

Arkema ......................................................................................................................... HCFC–22 .................................................. 48,637,642 

HCFC–141b .............................................. 25,405,570 

HCFC–142b .............................................. 483,827 

HCFC–124 ................................................ 3,719 

Carrier ........................................................................................................................... HCFC–22 .................................................. 54,088 

Continental Industrial Group ........................................................................................ HCFC–141b .............................................. 20,315 

Coolgas, Inc ................................................................................................................. HCFC–141b .............................................. 16,097,869 

Coolgas Investment Property ....................................................................................... HCFC–22 .................................................. 1,040,458 

HCFC–123 ................................................ 19,980 

HCFC–124 ................................................ 3,742 

Discount Refrigerants ................................................................................................... HCFC–141b .............................................. 994 

DuPont .......................................................................................................................... HCFC–22 .................................................. 38,814,862 

HCFC–141b .............................................. 9,049 

HCFC–142b .............................................. 52,797 

HCFC–123 ................................................ 1,877,042 

HCFC–124 ................................................ 743,312 

H.G. Refrigeration Supply ............................................................................................ HCFC–22 .................................................. 40,068 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 35,392,492 

HCFC–141b .............................................. 20,749,489 

HCFC–142b .............................................. 1,315,819 

HCFC–124 ................................................ 1,284,265 

ICC Chemical Corp ...................................................................................................... HCFC–141b .............................................. 81,225 

ICOR ............................................................................................................................. HCFC–124 ................................................ 81,220 

Mexichem Fluor Inc ...................................................................................................... HCFC–22 .................................................. 2,546,305 

Kivlan & Company ........................................................................................................ HCFC–22 .................................................. 2,081,018 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,541,545 

Mondy Global ............................................................................................................... HCFC–22 .................................................. 281,824 

National Refrigerants .................................................................................................... HCFC–22 .................................................. 5,528,316 

HCFC–123 ................................................ 72,600 

HCFC–124 ................................................ 50,380 

Perfect Technology Center, LP .................................................................................... HCFC–123 ................................................ 9,100 

Refricenter of Miami ..................................................................................................... HCFC–22 .................................................. 381,293 

Refricentro .................................................................................................................... HCFC–22 .................................................. 45,979 

R-Lines ......................................................................................................................... HCFC–22 .................................................. 63,172 

Saez Distributors .......................................................................................................... HCFC–22 .................................................. 37,936 

Solvay Fluorides ........................................................................................................... HCFC–22 .................................................. 3,781,691 

HCFC–141b .............................................. 3,940,115 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 194,536 

Tulstar Products ........................................................................................................... HCFC–141b .............................................. 89,913 

HCFC–123 ................................................ 34,800 

HCFC–124 ................................................ 229,582 

USA Refrigerants ......................................................................................................... HCFC–22 .................................................. 14,865 


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Federal Register / Vol. 76, No. 151 / Friday, August 5, 2011 / Rules and Regulations 47469 

[FR Doc. 2011–19896 Filed 8–4–11; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 64 

CG Docket No. 10–51; FCC 11–118] 

Structure and Practices of the Video 

Relay Service Program 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, the 

Commission adopts modifications to its 

certification process for all Internetbased telecommunications relay service 

(iTRS) providers to ensure that all 

entities seeking certification in the 

future—or currently certified entities 

seeking re-certification—are fully 

qualified to provide iTRS in compliance 

with its rules and requirements, to 

reduce waste, fraud and abuse, and to 

improve the Commission’s oversight of 

these providers once they have been 

certified. 

DATES: Effective September 6, 2011, 

except 47 CFR 64.606(a) (2), (g), (h) (2) 

and (3) which contains information 

collection requirements that have not 

been approved by the Office of 

Management and Budget (OMB). The 

Federal Communications Commission 

will publish a document in the Federal 

Register announcing the effective date. 

Written comments on the Paperwork 

Reduction Act (PRA) modified 

information collection requirements 

must be submitted by the public, OMB 

and other interested parties on or before 

September 6, 2011. 

ADDRESSES: Federal Communications 

Commission, 445 12th Street, SW., 

Washington, DC 20554. Comments on 

the information collection requirements 

contained herein should be submitted to 

Cathy Williams, Federal 

Communications Commission, via 

e-mail at PRA@fcc.gov and 

Cathy.Williams@fcc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Gregory Hlibok, Consumer and 

Governmental Affairs Bureau at (202) 

559–5158 (VP), or e-mail: 

Gregory.Hlibok@fcc.gov. For additional 

information concerning the information 

collection requirements contained in 

this document, contact Cathy Williams 

at (202) 418–2918, or e-mail: 

Cathy.Williams@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Structure 

and Practices of the Video Relay Service 

Program, Second Report and Order 

(Second Report and Order), document 

FCC 11–118 adopted July 28, 2011, and 

released July 28, 2011, in CG Docket No. 

