[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]



 
   PROMOTING AMERICAN INNOVATION AND JOBS: LEGISLATION TO PHASE DOWN 
                           HYDROFLUOROCARBONS

=======================================================================

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON ENVIRONMENT AND CLIMATE CHANGE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                       TUESDAY, JANUARY 14, 2020

                               __________

                           Serial No. 116-88
                           
                           
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 


      Printed for the use of the Committee on Energy and Commerce

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                        energycommerce.house.gov
                        
                        
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             U.S. GOVERNMENT PUBLISHING OFFICE 
47-911PDF           WASHINGTON : 2022                        
                        
                        
                        
                        

                    COMMITTEE ON ENERGY AND COMMERCE

                     FRANK PALLONE, Jr., New Jersey
                                 Chairman
BOBBY L. RUSH, Illinois              GREG WALDEN, Oregon
ANNA G. ESHOO, California              Ranking Member
ELIOT L. ENGEL, New York             FRED UPTON, Michigan
DIANA DeGETTE, Colorado              JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania             MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois             STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina    ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California          CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida                BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland           PETE OLSON, Texas
JERRY McNERNEY, California           DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont                 ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico            H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York                 GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice     BILL JOHNSON, Ohio
    Chair                            BILLY LONG, Missouri
DAVID LOEBSACK, Iowa                 LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon                BILL FLORES, Texas
JOSEPH P. KENNEDY III,               SUSAN W. BROOKS, Indiana
    Massachusetts                    MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California            RICHARD HUDSON, North Carolina
RAUL RUIZ, California                TIM WALBERG, Michigan
SCOTT H. PETERS, California          EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan             JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas                GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
                                 ------                                

                           Professional Staff

                   JEFFREY C. CARROLL, Staff Director
                TIFFANY GUARASCIO, Deputy Staff Director
                MIKE BLOOMQUIST, Minority Staff Director
             Subcommittee on Environment and Climate Change

                          PAUL TONKO, New York
                                 Chairman
YVETTE D. CLARKE, New York           JOHN SHIMKUS, Illinois
SCOTT H. PETERS, California            Ranking Member
NANETTE DIAZ BARRAGAN, California    CATHY McMORRIS RODGERS, Washington
A. DONALD McEACHIN, Virginia         DAVID B. McKINLEY, West Virginia
LISA BLUNT ROCHESTER, Delaware       BILL JOHNSON, Ohio
DARREN SOTO, Florida                 BILLY LONG, Missouri
DIANA DeGETTE, Colorado              BILL FLORES, Texas
JAN SCHAKOWSKY, Illinois             MARKWAYNE MULLIN, Oklahoma
DORIS O. MATSUI, California          EARL L. ``BUDDY'' CARTER, Georgia
JERRY McNERNEY, California           JEFF DUNCAN, South Carolina
RAUL RUIZ, California, Vice Chair    GREG WALDEN, Oregon (ex officio)
DEBBIE DINGELL, Michigan
FRANK PALLONE, Jr., New Jersey (ex 
    officio)
    
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Paul Tonko, a Representative in Congress from the State of 
  New York, opening statement....................................     1
    Prepared statement...........................................     3
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     4
    Prepared statement...........................................     6
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     7
    Prepared statement...........................................     8
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     9
    Prepared statement...........................................    11

                          Witnesses Statement

Cynthia Newberg, Director, Stratospheric Protection Division, 
  Office of Atmospheric Programs, U.S. Environmental Protection 
  Agency, Office of Air and Radiation............................    12
    Prepared statement...........................................    15
Answers to submitted questions \1\
John Galyen, President, Danfoss North America, on Behalf of the 
  Air-Conditioning, Heating, and Refrigeration Institute.........    38
    Prepared statement...........................................    41
Ben Lieberman, Senior Fellow, Competitive Enterprise Institute...    51
    Prepared statement...........................................    53
    Answers to submitted questions...............................   139
David D. Doniger, Senior Strategic Director, Natural Resources 
  Defense Council................................................    55
    Prepared statement...........................................    57
Gary Bedard, President and Chief Operating Officer, Lennox 
  International, Inc., on Behalf of the Alliance for Responsible 
  Atmospheric Policy.............................................    60
    Prepared statement...........................................    62
    Answers to submitted questions...............................   148

                           Submitted Material

H.R. 5544, The American Innovation and Manufacturing Leadership 
  Act of 2020 \2\
A presentation by the University of Maryland, entitled ``Economic 
  and Consumer Impacts of HFC Phasedown'' December 12, 2019, 
  submitted by Mr. Tonko.........................................    87
Letter of January 14, 2020, from Senator John Kennedy, et al., to 
  Mr. Tonko and Mr. Shimkus, submitted by Mr. Tonko..............   106
Letter of January 8, 2020, the Association of Home Appliance 
  Manufacturers, from Kevin Messner, Senior Vice President, 
  Policy and Government Relations, to Mr. Tonko and Mr. Shimkus, 
  submitted by Mr. Tonko.........................................   108

----------
\1\Ms. Newberg did not answer submitted questions for the record 
  by the time of publication.

\2\The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF18/
  20200114/110388/BILLS-116HR5544ih-U2.pdf.
Letter of October 7, 2019, Air-Conditioning, Heating, and 
  Refrigeration Institute and the Alliance for Responsible 
  Atmospheric Policy, from Mike Armstrong, President, A-Gas in 
  the Americas, et al., to Mr. Pallone, et al., submitted by Mr. 
  Tonko..........................................................   109
Letter of January 13, 2020, from a coalition of HVACR industry 
  associations, by Bart James, President and CEO, ACCA, et al., 
  to Mr. Pallone and et al., submitted by Mr. Tonko..............   113
Letter of January 8, 2020, from ASHRAE, the American Society of 
  Heating, Refrigerating and Air-Conditioning Engineers, by 
  Darryl Boyce, President, ASHRAE, to Mr. Pallone, et al., 
  submitted by Mr. Tonko.........................................   116
Letter of January 14, 2020, from the Ceres BICEP Network, by Anne 
  L. Kelly, Vice President of Government Relations, Ceres, to Mr. 
  Pallone et. al., submitted by Mr. Tonko........................   118
Letter of January 10, 2020, from Environmental Investigation 
  Agency, by Alexander von Bismarck, Executive Director, to Mr. 
  Pallone and Mr. Walden, submitted by Mr. Tonko.................   120
Letter of January 13, 2020, from Environmental Defense Fund, et 
  al., to Committee, submitted by Mr. Tonko......................   122
Letter of January 13, 2020, from the National Association of 
  Manufacturers and the U.S. Chamber of Commerce, by Ross 
  Eisenberg, Vice President of Energy and Resources Policy, and 
  Chuck Chaitovitz, Vice President for Environmental Affairs and 
  Sustainability, submitted by Mr. Tonko.........................   124
Letter of January 13, 2020, from the National Marine 
  Manufacturers Association, by T. Nicole Vasilaros, Esq., Senior 
  Vice President, Government and Legal Affairs, submitted by Mr. 
  Tonko..........................................................   125
Letter of June 20, 2018, from Conservative Groups, by Alex 
  Hendrie, Director of Tax Policy, et al., to President Trump, 
  submitted by Mr. Tonko.........................................   127
Report on July 23, 2018, the Economic Impact of Kigali Amendment 
  Ratification, by David T. Stevenson, Caesar Rodney Institute, 
  submitted by Mr. Tonko.........................................   128


   PROMOTING AMERICAN INNOVATION AND JOBS: LEGISLATION TO PHASE DOWN 
                           HYDROFLUOROCARBONS

                              ----------                              


                       TUESDAY, JANUARY 14, 2020

                  House of Representatives,
    Subcommittee on Environment and Climate Change,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:32 a.m., in 
room 2322, Rayburn House Office Building, Hon. Paul Tonko 
(chairman of the subcommittee) presiding.
    Present: Representatives Tonko, Clarke, Peters, Barragan, 
Blunt Rochester, Soto, Matsui, McNerney, Ruiz, Dingell, Pallone 
(ex officio), Shimkus (subcommittee ranking member), Rodgers, 
McKinley, Johnson, Long, Flores, Mullin, Carter, and Walden (ex 
officio).
    Also Present: Representative Olson.
    Staff Present: Jacqueline Cohen, Chief Environmental 
Counsel; Adam Fischer, Policy Analyst; Jean Fruci, Energy and 
Environmental Policy Advisor; Caitlin Haberman, Professional 
Staff Member; Rick Kessler, Senior Advisor and Staff Director, 
Energy and Environment; Brendan Larkin, Policy Coordinator; 
Dustin Maghamfar, Air and Climate Counsel; Mike Bloomquist, 
Minority Staff Director; William Clutterbuck, Minority Staff 
Assistant; Jerry Couri, Minority Deputy Chief Counsel, 
Environment and Climate Change; Tyler Greenberg, Minority Staff 
Assistant; Ryan Long, Minority Deputy Staff Director; Mary 
Martin, Minority Chief Counsel, Energy and Environment and 
Climate Change; Brandon Mooney, Minority Deputy Chief Counsel, 
Energy; Brannon Rains, Minority Legislative Clerk; and Peter 
Spencer, Minority Senior Professional Staff Member, Environment 
and Climate Change.
    Mr. Tonko. The Subcommittee on Environment and Climate 
Change will now come to order. I recognize myself for 5 minutes 
for the purposes of an opening statement.

   OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Today the subcommittee will examine H.R. 5544, the American 
Innovation and Manufacturing Leadership Act of 2020, which was 
introduced last week by Representatives Olson, Peters, 
Stefanik, and myself.
    Hydrofluorocarbons, commonly known as HFCs, are a class of 
chemicals primarily used as refrigerants in heating, 
ventilation, air conditioning, and refrigeration. HFCs gained 
widespread use in the 1990s as replacements for ozone-depleting 
substances, such as CFCs and HCFCs. But HFCs have their own 
challenges, which is why a global transition to the next 
generation of refrigerant technologies is currently underway.
    United States manufacturers are already investing billions 
of dollars in the research and development of new products and 
equipment to maintain their competitiveness. In fact, American 
companies are global leaders in the development of HFC 
substitutes.
    One such class of substitutes are known as HFOs. HFOs are 
more environmentally friendly. But even more importantly, 
American manufacturers stand to gain the most in the global 
marketplace by leaning into this transition.
    According to a study by the Interindustry Forecasting at 
the University of Maryland, the HFC phase-down will drive the 
creation of some 33,000 new United States manufacturing jobs, 
$12.5 billion more in direct manufacturing output annually, a 
significant trade balance improvement in equipment and 
chemicals, and a 25 percent growth of the U.S. share of the 
global export market. These projected benefits are not small.
    Just as important, American businesses recognize that any 
lagging on our part will open the door for China and other 
nations to erode our existing global market share. This bill 
supports the industry in anticipating such competition and 
would help propel America's industry.
    I would like to explain briefly a few aspects of this 
bipartisan proposal.
    First, we are not proposing a ban. This bill would phase-
down the production and consumption of HFCs over 15 years, 
limiting the production and consumption to 15 percent of 
baseline levels beginning in 2036.
    The benefits include certainty for manufacturers and 
consumers and an orderly and predictable transition to next-
generation technologies, while still allowing for exceptions 
for essential uses for which no substitute is available.
    The legislation is modeled on Title VI of the Clean Air 
Act, which was enacted in 1990 with 401 bipartisan votes in the 
House and proved an able vehicle to foster an orderly, market-
based phase-down of HFCs' predecessors. In fact, that earlier 
transition away from ozone-depleting substances was successful 
at an even lower cost than originally anticipated.
    Second, this bill will not force consumers to replace 
equipment before the end of its useful life. Today, some older 
equipment is still using CFCs. This framework will guarantee 
that consumers are protected during the transition.
    These benefits are why a phase-down of this kind has 
received incredibly broad support. I have served on this 
subcommittee for seven years. I cannot remember a time when we 
had the United States Chamber of Commerce, the National 
Association of Manufacturers, and the Natural Resources Defense 
Council in complete agreement on anything, let alone granting 
new targeted authority to EPA.
    Companion legislation has received significant bipartisan 
support in the Senate, with 32 cosponsors, half Republican and 
half Democratic.
    On Capitol Hill, the phrase ``commonsense legislation'' 
gets thrown around a lot, but this bill truly fits that 
description. It addresses an environmental concern in a manner 
that will spur innovation and make U.S. manufacturers more 
globally competitive.
    This bill presents us a bipartisan opportunity to ensure 
the next generation of refrigerants are American made and that 
our constituents experience the significant economic and job 
benefits that come from American-led innovation.
    I want to thank Mr. Olson for co-leading this effort, and I 
yield the remainder of my time to him.
    [The prepared statement of Mr. Tonko follows:]

                 Prepared Statement of Hon. Paul Tonko

    Today the subcommittee will examine H.R. 5544, the American 
Innovation and Manufacturing Leadership Act of 2020, which was 
introduced last week by Reps. Olson, Peters, Stefanik, and 
myself.
    Hydrofluorocarbons, commonly known as HFCs, are a class of 
chemicals primarily used as refrigerants in heating, 
ventilation, air conditioning, and refrigeration. HFCs gained 
widespread use in the 1990s as replacements for ozone-depleting 
substances, such as CFCs and HCFCs.
    But HFCs have their own challenges, which is why a global 
transition to the next generation of refrigerant technologies 
is currently underway.
    U.S. manufacturers are already investing billions of 
dollars in the research and development of new products and 
equipment to maintain their competitiveness.
    In fact, American companies are global leaders in the 
development of HFC substitutes. One such class of substitutes 
are known as HFOs. HFOs are more environmentally-friendly, but 
even more importantly, American manufacturers stand to gain the 
most in the global marketplace by leaning into this transition.
    According to a study by the Interindustry Forecasting at 
the University of Maryland, the HFC phase down will drive the 
creation of 33,000 new U.S. manufacturing jobs, $12.5 billion 
more in direct manufacturing output annually, a significant 
trade balance improvement in equipment and chemicals, and a 25 
percent growth of the U.S. share of the global export market. 
These projected benefits are not small.
    Just as important, American businesses recognize that any 
lagging on our part will open the door for China and other 
nations to erode our existing global market share.
    This bill supports the industry in anticipating such 
competition and would help propel America's industry.
    I would like to explain briefly a few aspects of this 
bipartisan proposal.
    First, we are not proposing a ban. This bill would phase 
down the production and consumption of HFCs over 15 years, 
limiting the production and consumption to 15 percent of 
baseline levels beginning in 2036.
    The benefits include certainty for manufacturers and 
consumers and an orderly and predictable transition to next 
generation technologies, while still allowing for exceptions 
for essential uses for which no substitute is available.
    The legislation is modeled on Title VI of the Clean Air 
Act, which was enacted in 1990 with 401 bipartisan votes in the 
House and proved an able vehicle to foster an orderly, market-
based phase down of HFCs' predecessors.
    In fact, that earlier transition away from ozone-depleting 
substances was successful at an even lower cost than originally 
anticipated.
    Second, this bill will not force consumers to replace 
equipment before the end of its useful life. Today, some older 
equipment is still using CFCs. This framework will guarantee 
that consumers are protected during the transition.
    These benefits are why a phase down of this kind has 
received incredibly broad support.
     I have served on this subcommittee for seven years. I 
cannot remember a time when we had the U.S. Chamber of 
Commerce, the National Association of Manufacturers, and the 
Natural Resources Defense Council in complete agreement on 
anything-let alone granting new, targeted authority to EPA.
    Companion legislation has received significant bipartisan 
support in the Senate with 32 cosponsors, half Republican and 
half Democratic.
     On Capitol Hill, the phrase ``commonsense legislation'' 
gets thrown around a lot, but this bill truly fits the 
description. It addresses an environmental concern in a manner 
that will spur innovation and make U.S. manufacturers more 
globally competitive.
    This bill presents us a bipartisan opportunity to ensure 
the next generation of refrigerants are American-made, and that 
our constituents experience the significant economic and job 
benefits that come from American-led innovation.
    I want to thank Mr. Olson for co-leading this effort, and I 
yield him the balance of my time.

    I yield my remaining time to Representative Olson.
    Mr. Olson. Thank you, Chairman Tonko, lead Republican 
Member Shimkus, and members of the subcommittee, for letting me 
waive on this morning.
    Now, this hearing is about H.R. 5544, the so-called AIM 
Act. This is a rare bipartisan bill that, as was mentioned, is 
supported by normal combatants like the ATR, FreedomWorks, and 
the NRDC. They appreciate the hard work done by Chairman Tonko. 
Seven thousand people back home working for Dicon, living in 
Katy, Texas, in Texas 22, appreciate your hard work, too, sir. 
And people in America, manufacturers, appreciate all this hard 
work to get this bill where it is today.
    I am proud of H.R. 5544. The AIM Act is a commonsense 
approach that will create American jobs, expand exports, and 
encourage more investment in our economy. New jobs, about 
33,000 are expected. We will keep jobs here in America that may 
go overseas.
    This bill provides a clear, deliberate framework to 
transition from HFCs, and puts American manufacturers, American 
workers, and American consumers first. It ensures we keep doors 
open to foreign markets that have been opened because of our 
new competitive Tax Code.
    Mr. Shimkus. Mr. Chairman, my colleague is 33 seconds over.
    Mr. Olson. I thank the chairman. I thank the ranking 
member. I am proud to support this bill. I yield back.
    Mr. Tonko. The gentleman yields back.
    The Chair now recognizes Mr. Shimkus, ranking member of the 
Subcommittee on Environment and Climate Change, for 5 minutes 
for his opening statement.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. Thank you, Mr. Chairman, for recognizing me.
    Today's legislative hearing demands a certain baseline 
amount of knowledge about the subject, particularly to review a 
bill on this multilayered subject and whose text itself belies 
the many issues it is trying to address.
    If I didn't know better, I would think, as we are going to 
hear today, that this is a simple subject that certain parts of 
the industry have worked with a few environmental advocacy 
organizations to solve. I want to believe that tidy story, but 
the more I look into this issue, the more my eyes notice a 
story much different from the one my ears are hearing.
    The issues we are discussing in this bill before us today 
go back five decades. In fact, the last time this committee 
addressed ozone-depleting substances and the Montreal Protocol, 
only one-third of the members of both this committee and the 
full committee was on the panel.
    This issue is far too big and has far too many implications 
on the American consumer for our committee to put members in a 
position of asking questions about legislation for which they 
have little background.
    Moreover, Mr. Chairman, after the minority outlined the 
need for a comprehensive and fair look at both the issue and 
the bill, since the committee had not done anything to put them 
in context for us, the majority denied the minority a second 
witness for this hearing.
    This was not because that perspective was already covered. 
This was not because there were time pressures or the panel was 
already unwieldy. No, this rejected request was done to 
suppress dissenting voices. It is unseemly and sours the desire 
that some have to get to, quote, unquote, ``yes'' on this bill.
    Speaking of the bill, I do have some questions about that I 
want to explore based upon what I do know about this subject. 
This bill seeks to phase-out production of HFCs or 
hydrofluorocarbons. I question how much a bill like this is 
needed.
    Why? The Illinois-based North American Association of Food 
Equipment Manufacturers is the lead trade association for 
commercial food service refrigeration projects. It hasn't taken 
a position on this legislation, but, since 2015 has 
proactively, on their own, undertaken transitioning away from 
HFCs to meet customers' demands.
    How many other parts of the impacted universe are also 
making this transition without a government mandate? If it is 
necessary, I understand the bill's industry advocates want a 
law because States like California are acting in a way that is 
creating an uneven national marketplace. Yet this legislation 
contains no preemption provisions.
    Perhaps the States didn't engage much after Montreal almost 
four decades ago, but as TSCA and CAFE debates have recently 
shown, increasing Federal action is no barrier to additional 
State action and sometimes serves as an incentive for more 
State action.
    The accelerated phaseout and technology transition 
provisions in this legislation also give me pause. I worry 
that, as Justice Kavanaugh found with certain Significant New 
Alternatives Program, commonly known as SNAP rules, these 
provisions can be gamed by market actors for competitive 
advantage at the expense of consumers.
    Likewise, these provisions could be used by nonmarket 
actors to drive technology that is infeasible and without EPA 
needing much of a basis to make that leap.
    Finally, I think it bears mentioning that we should be 
exploring the constitutional precedent of this proposal, in an 
effort to implement requirements necessary for participation in 
the Kigali Amendment to the Montreal Protocol.
    This amendment has not been submitted to the Senate for 
ratification by either the Obama or the Trump administrations. 
While I understand the attractiveness of a proposal like this 
to some, I wonder whether a Federal court would see this as a 
durable solution.
    Mr. Chairman, although I wish we had a legitimate small 
business and other sector perspectives represented, I want to 
welcome our witnesses here this morning.
    I especially welcome Energy and Commerce Committee staff 
alumnus Ben Lieberman to our second panel. Ben served our 
committee with honor for nearly ten years on these issues and 
it is good to have his friendly face back in the committee 
room.
    And, Mr. Chairman, going off script for a second, I had 
constantly defended the majority over the past year through our 
rush to legislate, bypassing regular order, which would define 
it as having a hearing on the general subject and then doing a 
subcommittee legislative hearing and then going through markup.
    We are in a new year. It is hard to continue to defend that 
position of not going through regular order when we haven't had 
a hearing on the Montreal Protocol, HFCs, or CFCs in over a 
decade, which makes it more difficult for my colleagues. As I 
said in the opening statement, one-third of us have never had 
this before us.
    So with that, I wish we would return to regular order. And 
I yield back my time.
    [The prepared statement of Mr. Shimkus follows:]

