622 
cluding cost of administration, transparency, 
and fairness. In determining whether and how 
to revise the initial regulations under this para-
graph, the Administrator shall not consider 
maximization of revenues to the Federal Gov-
ernment. 
‘‘(C) PENALTIES
FOR
NON-PAYMENT.— 
Failure to pay for purchased allowances in ac-
cordance with the regulations promulgated pur-
suant to this paragraph shall be a violation of 
the requirements of subsection (b). Section 
113(c)(3) shall apply in the case of any person 
who knowingly fails to pay for purchased allow-
ances in accordance with the regulations pro-
mulgated pursuant to this paragraph. 
‘‘(8) IMPORTED
PRODUCTS.—If the United 
States becomes a party or otherwise adheres to a 
multilateral agreement, including any amendment to 
the Montreal Protocol on Substances That Deplete 
the Ozone Layer, which restricts the production and 
consumption of class II, group II substances— 
‘‘(A) as of the date on which such agree-
ment or amendment enters into force, it shall 
no longer be unlawful for any person to import 
from a party to such agreement or amendment 
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any product containing any class II, group II 
substance whose production and consumption 
are regulated by such agreement or amendment 
without holding one consumption allowance or 
one destruction offset credit for each carbon di-
oxide equivalent ton of the class II, group II 
substance; 
‘‘(B) the Administrator shall promulgate 
regulations within 12 months of the date the 
United States becomes a party or otherwise ad-
heres to such agreement or amendment, or the 
date on which such agreement or amendment 
enters into force, whichever is later, to establish 
a new baseline for purposes of paragraph (2), 
which new baseline shall be the original baseline 
less the carbon dioxide equivalent of the annual 
average quantity of any class II substances reg-
ulated by such agreement or amendment con-
tained in products imported from parties to 
such agreement or amendment in calendar 
years 2004, 2005, and 2006; 
‘‘(C) as of the date on which such agree-
ment or amendment enters into force, no per-
son importing any product containing any class 
II, group II substance may, directly or in con-
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cert with another person, purchase any con-
sumption allowances for sale by the Adminis-
trator for the importation of products from a 
party to such agreement or amendment that 
contain any class II, group II substance re-
stricted by such agreement or amendment; and 
‘‘(D) the Administrator may adjust the 
two allowance pools established in paragraph 
(4) such that up to 90 percent of the consump-
tion allowances available for a calendar year are 
placed in the producer-importer pool with the 
remaining consumption allowances placed in the 
secondary pool. 
‘‘(9) OFFSETS.— 
‘‘(A) CHLOROFLUOROCARBON
DESTRUC-
TION.—Within 18 months after the date of en-
actment of this section, the Administrator shall 
promulgate regulations to provide for the 
issuance of offset credits for the destruction, in 
the 
calendar 
year 
2012 
or 
later, 
of 
chlorofluorocarbons in the United States. The 
Administrator shall establish and distribute to 
the destroying entity a quantity of destruction 
offset credits equal to 0.8 times the number of 
tons of carbon dioxide equivalents of reduction 
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achieved through the destruction. No destruc-
tion offset credits shall be established for the 
destruction of a class II, group II substance. 
‘‘(B) DEFINITION.—For purposes of this 
paragraph, the term ‘destruction’ means the 
conversion of a substance by thermal, chemical, 
or other means to another substance with little 
or no carbon dioxide equivalent value and no 
ozone depletion potential. 
‘‘(C) REGULATIONS.—The regulations pro-
mulgated under this paragraph shall include 
standards and protocols for project eligibility, 
certification of destroyers, monitoring, tracking, 
destruction efficiency, quantification of project 
and baseline emissions and carbon dioxide 
equivalent value, and verification. The Adminis-
trator shall ensure that destruction offset cred-
its represent real and verifiable destruction of 
chlorofluorocarbons or other class I or class II, 
group I, substances authorized under subpara-
graph (D). 
‘‘(D) OTHER SUBSTANCES.—The Adminis-
trator may promulgate regulations to add to the 
list of class I and class II, group I, substances 
that may be destroyed for destruction offset 
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credits, taking into account a candidate sub-
stance’s carbon dioxide equivalent value, ozone 
depletion potential, prevalence in banks in the 
United States, and emission rates, as well as 
the need for additional cost containment under 
the class II, group II cap and the integrity of 
the class II, group II cap. The Administrator 
shall not add a class I or class II, group I sub-
stance to the list if the consumption of the sub-
stance has not been completely phased-out 
internationally (except for essential use exemp-
tions or other similar exemptions) pursuant to 
the Montreal Protocol. 