10–51, adopting modifications to its 

certification process for all iTRS 

providers. The full text of FCC 11–118 

and copies of any subsequently filed 

documents in this matter will be 

available for public inspection and 

copying during regular business hours 

at the FCC Reference Information 

Center, Portals II, 445 12th Street, SW., 

Room CY–A257, Washington, DC 20554. 

FCC 11–118 and copies of subsequently 

filed documents in this matter may also 

be purchased from the Commission’s 

duplicating contractor, Best Copying 

and Printing, Inc. (BCPI), at Portals II, 

445 12th Street, SW, Room CY–B402, 

Washington, DC 20554. Customers may 

contact BCPI at its Web site, http:// 

www.bcpiweb.com, or by calling 202– 

488–5300. FCC 11–118 can also be 

downloaded in Word or Portable 

Document Format (PDF) at: http:// 

www.fcc.gov/cgb/dro/trs.html#orders. 

To request materials in accessible 

formats for people with disabilities 

(Braille, large print, electronic files, 

audio format), send an e-mail to 

fcc504@fcc.gov or call the Consumer 

and Governmental Affairs Bureau at 

(202) 418–0530 (voice), (202) 418–0432 

(TTY). 

Final Paperwork Reduction Act of 1995 

Analysis 

Document FCC 11–118 contains 

modified information collection 

requirements subject to the PRA. It will 

be submitted to OMB for review under 

section 3507(d) of the PRA. OMB, the 

general public, and other Federal 

agencies are invited to comment on the 

modified information collection 

requirements contained in this 

proceeding. In addition, the 

Commission notes that pursuant to the 

Small Business Paperwork Relief Act of 

2002, Public Law 107–198, the 

Commission previously sought specific 

comment on how it might further 

reduce the information collection 

burden on small business concerns with 

fewer than 25 employees. 

In document FCC 11–118, the 

Commission has assessed the effects of 

imposing various requirements on iTRS 

providers to obtain certification from 

the Commission in order to be eligible 

for compensation from the Interstate 

TRS Fund (Fund). The Commission has 

determined that any additional data 

filing requirements imposed by 

document FCC 11–118 on iTRS 

providers are reasonable and necessary 

in order to ensure compliance with the 

Commission’s rules. The Commission 

has taken steps to address the concerns 

of commenters stating that some of the 

Commission’s proposed rules were 

overly burdensome. For example, the 

Commission initially proposed to 

require that a provider file a deed or 

lease for every service center operated. 

The Commission has modified this 

requirement in its final rule to allow for 

providers with more than five centers to 

submit a representative sampling of 

deeds and leases. In addition, the 

Commission has declined to adopt its 

proposed requirement for providers to 

submit documentation of all financing 

arrangements pertaining to the 

provision of iTRS. The Commission has 

also declined to adopt the requirement 

that providers submit copies of all 

subcontracting agreements for services 

not directly essential for the provision 

of iTRS. The Commission concludes 

that it has taken steps to further reduce 

the burdens on affected entities to apply 

for certification to receive compensation 

from the Fund for the provision of iTRS, 

and that the remaining filing 

requirements are not overly 

burdensome. 

Congressional Review Act 

The Commission will send a copy of 

document FCC 11–118 in a report to be 

sent to Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act. See 5 U.S.C. 

801(a)(1)(A). 

Synopsis 

1. In document FCC 11–118, the 

Commission modifies its process for 

certifying iTRS providers as eligible for 

payment from the Fund for their 

provision of iTRS, as proposed in the 

Commission’s Structure and Practices of 

the Video Relay Service Program, Report 

and Order and Further Notice of 

Proposed Rulemaking (VRS Practices 

Report and Order and Certification 

FNPRM), document FCC 11–54, 

published at 76 FR 24393, May 2, 2011 

and 76 FR 24437, May 2, 2011. In the 

Certification FNPRM, the Commission 

sought comment on ways to modify the 

current certification process to ensure 

that iTRS providers receiving 

certification are qualified to provide 

iTRS in compliance with the 

Commission’s rules, and to eliminate 

waste, fraud and abuse through 

improved oversight of such providers. 

Eligibility for Compensation From the 

TRS Fund 

2. Under the Commission’s current 

rules, an iTRS provider is eligible to 

provide relay services and receive 

compensation from the Fund if it is: (1) 


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