                Prepared Statement of Hon. John Shimkus

    Thank you, Mr. Chairman for recognizing me for this opening 
statement.
    Today's legislative hearing demands a certain baseline 
amount of knowledge about this subject. Particularly to review 
a bill on this multi-layered subject and whose text itself 
belies the many issues it is trying to address.
    If I didn't know better, I would think--as we are going to 
hear today - that this is a simple subject that certain parts 
of the industry have worked with a few environmental advocacy 
organizations to solve. I want to believe that tidy story, but 
the more I look into this issue, the more my eyes notice a 
story much different from the one my ears are hearing.
    The issues we're discussing in the bill before us today go 
back five decades. In fact, the last time this Committee 
addressed ozone depleting substances and the Montreal Protocol, 
only one-third of the members of both this subcommittee and the 
full committee were on this panel. This issue is far too big 
and has far too many implications on the American consumer for 
our Committee to put members in the position of asking 
questions about legislation for which they have very little 
background.
    Moreover, Mr. Chairman, after the Minority outlined the 
need for a comprehensive and fair look at both the issue and 
the bill--since the Committee had not done anything to put them 
in context for us--the Majority denied the Minority a second 
witness for this hearing. This was not because that perspective 
was already covered, this was not because there were time 
pressures, or the panel was already unwieldy. No, this rejected 
request was done to suppress dissenting voices--it is unseemly 
and sours the desire some might have to get to ``yes'' on this 
bill.
    Speaking of the bill, I do have some questions about it 
that I want to explore based upon what I do know about this 
subject.
    This bill seeks to phase out the production and use of HFCs 
or hydro-fluoro- carbons. I question how much a bill like this 
is needed.
    Why?
    The Illinois-based North American Association of Food 
Equipment Manufacturers (NAFEM) is THE lead trade association 
for commercial foodservice refrigeration products. It not only 
has not taken a position on the legislation, but since 2015, 
has proactively undertaken transitioning away from HFCs to meet 
customer demands. How many other parts of the impacted universe 
are also making this transition without a government mandate?
    If it is necessary, I understand the bill's industry 
advocates want a law because states, like California, are 
acting in a way that is creating an uneven national 
marketplace. Yet, this legislation contains NO PREEMPTION 
provisions. Perhaps the States didn't engage much after 
Montreal almost four decades ago, but as TSCA and CAF debates 
have recently shown, increasingly Federal action is NO barrier 
to additional State action and sometimes serves as an 
incentive.
    The accelerated phase-out and technology transition 
provisions in the legislation also give me pause. I worry that, 
just as Justice Kavanaugh found with certain SNAP rules, these 
provisions can be gamed by market actors for competitive 
advantage at the expense of consumers. Likewise, these 
provisions could be used by non-market actors to drive 
technology that is infeasible and without EPA needing much of a 
basis to make that leap.
    Finally, I think it bears mentioning that we should be 
exploring the constitutional precedent of this proposal--an 
effort to implement requirements necessary for participation in 
the Kigali Amendment to the Montreal Protocol. This Amendment 
has not been submitted to the Senate for ratification by either 
the Obama or Trump Administrations. While I understand the 
attractiveness of a proposal like this to some; I wonder 
whether a Federal court would see this as a durable solution.
    Mr. Chairman, although I wish we had a legitimate small 
business or other sector perspective represented, I want to 
welcome our witnesses here this morning. I especially welcome 
Energy and Commerce Committee staff alumnus, Ben Lieberman, to 
our second panel. Ben served our Committee with honor for 
nearly ten years on these issues and it's good to have his 
friendly face back here.

    Mr. Tonko. The gentleman yields back.
    The Chair now recognizes Mr. Pallone, chair of the full 
committee, for 5 minutes for his opening statement, please.

OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Chairman Tonko.
    We are here this morning to discuss H.R. 5544, the 
bipartisan American Innovation and Manufacturing and Leadership 
Act. This legislation is supported by both industry and the 
environmental community. It will benefit our economy, maintain 
American manufacturing leadership, create jobs, and protect the 
environment.
    I want to congratulate Chairman Tonko and Representatives 
Olson, Peters, and Stefanik for seizing this opportunity.
    The bill will help the United States maintain its position 
as a leader in the chemical, appliance, and equipment 
industries. It will also allow us to continue as a leader in 
innovation and on global environmental issues.
    H.R. 5544 builds upon our previous experience in phasing 
out CFCs and their replacement chemicals, HCFCs. Our success 
working with other nations within the global framework of the 
Montreal Protocol is healing the ozone layer and reducing risks 
associated with higher exposures to ultraviolet radiation.
    Because CFCs and HCFCs are also potent greenhouse gases; 
their phaseout also averted additional global warming. And 
their replacement chemicals, hydrofluorocarbons, or HFCs, 
helped us to address the ozone problem, but are also potent 
greenhouse gases.
    Fortunately, American companies are innovating new 
substitutes for HFCs, and that means we have an opportunity to 
gain additional environmental benefits.
    Innovation by industry resulted in a transition away from 
CFCs that was less costly to business and consumers than 
originally anticipated, and I am confident we can achieve the 
same outcome in the transition away from HFCs.
    The European Union and other nations, like Japan, Canada, 
and China, are already transitioning away from HFCs. This 
legislation will provide the certainty and stability American 
companies need to do the same. Not only will it help these 
companies remain competitive in the global market for air 
conditioning, heating, and other consumer products, but it will 
also help them increase their share of the global market and it 
has the potential of creating tens of thousands of high quality 
American jobs.
    The bill, H.R. 5544, braces innovation and the power of the 
market to add billions to our economy while delivering 
environmental benefits, phasing down the use of HFCs, and 
transitioning to next-generation technologies, provides the 
policy certainty American companies need to capitalize on their 
investments and innovation, and provide consumers with quality 
products that are anticipated to have lower operating cost.
    So I think this bill is good for workers, good for the 
economy, good for consumers, and good for the environment. And 
I thank our witnesses for being here today.
    I want to welcome back to the committee Ben Lieberman, who 
once served on the Republican staff.
    And I would like to yield the remaining time to 
Representative Peters.
    [The prepared statement of Mr. Pallone follows:]

             Prepared Statement of Hon. Frank Pallone, Jr.

    We are here this morning to discuss H.R. 5544, the 
bipartisan American Innovation and Manufacturing Leadership 
Act. This legislation is supported by both industry and the 
environmental community. It will benefit our economy, maintain 
American manufacturing leadership, create jobs, and protect the 
environment.
     I congratulate Chairman Tonko, and Representatives Olson, 
Peters and Stefanik for seizing this opportunity. H.R. 5544 
will help the United States maintain its position as a leader 
in the chemical, appliance, and equipment industries. It will 
also allow us to continue as a leader in innovation and on 
global environmental issues.
    H.R. 5544 builds upon our previous experience in phasing 
out CFCs--and their replacement chemicals, HCFCs. Our success 
working with other nations within the global framework of the 
Montreal Protocol is healing the ozone layer and reducing risks 
associated with higher exposures to ultraviolet radiation.
    Because CFCs and HCFCs are also potent greenhouse gases, 
their phase out also averted additional global warming. Their 
replacement chemicals, hydrofluorocarbons or HFCs, helped us to 
address the ozone problem, but are also potent greenhouse 
gases. Fortunately, American companies are innovating new 
substitutes for HFCs. That means we have an opportunity to gain 
additional environmental benefits.
    Innovation by industry resulted in a transition away from 
CFCs that was less costly to business and consumers than 
originally anticipated. I am confident we can achieve the same 
outcome in the transition away from HFCs.
    The European Union, and other nations like Japan, Canada, 
and China are already transitioning away from HFCs. This 
legislation will provide the certainty and stability American 
companies need to do the same. Not only will it help these 
companies remain competitive in the global market for air 
conditioning, heating, and other consumer products, but it will 
also help them increase their share of the global market. It 
has the potential of creating tens of thousands of high-quality 
American jobs.
    H.R. 5544 embraces innovation and the power of the market 
to add billions to our economy while delivering environmental 
benefits. Phasing down the use of HFCs and transitioning to 
next-generation technologies provides the policy certainty 
American companies need to capitalize on their investments in 
innovation and provide consumers with quality products that are 
anticipated to have lower operating costs.
    H.R. 5544 is good for workers, good for the economy, good 
for consumers, and good for the environment. I thank our 
witnesses for being here today, and welcome back to the 
Committee Ben Lieberman, who once served on the Republican 
staff.
    I yield my remaining time to Representative Peters.

    Mr. Peters. Thank you very much, Mr. Chairman.
    Today is a good day. We are here to discuss the American 
Innovation and Manufacturing Leadership Act of 2020, a 
bipartisan bill that enjoys widespread support from industry 
groups and environmental organizations, Democrats and 
Republicans, and both Chambers of Congress. It is also a bill 
that I am proud to support as an original cosponsor.
    As we will hear today, the global phase-down of HFCs has 
begun. Their transition provides an opportunity for the United 
States to establish new domestic production facilities and 
innovative industrial processes to meet the growing demand for 
HFC alternatives from countries around the world. There is 
plenty of evidence that the private sector is poised to lead 
this transition if they have the right legal framework.
    First, major manufacturers in the U.S., but also Japan, 
China, and India, are developing low-cost alternatives to HFC. 
In California, there are more than 5,500 direct jobs in the 
HVACR industry alone, and the bill's orderly phase-down of HFCs 
is projected to create tens of thousands more jobs nationally.
    Second, phasing down the use of HFCs is certainly 
profitable. The Chamber of Commerce and the Consumer Goods 
Forum, which represents over 400 member companies, 
enthusiastically support the bill.
    Third, companies that use HFCs in their operations and 
supply chains will benefit from the clarity and certainty this 
bill provides.
    Fourth, this bill will protect American businesses against 
highly anticompetitive practices that include the dumping of 
highly subsidized HFCs. Right now, there are no limits on how 
much HFCs can be imported and this bill would change that.
    And finally, placing HFCs with non-HFC alternatives has no 
downside. It protects the environment while also promoting 
industry.
    So I am eager to get this hearing underway. I thank my 
colleagues and committee staff for assembling this important 
hearing. I am proud to be a cosponsor. I yield back.
    Mr. Tonko. The gentleman yields back.
    I now recognize Mr. Walden, ranking member of the full 
committee, for 5 minutes for his opening statement, please.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Good morning, Mr. Chairman.
    Today's hearing obviously examines a bill that would 
mandate a rapid phase-down in the U.S. of the use of 
hydrofluorocarbons, or HFCs.
    Now, these substances, which, as we all know, contribute to 
climate change when emitted into the atmosphere, serve many 
important uses, including as a very critical ingredient in 
cooling and refrigeration equipment throughout our society.
    Scrutiny of this issue for the purpose of addressing risk 
to the climate is important and it is welcome. However, the 
approach today falls short of what is necessary to make good 
policy decisions.
    Indeed, there appears to a rush towards a prepackaged 
legislative solution without having developed a full 
understanding of the problem we are trying to solve or whether 
this regulatory approach is truly the most appropriate way to 
work in a dynamic and very complex marketplace or in the best 
interests of the American consumer or even who specifically 
benefits from this.
    To do this completely requires more upfront work in terms 
of oversight and background hearings, as we heard from Mr. 
Shimkus, so we can have a record that we can rely upon as we 
consider pretty major policy options that have long-term 
implications for environmental policy, for market competition, 
and household economics.
    This is especially the case in policy areas like this one, 
where most members have, frankly, pretty limited experience. 
Not all, however.
    Consider that the broad backdrop of this legislation or 
concerns about international emissions in the international 
agreement under the Montreal Protocol in substances that 
deplete the ozone layer. That was finalized in the late 1980s.
    Yet the committee, which was instrumental in developing 
provisions to address implementation of the protocol in the 
Clean Air Act, has not had a single hearing on that topic for 
more than a decade.
    Meanwhile, we are considering a bill that implicates U.S. 
participation under the protocol, and I would like to better 
understand how this will work in real life and practice.
    Recent amendments under the protocol, which have not been 
ratified by the United States Senate, anticipate a rapid growth 
of demand for refrigerants in cooling that is occurring in the 
developing world. How to address the needs of the developing 
world is a key policy matter. For example, we should understand 
how mandating U.S. conversion to new technologies addresses 
development internationally and whether it is this bill or 
amendment ratification that is the linchpin in the Kigali 
Amendment ratification.
    It is worth noting that certain industries were already 
innovating towards non-HFC substances, which begs the question, 
does this have to be mandated phase-down? What are the problems 
in the marketplace that require government intervention at this 
time rather than the natural turnover to newer, more innovative 
technologies?
    We would also benefit from a deeper understanding of the 
implications of any policies to phase-out HFCs on existing U.S. 
stock of refrigeration and cooling equipment in businesses and 
in households and automobiles and what those costs might be.
    Are there safety issues to consider with replacement 
substances? We haven't heard about that. Are there energy 
efficiency issues? We should learn more. Will routine repair 
and maintenance costs accelerate for consumers? Will States 
implement their own more accelerated schedules for phasing out 
HFCs that will send the market into further turmoil?
    I am hopeful the witnesses can help us answer some of these 
questions today and help us understand other areas that may be 
worth exploring.
    There appears to be strong support from industry, 
environmentalists, and others to work on this legislation and 
to be clear; I am open to working on it. But we should look to 
do more regarding HFCs and related greenhouse gasses and we 
should be open to practical policies, and I am.
    Maybe this legislation is a good starting point. But I 
think we have to look carefully to be sure it will provide the 
benefits promised and actually work in the best interests of 
American consumers.
    So I should note we have some quality witnesses here this 
morning, including Ben Lieberman.
    We are delighted to have you back.
    He served on our committee staff for many years, did great 
public service, and did much to ensure we were keeping the 
consumer in mind.
    So with that, Mr. Chairman, I would willfully yield back 
the remaining minute of my time so we can get about the 
hearing. And thank you.
    [The prepared statement of Mr. Walden follows:]

                 Prepared Statement of Hon. Greg Walden

    This morning's hearing will examine a bill that would 
mandate a rapid phase down, in the United States, of the use of 
hydrofluorocarbons, or HFCs.
    These substances, which contribute to climate change when 
emitted into the atmosphere, serve many important uses, 
including as a very critical ingredient in cooling and 
refrigeration equipment throughout our society.
    Scrutiny of this issue for the purpose of addressing risks 
to the climate is important, and welcome. However, the approach 
today falls short of what is necessary to make good policy 
decisions.
    Indeed, there appears to be a rush towards a pre-packaged 
legislative solution, without having developed a full 
understanding of the problem we are trying to solve or whether 
this regulatory approach is truly the most appropriate way to 
work in a dynamic and complex marketplace or in the best 
interest of the American consumer.
    To do this competently requires more upfront work in terms 
of oversight and background hearings so we can have a record to 
rely upon as we consider policy options that have long term 
implications for our environmental policy, market competition, 
and household economics. This is especially the case in policy 
areas like this one where most members have limited experience.
    Consider that the broad backdrop for this legislation are 
concerns about international emissions and the international 
agreement under the Montreal Protocol on Substances that 
Deplete the Ozone Layer, which was finalized the late 1980s. 
Yet the Committee, which was instrumental in developing 
provisions to address implementation of the Protocol in the 
Clean Air Act, has not had a single hearing on the topic for 
more than a decade.
    Meanwhile, we're considering a bill that implicates U.S. 
participation under the Protocol. I would like to better 
understand how this will work in practice.
    Recent amendments under the Protocol, which have not been 
ratified by the U.S. Senate, anticipate a rapid growth of 
demand for refrigerants and cooling that is occurring in the 
developing world.
    How to address the needs of the developing world is a key 
policy matter. For example, we should understand how mandating 
U.S. conversion to new technologies addresses development 
internationally and whether it is this bill or Kigali Amendment 
ratification that is the lynch pin.
    It is worth noting that certain industries are already 
innovating towards non HFC substances, which begs the 
questions: Does this have to be a mandated phase down? What are 
the problems in the marketplace that require government 
intervention, rather than the natural turnover to newer, more 
innovative technologies?
    We would also benefit from a deeper understanding of the 
implications of any policies to phase out HFCs on the existing 
U.S. stock of refrigeration and cooling equipment-in businesses 
and in households, in automobiles- and what the costs of that 
are. Are there safety issues to consider with replacement 
substances? Are there energy efficiency issues? Will routine 
repair and maintenance costs accelerate for consumers? Will 
states implement their own, more accelerated schedules for 
phasing out HFCs that will send the market into further 
turmoil?
    I am hopeful the witnesses can help us answer some of these 
questions today and help us understand other areas that may be 
worth exploring.
    There appears to be strong support-from industry, 
environmentalists, and others-to work on this legislation. And 
to be clear, I am open to working on it. We should look to do 
more regarding HFCs and related greenhouse gases and we should 
be open to practical policies. Maybe this legislation is a good 
starting point, but I think we have to look carefully to be 
sure it will provide the benefits promised and actually work in 
the best interests of American consumers.
    I should note we have some quality witnesses this morning, 
including Ben Lieberman, who served on the Committee staff for 
many years, and did much to ensure we were keeping the consumer 
in mind.

    Mr. Tonko. Thank you, Representative Walden. The gentleman 
yields back.
    The Chair would like to remind members that, pursuant to 
committee rules, all Members' written opening statement shall 
be made part of the record.
    I now will introduce the witness for our first panel, a 
single witness at today's hearing, Ms. Cynthia Newberg, 
director of the Stratospheric Protection Division, Office of 
Atmospheric Programs, at the U.S. Environmental Protection 
Agency, Office of Air and Radiation.
    Before we begin, I would like to explain the lighting 
system. In front of you are a series of lights. The light will 
initially be green. The light will turn yellow when you have 1-
minute remaining. Please begin to wrap up your testimony at 
that point. The light will turn red when your time has expired.
    So at this time, the Chair recognizes Ms. Newberg for 5 
minutes; please to provide your opening statement.