‘‘(E) EXTENSION OF OFFSETS.—(i) At any 
time after the Administrator promulgates regu-
lations pursuant to subparagraph (A), the Ad-
ministrator may add the types of destruction 
projects authorized to receive destruction offset 
credits under this paragraph to the list of types 
of projects eligible for offset credits under sec-
tion 733. Nothing in this paragraph shall affect 
the issuance of offset credits under section 740. 
‘‘(ii) The Administrator shall not make the 
addition under clause (i) unless the Adminis-
trator finds that insufficient destruction is oc-
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curring or is projected to occur under this para-
graph and that the addition would increase de-
struction. 
‘‘(iii) In no event shall more than one de-
struction offset credit be issued under title VII 
and this section for the destruction of the same 
quantity of a substance. 
‘‘(10) LEGAL
STATUS
OF
ALLOWANCES
AND 
CREDITS.—None of the following constitutes a prop-
erty right: 
‘‘(A) A production or consumption allow-
ance. 
‘‘(B) A destruction offset credit. 
‘‘(c) 
DEADLINES
FOR
COMPLIANCE.—Notwith-
standing the deadlines specified for class II substances in 
sections 608, 609, 610, 612, and 613 that occur prior to 
January 1, 2009, the deadline for promulgating regula-
tions under those sections for class II, group II substances 
shall be January 1, 2012. 
‘‘(d) EXCEPTIONS FOR ESSENTIAL USES.—Notwith-
standing any phase down of production and consumption 
required by this section, to the extent consistent with any 
applicable multilateral agreement to which the United 
States is a party or otherwise adheres, the Administrator 
may provide the following exceptions for essential uses: 
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‘‘(1) MEDICAL
DEVICES.—The Administrator, 
after notice and opportunity for public comment, 
and in consultation with the Commissioner of the 
Food and Drug Administration, may provide an ex-
ception for the production and consumption of class 
II, group II substances solely for use in medical de-
vices. 
‘‘(2) AVIATION
SAFETY.—The Administrator, 
after notice and opportunity for public comment, 
may authorize the production and consumption of 
limited quantities of class II, group II substances 
solely for the purposes of aviation safety if the Ad-
ministrator of the Federal Aviation Administration, 
in consultation with the Administrator, determines 
that no safe and effective substitute has been devel-
oped and that such authorization is necessary for 
aviation safety purposes. 
‘‘(e) DEVELOPING
COUNTRIES.—Notwithstanding 
any phase down of production required by this section, the 
Administrator, after notice and opportunity for public 
comment, may authorize the production of limited quan-
tities of class II, group II substances in excess of the 
amounts otherwise allowable under this section solely for 
export to, and use in, developing countries. Any produc-
tion authorized under this subsection shall be solely for 
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purposes of satisfying the basic domestic needs of such 
countries as provided in applicable international agree-
ments, if any, to which the United States is a party or 
otherwise adheres. 
‘‘(f) NATIONAL
SECURITY; FIRE
SUPPRESSION, 
ETC.—The provisions of subsection (f) and paragraphs (1) 
and (2) of subsection (g) of section 604 shall apply to any 
consumption and production phase down of class II, group 
II substances in the same manner and to the same extent, 
consistent with any applicable international agreement to 
which the United States is a party or otherwise adheres, 
as such provisions apply to the substances specified in 
such subsection. 
‘‘(g) ACCELERATED SCHEDULE.—In lieu of section 
606, the provisions of paragraphs (1), (2), and (3) of this 
subsection shall apply in the case of class II, group II sub-
stances. 
‘‘(1) IN
GENERAL.—The Administrator shall 
promulgate initial regulations not later than 18 
months after the date of enactment of this section, 
and revised regulations any time thereafter, which 
establish a schedule for phasing down the consump-
tion (and, if the condition in subsection (b)(1)(B) is 
met, the production) of class II, group II substances 
that is more stringent than the schedule set forth in 
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this section if, based on the availability of sub-
stitutes, the Administrator determines that such 
more stringent schedule is practicable, taking into 
account technological achievability, safety, and other 
factors the Administrator deems relevant, or if the 
Montreal Protocol, or any applicable international 
agreement to which the United States is a party or 
otherwise adheres, is modified or established to in-
clude a schedule or other requirements to control or 
reduce production, consumption, or use of any class 
II, group II substance more rapidly than the appli-
cable schedule under this section. 