     STATEMENT OF CYNTHIA NEWBERG, DIRECTOR, STRATOSPHERIC 
   PROTECTION DIVISION, OFFICE OF ATMOSPHERIC PROGRAMS, U.S. 
  ENVIRONMENTAL PROTECTION AGENCY, OFFICE OF AIR AND RADIATION

    Ms. Newberg. Good morning, Chairman Tonko, Ranking Member 
Shimkus, and members of the subcommittee. My name is Cindy 
Newberg, and I am the director of the Stratospheric Protection 
Division in the Office of Atmospheric Programs in the Office of 
Air and Radiation at the U.S. Environmental Protection Agency.
    The Stratospheric Protection Division implements the 
Montreal Protocol and substances that deplete the ozone layer 
in Title VI of the Clean Air Act, which have the shared goal of 
restoring the ozone layer.
    I appreciate the opportunity to testify today regarding 
H.R. 5544. Although the Agency does not have a formal position 
on the bill, my testimony today will focus on how EPA 
implements current stratospheric protection programs, as well 
as technical aspects of the committee's bill to address 
hydrofluorocarbons, or HFCs, which are substitutes for certain 
ozone-depleting substances.
    To provide a brief background, I have been with EPA for 
more than 27 years and have served on delegations for the 
Montreal Protocol representing the United States and EPA's 
interests under the last three administrations.
    The Montreal Protocol is a global agreement to protect the 
Earth's ozone layer by phasing out production and consumption 
of chemicals that deplete it. The protocol was signed by the 
United States in 1987 and ratified by the Senate in 1988. 
Today, all countries that are members of the U.N. are parties 
to the protocol.
    By restoring the ozone layer we reduce risk of skin cancer 
and cataracts. For Americans, full implementation of the 
Montreal Protocol is expected to result in the avoidance of 
more than 280 million cases of skin cancer and more than 45 
million cases of cataracts in the United States alone.
    Ozone-depleting substances have been used in many 
households, industrial and military applications. The phase-out 
of the U.S. production and consumption of ozone-depleting 
substances is managed by issuing tradable allowances through 
rulemaking.
    In addition, Title VI of the Clean Air Act includes 
complementary measures to smooth transition to alternatives, 
including provisions to support recovery and reuse of existing 
chemicals and identification of alternatives for relevant 
applications.
    To facilitate transition, EPA has implemented domestic 
regulations and partnership programs that have enabled the 
United States to not only meet, but to exceed our commitments 
outlined in the Montreal Protocol. Many other countries have 
looked at our programs as models. And at the same time, U.S. 
companies have shown great leadership with the development and 
deployment of alternatives.
    In the wake of the Montreal Protocol and Title VI of the 
Clean Air Act, the U.S. has been substituting ozone-depleting 
substances with alternatives, including, to a large extent 
HFCs. And at the same time, global demand for refrigeration and 
air conditioning has increased and more HFCs are being used, 
particularly in cooling applications.
    While HFCs do not deplete the ozone layer, most HFCs are 
potent greenhouse gases. The AIM Act would establish new 
domestic authority to phase-down production and consumption of 
HFCs. If signed, the AIM Act would require the EPA to do many 
of the same types of activities for HFCs that we have done and 
continue to do for the ozone-depleting substances.
    The bill would require EPA to publish a list of HFCs and 
their exchange values, which are defined in the bill. It would 
require periodic reporting to the EPA for HFCs that are 
produced, imported, exported, reclaimed, destroyed, used and 
consumed in the manufacture of other chemicals. It would 
establish a baseline which would be used to help create an 
allowance and trading program.
    The EPA Administrator would bear responsibility for 
allocating allowances on either an annual or multiyear basis, 
following a phase-down schedule for production and consumption. 
Transfer of allowances between companies would be allowed, and 
the Administrator could be petitioned to increase the speed of 
the phase-down schedule.
    The Administrator would also be required to promulgate 
regulations to establish standards for the management of HFCs 
to control practices for servicing, repairing, disposing, or 
installing of equipment.
    Furthermore, the Administrator would be authorized to 
facilitate transition to next-generation technologies by 
establishing restrictions on specific uses of HFCs based on 
availability of alternatives.
    Again, while EPA does not have a position on the 
legislation, I am here on behalf of the agency to discuss 
technical aspects of the bill and provide a perspective on our 
stratospheric protection programs.
    In conclusion, the AIM Act would provide EPA authority to 
phase-down production and consumption of HFCs in the United 
States, as well as authority to establish complementary 
measures.
    Thank you again for the opportunity to testify, and I look 
forward to answering your questions.
    [The prepared statement of Ms. Newberg follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
      
    Mr. Tonko. Thank you very much. And we are indeed fortunate 
to have you here today because of your wealth of technical 
expertise on many issues before us. But in regard to this 
committee hearing, and subcommittee hearing, thank you for 
being here for the technical assistance that EPA is providing 
to the committee and subcommittee on this legislation.
    So, Ms. Newberg, I would like to begin broadly. First, 
subject to the technical assistance EPA has provided, does EPA 
have any concerns about its ability to implement this 
legislation?
    Ms. Newberg. Thank you very much, Chairman Tonko.
    I believe our view is that, based on the technical 
assistance that we provided that were taken up in the bill, we 
believe that it could be implemented.
    Mr. Tonko. Thank you.
    And how goes the regulatory program that this legislation 
creates compare to existing programs under Title VI of the 
Clean Air Act.
    Ms. Newberg. There are many similarities between what is in 
this bill and what is in the current Title VI Clean Air Act and 
how we implement that in the domestic program. There are a few 
differences between the two, but there are relatively 
provisions that are more niche. And most of the main 
components, particularly the phase-down, is very similar.
    Mr. Tonko. Thank you.
    And do you foresee EPA implementing a program that phases-
down HFCs in a substantially similar manner as to how CFCs and 
HCFCs were addressed?
    Ms. Newberg. I can speak to what is in this bill, and if we 
were to implement something that was based on this bill, then 
there is certainly a likelihood that we would do so in a 
similar manner.
    Mr. Tonko. Thank you.
    And for entities already subject to regulation under Title 
VI, does EPA believe it could implement this legislation in an 
efficient and streamlined manner that minimizes additional 
burdens on regulated entities?
    Ms. Newberg. I believe that we would look at our existing 
regulations and seek to find ways to make sure that they were 
taken up together. There are a few places in this bill where 
specifically coordination with existing programs is mentioned. 
And there is at least, I can recall, at least one other 
instance in our technical assistance where we suggest similar 
coordination should be requested.
    Mr. Tonko. Thank you.
    And, Ms. Newberg, if I could please direct your attention 
to section 3, paragraph (d), of the draft bill.
    My understanding--do you have the section?--my 
understanding of the intent of this provision is to preclude 
the Agency from listing a blend of substances as a regulated 
substance. That way, if the blend contains a regulated HFC and 
some other chemical, the non-HFC chemical would now become 
subject to the phase-down.
    I do not believe the intent was to affect the regulation of 
any listed HFC that may be used in such a blend. Does EPA 
believe this legislative text accomplishes this intent?
    Ms. Newberg. In the technical direction that we provided, 
EPA actually did speak to this particular provision, and we 
indicated that we thought that, based on our understanding and 
based on what you have just said now, it looked to us like the 
provision may have been drafted perhaps more broadly than what 
was intended.
    It looked like the intent may be to effect insurance that 
we would not somehow be listing twice chemicals under the 
phase-down schedule and our suggestion was to perhaps narrow 
that provision and we provided some text.
    Mr. Tonko. OK. And the draft legislation requires EPA to 
include isomers in the initial list of regulated substances. I 
understand the Agency has suggested there may not be any 
benefit to this requirement.
    Ms. Newberg, would you please explain why the Agency does 
not think it is necessary to include isomers in the list of 
regulated substances?
    Ms. Newberg. I would be happy to.
    The schedule and the list of chemicals that were provided 
on the HFCs would be the only chemicals, in our understanding, 
that would be subject to the provisions. So our view was that 
collecting information on isomers could be burdensome and would 
not be necessary to effectuate what was being asked for in the 
legislation.
    Mr. Tonko. Thank you.
    Those are the questions I have. I will now allow Mr. 
Shimkus, our subcommittee ranking member, to have 5 minutes for 
questioning please.
    Mr. Shimkus. Thank you, Mr. Chairman. And thanks for 
identifying section 3(d), because I want to go originally to 
there also.
    And based upon the questions that the chairman already 
asked, I guess my follow-up question would be, what would be 
the practical impact of having this provision remain so 
ambiguous? If not changed, based upon your advice, identifying 
it as ambiguous, what is the risk?
    Ms. Newberg. I appreciate the question and I believe it is 
also one that I would want our general counsel to consult with, 
so we may have to come back to you on that. I think our view is 
that we may have to take up some better understanding of this.
    Mr. Shimkus. So you do agree, as you replied to the 
chairman, that it is ambiguous and needs more legislative 
scrutiny?
    Ms. Newberg. I believe the terms I used were a little bit 
different. I think what I said was in our technical advice, we 
had suggested that if it were intended to be limited to just 
the phase-down schedule that it needed to be more narrowly 
aimed. I don't believe I had indicated----
    Mr. Shimkus. More narrowly named, OK, more specific, more 
narrowly focused.
    Ms. Newberg. If that is the intent.
    Mr. Shimkus. Yes. And that is why we have legislative 
hearings.
    Let me go to then; I want to ask about transparency and the 
public's ability to know what is happening at the Agency on 
this matter.
    Is it your opinion that section 7(c)(3) provides 
transparency on decisions regarding the evaluation of 
petitions.
    Ms. Newberg. Thank you very much.
    And, again, I will refer to the fact that we did provide 
some technical assistance on this section as well. And in 
particular, what we had commented on was that the provision 
seems to indicate that petitions that were denied would be 
subject to providing that information in the Federal Register. 
And I think our suggestion was that both petitions that were 
granted or denied should be treated in the same manner.
    Mr. Shimkus. So by filing in the Federal Register, then you 
are saying that is the transparency of the basis of my 
question?
    Ms. Newberg. I believe that the technical advice suggests 
that on the grounds that we did believe a transparent process 
would be necessary.
    Mr. Shimkus. So let's go to section 7(c)(5). Does this 
section ensure petitions are available to the public?
    Ms. Newberg. As drafted, it would ask that we publish the 
full petition, so that would make them available to the public. 
We did provide some advice on perhaps we could notify that they 
were available and make them available on a docket, rather than 
publish the full petition in the Federal Register.
    Mr. Shimkus. Should the criteria established in section 
7(d) apply to regulations promulgated under both section 7(a) 
and in response to a petition under section 7(c)?
    Ms. Newberg. So. Again, referring back to our technical 
assistance, that was the suggestion that we did make.
    Mr. Shimkus. OK. Let me just ask some general questions. 
This is coming from the Democratic memo.
    On page one, they say a global transition away from 
hydrofluorocarbons is beginning. Do you agree with that general 
statement?
    Ms. Newberg. I think generally we are seeing that.
    Mr. Shimkus. OK. And that is without any movement of any 
legislation. That is just a global movement away from HFCs.
    And on their second page, they have a statement: Since 
then, the United States has led the world in the transition 
away from ozone-depleting substances. Would you agree with that 
statement?
    Ms. Newberg. I would.
    Mr. Shimkus. On their third page, they identify that EPA's 
refrigerant management regulations established requirements for 
the handling, recovering, and disposal of refrigerants, as well 
as the prevention and repair of leaks. This framework has led 
to more than 168 million pounds of refrigerants being reclaimed 
from 2000 to 2016, which has avoided significant ozone-depleted 
substance emissions to the atmosphere. In addition, EPA 
regulations have successfully facilitated transitions away from 
ozone-depleting systems in specific applications.
    Would you agree with that?
    Ms. Newberg. I would need to go back and work with my 
congressional affairs to provide you with that answer. We do 
have information reported to the Agency on reclaimed 
refrigerant on an annual basis, so we could provide it that.
    Mr. Shimkus. Yes. And I think that is going to be one of 
the points as we raise this again.
    My other concern has been that we will have industry, we 
will have the environmental community. We will not have small 
businesses representing or consumers being represented in this 
hearing. We are going to make an attempt to make sure their 
voices are heard.
    And with that, Mr. Chairman, I yield back my time.
    Mr. Peters [presiding]. Thank you. The gentleman yields 
back.
    The Chair now recognizes himself for 5 minutes for the 
purpose of asking questions.
    Thank you again, Ms. Newberg, for being here.
    I wanted to ask you a little bit about small users and the 
phase-down. So the legislation requires a phase-down in the 
production and consumption of the listed HFCs--and I take the 
gentleman's point about isomers; we will follow up on that--by 
85 percent over 15 years. It is not a ban. I think you have 
seen things like this in other contexts.
    When the phase-down is complete in 2036, 15 percent of 
baseline levels of production and consumption will still be 
available.
    So, Ms. Newberg, can you put the 15 percent amount in 
context? Is that a sufficient amount to allow small or niche 
users of these materials to continue to use HFCs?
    Ms. Newberg. Thank you very much.
    There may be a couple points to that that are worth noting. 
First, there are provisions that are included in here that seem 
to allow for additional production or consumption if there are 
needs that are going unmet. So that may be something that is 
there.
    In terms of the 15----
    Mr. Peters. In addition to the 15 percent potentially.
    Ms. Newberg. Additional. That is our read of what is 
written.
    Mr. Peters. Correct.
    Ms. Newberg. With regard to the 15 percent, for the ozone-
depleting substances, the phase-outs have been complete to 
zero, and we have had at times had to look at whether or not 
there were additional uses.
    Typically, those were not for small business. It was more 
for human health. For example, for metered dose inhalers for 
asthmatics. And in those cases, we have always found a way to 
work with those uses.
    From a point of view in terms of the percentage, the 15 
percent number seems consistent with numbers that we looked at 
to ensure that we would not have to look at any kind of 
additional amounts needed in order to service existing 
equipment, ensure that equipment met its useful lifetime, and 
ensure that if there were any niche applications that were 
consumer based or military or others that those uses could get 
met.
    Mr. Peters. And just to follow up then, if the 15 percent 
somehow isn't enough, there are other protections in the bill 
for small uses that don't have substitutes available for their 
applications. Is that correct?
    Ms. Newberg. That seems consistent with what is in the 
bill.
    Mr. Peters. OK. Good.
    On the subject of developing substitutes for the use of 
HFCs, how has EPA considered lead times for transitions away 
from certain chemicals when acting under Title VI?
    Ms. Newberg. In this particular space, chemicals are used 
in a wide variety of applications. So anywhere from an aerosol 
or a solvent wipe to foam products.
    So for the ozone-depleting substances--and HFCs are used in 
all of the same applications as their predecessor chemicals--we 
have seen lead times vary, industry by industry, end use by end 
use, and without any specific minimum time needed.
    Mr. Peters. OK. So you do see a variation.
    And then are there restrictions under Title VI on the 
import of HFCs at this time.
    Ms. Newberg. There are no restrictions under Title VI for 
the import of HFCs.
    Mr. Peters. So if H.R. 5544 became law, imports of the HFCs 
to be phased-down under the law would be subject to the 
allowance-based phase-down program. Is that true in your 
understanding?
    Ms. Newberg. Our understanding is that we would be 
establishing an allowance-based program.
    Mr. Peters. OK. Good. Well, thank you very much.
    I don't have any more questions, so I will yield back and 
at this time, recognize Mrs. McMorris Rodgers from Washington 
for 5 minutes.
    Mrs. Rodgers. Thank you, Mr. Chairman.
    While a stated goal of this legislation is to provide 
certainty to U.S. companies to phase down the use of HFCs and 
to invest in next-generation coolants, I am concerned that this 
bill will just add to a growing patchwork of State laws phasing 
outs these chemicals.
    This past year, Washington State, along with California and 
Vermont, passed legislation to phase them out. More States are 
expected to follow suit.
    Like other debates we are having in the committee, for 
example on CAFE standards and privacy, having one national 
standard often makes the most sense for providing that 
regulatory certainty.
    Ms. Newberg, I am concerned about the danger of 
unrealistic, legally enforceable timelines and increasing 
litigation. Does the Agency believe 90 days is enough time for 
the Agency to meet the listing requirements in section 3(a), 
including the requirement to list all isomers?
    Ms. Newberg. Thank you very much for the question.
    The Agency did provide technical assistance suggesting that 
180 days would be more appropriate and suggesting that the 
trigger not be based on publication in the Federal Register 
since publication is outside of our scope.
    Mrs. Rodgers. Should the obligation to create such a list 
by a date certain or to publish it--should the obligation be a 
date certain or a date to publish it in the Federal Register?
    Ms. Newberg. Our technical assistance indicated that we 
could--we would be able to implement something that was within 
180 days. We did not suggest that we needed to have no date 
included in the bill.
    Mrs. Rodgers. Why do you think it is important to have a 
date?
    Ms. Newberg. I think that is up to Congress.
    Mrs. Rodgers. But you are advising 180 days.
    Ms. Newberg. We were advising 180 days as opposed to 90 
day, that is right.
    Mrs. Rodgers. OK. Thank you. I don't have any further 
questions.
    Mr. Peters. The gentlelady yields back.
    The chair now recognizes the gentlelady from Delaware, Ms. 
Blunt Rochester, for 5 minutes.
    Ms. Blunt Rochester. Thank you, Mr. Chairman.
    And I want to thank the members who worked very hard on 
this legislation, H.R. 5544.
    And thank you, Ms. Newberg, for being here today and for 
the technical assistance that you provided on this legislation.
    I would like to begin with a few questions about how 
consumers will be affected. And my first question is, have you 
evaluated the cost to consumers of an HFC phase-down, and if 
so, what are the results of the Agency's evaluation?
    Ms. Newberg. So we have not provided--I am sorry, we have 
not prepared a cost assessment of this particular bill.
    Ms. Blunt Rochester. OK. Do you intend to?
    Ms. Newberg. We have not been asked to.
    Ms. Blunt Rochester. OK. I think we might want to ask you 
to do that. OK.
    Would this legislation result in consumers having to 
replace equipment using HFCs before the natural end of life for 
that equipment? For example, let's say my air conditioner is 
only a couple of years old. If this legislation passes, will I 
have to replace my air conditioner?
    Ms. Newberg. No. In reading this bill and our understanding 
of the provisions, particularly the provisions in the section, 
I believe it is in section 6, we do not believe that that would 
at all force anyone to replace their air conditioner before it 
reaches the end of its useful lifetime.
    Ms. Blunt Rochester. So what about for servicing my air 
conditioner, will service technicians still have access to the 
HFC in my air conditioner if, for example, it needs to be 
topped up?
    Ms. Newberg. So, again, looking at section 6, it does 
appear that that section would promote recover, recycle, reuse 
of existing chemicals. I can say from our history on the ozone-
depleting substances, we phased out of CFCs in 1996 and we 
still have CFCs available for servicing equipment. So the 
history shows that it should be available.
    Ms. Blunt Rochester. OK. And can you describe how this 
worked for the phase-out of CFCs and HCFCs? And specifically, 
were there early equipment retirements necessary or were there 
sufficient CFCs and HCFCs available to continue servicing 
existing equipment?
    Ms. Newberg. Based on looking at the programs that we have 
in place today, and those programs have been in place since the 
1990s, we have not seen situations where people have replaced 
equipment because they have not had access to CFCs or HCFCs. 
And the recovered CFCs and HCFCs need to meet the same purity 
standard as newly manufactured chemicals.
    Ms. Blunt Rochester. And I understand that refrigerant 
management, such as requiring that refrigerants be recovered 
and addressing leaks, is critical to minimizing emissions to 
the atmosphere of refrigerants like HFCs. Does section 6 of the 
bill give EPA sufficient authority to address refrigerant 
management and work to minimize emissions?
    Ms. Newberg. I believe our review of it seems to indicate 
that it would provide sufficient authority to establish 
recovery, recycling, and reclamation programs.
    Ms. Blunt Rochester. And under Title VI, does EPA currently 
address things like training for HVAC technicians? And is that 
done broadly, or does it have to be focused on an environmental 
focus?
    Ms. Newberg. Currently, Title VI has provisions that we 
have implemented that do require that technicians are certified 
to work on equipment that contains ozone-depleting substances 
and nonexempt chemicals. In those instances, the training is 
focused really much more on the environmental outcome. We don't 
see ourselves as establishing trade programs.
    Ms. Blunt Rochester. OK. And, Ms. Newberg, we are obviously 
interested in making sure that this new regulatory program 
would be implemented efficiently and in coordination with 
existing requirements for regulated businesses, such as under 
Title VI. With respect to section 7 of the legislation, does 
EPA have sufficient authority to coordinate any regulations 
issued under section 7 with other regulatory requirements?
    Ms. Newberg. We did note in our technical assistance that 
language that was similar to language that is in section 6 
would be useful to ensure that there was coordination and that 
we did not create duplicative requirements.
    Ms. Blunt Rochester. And I want to thank you, and just ask 
a more broad question. Is it your expectation that, if passed, 
EPA would implement this legislation by integrating and 
coordinating the HFC phase-down with the existing regulatory 
structure of Title VI?
    Ms. Newberg. I believe that is a question I would need to 
take back and we would need to consider that within the Agency. 
But I think based on what is here, there are a lot of 
similarities to Title VI.
    Ms. Blunt Rochester. Thank you so much for your testimony.
    And I would close by just saying it is not often, 
especially in these times, that we see things that are 
bipartisan, members of both Houses, both Chambers, in support, 
and industry and advocates. And so I am strongly in support of 
this bill, and I hope that my colleagues will also recognize 
the time is now.
    Thank you, and I yield back.
    Mr. Peters. The gentlelady yields back.
    The chair now recognizes the gentleman from Ohio, Mr. 
Johnson, for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman.
    And, Ms. Newberg, thanks for being with us today.
    And I know you already know this. The Kigali Amendment to 
the Montreal Protocol aims to phase down the use of HFCs but 
has not been ratified by the United States.
    If the legislation before us today is enacted, what would 
still need to be done to align our domestic laws in a way that 
ensures full compliance with the Kigali Amendment?
    Ms. Newberg. Thank you very much, and I appreciate the 
question.
    We have not done an assessment of how this bill compares to 
Kigali. That process would be an interagency process that would 
include the Department of State.
    Mr. Johnson. OK. How could this lack of full compliance 
affect U.S. interactions with other countries that have already 
ratified the agreement?
    Ms. Newberg. Well, again, we haven't done an assessment of 
that.
    Mr. Johnson. So you would address that issue in your 
assessment?
    Ms. Newberg. I think that the process for determining 
whether or not an international treaty and how that works with 
domestic regulation, typically that is a process that is led by 
the Department of State. EPA certainly participates, but 
typically that is a Department of State-led process.
    Mr. Johnson. OK.
    I would like to get a better understanding of the language 
used in H.R. 5544. And if you can't answer some of these now, 
just say so, and I would appreciate an answer for the record if 
we get to that point.
    Does H.R. 5544's definition of consumption allow an 
importing country to have established the same or similar 
requirements to those in the bill?
    Ms. Newberg. I am sorry. To allow an importing country?
    Mr. Johnson. Yes.
    Ms. Newberg. I think I would need to take that back. 
Typically we think about companies, not countries.
    Mr. Johnson. OK. All right.
    Does H.R. 5544's definition of exchange value have clear 
direction for purposes of calculations under this act, since 
other provisions provide for different calculations aside from 
the exchange value?
    Ms. Newberg. I believe we provided some technical 
assistance with regards to different areas in the draft--in the 
legislation--that would rely on the exchange value. So we can 
go back and provide additional information if needed and see. 
But I think generally, we have already addressed that in the 
technical assistance.
    Mr. Johnson. OK.
    And does H.R. 5544's definition of produce, produced, and 
production operate similarly to how EPA implements Title VI of 
the Clean Air Act when it comes to excluding regulated 
substances that were destroyed?
    Ms. Newberg. We did make a suggestion in our technical 
assistance that there should be maybe an addition of a phrase 
at the end of that section just to be more clear that 
destruction would be excluded.
    Mr. Johnson. OK. All right. Thank you.
    Mr. Chairman, I am going to yield the remaining balance of 
my time to my colleague from Oklahoma, Mr. Mullin.
    Mr. Peters. The gentleman is recognized.
    Mr. Mullin. Thank you, Mr. Johnson.
    I would like to address some of the stuff that Ms. 
Rochester, who is a good friend of mine, brought up.
    Ms. Newberg, are you in the HVAC business?
    Ms. Newberg. I am not.
    Mr. Mullin. You are not? Well, it is interesting to me how 
you could certainly answer questions about refrigerant and 
about replacement parts when she was asking you about service 
and repair, such as, have you seen that the equipment runs its 
full life span without replacement? And you said: We have not 
seen that.
    Well, I have been in the business 20 years--actually 23 
years. I have seen it.
    Because what happens is the R-22, which is the ODS that is 
being phased out right now--so you don't have to go back to 
counsel on this one, which you did the rest of them, but I 
appreciate your answering with certainty some of these 
questions--the R-22, when you do a replacement drop-in, what we 
call a drop-in of new refrigerant, what ends up happening is 
you lose 80 percent of the capacity of the unit.
    So if you go from an R-22 and you are going to do a drop-in 
of like, say, a 421A--which I am sure you are probably not 
familiar with that--or you are going to do a drop-in of a 422 
or an R-453A, what happens is you lose 80 percent of your 
capacity.
    And then your PSIs on your compressor runs at 136 PSI, 
which is your pressure, at 80 degree temperature day. And when 
you do your replacement, it jumps that PSI for your compressor 
to run up to 236 to 240 PSI, which burns out the unit, with 
less efficiency and less capacity.
    So what happens is, yes, you do have to replace it. So when 
you talk about a phase-out, you are talking about phasing out a 
system; 60 to 65 percent of all the systems out there right now 
are still running on R-22. And we haven't even phased out R-22 
and we are supposed to be phasing it to the 410A, and now you 
are saying we are going to phase it out. There is a problem 
here.
    Mr. Johnson. Sorry, Mr. Mullin, I am going to reclaim my 
time.
    And, Mr. Chairman, I yield back.
    Mr. Peters. The gentleman's time has expired.
    The Chair now recognizes the gentleman from Florida, Mr. 
Soto, for 5 minutes.
    Mr. Soto. Thank you, Mr. Chairman.
    And thank you, Ms. Newberg, for being here today. I am from 
Florida, and we have a lot of sun, and obviously a lot of ACs, 
and care deeply about the ozone layer and about clean air.
    I wanted to ask you about section 4 monitoring and 
reporting. Does section 4, as drafted provide the EPA with all 
of the information that it would need to implement the phase-
down?
    Ms. Newberg. It provides some technical assistance with 
regards to section 4. Generally speaking, I think we did feel 
like the section did provide us with the information that the 
Agency needed. In a few instances, we noted that some of the 
information being requested, we may already have that 
information, particularly information with regards to the 1989 
baselines.
    Mr. Soto. Right. And I have in my notes that you all have 
been collecting it since that day. So to confirm, is the 
current requirement that persons subject to the reporting 
requirement report data for the baseline years of 2011, 2012, 
and 2013, helpful? Is that helpful to you all?
    Ms. Newberg. I am sorry; I may need to look back at that. I 
believe for 2011 and 2013 the information would be helpful in 
the sense that those are the years that are the baseline years. 
The Agency has some information already reported, but we did 
not feel that we necessarily would have a perfect set. We would 
have to go back and look at that. So having something included 
would be helpful.
    Mr. Soto. I would direct your attention to section 4, 
paragraph (d), entitled ``Coordination.'' Does this paragraph 
provide sufficient authority to EPA to allow for efficient 
integrated reporting between this legislation and existing 
reporting requirements?
    Ms. Newberg. We believe the paragraph on coordination was 
very helpful and would allow for us to streamline some of the 
reporting requirements.
    Mr. Soto. I appreciate your assistance.
    And I yield back.
    Mr. Peters. The gentleman yields back.
    The Chair now recognizes the ranking member of the full 
committee, Mr. Walden, for 5 minutes.
    Mr. Walden. Well, thank you, Mr. Chairman. As you know, we 
have got this other subcommittee going on downstairs. So I 
wanted to ask a couple of questions, and hopefully, they 
haven't been already asked.
    Section 7 of H.R. 5544 calls for the EPA to engage in 
negotiated rulemaking with the stakeholders and promulgate 
regulations on the sector level, meaning a limited list of 
stakeholders may participate.
    Since consumers are left out of this engagement, do you 
think it is appropriate to have the consumers' voices and not 
just the manufacturers' made a part of this rulemaking 
discussion about the products they will be able to buy?
    Ms. Newberg. I believe in any rulemaking that the Agency 
does that participation by the public is always welcome and 
always encouraged.
    I have not personally had experience with a negotiated 
rulemaking, so that would be something I would want to check 
back as to how best we would make sure that other voices are 
heard in the process.
    Mr. Walden. All right. Section 5(d)(2) of H.R. 5544 allows 
any outside party to petition the Agency to accelerate the 
scheduled phase-down of HFCs. Section 7(c) of the bill allows 
any outside party to petition the Agency to restrict the use of 
an HFC in a specific industry.
    It appears that the Agency grants these petitions; they 
automatically must issue regulations with the requested 
outcomes, thereby limiting public input.
    So do you believe it is clear how the petition process 
described in these sections and their subsequent rulemaking 
processes relate to one another?
    Ms. Newberg. So the Agency did provide technical assistance 
suggesting that in instances both where we grant and deny a 
petition, in both instances that information should be put in 
the Federal Register and should be in a more transparent way so 
that the public is aware of that.
    Mr. Walden. But do you think--well, when would the public 
have the opportunity for meaningful participation in that kind 
of decisionmaking?
    Ms. Newberg. I would probably need to go back and consult 
with our general counsel. Generally, in our rulemaking process, 
obviously, we do provide comment periods. In this particular 
instance with this language, I would want to go back and 
consult.
    Mr. Walden. It is an issue, question we have. So that would 
be helpful to know.
    And could either of these subsections be read to prejudge 
the outcome of a rulemaking process?
    Ms. Newberg. We noted in our technical assistance that (c)4 
could be read to prejudge the outcome and we had suggested 
changes to that language on that basis.
    Mr. Walden. Did those changes get incorporated into the 
draft?
    Ms. Newberg. To my knowledge, they have not yet been 
incorporated.
    Mr. Walden. OK. All right.
    I would yield to the ranking member.
    Mr. Shimkus. Just to jump in on your question. I think you 
are debating between the words or the proposals of promulgating 
and promote. And I think if an outside group can appeal and 
there is a ruling, a decision made, that does exclude the 
public from that debate. And I would hope that we wouldn't want 
to do that.
    And I would yield back.
    Mr. Walden. Yes. No, I would hope that, too. I can't 
imagine that is actually the intent of the authors, but it may 
be the consequence, which is why I think having additional time 
to fully consider these matters is pretty important.
    So with that, I would yield back, Mr. Chairman.
    Mr. Peters. The chairman yields.
    The Chair now recognizes the gentlewoman from Michigan, 
Mrs. Dingell, for 5 minutes.
    Mrs. Dingell. Thank you, Mr. Chairman.
    And I want to thank the committee ranking, the chair and 
the ranking minority, for holding and participating in this 
because I think this is very important legislation. I think 
that if you are not in your position a lot of people that are 
watching this hearing probably don't understand a lot of what 
they are listening to.
    But it is--this is a good, strong bill. It does have 
bipartisan support. And it is important that we stay at the 
forefront of innovation in this country, strengthen our 
economy, protect our consumers, and protect our environment at 
the same time.
    As Mr. Shimkus asked earlier in his questioning; it is 
clear that the transition away from hydrofluorocarbons is 
already happening globally, and if we are to remain 
competitive, we can't afford to sit on the sidelines.