‘‘(2) PETITION.—Any person may submit a pe-
tition to promulgate regulations under this sub-
section in the same manner and subject to the same 
procedures as are provided in section 606(b). 
‘‘(3) INCONSISTENCY.—If the Administrator de-
termines that the provisions of this section regarding 
banking, allowance rollover, or destruction offset 
credits create a significant potential for inconsist-
ency with the requirements of any applicable inter-
national agreement to which the United States is a 
party or otherwise adheres, the Administrator may 
promulgate regulations restricting the availability of 
banking, allowance rollover, or destruction offset 
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credits to the extent necessary to avoid such incon-
sistency. 
‘‘(h) EXCHANGE.—Section 607 shall not apply in the 
case of class II, group II substances. Production and con-
sumption allowances for class II, group II substances may 
be freely exchanged or sold but may not be converted into 
allowances for class II, group I substances. 
‘‘(i) LABELING.—(1) In applying section 611 to prod-
ucts containing or manufactured with class II, group II 
substances, in lieu of the words ‘destroying ozone in the 
upper atmosphere’ on labels required under section 611 
there shall be substituted the words ‘contributing to global 
warming’. 
‘‘(2) The Administrator may, through rulemaking, 
exempt from the requirements of section 611 products 
containing or manufactured with class II, group II sub-
stances determined to have little or no carbon dioxide 
equivalent value compared to other substances used in 
similar products. 
‘‘(j) NONESSENTIAL PRODUCTS.—For the purposes 
of section 610, class II, group II substances shall be regu-
lated under section 610(b), except that in applying section 
610(b) the word ‘hydrofluorocarbon’ shall be substituted 
for the word ‘chlorofluorocarbon’ and the term ‘class II, 
group II’ shall be substituted for the term ‘class I’. Class 
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II, group II substances shall not be subject to the provi-
sions of section 610(d). 
‘‘(k) INTERNATIONAL TRANSFERS.—In the case of 
class II, group II substances, in lieu of sections 616(a) 
and 616(b), this subsection shall apply. To the extent con-
sistent with any applicable international agreement to 
which the United States is a party or otherwise adheres, 
including any amendment to the Montreal Protocol, the 
United States may engage in transfers with other parties 
to such agreement or amendment under the following con-
ditions: 
‘‘(1) The United States may transfer produc-
tion allowances to another party to such agreement 
or amendment if, at the time of the transfer, the 
Administrator establishes revised production limits 
for the United States accounting for the transfer in 
accordance with regulations promulgated pursuant 
to this subsection. 
‘‘(2) The United States may acquire production 
allowances from another party to such agreement or 
amendment if, at the time of the transfer, the Ad-
ministrator finds that the other party has revised its 
domestic production limits in the same manner as 
provided with respect to transfers by the United 
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States in the regulations promulgated pursuant to 
this subsection. 
‘‘(l) RELATIONSHIP TO OTHER LAWS.— 
‘‘(1) STATE
LAWS.—For purposes of section 
116, the requirements of this section for class II, 
group II substances shall be treated as requirements 
for the control and abatement of air pollution. 
‘‘(2) INTERNATIONAL
AGREEMENTS.—Section 
614 shall apply to the provisions of this section con-
cerning class II, group II substances, except that for 
the words ‘Montreal Protocol’ there shall be sub-
stituted the words ‘Montreal Protocol, or any appli-
cable international agreement to which the United 
States is a party or otherwise adheres that restricts 
the production or consumption of class II, group II 
substances,’ and for the words ‘Article 4 of the Mon-
treal Protocol’ there shall be substituted ‘any provi-
sion of such international agreement regarding trade 
with non-parties’. 
‘‘(3) FEDERAL
FACILITIES.—For purposes of 
section 118, the requirements of this section for 
class II, group II substances and corresponding 
State, interstate, and local requirements, administra-
tive authority, and process and sanctions shall be 
treated as requirements for the control and abate-
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