    Michigan is home to nearly 3,900 direct jobs in the 
heating, ventilation, air conditioning, and refrigeration 
industry. This bill would not only sustain those jobs and 
another 134,500 manufacturing jobs in the United States, but it 
would create another 33,000 high quality American jobs.
    So I thank you for being here. I thank you for providing 
testimony and your expertise. And I thank the second panel as 
well.
    So I am going to ask a basic question, because I think a 
lot of people don't understand this question. How do 
hydrofluorocarbons enter the environment? And why do they 
matter?
    Ms. Newberg. Thank you. They are generally released at some 
point in time, either through--if it is in an aerosol, then it 
is a direct release. If it is air conditioning or refrigeration 
equipment, then it would maybe leak out over time. Or if it 
were not properly recovered and recycled at the end of life 
from a piece of equipment, it would be emitted as well. There 
are other ways as well. Equipment that has been landfilled, 
sometimes the degradation products over time will lead to 
emissions.
    Mrs. Dingell. And it is ending up in our air, our land, and 
our water, correct, or at least our air and land?
    Ms. Newberg. I am not familiar on the water side.
    Mrs. Dingell. All right, I take that back. And how would 
EPA go about promulgating a new regulation as directed in this 
bill to establish standards for the management of HFCs as you 
also mentioned in your testimony?
    Ms. Newberg. What the bill seems to be identifying is for 
the agency to promulgate notice and comment rulemaking, and we 
would do so following both the requirements to do that and 
using an information and availability for our partnership 
programs as well.
    Mrs. Dingell. We talked about earlier--my colleague, Mr. 
Shimkus, raised it that the worldwide transition away from HFCs 
is beginning. Are you aware of any other countries who are 
implementing a regulatory framework to manage this transition 
successfully, and are there lessons learned?
    Ms. Newberg. I am certainly aware of a number of countries 
that are already implementing restrictions and phase-downs of 
HFCs. We have not evaluated whether or not there are lessons 
learned from those.
    Mrs. Dingell. Would it be a good idea to do that?
    Ms. Newberg. I am sure we can take that back. It is always 
a positive way to look at other countries and see what works 
and what doesn't work.
    Mrs. Dingell. And in your technical opinion, does H.R. 5544 
give the EPA the necessary authority to phase-down HFCs 
responsibly that provides both economic and environmental 
benefits?
    Ms. Newberg. We have not evaluated the bill in particular 
on either the economic or environmental benefits in any kind of 
specific way. It does appear to provide the authority that 
would be needed to phase down HFCs.
    Mrs. Dingell. I thank you for those answers, and I yield 
back my time.
    Mr. Peters. The gentlelady yields back.
    The Chair now recognizes the gentleman from Oklahoma, Mr. 
Mullin, for 5 minutes.
    Mr. Mullin. Thank you, Chairman.
    Can I go back to a question that was asked earlier too 
about licensings. Ms. Newberg, starting with page 22, line 23, 
it says regulations to control, where appropriate, any 
practice, process, or activity regarding a service repair, 
disposal, or installation of equipment that involves a 
regulated substance or substitute for regulated substance that 
the EPA administrator basically would set those standards. You 
would be over the licensings of insulation, repair, service, 
everything. Are you guys prepared to take over the licensing of 
that?
    Earlier you said--when Ms. Rochester asked the question, 
you said that you guys are already in that space. You are not 
in the space where I am at for the install, repair. You are not 
in that space.
    Ms. Newberg. Under Title 6 of the Clean Air Act, there are 
regulations today that do guide air conditioning service and 
repair.
    Mr. Mullin. About emitting. It is emitting. It is when it 
is released. That is where you guys are in it, when we release 
the product that is being used. It is illegal.
    Ms. Newberg. There are additional requirements on recovery, 
recycling----
    Mr. Mullin. Sure.
    Ms. Newberg [continuing]. And reclamation, including 
provisions that deal with servicing practices.
    Mr. Mullin. But you are not into the repair side of it. 
Specifically, when this talks about licensing, that you are 
going to be overseeing the regulations to control, where 
appropriate, any practice, process, or activity, any, any 
practice, process, or activity regarding the servicing, repair, 
or disposal or the installation, that is the whole product. 
That is everything. That is not the refrigerant at this point. 
You guys are in the refrigerant space, not in this.
    Ms. Newberg. So I will need to go back and consult and work 
through our congressional affairs to provide----
    Mr. Mullin. Well, while ago when you was asked the 
question, you said that you guys are already in that space, and 
so I want to clarify, you are not in that space. You are just 
in the refrigerant space, right? And underneath this, it gives 
you authority to enter in broadly, more broadly into the 
licensing of service techs, of our technicians.
    Ms. Newberg. So Title 6 under subsection 608, we do have a 
licensing presence.
    Mr. Mullin. Not Title 6. I am talking about this.
    Ms. Newberg. Yes.
    Mr. Mullin. Underneath this, this gives you more broad 
authority. Does it not?
    Ms. Newberg. I would like to make sure I answer your 
question correctly.
    Mr. Mullin. Yes.
    Ms. Newberg. You asked about the licensing. So EPA does 
provide licenses for air conditioning and refrigeration 
technicians, both for motor vehicles and for stationary 
equipment.
    Mr. Mullin. For the recovery of the refrigerant.
    Ms. Newberg. For including servicing practices associated 
with----
    Mr. Mullin. Not the servicing practicing because that comes 
from the--our licensing that we do comes from the construction 
industry board in the State of Oklahoma. And if we go to a 
different State, that is where our licensing comes from. Where 
you guys are over is when we start recovering or filling the 
refrigerant of the units.
    Ms. Newberg. I am happy to take this back and work with our 
congressional affairs.
    Mr. Mullin. Right.
    Ms. Newberg. I believe the language is opening in our 
regulation, so it is opening the system, but I am happy to----
    Mr. Mullin. Right, which is the refrigerant. When we open 
it, it is reclaiming the refrigerant.
    Ms. Newberg. If you are asking if we have licensing on the 
electrical side----
    Mr. Mullin. I am not talking about the electrical side. I 
am talking about what this says. It says any practice. And my 
whole point that I am getting to is this is much more broader 
language than what it is, which opens the door for 
interpretation. So I am not--I am telling you where our 
licensing already comes from versus reading this.
    Now, going back, when we start talking about the recovery 
of the refrigerant, is it illegal right now for the refrigerant 
to be released into the air?
    Ms. Newberg. There is a prohibition in the Clean Air Act 
that prevents it.
    Mr. Mullin. Right. And so what is the fine for that?
    Ms. Newberg. I will have to check with the----
    Mr. Mullin. Five thousand dollars. It is $5,000 per 
occurrence is what we would get fined, according to our 
training from the EPA, if we were to get caught releasing the 
refrigerant. And so I say that because 65 percent of all the 
units that are out there right now are still on the old R-22 
system because when you was asked questions earlier, you was 
asked can a system run its full cycle? Well, the full cycle is 
15 to 20 years is what your system works.
    And they phase-out--when you are phasing this stuff out, 
you phase-out the parts to it too. That is why this has been 
getting phased out since the Montreal Protocol, but yet 65 
percent of the system, 60 to 65 percent of the systems, are 
still working on the old system, the R22 system. And now we are 
already trying to phase out the new system to which is 
supposedly supposed to go to the 410A. What is the measurement 
that you are using to say that the 410A needs to be phased out, 
too, because in your testimony, you stated that while HFCs do 
not deplete the ozone layer, most HFCs are potent greenhouse 
gases? How are you measuring that because more of the systems 
right now are still using the old system?
    Ms. Newberg. I am sorry.
    Mr. Mullin. What is the need----
    Mr. Peters. Mr. Mullin--Mr. Mullin, ask her a question and 
allow her to answer it, but your time has expired.
    Mr. Mullin. I think she was answering me.
    Mr. Peters. OK.
    Mr. Mullin. What is the purpose to phase-out the HFCs? What 
is causing the urgency to phase it out?
    Ms. Newberg. Well, that is a question for Congress. That is 
a policy question, and I can only answer based on what I can 
interpret in the bill.
    What your question was regarding the measurement, I believe 
what they--of greenhouse gasses, I believe, was your question, 
and the list that seems to be being used is an IPCC list of 
greenhouse gas substances and their potency.
    With regards to your question on fines, I believe it is 
more like $50,000, but I would need to check that. I believe it 
is $50,000 per incident per day is the maximum fines, but that 
is----
    Mr. Mullin. It depends on the----
    Mr. Peters. The gentleman's time has expired. The Chair now 
recognizes Mr. Carter from Georgia for 5 minutes.
    Mr. Carter. Ms. Newberg, thank you for being here. We 
appreciate you being here very much.
    Ms. Newberg, I want to ask you about the--you are obviously 
very familiar with--thank you--with the Kigali--Kigali, is that 
the way you pronounce it?
    Kigali.
    Mr. Peters. He is from Georgia, he doesn't speak Georgia.
    Mr. Carter. Kigali is the way you pronounce it in Geechee. 
That is what we speak down in south Georgia. OK. And pay no 
attention to my colleagues here up on the dais, but 
nevertheless, you know, help me understand this. I am a 
pharmacist. I am not in this area, necessarily, but I just want 
to understand the difference, the basic difference between the 
HFCs and the HFOs and how they differ in utilization.
    Ms. Newberg. Between the HFCs and the HFOs?
    Mr. Carter. Right.
    Ms. Newberg. The HFOs are another class of substitute 
chemicals. There are a lot of substitutes, ozone depleting 
substances. They are not all HFCs. They are not all HFOs. 
Hydrocarbons, carbon dioxide, many other types of chemicals 
have been used, Methylene----
    Mr. Carter. Right. So how much do we know about the HFOs?
    Ms. Newberg. I think that may be a question----
    Mr. Carter. I think the question that was asked earlier 
about how can you measure this if we haven't been using them, 
that is what I am concerned with here.
    Ms. Newberg. So HFCs have been used in the United States 
since at least the early 1990s, probably certainly before then. 
They have been used in a variety of uses for a very long time. 
They are not new chemistry from that perspective.
    Mr. Carter. OK. One last question and that is--Mr. 
Chairman, I want to ask unanimous consent to enter into the 
record a letter from the National Marine Manufacturers 
Association.
    Mr. Peters. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Carter. Thank you. One thing, one point that the boat 
makers make is that they do not have an option now, an 
alternative, if they are not using the HFCs for certain parts 
of the boats. Now, they have decreased, they have decreased 
their use of them 80 to 90 percent. However, it adds to the 
weight on it if they don't use the HFCs, and therefore, they 
use more fuel. Are we not just shooting ourselves in the foot 
here if we try to solve one problem but we create another 
problem?
    Ms. Newberg. I think there is a policy question in there 
that has to be taken up in how this legislation is developed, 
but in terms of your question on whether or not they have 
alternatives, or any group has alternatives, I think the way 
this is structured in the legislation is, that is something 
that we would look at as sector-by-sector basis.
    And the technical assistance we provided is that we should 
actually cut that even finer and not just look at the sector 
but look at the individual end uses. Because foams used in 
boats is going to be different used than foams used, for 
example, in chairs or foams used in building insulation.
    Mr. Carter. So what you are telling me is, you may have 
exemptions, exceptions?
    Ms. Newberg. I believe the legislation is set up both to 
allow for that, and also the gradual phase-down means that 
different sectors could go at very different times.
    Mr. Carter. OK. I am going to yield the rest of my time to 
the gentleman from Oklahoma.
    Mr. Mullin. What is the reason for the change to phase-out 
410A to A2L?
    Ms. Newberg. So A2L is a designation by ASHRAE as to types 
of refrigerant. It is not a specific type. There are a number 
of refrigerants that are both HFCs and non-HFCs that would meet 
that designation.
    Mr. Mullin. But to phrase out from the 410L to the new 
refrigerant that we are going to, what is the need for that? 
Why do we feel the need for it if it is not depleting the 
ozone?
    Ms. Newberg. Well, I mean, I noted in my testimony, they 
are put in greenhouse gases, but I believe that is a question 
for the co-sponsor of the bill.
    Mr. Mullin. But isn't the A2L, isn't it flammable? The 
refrigerant that we are going to, we go from a non-flammable 
refrigerant to a flammable refrigerant, is that not true?
    Ms. Newberg. So there are both flammable and non-flammable 
refrigerants in use broadly today, including, you mentioned 
410A----
    Mr. Mullin. The one that we are specifically talking about, 
that we use daily, each day, inside customers' air 
conditioners, consumers, it is non-flammable?
    Ms. Newberg. I believe you are referencing a particular 
product.
    Mr. Mullin. The 410A to which we are going out, to which we 
are phasing out because it is part of the FHCs, we are phasing 
that out, and we are going to a flammable, to, the manufacturer 
says, a mildly flammable refrigerant. Is that not accurate?
    Ms. Newberg. I don't believe there is anything that 
legislation that dictates a specific choice on what 
manufacturers----
    Mr. Mullin. But that is the direction that we are going to. 
That is what the manufacturers are phasing out to. The 
manufacturers are even claiming that it is mildly flammable.
    Ms. Newberg. So I believe there are a full range of 
flammable, non-flammable, and mildly flammable alternatives. It 
would depend on the end use and the manufacturer----
    Mr. Mullin. Not widely used right now. We are not putting 
flammable refrigerant in consumers' homes.
    Ms. Newberg. I believe in certain products we are.
    Mr. Mullin. Not for refrigerant, we are not putting them in 
because we are not allowed to. I am not allowed to put those 
in. The only way they can come in is they come in with a 
closed-loop system, and then we are not allowed to work on 
those. That takes a whole other classification. I yield back.
    Mr. Peters. The gentleman's time has expired. The chair now 
recognizes the gentleman from West Virginia, Mr. McKinley, for 
5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman. And I would really 
like to give more of the time to Representative Mullin to 
continue his questioning if he could, please. I yield to him.
    Mr. Peters. OK.
    Mr. Mullin. Coming back to the question that I was asking, 
to reference it again--and I will try to give you more time to 
answer it here--if we are still using the old, old system, 
which is the R22, if we are still using the old, old system, it 
is 60 to 65 percent of all the air conditioners that are still 
in customers' homes that are being used today, and only 30 to 
35 percent of the systems are running on the HFCs, which is the 
410A system for customers that are running refrigerant, my 
whole point that I am trying to get to is, does it seem 
reasonable that we are phasing out the 410As when they are not 
even widely used yet? So we really don't have a way to measure 
what their impact is on the environment. Would you say that is 
accurate?
    Ms. Newberg. So we have not installed new equipment in the 
United States, at least not legally, since 2010, using R22. 
Since that time----
    Mr. Mullin. All right. There is a complete phase-out in 
2015. You couldn't even buy replacement parts in 2015, and 
then, of course, in 2020, this year, you can't even buy the 
drop-in refrigerant anymore for what we call for the R22s.
    Ms. Newberg. So R22 is available today. It is just not 
newly manufactured. It is recovered and recycled. It is still 
available today. It has not been available for new equipment 
since 2010.
    Mr. Mullin. Right.
    Ms. Newberg. And then I think to answer your other 
question, the agency hasn't approved any A2L refrigerants for 
split systems for-- I believe what you are talking about is 
what we would commonly call essential air conditioning. We have 
not approved an A2L refrigerant for that application to date.
    Mr. Mullin. Well, the manufacturers are already saying that 
the phase-out, the replacement for the 410A will be the A2L, 
and they openly say that it is mildly flammable.
    Ms. Newberg. A2L is an ASHRAE designation----
    Mr. Mullin. I know that.
    Ms. Newberg. --it might be mildly flammable, but my 
understanding--and I am not--I think you have a panel coming up 
of industry experts, so you may be better off having that 
conversation with them.
    Mr. Mullin. Well, but we are talking about the environment. 
My whole point that I am trying to get to, is it really safe? 
Is it really safe for us to be going to a non-flammable to a 
flammable when the product that we have right now is safe to be 
in a home, it is not ozone-depleting, it is against the law to 
release it, we have to recover it, we have to measure it? For 
your account, you are saying 50,000; for our account, it is 
5,000 depending on what level of claims that you are bringing 
into it--for the fines to be able to release it.
    And all I am saying is, the consumer is the one that is 
getting hit with this. Because when you replace the system, the 
system for a three-ton unit which is the average for a average 
home inside the United States, the replacement cost it roughly 
$6,500. For a five-ton system which is what you have in a lot 
of Midwest because the homes are slightly larger, the 
replacement cost is roughly $10,000. So that is today.
    And so I am trying to figure out, what is the consumer 
benefit of this. We are going to cause the consumer to switch 
to a new system that is going to be already out in another 15 
years. So we are going to take out--we are going to say, you 
can't put in the R22 systems anymore, so you got to go to the 
410A systems. And by the way, when you put that 410A system in 
it, by the time it is going to start needing repairs, which is 
about 15 years, it is not going to be able to be repaired, and 
you are going to replace the system again to the new A2L, which 
by the way, that is flammable. We are going to put--now we are 
going to put a flammable product into your system. How is that 
best for the consumer?
    And when you start talking about, according to you, the 
410L--or 410A isn't ozone depleting, what is the measurable 
reason then that we would put the consumers' safety at risk 
over a possible greenhouse gas potential leak?
    Ms. Newberg. I think if you--we would be happy to follow up 
through my Congressional Affairs Office and provide you with 
information on refrigerant safety.
    Mr. Mullin. But that is not answering the question. Is it--
in your opinion, is that the right way to do, to put--to 
switch, to go from a non-flammable product to a mildly 
flammable product?
    Ms. Newberg. I believe that is a question that I can take 
back and work with you with our Congressional Affairs to 
provide you with information.
    Mr. Mullin. OK. With that, I yield back.
    Mr. Peters. The gentleman yields. The Chair now recognizes 
the gentleman from Texas, Mr. Flores, for 5 minutes.
    Mr. Flores. Thank you, Mr. Chairman. Ms. Newberg, thanks 
for joining us today. I have two quick questions for you. In 
section 5, there is an outline for a timeline for the phase-
down of regulated substances. But that timeline also allows 
exemptions under certain circumstances. So my question is this. 
Do you believe that section 5 is clear when it comes to 
specifying for when and what and why exemptions would be 
allowed under the HFC phase-down?
    Ms. Newberg. Thank you. I believe we provided in our 
technical assistance, and I am just looking now, that we did 
believe that there were some small changes that could be made 
to make that a little bit more clear and connect that 
information.
    Mr. Flores. OK. Great. I appreciate that. My next question 
builds on the question that GOP Leader Walden was asking about, 
section 7. There is an evaluation provision that is designated 
as ``E'' under section 7 for technology transitions. It is 
clear in that provision that the EPA shall consider the 
availability of alternatives to regulated substances for 
potential rulemaking procedures. And so my question in this 
regard is, what would help facilitate this process and also to 
make sure that there is transparency for the public in this 
process?
    Ms. Newberg. Thank you. I appreciate the question. And I 
will note that one of the conditions that the EPA is supposed 
to look at is safety in particular. I believe we provided 
technical assistance that also noted for more transparency what 
might be helpful is for some language to be added in, language 
that could be consistent with Title 6 on a clearinghouse, which 
would be just for folks to understand what alternatives we are 
looking at in terms of availability.
    Mr. Flores. OK. Great. I appreciate the responses on that. 
I am going to yield the balance of my time to the gentleman 
from Oklahoma, Mr. Mullin.
    Mr. Mullin. Ma'am, I am sorry you and I get to talk so 
much. It is just that this is a very passionate point for me 
because at the end of the day, the consumer, I think, is the 
one that is being left out of this conversation.
    I know we have heard from different people up here that 
they said it is rare that the manufacturers and the chamber 
come together on an agreement, but as our--Ranking Member 
Shimkus pointed out, the small businesses and the customer, the 
consumer, our constituents, are left out. And the whole thing 
that I am trying to get to is, is we talk about certainty 
inside the industry through regulation, but what about the 
uncertainty to the consumer?
    As I said, we haven't even completely finished out the 
phase-out of the R22. And I go back to the same question. I 
can't figure out what the need is if we haven't already phased 
out the R22, the 410A, what is the need to go ahead and phase-
out the HFCs which is the 410A? What is--your expert opinion, 
what is driving the need to do this?
    Ms. Newberg. I appreciate the question and I do believe 
that is a question for the drafters of the bill. It is a policy 
question as to what the----
    Mr. Mullin. OK. Well, in your opinion, do you feel like 
there is actual need to phase-out HFCs?
    Ms. Newberg. I am not here in my personal capacity. I am 
here as a representative of my agency and providing technical 
assistance on draft legislation.
    Mr. Mullin. I understand that, but the drafters of the bill 
was pointing towards the environment.
    Ms. Newberg. I understand that.
    Mr. Mullin. And you are the EPA.
    Mr. Shimkus. If the gentleman would yield?
    Mr. Mullin. Yes.
    Mr. Shimkus. I have been in this position numerous times. 
She is not supposed to give her personal opinion. She is just 
supposed to comment on the legislative language of the bill and 
whether it can be enacted or it can't or some other----
    Mr. Mullin. OK. I will rephrase my question then. Is there 
a concern at the EPA that 410A is hurting the environment?
    Ms. Newberg. The agency already has regulations on 410A 
because of recovery recycling and to prevent the venting of the 
refrigerant.
    Mr. Mullin. But do you feel like the 410A, the HFCs are 
hurting the environment?
    Ms. Newberg. The agency made a determination that it was 
not exempt from the venting prohibition, that it needed to be 
recovered and recycled under section 608--I am sorry--it needed 
to be not vented.
    Mr. Mullin. But with the recycling going on, is HFCs 
hurting the environment?
    Ms. Newberg. So the agency made a determination in 2001 
that it was not exempt, meaning, it did not find that there was 
no environmental impact. In other words, we found there was an 
impact. Otherwise, we would have exempted it from the section 
608 prohibition.
    Mr. Mullin. That is back from 2001?
    Ms. Newberg. That is back since 2001 and before then, the 
agency had determined, based on what Congress gave us in the 
Clean Air Act under section 608, that we could not allow the 
releases during service, maintenance, repair, and disposal of 
air conditioning refrigeration equipment.
    Mr. Mullin. OK.
    Mr. Peters. The gentleman's time has expired. The chair now 
recognizes the gentleman from Texas, Mr. Olson, for 5 minutes.
    Mr. Olson. Yes, I thank the Chair, and welcome to our 
witness. Ma'am, my home in southeast Texas, I have lived there 
since 1972. Now, I am a Texan, so I don't talk funny like my 
friend from Georgia, but we moved there with one car, a 1963 
Chevy station wagon with no AC. That car was in my family for, 
maybe, two days maximum in Texas. We could not live without air 
conditioning. The forecast in southeast Texas is the same from 
late April to mid October. It is 95 degrees or more, and 95 
percent humidity or more.
    Without air conditioning, my home region would not be the 
fastest growing region in the country with Houston, Texas, 
about to become the third biggest city in America.
    The Texas Medical Center, Texas Children's Hospital in the 
medical center, M.D. Anderson Cancer Center, all those great 
research places for kids get care, cancer cured, they would not 
be here without air conditioning.
    The 8th wonder of the world, a building called the Houston 
Astrodome, was solely built for air conditioning. We have a 
little park out there called Colts Park, outside, heat, 
humidity, they cannot play there. The mosquitoes were as big as 
flies. They kept swarming. So my point is, air conditioning is 
a part of our life that we have to have in Houston, Texas.
    We just replaced my air conditioner in my house. Have two 
ACs, had to replace one because it got old. My question is, if 
this bill becomes law, do I have to replace my air conditioner 
within 15 years, 20 years, 25 years, or can I keep it as long 
as it is working?
    Ms. Newberg. You do not need to replace it. You can keep it 
as long as it is working.
    Mr. Olson. OK. That is good news for my wife. I want to 
talk about the commercial aspect. As I mentioned in my opening 
statement, a company called Daikin, which is a Japanese company 
that has got 7,000 people working in Texas 22, they make air 
conditioners. Their sales last year, $17 billion. They operate 
in 150 countries. Their research and development budget last 
year, $300 million. Been in business now since 1924, 96 years.
    My question is, if this bill does not become law, what 
happens to Daikin here in America? Can they stay here? Will 
they stay here? Or will they be forced to go overseas because 
we can't compete with old laws?
    Ms. Newberg. I appreciate the question. I don't think I 
could speak to the ramifications on any particular company or 
business based on the legislation. We haven't done that type of 
analysis.
    Mr. Olson. But you said in your statement, though, lots of 
countries right now, overseas, are switching to, you know, 
getting rid of the CFCs, and we are behind that curve. So if we 
don't adapt and give a phased, defined timeline, does that hurt 
a company like Daikin that wants to stay here, that may have to 
go somewhere else because the whole world is doing something 
with HFCs and we are not?
    Ms. Newberg. I appreciate the question, and it may be 
better for the industry or others to weigh in on that more than 
from the EPA's perspective. I think what we have seen before 
and what we have spoken to is, the time--the time differences 
could impact different industries in different ways, but we 
haven't done any analysis on a particular company.
    Mr. Olson. And this is not something new, right? EPA has 
done this in the past where you phase in some new process or 
some new chemical. We talked about what we did the last time 
with the, you know, the Montreal Protocol. This is nothing new, 
right? Not a big deal for EPA to adapt, correct?
    Ms. Newberg. So Title 6 of the Clean Air Act set in motion 
for EPA implementation of the Montreal Protocol and phase-out 
of alternatives as well as--sorry--phase-out of the ozone-
depleting substances and identification of alternatives. The 
legislation does seem to request the agency to do many of the 
same activities.
    Mr. Olson. So again we have been down this road once 
before. It is not some radical path we are going down right now 
with this bill.
    Mr. Chairman, I would like to offer unanimous consent four 
documents of support for the record. The first one is from five 
Senators--Mr. Kennedy and Mr. Cassidy, Ms. Collins, Mr. Cotton, 
and Mr. Graham. The second one, it was mentioned by my 
colleague from Georgia. It is from the National Marine 
Manufacturers Association. The third is from the U.S. Chamber 
of Commerce and National Association of Manufacturers. And the 
fourth one is from the Americans for Tax Reform, Freedom Works, 
and the ACCF, the American Council for Capital Formation.
    Mr. Peters. Without objection, those will be ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Olson. Thank you. I yield back.
    Mr. Peters. OK. The gentleman yields back. That concludes 
our first panel. I would like to thank Ms. Newberg for joining 
us today. Thank you for being here.
    I would like to recognize that Mr. Olson cannot not talk 
about the Astros, no matter happens.
    Mr. Olson. Well, we got caught----
    Mr. Carter. Well we can talk about the Astro's we can talk 
about them----
    Mr. Peters. No matter what happens, he has got to mention 
the Astros.
    At this time, I would ask the staff to prepare the witness 
table so we can get begin our second panel shortly. The 
committee is in recess for 5 minutes.
    [Recess.]
    Mr. Peters. All right. We will call the committee to order. 
We are now ready for our second panel, and I will now introduce 
the witnesses.
    Thank you all for being here very much. Mr. John Galyen is 
president of Danfoss North America. He is testifying on behalf 
of the Air Conditioning, Heating, and Refrigeration Institute.
    Ben Lieberman, senior fellow, Competitive Enterprise 
Institute, and I understand, Mr. Lieberman, you spent some time 
with this committee before, so welcome back.
    Mr. David Doniger, senior strategic director of Natural 
Resources Defense Council.
    Mr. Gary Bedard, president and chief operating officer of 
Lennox International, who is testifying on behalf of the 
Alliance for Responsible Atmospheric Policy.
    Before we begin, just an explanation about the lighting 
system. In front of you are a series of lights. The light will 
initially be green. The light will turn yellow when you have 1 
minute left. Please begin to wrap up your testimony at that 
point. The light will turn red when your time expires.
    At this time, Mr. Galyen, you are recognized for 5 minutes 
for your opening statement.

STATEMENTS OF JOHN GALYEN, PRESIDENT, DANFOSS NORTH AMERICA, ON 
  BEHALF OF THE AIR-CONDITIONING, HEATING, AND REFRIGERATION 
INSTITUTE; BEN LIEBERMAN, SENIOR FELLOW, COMPETITIVE ENTERPRISE 
INSTITUTE; DAVID D. DONIGER, SENIOR STRATEGIC DIRECTOR, NATURAL 
RESOURCES DEFENSE COUNCIL; AND GARY BEDARD, PRESIDENT AND CHIEF 
OPERATING OFFICER, LENNOX INTERNATIONAL, INC., ON BEHALF OF THE 
          ALLIANCE FOR RESPONSIBLE ATMOSPHERIC POLICY

                    STATEMENT OF JOHN GALYEN

    Mr. Galyen. Good morning, everyone. And thank you, Mr. 
Chairman and Ranking Member Shimkus, and the members of the 
subcommittee.
    As already stated, my name is John Galyen, and I am the 
chairman of the board of directors at the Air-Conditioning, 
Heating, and Refrigeration Institute, the trade association of 
manufacturers of HVACR and water heating equipment. AHRI is 
more than 300 member companies, manufacture quality, efficient 
and innovative residential and commercial air conditioning, 
space heating, water heating, and commercial refrigeration 
equipment and components for sale in North America and around 
the world.
    AHRI member companies produce more than 90 percent of the 
previously named equipment used here and around the world. I 
also serve as president of Danfoss North America, a 
manufacturer and a member company of AHRI. Thank you for this 
opportunity to provide comments on this important bill.
    The companies in this industry, with significant business 
and manufacturing operations here in the United States, are 
among the recognized world leaders in HVACR technologies with 
decades of substantial investments in innovation and R&D that 
has enabled us to lead and support successful transitions in 
refrigerant technologies over the past 30 years.
    I would like to highlight that the swift enactment of the 
AIM Leadership Act would establish a Federal framework to guide 
the transition out of the group of substances known as 
hydrofluorocarbons, commonly referred to as HFCs, into the 
next-generation technologies, many of which are made here in 
the United States.
    HFCs are used as refrigerants as well as solvents, foam-
blowing agents, propellants, fire suppressants, and aerosols. 
Some have asked, why is Federal legislation needed to phase- 
down HFCs? Without Federal legislation, or passage of this 
bill, we face a disorderly transition that puts American 
industry and innovation at risk. This will add significantly 
more cost and complexity that will be especially burdensome for 
small and mid size businesses that have limited resources and 
without the scale to absorb the incremental investments 
required.
    Many of the new technologies needed in the transition will 
be developed here in the United States which can be a major 
advantage for American business, workers, and consumers. 
However, there is a big difference between an orderly 
transition guided by Federal legislation and a disorderly 
transition, which will occur in the absence of a Federal 
framework.
    With an orderly transition, the American HVACR industry has 
certainty, stability, and predictability with regard to product 
lines, supply chains, distribution networks, and legal and 
regulatory requirements. This will enable businesses to invest 
and innovate. This is where all the economic benefits come 
from, 33,000 new jobs, $12 billion in direct manufacturing 
output, and a 25 percent increase in exports.
    In an orderly transition, we have a pretty clear picture of 
how to manage the HFC transition and we can plan, invest, hire, 
and build accordingly and to transition in a shorter timeframe. 
In a disorderly transition, where there is no Federal 
framework, it is likely that chaos will prevail. And it is 
uncharted water for us, since all prior refrigerant transitions 
were all guided by an early Federal framework.
    In a disorderly transition, a company, in order to remain 
competitive, will have to maintain multiple product lines 
without a national framework. This complexity would extend into 
supply chains, warehousing, distribution networks, and 
significantly increase the cost of regulatory compliance. A 
smaller company may be forced to compete in some regions and 
not in others due to the extra costs and complexity.
    The AIM Leadership Act puts us on a path for an orderly 
transition away from HFCs. The American HVACR manufacturing 
industry and the AHRI member companies are in strong support of 
the AIM Leadership Act.
    NAM and the U.S. Chamber of Commerce also support H.R. 
5544. We believe it would create regulatory certainty, 
stability, and predictability. This protects the interests of 
large and small manufacturers and all consumers, while also 
encouraging new technology investment and development that 
would result in jobs creation and increased trade.
    I urge Congress to act swiftly in the passage of this bill 
for the benefit of American manufacturers, workers, and 
consumers.
    Thank you for the opportunity to testify, and I welcome any 
questions you might have.
    [The prepared statement of Mr. Galyen follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    Mr. Peters. Thank you, Mr. Galyen.
    Mr. Lieberman, you are now recognized for 5 minutes for 
your opening statement.


                   STATEMENT OF BEN LIEBERMAN

    Mr. Lieberman. Chairman Tonko, Vice-Chairman Peters, Mr. 
Shimkus, and members of the subcommittee----
    Mr. Peters. Ben, pull that a little bit closer to you.
    Mr. Lieberman. You would think I would know that by now.
    Mr. Peters. You would think.
    Mr. Lieberman. Thank you for this invitation to speak today 
at this hearing on H.R. 5544, the American Innovation and 
Manufacturing Leadership Act of 2020.
    My name is Ben Lieberman, and I am a senior fellow at the 
Competitive Enterprise Institute, a nonprofit, nonpartisan, 
public policy institute committed to advancing the principles 
of free markets and limited government.
    Before that I had the distinct privilege of being a staff 
member for the House Committee on Energy and Commerce, 
including work on this subcommittee from 2011 to 2018.
    Now, I know that a number of you have expressed misgivings 
about the Green New Deal or carbon taxes or other comprehensive 
climate change measures, and I certainly share those 
misgivings. But I also know that several of you are casting 
about for something you can support on climate, something less 
controversial and costly, the proverbial low-hanging fruit or 
win-win proposal, and it appears that some of you may be 
gravitating towards H.R. 5544, the American Innovation and 
Manufacturing Leadership Act of 2020 as possibly being that 
vehicle. But I would strongly caution against doing so.
    I believe that this bill, especially in its present form, 
risks imposing significant and unnecessary costs on homeowners, 
vehicle owners, and many small business owners, and promises 
more economic pain than environmental gain.
    The bill places limits on production of hydrofluorocarbons, 
or HFCs. These are the refrigerants currently used in literally 
hundreds of millions of air conditioning and refrigeration 
systems, nearly every vehicle air conditioner, many residential 
air conditioners and refrigerators, and the equipment used in 
millions of small businesses such as restaurants, for example.
    Future repairs of this equipment and particularly, repairs 
of leaks that require additional HFCs would very likely rise if 
supplies of these refrigerants become restricted. In addition, 
the cost of HFC substitute refrigerants and the equipment 
designed to use them is also likely to be higher. For example, 
perhaps the most common HFC targeted under the bill is HFC 
134A, which is the stuff used in your car air conditioner and 
refrigerator, as well as quite of the bit of the equipment you 
might see in a food store.
    Well, you can go to any of a number of online supply houses 
and find 134A for around $5 to $7 a pound, even less if you buy 
it in bulk. But its substitute, something called HFO 1234YF, 
can be found on those same sites for something closer to $50 
per pound. So make no mistake, this bill will imposes costs, 
both higher repairs of existing equipment and a higher purchase 
price for new equipment.
    Now, there are a few provisions in this bill that are 
particularly problematic, and I would like to spend a moment 
highlighting them. This includes the provision that lets the 
deadlines be accelerated. The bill sets out a schedule of a 40 
percent reduction of HFCs by 2024 and an 80 percent reduction 
by 2034. Not great, but not terrible in terms of allowing for a 
gradual transition.
    But the bill allows these deadlines to be accelerated. And 
even if EPA chooses not to do so, the bill's wide open 
litigation opportunities practically guarantee that 
environmental groups will sue to do so. This provision destroys 
any certainty and could lead to HFC restrictions far costlier 
than originally set out for all those pieces of equipment that 
will still need it.
    At a minimum, I believe that any policy change should allow 
the existing generation of HFC-dependent equipment to live out 
its useful life relatively undisturbed without higher costs to 
be replaced in due course by whatever comes next. And this 
bill, in its present form, falls well short of that goal.
    I also see problems with the lack of state preemption. Many 
of the issues I worked for on this committee, such as cafe 
standards and appliance efficiency standards were complicated 
by California and other States going in their direction often 
for the express purpose of trying to force the issue in 
Washington. And that is already happening with HFCs.
    However, this bill does nothing to rein in States that want 
to continue setting conflicting HFC measures. I think one set 
of HFC restrictions would be enough of a challenge. We don't 
need a multiplicity of requirements.
    I would also add that the bill's exceptions are far too 
narrow and do not provide relief should compliance costs prove 
to be high, especially for small businesses and consumers with 
other issues like the flammability concerns that were touched 
on, or not really resolved in time.
    This bill would be uncharted territory in a number of 
respects, so there should be a safety valve if things don't go 
quite as well as proponents are predicting.
    In conclusion, there are a number of things that could be 
done to improve this bill, but I should add that I am not yet 
convinced that a bill is necessary. To put it bluntly, what 
would be so bad if the new stuff had to compete with the old 
stuff----
    Mr. Peters. Mr. Lieberman, you can conclude.
    Mr. Lieberman [continuing]. And let consumers decide for 
themselves. That is the way it usually works when the new 
product is introduced.
    I appreciate the opportunity to participate in this hearing 
and look forward to any questions you may have.
    [The prepared statement of Mr. Lieberman follows:]
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    Mr. Peters. Thank you.
    Mr. Doniger, you are now recognized for 5 minutes.


                 STATEMENT OF DAVID D. DONIGER

    Mr. Doniger. Thank you very much, Mr. Chairman, Ranking 
Member, for the opportunity to testify.
    And thank you to the cosponsors of this bipartisan 
legislation to phase-down harmful hydrofluorocarbons and help 
U.S. companies lead the world in replacing them with innovative 
and climate-friendlier alternatives.
    I am David Doniger. I helped lead the Climate and Clean 
Energy Program of the Natural Resources Defense Council, and I 
have worked in this area for more than 30 years to safeguard 
the ozone layer and the climate from the fluorocarbon family of 
chemicals.
    Under the Montreal Protocol in the 1990 Clear Air Act, we 
successfully phased out the CFCs that were depleting the 
stratospheric ozone layer. And if we had not eliminated CFCs, 
humanity would have suffered hundreds of millions of skin 
cancers, millions of them fatal, as well as cataracts and 
immune disorders, and huge agriculture losses over this 
century. You can see how bad it would have been in the 1-minute 
NASA video that I linked to in my testimony.
    But thanks to U.S. bipartisan leadership under President 
Reagan and every President since, and the Congress, the ozone 
layer will recover in the lifetime of my children. Phasing out 
CFCs is also the most effective step we have taken so far to 
slow climate change. And that is because CFCs are also 
extremely powerful greenhouse gases, some more than 10,000 
times the heat-trapping power, pound for pound, of carbon 
dioxide. If we had let CFCs keep growing, the climate change 
impacts we are feeling now--heat waves, droughts, wildfires, 
storms, flooding, sea level rise--would have hit us ten years 
ago, and they would be even worse today.
    HFCs were an initial replacement for CFCs. They don't harm 
the ozone layer, they have lower heat-trapping power, so they 
were a step in the right direction on climate change, but not 
enough because HFCs themselves still have hundreds of thousands 
of times the heat-trapping power of CO2, and HFC emissions are 
growing much more rapidly than CO2.
    If HFCs keep growing, they could add nearly another half 
degree Celsius, that is nearly a full degree Fahrenheit, to the 
global average temperatures we will experience by 2100.
    In a world now on track for at least a 3-degree Celsius 
rise and struggling to find the policies to hold warming to one 
and a half or even two degrees, we cannot afford to add another 
half degree of new warming on top of everything else. So that 
is the imperative for replacing HFCs with climate friendlier 
alternatives.
    Fortunately, this is an area of consensus and cooperation 
between the industries that make and use these chemicals and 
the environmental community. Industry leaders have pioneered a 
wide range of alternatives, some new, some old, that can do the 
jobs HFCs do effectively, safely, and economically with much 
less, in some cases nearly zero, impact on the climate.
    The transition has started, but as with CFCs, we need the 
framework of an orderly phase-down under Federal law. That is 
why both industry and environmentalists are here today to 
testify in support of H.R. 5544.
    The bill does three main things: It sets a schedule for 
reducing the production and import of HFCs--and I emphasis the 
import, because there are no restrictions on imports from China 
and other countries now; it requires recovering your reusable 
chemicals and reducing leaks; it provides for replacing HFCs in 
end uses where safer alternatives are available.
    It is not often that the committee hears support for the 
same bill from all sides--from the environmental community, 
from the chemical makers and equipment suppliers, from business 
organizations like the Chamber of Commerce and the National 
Association of Manufacturers.
    Again, we applaud Representatives Tonko, Olson, Peters, and 
Stefanik for their bipartisan leadership and invite all of you 
to join in this bill. We note that the Senate companion bill 
currently has 32 cosponsors drawn equally from both parties.
    I will close by noting that American industries have led in 
bringing new alternatives and new products to the multi-hundred 
billion dollar international marketplace in these technologies. 
If we sustain that leadership, that will mean more 
manufacturing investment and jobs here in America and more 
American exports, but American firms need the encouragement and 
certainty of this bill. Companies in Europe, Japan, and China 
are already working to catch up.
    This legislation will enable our country to retain its 
environmental leadership and our industries to maintain their 
commercial edge and reap the rewards. That is why 
environmentalists and industry alike support enacting this 
legislation now. I would be happy to answer your questions.
    [The prepared statement of Mr. Doniger follows:]
    
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    Mr. Tonko [presiding]. I now recognize Mr. Bedard, I 
believe, for 5 minutes.

                    STATEMENT OF GARY BEDARD

    Mr. Bedard. Thank you Chairman Tonko, Ranking Member 
Shimkus, and members of the committee. I am Gary Bedard, the 
president and chief operating officer of Lennox International's 
global refrigeration business, and today I speak on behalf of 
the Alliance for Responsible Atmospheric Policy in support of 
H.R. 5544, the American Innovation and Manufacturing Leadership 
Act.
    The Alliance is an organization of industry users and 
producers of fluorocarbon compounds established in 1980. Today 
the Alliance represents businesses that produce and use HFCs in 
air conditioning, refrigeration, appliances, foam, electronics, 
aerosols, and metered-dose inhalers.
    Lennox International is based in Richardson, Texas, and 
employs 10,000 people, many of whom work in American 
manufacturing or engineering facilities in Georgia, Iowa, 
Texas, South Carolina, Arkansas, and Mississippi.
    American industry has invested billions in the development 
of low GWP compounds and technologies and led the global 
development of policies to achieve a cost-effective transition 
to lower GWP technologies. Our future is dependent upon a 
rational Federal transition to low GWP refrigerants. The AIM 
Leadership Act facilitates an efficient and cost effective, 
domestic phase-down of HFC refrigerants by providing narrow 
authority to the EPA to transition to new substances.
    The alternative is an inefficient process that increases 
cost for manufacturers, distributors, contractors, and 
ultimately consumers, your constituents. The most economical 
transition is a predictable and rational Federal transition. 
The AIM Leadership Act relies on three key components--a 
market-based allocation system that gradually phases down 
production, a flexible program for user sectors with no impact 
on user--on existing equipment owners, and improved management 
of refrigerants.
    We successfully managed prior transitions yielding 
significant consumer benefits and environmental improvements. 
Independent analysis estimates a Federal transition will 
stimulate additional domestic investment, generating 33,000 
manufacturing jobs over the first decade while increasing 
exports by $5 billion.
    This legislation simplifies a complicated regulatory 
structure using known policy approaches with some key 
improvements from lessons learned. The AIM Leadership Act 
advances American-made technology, provides economic benefits 
and significant job growth while facilitating American 
leadership globally.
    A Federal program also curtails illegal dumping of HFCs 
into the U.S. as is currently occurring, particularly from 
countries like China. This transition is well underway 
globally. More than 90 countries, including all of our major 
economic competitors, have a defined policy approach. The only 
debate remaining is the timing of the transition in the United 
States, the efficiency by which it occurs, and whether our 
industry maintains its global leadership in a market that is 
expected to double in the next ten years.
    The domestic HVAC in our industry is lagging and falling 
behind both the EU and Asia as a result of uniform Federal 
policy--a lack of uniform Federal policy. Failure to pass this 
legislation into law significantly increases our regulatory 
burden, ensuring a costly localized refrigerant transition. 
This means industry will manufacture redundant product lines, 
increase our distribution costs, and reduce our inventory 
turns. Failure to pass this legislation means inefficiency wins 
over innovation, and American industry, workers, and consumers, 
lose to foreign competition.
    Conversely, this legislation reduces regulation to a 
single, rational, efficient, and cost-effective Federal 
program. We strongly support smart Federal policy that enables 
American industry to win globally. We believe that is what H.R. 
5544 offers us.
    The AIM Leadership Act is supported by industry--the 
National Association of Manufacturers, the U.S. Chamber of 
Commerce, and the NRDC. We should take advantage of this rare, 
broad-based advocacy. Historically, Title 6 programs have 
experienced broad bipartisan support as a similar legislator 
proposal in the Senate, S. 2754, currently enjoys. We hope that 
this legislation will also receive bipartisan support in the 
House of Representatives.
    The AIM Leadership Act provides regulatory simplification, 
implements smart, market-based, and flexible approaches that 
have proved cost effective over the years and are projected to 
do so in the future. It is pro jobs, pro trade, pro American 
technology, leadership, and pro environment. It deserves strong 
bipartisan support, and we hope you will give it favorable 
passage.
    Thank you.
    [The prepared statement of Mr. Bedard follows:]
    
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    Mr. Tonko. Thank you, Mr. Bedard, and all of the members of 
the panel for your testimony.
    We will now move to Member questions, and I will start by 
recognizing myself for 5 minutes.
    Mr. Bedard, I mentioned the broad support from the heating, 
ventilation, air conditioning, and refrigeration industry for 
this legislation. Can you help us better understand the breadth 
of that support?
    Mr. Bedard. Sure.
    Mr. Tonko. Does it improve the entire supply chain from 
chemical and equipment manufacturers down to contractors? Just 
let us better understand.
    Mr. Bedard. Sure, Chairman. I think if you look at the 
AHRI, which represents the manufacturers as well as the 
chemical manufacturers--again, I talked about the alliance that 
I am representing here today. Obviously, the chemical 
manufacturers are part of that, but I think also included, you 
know, small business. The Air Conditioning Contractors 
Association has submitted a letter. Of course, there are small 
businesses, there is not a district in the country that doesn't 
have a small air conditioning contractor in their district, and 
they are supportive through their trade association.
    The wholesalers, those whom we sell to that then, in turn, 
sell to contractors, are represented by HARDI, the wholesaler 
group. And they also have provided support for it as well as 
the Sheet Metal and Air Conditioner Contractors, SMACNA, of 
North America. All of those organizations have submitted 
letters in support of this bill.
    Mr. Tonko. So there is also considerable private sector 
support outside of your industry, and obviously you mentioned 
the various end users and refrigerant consumers that will 
benefit from an orderly transition to this next generation 
refrigerant?
    Mr. Bedard. That is correct. And from a consumer point of 
view--obviously we are a manufacturer. We are very, very 
concerned about costs. We understand the costs that 
refrigerants have in the product. Frankly, they are a small 
part of the cost of the product, and we have evaluated this 
bill, and we have evaluated the timing, and we feel very 
comfortable that with the kind of road map that this bill 
provides, that we will be able to perform as we have in the 
past.
    And frankly we have been able to take the cost down, and 
the consumers have received better product and in many cases 
more efficient product for similar cost.
    Mr. Tonko. Thank you.
    It is a little unusual for us to receive testimony from 
industry stakeholders, asking for the creation of a new EPA 
program.
    So Mr. Galyen, are American manufacturers currently making 
investments to develop HFC substitutes?
    Mr. Galyen. Yes, most certainly, Mr. Chairman, they are, 
and have been for the last ten years. And most of us are also 
servicing not only the U.S.--is it on? Maybe I just need to get 
closer. Good. That we have been investing, and in fact, more 
than ten years, to meet the North American requirements, but it 
is also moving as it is already talked about globally. There is 
a transition that is underway today to move away, to more--to 
different chemical alternatives to the HFCs, so yes.
    And we have been leading in the U.S.--this is also a key 
point--so we have been leading in that area, we have been 
leading here in the U.S. and that transitions to larger market 
shares and business for us internationally.
    Mr. Tonko. And so does an orderly transition to next-
generation refrigerants, as was done with the phase-down of 
ozone-depleting substances, provide the certainty or grow that 
certainty necessary to continue to make those investments in 
the U.S. so that these HFS substitutes will be American-made?
    Mr. Galyen. Without question. So I represent today the 300 
member companies that manufacture for North America, as I made 
in my testimony. We represent 90 percent of the equipment that 
is produced and sold here in the U.S., and we are prepared to 
make this transition.
    Mr. Tonko. Thank you.
    Mr. Doniger, you have worked on these issues for decades. 
How has the phase-down of ozone-depleting substances informed 
your position? And did that program benefit both industry and 
the environment?
    Mr. Doniger. Well, we learned a great deal from that 
experience. In the early 1980s, the people on this panel were 
at odds with one another. And in about the mid-1980s, we came 
to a way of dealing with one other on a partnership basis.
    NRDC asked for a phaseout of the CFCs over a period of time 
rather than an immediate ban. And the industries began to 
cooperate in the design of that system. They had alternatives, 
they had the expertise. And we have worked together for 30 
years on a successful phaseout of the CFCs, the HCFCs, and now, 
hopefully, the HFCs.
    This is really an island of cooperation and bipartisanship, 
and it has come with tremendous health benefits, both for ozone 
layer-related diseases and for the reduction of climate change, 
and it has come at imperceptible impact on consumers.
    Mr. Tonko. Thank you very much.
    I will now recognize Mr. Shimkus, subcommittee ranking 
member, for 5 minutes to ask questions, please.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Mr. Galyen, Mr. Bedard, and Mr. Lieberman, and Mr. Doniger 
also, you all talked about an orderly transition versus 
disorder. You all talked about a rational transition. So two 
questions.
    Wouldn't it be more orderly, especially in this day and 
age, that we would allow State preemption, we would have 
preemption language in this bill?
    And from the point of the interstate commerce--the Energy 
and Commerce Committee, the International Commerce Clause is 
the constitutional provision that gives us our power to be 
involved in interstate commerce issues.
    So let me start with Mr. Lieberman. Would it be helpful for 
an orderly versus disorderly transition, using terminology that 
you all have stated, that there be State preemption?
    Mr. Lieberman. If certainty and order was the goal, there 
are some flaws with this bill, especially the lack of State 
preemption.
    This is going to be a very big challenge if we set a set of 
Federal requirements to phase-down HFCs. And then, on top of 
that, California can go in its own direction, other States 
which are already doing that can go also in their own 
direction. That makes it a lot more difficult. So I think one 
set of standards should be enough.
    I would also point out, with the accelerator clause we 
don't know how orderly and certain. This could happen a whole 
heck of a lot faster than anybody here is talking about.
    Mr. Shimkus. My next question was on the accelerator 
clause.
    Mr. Galyen, what certainty is there in the bill language 
that would allow us to change and accelerate this provision to 
an unknown time?
    Mr. Galyen. Probably would have been good to ask the EPA 
person, because I think the bill, actually provisions allow 
them to petition and there is a review, just as the EPA has 
done previously.
    Mr. Shimkus. But don't you agree that having that 
provision, instead of a State--a Federal standard across the 
board that applies to all the States would bring more certainty 
versus less certainty? And then you bring in the accelerator 
provision, which creates more uncertainty.
    Mr. Bedard?
    Mr. Bedard. Sure. I think the best way to answer that is to 
look at what history says, and that in the absence of a Federal 
program what happens is you do see that balkanization of 
regulation. In the past, when we have had a single Federal 
standard, essentially the States just follow the Federal 
standard.
    Mr. Shimkus. Well, that is true for 40 years ago when we 
did ozone.
    Mr. Lieberman, in your testimony you mentioned CAFE and the 
possible current actions of Federal law that don't support that 
issue.
    I am not asking you, Mr. Doniger, I am asking Mr. 
Lieberman.
    Mr. Lieberman. Yes. Well, if we don't want the States to 
keep going in their own direction we should put it in writing. 
It is that clear.
    Mr. Shimkus. That is the certainty aspect.
    My friends, and we discussed during the legislative 
hearings on the side, they say, ``Oh, trust us,'' because it 
didn't work for ozone, but the ozone era was 40 years ago, a 
different era than now when we have a California environmental 
agency that likens itself to be the Federal EPA. And then you 
have New York follow, you will have New Hampshire, you will 
have these States. So there is no certainty in this language 
because there is no State preemption.
    Also, I am going to ask unanimous consent, I know you are 
going to look at it later on and make an approval of this, 
economic impact of Kigali Amendment ratification, it speaks in 
the language.
    The first question I want to ask, Mr. Bedard, you might be 
able to answer this. It says in this report that 49 percent of 
HVAC equipment are imported into the United States. Is that 
accurate?
    Mr. Bedard. Forty-nine?
    Mr. Shimkus. Eighty-nine percent. Mexico, 44 percent, China 
is 27, South Korea 10, Canada 4, Japan 4 percent.
    Mr. Bedard. Again, HVAC equipment is a very broad topic, so 
it could be room air conditioners and those types of things.
    Mr. Shimkus. OK. My point being is we have got to be 
careful when we hear testimony. If these manufacturings are 
overseas, the impact--the reason why they are being produced 
overseas is because low cost, local equipment, parts. But you 
are spinning the hearing to say we are--we may be doing the 
research and development, and we may have a corporate 
headquarters, but we are not building the equipment.
    Last question is, HFC refrigerants currently cost four to 
six pounds on Amazon compared to $40 to $60 per pound of HFOs. 
Is it that an accurate price comparison, Mr. Galyen?
    Mr. Galyen. Yes, I heard that in earlier testimony. So I 
don't follow the exact price of refrigerants.
    Mr. Shimkus. Well, maybe we should. If we are going to be 
talking about consumers and their costs, maybe we should look 
at that cost.
    And I yield back my time.
    Mr. Galyen. Can I continue to answer the question?
    Mr. Tonko. Please.
    Mr. Galyen. Put it in context. Today, if you look at the 
broad base of different types of equipment, in a residential 
air conditioning system the cost of refrigerant represents 
something like one percent of the cost of that system. In a 
commercial system, it is something like a quarter of a percent. 
So it is a contributor, yes. OK?
    But what I also heard earlier was talking about replacing 
R-134a, so it is a chemical refrigerant, it is HFC today, to a 
specific HFO that was mentioned. That is not the only option. 
There are many options. And I would say that it depends very 
much on the specific application.
    Let me be specific. A white goods appliance refrigerator 
today has historically used R-134a. Around the world and the 
other millions of refrigerators have for more than two decades 
used a hydrocarbon, R-600a, Isobutane. I would, fair to say, 
that those prices are equal or less.
    Mr. Shimkus. Mr. Chairman, if I may, because of the 2-
minute explanation of the question, the reality is $6 per pound 
for HFCs versus for HFOs.
    And I yield back my time.
    Mr. Tonko. The chair now recognizes Mr. Peters for 5 
minutes, please.
    Mr. Peters. Thank you, Mr. Chairman.
    San Diego is not thought of as a big manufacturing town, 
but we have companies with household names in defense, 
aerospace, shipbuilding, and repair medical devices, even craft 
brewing, headquartered there. And we benefit tremendously from 
our close proximity to Mexico, which I mentioned many times 
before.
    It is estimated that the value of the co-producing 
manufacturing supply chain in San Diego County, Imperial 
County, and Baja California is about $2.5 billion. So Mexico 
has committed to transitioning away from HFCs.
    Keeping our markets aligned and maintaining a strong 
relationship between the U.S. and Mexico is vital to the San 
Diego region. And today's testimony suggested that, if enacted, 
the AIM Leadership Act will provide certain trade benefits.
    According to one study, the transition to next-generation 
technologies would increase the U.S. share of global HVACR 
market by 25 percent, and that would lead to a $12.5 billion 
positive swing in the balance of trade for the HVACR sector. 
Conversely, if we went along with the so-called disorderly 
transition, the prediction is we would lose about 14 percent of 
our current market share.
    So I would like to go ask the industry representatives, Mr. 
Bedard and Mr. Galyen, how does that play out? Who are the 
winners? And if we did not go forward with this kind of orderly 
transition and maybe we have to massage it to make it perfect, 
who are the losers?
    We will start with you, Mr. Galyen.
    Mr. Galyen. Sure. Thank you for the question.
    I think here that we have and are today the leaders. So our 
R&D, our engineers, our manufacturers are the state of the art 
and the reference in the global economy. And we compete 
globally.
    If the national standards are something different than what 
is moving in the global standards we will not invest for that 
R&D here, but our competitors globally will. And they are in 
China, they are in Asia, they are in Europe. And they will take 
a lead because they are serving their own markets that are 
typically under a national framework to move to something--to 
have a phase-down framework.
    Mr. Peters. And we are trying to export to those countries 
with those new standards. Is that correct?
    Mr. Galyen. Correct. But if we are relying most of our 
production on the old way of doing it to the new way, we will 
not also be competitive and we will lose market share, and I 
think that is what the study reflects.
    Mr. Bedard. Manufacturers tend to have centers of 
excellence, both form a design point of view as well as from a 
manufacturing point of view. And to the extent that we are 
dissimilar from the rest of the world, those design centers and 
those manufacturing centers will be elsewhere.
    Mr. Peters. Let me ask you another question just about the 
cross-border shipments. I asked Ms. Newberg from EPA this 
morning about the limits on how much HFC can be imported. There 
is no limit right now.
    She has testified that if H.R. 5544 becomes law imports 
would also be subject to the phase-down program. We set up a 
system for tracking imports, and imports would be unlawful 
without an allowance.
    And I understand that there have been longstanding concerns 
among American manufacturers that foreign producers of HFCs are 
exporting them to the U.S., heavily subsidizing their price, 
which undercuts American-made products and potentially violates 
trade rules.
    Again, Mr. Bedard, can you address how the AIM Leadership 
Act would address these anticompetitive practices, and 
particularly with reference to China?
    Mr. Bedard. So there are restrictions in the bill on the 
import of those substances. And from that point of view, that 
would limit the dumping, if you will.
    Mr. Peters. Mr. Galyen, do you have a comment on that?
    Mr. Galyen. Yes. We are aware. And actually it has been 
recognized that in a lot of cases China has been dumping 
refrigerants or being subsidized. And then while there have 
been some attempts to restrict that, there is the movement to 
other countries, which doesn't allow a benefit here. So this 
bill would allow regulations of all imports and put it on a 
level playing field.
    Mr. Peters. It just seems to me that it is rare that we 
have an industry sort of from small to large across the country 
interested in the Federal Government setting a regulatory 
framework that other groups don't object to. And it seems to me 
that we ought to take that opportunity, we ought to pursue 
this.
    And I do understand there may be some massaging, and I have 
got a list of issues here that people have raised. We should do 
that. That is the purpose of a hearing on this legislation.
    But it does strike me that it is important for trade, and 
for business, and for industry that we move forward today. It 
doesn't bother me that it is helpful to the environment as 
well.
    So I am happy to be a cosponsor of this. I look forward to 
continuing work.
    Mr. Chairman, thank you for the hearing, and I yield back.
    Mr. Tonko. The gentleman yields back.
    The Chair now recognizes Mr. Walden, full committee ranking 
member, for 5 minutes, please.
    Mr. Walden. Thank you, Mr. Chairman.
    Mr. Bedard, if I heard you correctly, you said about this 
bill that this sets up a national single Federal standard, 
right? That was what you said in your testimony.
    Mr. Bedard. It does, yes.
    Mr. Walden. But yet it doesn't have State preemption in it, 
correct?
    Mr. Bedard. That is correct.
    Mr. Walden. So do you think that States won't on their own 
try and do something beyond this national Federal standard?
    Mr. Bedard. I mean, frankly, the States have other things 
to do, they have other work to do. In the absence--what I can 
tell you with certainty is, without a Federal standard, they 
will.
    Mr. Walden. So let me ask you this. Do you oppose a 
preemption provision added to this bill?
    Mr. Bedard. Do I oppose it? No, I do not.
    Mr. Walden. Mr. Doniger, do you oppose a Federal preemption 
if we are going to set a Federal standard?
    Mr. Doniger. I do. We would oppose it.
    Mr. Walden. All right.
    Mr. Lieberman?
    Mr. Doniger. May I explain?
    Mr. Walden. Let me just get that answer. I will come back 
to you.
    But, Mr. Lieberman?
    Mr. Lieberman. It would put some lipstick on this pig, yes.
    Mr. Walden. All right.
    Mr. Galyen?
    Mr. Galyen. The priority for industry and the AHRI members 
is to have a Federal framework.
    Mr. Walden. Federal framework or a Federal preemption? That 
is my question. Yes or no?
    Mr. Galyen. The priority is Federal framework.
    Mr. Walden. Is that--OK. I need to understand what you mean 
by Federal framework.
    Mr. Galyen. A Federal framework sets a standard of which 
then the States can refer to. That is the priority for our 
industry.
    Mr. Walden. So that is not a preemption. So you are telling 
me you don't support a Federal preemption.
    Mr. Galyen. The priority for our industry is that we have a 
Federal framework.
    Mr. Walden. Yes. That is different than a preemption. 
Because for me, and I think Mr. Shimkus' point, is we can set 
up a Federal framework for you, but our history is maybe 
different than yours in that States tend to then try and one-up 
the Federal Government--or precede the Federal Government, to 
your point, Mr. Bedard. But you don't support that.
    Mr. Doniger, I said I would go back to you, and I will.
    Mr. Doniger. Thank you.
    Under Title VI from the 1990 Clean Air Act, we have had no 
preemption and there has been no significant State activity 
beyond the Federal minimum. Why? Because there is a strong 
Federal program and the States use their resources to do other 
things.
    States are active in this area now because there is a gap. 
There is an absence of Federal authority.
    Mr. Walden. OK, I am going to--I appreciate that.
    Mr. Doniger. And they, in my opinion, will stand down.
    Mr. Walden. I am going to reclaim my time, sir. I reclaim 
my time. Because we have seen this happen in CAFE standards 
where there is a Federal standard in place and other States 
then have proceeded to find their own paths, which sets up all 
kinds of conflict.
    I notice, too, that you also mentioned, Mr. Doniger, the 
issue of wildfires. We are seeing what is happening in 
Australia. My district has been ravaged by wildfires. Over the 
years when I chaired the committee we had multiple hearings on 
the air quality effects of wildfire.
    And I have to confess, I looked up on your Web site NRDC's 
views of biomass and your hatred toward them. I guess I would 
call it that. I will let you read it and decide.
    But if we don't do a better job of managing our Federal 
forests to reduce the overstocking that puts them completely 
out of balance with nature, you are going to have fires worse 
than what we are seeing in the last few years. So I would hope 
that we could have a discussion about that at some point.
    But at this point, I will yield to my friend from Oklahoma, 
Mr. Mullin, the remainder of my time.
    Mr. Mullin. Thank you, Mr. Walden.
    Can someone please tell me who came up with the idea of 
this bill? Did the EPA think there was a need to make this 
change in refrigerant from the 410A to the A2L? Somebody?
    Mr. Lieberman. This is something that has been bubbling up 
for about a decade or more. I think the genesis of it 
particularly comes from Honeywell, which has patented a number 
of the substitute refrigerants.
    Mr. Mullin. So the manufacturing industry came up with it?
    Mr. Lieberman. Yes. And the first attempt to put it in law 
was the cap-and-trade bill of about a decade ago.
    Mr. Mullin. So there wasn't--the EPA didn't, like, sound 
the alarm that there was an environmental urgency to make this 
change. It was the manufacturers thought maybe it would be a 
good idea to go ahead and make this change. Is that fair to 
say? I am not trying to put words in your mouth.
    Mr. Bedard. Congressman, I think a better characterization 
will be that under the Montreal Protocol when the HFCs were 
introduced----
    Mr. Mullin. Excuse me on this one. That called for the 
removal of the R-22 to go to the 410A.
    Mr. Bedard. Correct. Correct. I understand, Congressman.
    Mr. Mullin. I am trying to figure out why we are making the 
change to go to the 410A. And all I am saying is, who came up 
with the idea?
    Mr. Bedard. I understand, but at that time that transition 
occurred industry recognized, everyone recognized that there 
was a global warming potential issue with the HFCs. So I would 
say the genesis of the concern was probably at the time of the 
initial transition.
    Mr. Mullin. Then why did we get sold on changing it to the 
410As? If you already knew there was a concern--and I am out of 
time, I yield back, and I will get back to that--but why then 
was there an urgency to switch from the R-22 to the 410A and 
now going to the A2L? That is a bigger question that I don't 
have time to get into.
    Mr. Tonko. The gentleman yields back.
    The Chair now recognizes Representative Barragan for 5 
minutes, please.
    Ms. Barragan. Thank you.
    I want to follow up a little bit, Mr. Galyen and Mr. 
Bedard. We understand that this bill will help produce jobs. 
Can you both speak to how many jobs this bill might help 
protect and create? If you have any info on California in 
particular or southern California, that would be helpful as 
well.
    Mr. Galyen. I can speak to the number of jobs we have 
estimated by a third party, I think it was University of 
Maryland: 33,000 new manufacturing jobs. I can't remember the 
exact number. I can dig it up in my notes real quick. But it 
protects something more than 120,000 existing jobs today that 
are supporting the HVACR business.
    Ms. Barragan. Great.
    Mr. Bedard, do you want to add anything to that?
    Mr. Bedard. No, not necessarily, Congresswoman. We are just 
talking about the number of jobs throughout the U.S.
    We manufacture in a number of different States. We have 
lots of manufacturing workers in the U.S. We do not have them 
in California. But we certainly have salespeople and wholesale 
distribution folks. And so, again, the number was 33,000 jobs 
and it will be spread across a number of different types.
    Ms. Barragan. Great. Thank you.
    Mr. Doniger, in your testimony you say that transitioning 
off of HFCs can curb global warming by nearly half a degree 
Celsius. Can you briefly speak to the scale of how great an 
accomplishment this could be to achieve this through a bill at 
no cost?
    Mr. Doniger. Yes, thank you.
    Let me point out that the phaseout of CFCs before this has 
accomplished--already prevented one degree Celsius of warming 
in the Arctic. The Arctic is warming much faster than the 
global average. And by the middle of the century we will have 
avoided a degree global average. That is equivalent to 
postponing the effect of climate change, as I said in my 
testimony, by ten years. So it would be that much worse now if 
we hadn't acted.
    The same thing is happening with HFCs. They are not as 
potent, but there is a lot more of them because our air 
conditioning industry is growing, the world air conditioning 
and refrigeration industry is growing, the leakage is growing. 
And if we let that go, we will get another half degree of 
warming on top of what we are expecting.
    We are struggling to hold warming to 2 degrees or 1.5 
degree. Already we have these fires, floods, sea level rise, 
and so on. It will only get worse if we layer on the additional 
emissions from HFCs.
    So that is why it is so important to phase these chemicals 
down and to act now before we have to do it on an emergency 
basis.
    Ms. Barragan. Great.
    Mr. Bedard, can you speak to how the bill will strengthen 
the HVACR industry's competitiveness abroad?
    Mr. Bedard. Sure. I have a unique position. I have 
responsibility for HVAC in Europe. And I can tell you that 
there is more certainty in Europe, believe it or not, than in 
the U.S. in terms of taking a look at where things are going 
from an air conditioning point of view.
    And if you take a look at how that strengthens us globally, 
is we don't have to waste our time on things that won't happen. 
And if you understand where the direction is, if the supply 
chain understands where the direction is, essentially it is a 
more fruitful investment throughout the entire supply chain and 
the market grows.
    Ms. Barragan. Great.
    Well, I just want to say, I want to congratulate 
Congressmen Tonko and Peters and Olson and Stefanik for putting 
this legislation together. Both this bill and the comparable 
Senate bill are bipartisan, something that you don't get too 
often on environmental concerns and issues and certainly on 
addressing climate change. And so to hear about what it could 
help do to address that, which I believe is critical, is so 
great.
    And this particular bill has a coequal number of Democrats 
and Republicans that support it, which is a nice thing to see, 
especially in today's time. It is supported by the HVACR 
industry, the Chamber of Commerce, and NRDC.
    And it is never easy to achieve the level of consensus that 
this bill has done. So this HVAC initiative is a triple win--
for jobs, for consumers, and the environment. I look forward to 
supporting it, and I urge all of my colleagues on the committee 
to do the same. And just want to thank you again for having 
this hearing today.
    I yield back.
    Mr. Tonko. The gentlewoman yields back.
    The Chair now recognizes Representative McKinley for 5 
minutes, please.
    Mr. McKinley. Thank you, Mr. Chairman.
    In 2016, apparently there was a conference in Rwanda, and 
they developed an amendment, the Kigali--I hope I am 
pronouncing that correctly--this Kigali Amendment that was to 
phase-down the HFCs. But that never was ratified by the Senate 
here in the United States. So it has been sitting there since 
2016.
    I am curious, Mr. Chairman, is there--maybe someone here 
could answer--is there a difference between the Kigali 
Amendment and this specific legislation? Is there a difference 
between the two?
    OK. Mr. Lieberman?
    Mr. Lieberman. Very small differences. This is the 
legislative attempt to get the U.S. on track for perhaps future 
ratification of the Kigali Amendment. But you are right, we 
haven't ratified it, so there are questions what we should be 
doing in the absence of ratification.
    Mr. McKinley. Thank you. OK.
    Now, it is my understanding that under that Montreal 
Protocol that it wouldn't go into effect until 20-some 
countries had ratified that agreement. Have 20-some countries 
ratified that so it is in effect?
    Mr. Doniger. Ninety-one.
    Mr. Lieberman. It is in effect. But developing nations--
which, incidentally, includes China--have generous extensions 
of time to continue using HFCs. They demanded and got a lot of 
extra time to stick with the old refrigerants. That is why the 
claims of exports may be overblown. These nations demanded and 
got extra time to continue using HFCs.
    They have also said at the U.N. that they are not 
interested in switching to these new refrigerants unless they 
are subsidized to do so through something called the U.N. 
Multilateral Fund.
    And most of the demand growth around the world is from 
these developing nations who just really don't have an interest 
in these newer and largely more expensive refrigerants.
    Mr. McKinley. I would like to understand maybe, Mr. 
Lieberman, because you have obviously been paying attention to 
this legislation more than I, why didn't the Senate take it up? 
Why did we not ratify that treaty?
    Mr. Lieberman. It has to be submitted by the President to 
the Senate. President Obama chose not to do so. President Trump 
chose----
    Mr. McKinley. OK. But my question, why not? He is the one--
they agreed to the thing in Rwanda. Why didn't he submit it to 
the Senate for ratification?
    Mr. Lieberman. I could only guess. I would guess he was 
concerned about the number of votes at the time. That is 
President Obama. And I would guess that President Trump may not 
support this effort. But that is just a guess on my part.
    Mr. McKinley. OK. So someone has to submit it.
    All right. I have two minutes left. If I could yield my 
time to the gentleman from Oklahoma, if he would like to 
continue his line of questioning.
    Mr. Mullin. There has been a lot of question about the 
industry supporting this. And while I agree that industry 
does--I mean, let's be honest, for industry it is great, it is 
job is security--I mean, wouldn't this make sure that you guys 
are still producing units going forward, Mr. Bedard?
    Mr. Bedard. We certainly intend to continue to heat and 
cool people's homes.
    Mr. Mullin. Sure. But we talk a lot about all the industry 
supporting it, but once again we leave out the consumer. I 
mean, if the consumer begins to understand what their options 
are going to be--for instance, then when we phase-out the 410A, 
what refrigerant is going to be replacing that?
    Mr. Lieberman. That is a good question. And we have talked 
a little bit about certainty, but there really isn't any 
frontrunner to replace 410A. So we are going to see a number of 
different refrigerants, some different companies going in 
different directions.
    And as you know from your history, the proliferation of 
refrigerants is a very big problem. You don't know if the right 
refrigerant was used by the last person to repair the system. 
So it is the proliferation of refrigerants that is a problem 
and it is not helped by this bill.
    Mr. Mullin. And if you change refrigerants out then the 
equipment doesn't operate the same. Is that correct, Mr. 
Bedard?
    Mr. Bedard. The equipment is designed for certain 
refrigerants.
    Mr. Mullin. For certain. So if you phase-out R-22, then 
410A won't work with it, and if you phase-out the 410A, then 
the A2L won't work very good with it, right?
    Mr. Bedard. That is correct.
    Mr. Mullin. Is the A2L, which is commonly used right now to 
replace the 410A, what is the problem with it?
    Mr. Lieberman. Well, there are some flammable refrigerants 
that are being introduced. Flammability risk can largely be 
engineered around. It can't be completely eliminated, but they 
can be reduced. They are more of a problem for some types of 
equipment than others.
    I would say it is a safety issue, but it is also a cost 
issue, because the things you have to do in order to reduce 
those risks cost money. And these flammable refrigerants are 
particularly an issue in retail environments where there is 
proximity to customers and employees, and there are lease 
issues and insurance issues and building code issues. These 
issues are on their way to being worked out, but there is a 
long way to go and it is still silent on that.
    Mr. Mullin. And the consumer will be paying that bill, not 
the manufacturers or the installers.
    I yield back.
    Mr. Tonko. The gentleman yields back.
    The Chair now recognizes the gentlewoman from Delaware, 
Representative Blunt Rochester, for 5 minutes, please.
    Ms. Blunt Rochester. Thank you, Mr. Chairman. And in your 
absence, now that you are back, I would like to say thank you 
for your leadership and support on this bill, as well as Mr. 
Peters, Mr. Olson, and Ms. Stefanik.
    I also wanted to acknowledge that the senior Senator from 
the State of Delaware, Tom Carper, actually is the lead on this 
bill on the Senate side.
    And I want to thank our witnesses for joining us as well.
    This bill is a combination of a proven regulatory 
framework, an industry that is innovating next-generation 
technologies, providing both environmental and economic gains. 
It is nonetheless notable and some might say remarkable to see 
NRDC and two business associations sitting at the same table in 
support of this bipartisan legislation, and the U.S. Chamber of 
Commerce, the National Association of Manufacturers are also on 
the record for officially supporting this bill.
    It is also rare, some would say these days, that 
Republicans and Democrats can be in support of the same thing, 
small, medium, and large businesses, labor, environmentalists 
can all agree on something. But this legislation does just 
that.
    H.R. 5544 will boost American innovation and manufacturing, 
stimulate our economy, which ensures that we are competitive, 
and create tens of thousands of new and high quality jobs.
    I am going to start my first question with Mr. Doniger.
    Can you describe how the environmental and business 
communities came to agree to support this bill? Could you share 
a little bit about that?
    Mr. Doniger. Yes. As I said a little while ago, our 
environmental and business interests originally were very much 
at odds back in the early 1980s, but we found common ground. 
And the common ground is on the notion of a transitional period 
for each of these transitions, not an overnight ban, but also 
that it should happen with some dispatch.
    And also that there was advantage in having a strong 
Federal framework, that the States were going to enter the area 
if the Federal Government did not. That is what is happening 
now. The States are not going to be active in this area if 
there is a strong Federal program.
    We don't always agree. NRDC would like these transitions to 
go more quickly. We started work on this in the Bush 
administration, in the George W. Bush administration, and it 
took ten years to come to fruition in international 
negotiations.
    But we have always led with domestic legislation. The 
international treaty is not what governs these guys. It is 
American legislation. And that is what we need to do now.
    Ms. Blunt Rochester. Now, I only have a minute and 40 
seconds left. So there are two things that keep coming up, one 
is cost and the other is safety. Can I ask Mr. Galyen to speak 
on those?
    Mr. Galyen. Yes, please. Thank you. I appreciate the 
opportunity, Congresswoman.
    So let me say two clarifying points. So under the Montreal 
Protocol and the other--the CFCs, because all you guys are not 
that familiar with it, but that was actually a phaseout. I just 
need to be clear that this bill is proposing a phase-down and 
it is orderly over 15 years.
    I have heard it come up time and time again: What about 
service and replacement? It is 15 years, there will be ample 
refrigerants available for those existing applications for 
service and repair for the full lifetime of those individual 
products.
    I can then tell you switch to safety. This industry and the 
member companies, including my own, have a track record of 
safety. It is really important to us. We manage today gas 
furnaces which are in propane, as well as natural gas, same for 
water heating equipment, boilers, and the like, and we know how 
to do that. And it is very important and critical for the 
business.
    Ms. Blunt Rochester. Thank you so much. Thank you all.
    Mr. Bedard. And I would just add, Congresswoman.
    Ms. Blunt Rochester. Yes, Mr. Bedard?
    Mr. Bedard. Safety is very, very important to us. It is our 
number one consideration. I am not here to ask Congress 
questions, just think to yourselves how many of you have 
natural gas or propane in your home. You probably do.
    As long as the installation practices are that way, as long 
as the equipment is designed for it, you can do it. We are 
asking for your help. The longer that we have the certainty 
that we have, we can exercise a fragmented supply chain to 
train the installation folks and get this done the right way as 
we have done twice in the past.
    Ms. Blunt Rochester. Thank you so much. And I yield back.
    Mr. Tonko. The gentlewoman yields back.
    The Chair now recognizes Representative Long for 5 minutes, 
please.
    Mr. Long. Thank you, Mr. Chairman.
    And thank you all for being here today.
    And before I came to Congress, I had a 30-year career, a 
little over 30 years, in the auction business. And for 20 of 
those 30 years I did over 200 auctions a year. That is quite a 
few auctions. So I have wrestled with this issue for all of 
those 30 years, because as refrigerants would be inlawed and 
then outlawed, you had to be careful what you were selling, 
what was in that, who had done it the last time, as you have 
talked about here today.
    It is an issue, like I say, I have wrestled with for quite 
a while. And you can see from the sling I am in that I wasn't 
very good at wrestling my daughter's poodle back on the 20th of 
December.
    But for the rest of my time, my four minutes and 15 
seconds, I am going to yield 5 minutes of that time to one of 
the foremost wrestlers ever to come out of the State of 
Oklahoma, my buddy, Markwayne Mullin.
    Mr. Mullin. I don't know if I can take that title, but I 
will say I was decent.
    So before we quit talking a while ago, we talked about 
additional measures that could be done to install this safe--
and, Mr. Bedard, you mentioned that just a second ago--which 
additional measures can be done, like ventilation, right?
    Mr. Bedard. Right.
    Mr. Mullin. Yes? I mean, if it is flammable----
    Mr. Bedard. There are a number of different things.
    Mr. Mullin. If it is flammable it has to be ventilated.
    Mr. Bedard. There are a number of different approaches, 
yes.
    Mr. Mullin. But you talked about natural gas appliances, 
and we hear every year homes exploding because of natural gas 
leaks. We hear of water heaters that are supposed to be 
ventilated correctly and the pressure relief valve isn't 
supposed to be capped off, but the homeowner decided to cap off 
the pressure relief valve on the side of the water heater, 
because they didn't know what it was, because it was leaking, 
or they cap off the ventilation because it was allowing cold 
air to go in, because the installers are trained on it but the 
homeowner isn't.
    And so when we start talking about safety, we start talking 
about a safe way to do this, Mr. Bedard, what is a life worth 
to you?
    Mr. Bedard. We--we----
    Mr. Mullin. No, no----
    Mr. Bedard. Our products are safe, Congressman. Our 
products are safe.
    Mr. Mullin. No, no, no, I didn't ask that question. What is 
a life worth to you?
    Mr. Bedard. Our products are safe and we go through 
multiple human analysis to make sure.
    Mr. Mullin. Mr. Doniger, what is a life worth to you?
    Mr. Doniger. I am offended by the question.
    Mr. Mullin. No, I am not, because I am the installer, and 
if a house were to explode or a house were to catch on fire, 
who is liable for that life? Because we are talking about going 
from a refrigerant that is nonflammable to a replacement 
refrigerant that is flammable.
    I am an installer. Believe me, safety is first and 
foremost. I know you don't create products to make them unsafe. 
You make them safer. But we are still talking about a 
refrigerant that we are replacing that is mildly flammable. And 
if you know anything about consumers, if it is mildly 
flammable, it is flammable.
    So what is a life worth? And then who is going to be liable 
for this if we do lose a life? Anybody?
    Mr. Lieberman. I think there are a lot of issues that 
haven't been thought through on this.
    Mr. Mullin. Agreed.
    Mr. Lieberman. So with regard to flammability and flammable 
refrigerants, there is a reason this industry has tried to 
avoid using flammable refrigerants for as long as it could. 
They have to consider new ones now that other things, the 
nonflammable ones, one after another, have been replaced.
    One quick point I wanted to make with regard to the claim 
that the Montreal Protocol was a phaseout. Actually it wasn't. 
It started out as a very reasonable phase-down, but it had one 
of these accelerator clauses. So before the ink was dry, 
organizations, I think including NRDC, pushed to accelerate the 
deadlines and we ended up with a much tougher deadline than we 
originally started with and that phase-down of HFCs can also be 
accelerated.
    Mr. Mullin. Mr. Galyen, you said that the products are 
available through the lifespan of the equipment. Is that right?
    Mr. Galyen. Refrigerants will be available for the service 
and repair of those systems for their useful life.
    Mr. Mullin. What is considered a useful life?
    Mr. Galyen. Generally in air conditioning systems around 15 
years.
    Mr. Mullin. So for 15, 20 years Lennox is going to produce 
both refrigerants?
    Mr. Bedard. We don't produce refrigerants, Congressman. 
However, if you want to buy R-22 today, you can.
    Mr. Mullin. At what cost?
    Mr. Bedard. It is----
    Mr. Mullin. At what cost? Because that is the important 
thing, what cost is it? Because I know the cost. So what is the 
cost of the refrigerant right now to replace R-22, to buy R-22?
    Mr. Bedard. So I know the wholesale cost is a little bit--
it is probably $12 a pound, or something like that, wholesale, 
for----
    Mr. Mullin. But you can't buy it wholesale right now.
    Mr. Bedard. So we sell it to contractors, so I don't sell 
it to consumers. The contractors in turn sell it.
    Mr. Mullin. So the point is the refrigerant is priced out. 
And if you price it out, then you price out the equipment.
    With that, I will yield back.
    Mr. Tonko. The gentleman yields back.
    The Chair recognizes Representative McNerney for 5 minutes, 
please.
    Mr. McNerney. I thank the chairman.
    I thank the witnesses this morning. Useful testimony.
    I think it is important to highlight the fact, as Mr. 
Galyen mentioned, H.R. 5544 does not force anyone to abandon 
existing refrigeration or air conditioning equipment and really 
requires a phase-down as opposed to a phaseout.
    Mr. Galyen, the cost difference between HFCs and HFOs has 
been mentioned a couple of times this morning, but is there a 
likely decrease in cost of HFOs as they phase in to large-scale 
production?
    Mr. Galyen. First, for as it becomes commercially to scale.
    But I want to clarify, if I can. The HFCs are not naturally 
going to go to HFOs. There are--can you hear me now? Sorry.
    There are many options. It is not a given that HFCs are 
going to transition to HFOs. There are many, many chemical 
options. They just all have a lower global warming potential--
or near zero in some cases if we are talking about hydrocarbons 
and such. It will vary very much by application.
    Mr. McNerney. Thank you.
    Mr. Bedard, I liked your comment that lists legislation 
proposes to use known proven policy approaches to accomplish 
the goals of reducing HFCs. Could you expand on that a little 
bit?
    Mr. Bedard. Yes, sir.
    Now, I have been in the HVAC business for 30 years, so I 
have experienced two major transitions. One where the CFCs were 
transitioned in the early 1990s, and one where the R-410A 
replaced R-22 in 2010.
    And what that gave us was a level of certainty where we 
planned with gradually decreasing quotas that essentially 
scaled down the availability of the other refrigerants, and it 
allowed us what I would call is a soft landing. And so we see 
this as a very similar approach, one that we are very 
comfortable with.
    Mr. McNerney. Excellent. Thank you.
    Mr. Doniger, does H.R. 5544, in your opinion, embrace the 
same legal framework that currently exists in Title VI?
    Mr. Doniger. Yes. It is modeled very closely on Title VI, 
the phase-down of production and consumption. And the other 
provisions are modeled on Title VI.
    Mr. McNerney. Well, can you speak to how the encouragement 
and certainty that H.R. 5544 provides will assist us in 
maintaining and extending American leadership?
    Mr. Doniger. Right now American companies have the lead in 
many areas of the technology in stuff they make here, as well 
as the know-how for stuff made elsewhere in the world. And 
other companies and other countries are trying hard to wrest 
that lead. They have clear guidance from their governments 
about the phase-down.
    The lack of clarity here is risking the lead that the 
American companies have, as well as risking the environmental 
benefit that comes from phasing these chemicals down.
    Mr. McNerney. So what was involved in maintaining American 
leadership? Was it industrial investment in R&D? Or what would 
go into that?
    Mr. Doniger. In my perception, and of course I am not in 
the companies, but that the companies were motivated to put a 
lot of money and a lot of planning into the transition between 
the late Bush administration through the Obama administration 
because they saw this transition coming and coming into focus. 
And now we need to solidify it with Federal legislation that 
would give them the guidance they need.
    Mr. McNerney. Mr. Galyen, could you take a stab at that? 
What has been involved in establishing American leadership? And 
can we build on that leadership stance that we have now with 
this legislation?
    Mr. Galyen. Yes. Thank you for the question.
    And for sure I think that is what the bill's intent is. I 
mean, Willis Carrier invented air conditioning in the United 
States way back when. We have since that time have got the good 
experience, the great engineers, the great designs that is 
recognized here and it is recognized around the world.
    But as Mr. Doniger said, if we give way and let other 
countries or companies in those countries who are designing to 
their own national framework, they will get a lead to us and 
eventually get an advantage in the marketplace and make 
American companies less competitive. That is a risk.
    Mr. McNerney. OK. Thank you, Mr. Chairman. I yield back.
    Mr. Tonko. The gentleman yields back.
    The chair now recognizes Representative Rodgers for 5 
minutes, please.
    Mrs. Rodgers. Thank you, Mr. Chairman.
    And to all the panelists, thank you for being here today.
    Proponents of this legislation argue that it will create 
approximately 33,000 new manufacturing jobs in the United 
States America.
    Mr. Lieberman, do you agree that the bill will directly 
lead to new jobs in the U.S.?
    Mr. Lieberman. It is probably not going to be 33,000 and 
they are probably not going to be American.
    I saw that study on jobs, and one word that was missing 
from the study was outsourcing, which is interesting because 
this is an industry, the air conditioning and refrigeration 
industry, that has been very aggressively outsourcing in recent 
decades.
    And in fact, some of the biggest supporters of this bill 
are some of the biggest outsourcers, and that includes the 
products that are being touted as the next big thing if this 
bill were to pass.
    For example, the HFO refrigerants that we were talking 
about, of which Honeywell and Chemours hold patents, well, both 
Honeywell and Chemours built their first production of HFOs in 
China. So all of the jobs--or some of the jobs and all of the 
technology has been handed over to the Chinese.
    And with regard to equipment makers, they buy compressors, 
motors, refrigerants, other components from all over the world 
and they do so because it is a cost-cutting measure. You want 
to get the cheapest products consistent with quality.
    And so I find it very hard to believe that that cost-
cutting incentive to outsource is going to come to an end if 
this bill were to pass.
    The reality is this bill does nothing to encourage exports. 
The only thing this bill does is hamper the U.S. market by 
restricting the low-cost option for American consumers.
    Mrs. Rodgers. I think that is a very important point as we 
think about American leadership, American competitiveness, and 
the importance of us leading and the rest of the world 
following our leadership.
    Mr. Lieberman. And if any company thinks that these new 
refrigerants and equipment really are the future, they are free 
to go ahead and move in that direction. They don't need the AIM 
Act to make this new stuff.
    Mrs. Rodgers. OK.
    I would like to yield the remainder of my time to the 
gentleman from Oklahoma, Mr. Mullin.
    Mr. Mullin. I know this hearing is winding down, and I want 
to make a point. I am not saying that anybody is purposely 
deceiving or misleading or is for sacrificing a life for a 
product. I am not saying that.
    What I am saying is that we are disguising this and not 
being true to the consumer of understanding what their choice 
is.
    What Ben just said is we don't have to have this bill for 
that. We can make the consumer, allow the consumer to choose, 
do I want a flammable or a nonflammable product in there?
    The EPA already said that the 410A doesn't hurt the ozone. 
And in fact we were even told that--Mr. Doniger, I think you 
said in your testimony that in your lifetime the ozone is 
already being rebuilt for your children. Is that you that said 
that in your testimony?
    Mr. Doniger. Yes. But we have another problem to deal with.
    Mr. Mullin. I get that. But what I am saying is, is the 
consumers have been left out of this conversation.
    Mr. Doniger. Not at all.
    Mr. Mullin. The cost to install these new units is a real 
cost. And we need to make sure that the consumer is, one, aware 
of what their choices are, and, two, understand what the cost 
is to them.
    That is what I represent. I am not representing industry of 
any sort. I am just representing my customers, my constituents, 
my consumers, and all of our consumers.
    And, Ben, when you were discussing the replacement and you 
were discussing the cost of the jobs that the consumers are 
going to have to bear, meaning in the installation of it, that 
is all I am talking about.
    Mr. Bedard. I understand the point, Congressman. I guess I 
would just point out that this transition is underway. It is 
happening. It is occurring. It is occurring in different 
States. And the only question is, how is it going to happen, 
under what terms, and are we going to accrue the benefits?
    We are asking for your help to provide that Federal 
structure that will help us, that will help the entire supply 
chain, and will help the consumer. Absent that structure, many 
of the things that you are predicting likely would occur. But 
with that structure----
    Mr. Mullin. Preemption is very important. Preemption, as 
you said, is important. Then it should be part of this bill. 
And not to mention that I believe what needs also to be part of 
this bill is consumer choice.
    I don't think we need a phase-down or phaseout where we are 
at today with the 410A considering we are just now phasing out 
the R-22 to the 410A, and we are already planning on already 
phasing it out.
    That means the products aren't going to be on online. And 
that means the consumer today is going to be buying something 
that they already know is out of compliance because we are 
moving it forward. They have to be part of the conversation.
    I appreciate every one of you guys here. And I appreciate 
your time.
    I think I am out of time.
    Mr. Tonko. You are out of time.
    Mr. Mullin. Yes, I am out of time.
    Mr. Tonko. The gentleman yields back.
    The House has called votes, and so we are going to 
recognize 5 more minutes from the Democratic side and then 
bring us to a close.
    So I now recognize the Representative from California, 
Representative Matsui, for 5 minutes, please.
    Ms. Matsui. Thank you very much, Mr. Chairman.
    I appreciate the witnesses for being here for so long.
    I am pleased to see the Energy and Commerce Committee is 
considering legislation that will phase-down the production and 
consumption of HFCs from the American economy. This effort is 
the result of years of groundwork laid within the international 
community to take actions on a worldwide scale to reduce human 
use of substances that are harmful to our environment and 
public health.
    It is clear that this is not just a question of chemicals 
that contribute to climate change. It is a matter of whether 
our country wants to protect public health and remain 
competitive within the international community.
    Depletion of the ozone results in dangerous increase in 
levels of ultraviolet radiation, which lead to serious health 
concerns like skin cancer, immune disorders, and eye cataracts.
    Moreover, with the rest of the world already on schedule to 
phase-out HFCs, industry is headed in a direction that will 
render HFC-using equipment obsolete. We want to lead in this 
effort and not fall behind.
    We heard in Mr. Doniger's testimony the significance of the 
Montreal Protocol and the broad support it has received over 
the years, including from every U.S. President since Ronald 
Reagan. In fact, as I understand it, Mr. Bedard, this bill is 
based substantially on policies and regulatory design concepts 
developed by President Reagan and President George H.W. Bush 
which were applied with broad industry support to transition 
out of earlier generations of refrigerants.
    Mr. Bedard, isn't this bill simply a continuation of 
regulatory principles that have proven to foster greater 
competition, lower prices, and more innovation over the past 30 
years?
    Mr. Bedard. Yes, I would say that the structure is 
identical. And I would expect the outcome to be very similar. 
The industry has grown, the jobs have grown. And it gives us a 
framework from which to work.
    Ms. Matsui. OK. And, Mr. Bedard, with 91 countries acting 
to phase-down HFCs, what changes are we seeing within your 
industry at the international level? And what role have 
American companies played in this transition thus far?
    Mr. Bedard. Sure. So we are using some of the new 
refrigerants in Europe. As a matter of fact, we just had a job 
where we shipped one to Lebanon. So it is not just Europe that 
are using the new refrigerants.
    The design work for those refrigerants is being done in 
Europe, but it was substantially assisted by work that we have 
done in the U.S. I think over time that if the U.S. would not 
be that center of excellence, then obviously those jobs would 
go somewhere and that growth would go somewhere else.
    Ms. Matsui. OK. Well, thank you very much.
    And I would like to yield the remainder of my time to my 
colleague from New York, Ms. Clarke.
    Ms. Clarke. I thank the gentlelady. And I thank our 
chairman and ranking member for convening this important 
hearing on the necessary phase-down of climate warming 
hydrofluorocarbons.
    As Chairman Rush said the other day, climate change 
represents only a tremendous threat to our future, but also a 
tremendous opportunity: an opportunity to create millions of 
new jobs, foster innovation in the new clean technologies, and 
increase the competitiveness of American businesses on the 
global stage.
    The American Innovation and Manufacturing Leadership Act 
represents one of these important opportunities. Transitioning 
away from HFCs towards climate-friendly alternatives will not 
only benefit the environment, it will also benefit American 
consumers with better products, increase the global 
competitiveness of our manufacturing sector, and spur the 
generation of thousands of new domestic jobs in this field.
    New York State is home to more than 2,600 direct jobs in 
the heating, ventilation, air conditioning, and refrigeration 
industry. And I anticipate that with this legislation we are 
poised to bring forth even more.
    So I want to thank each of you for coming today, lending 
your expertise to this conversation, and looking at how we can 
drill down and make this a reality. As I stated, I believe that 
we have an enormous opportunity here to simultaneously reduce 
climate-warming emissions and bolster the American economy, and 
I look forward to supporting this legislation.
    I did have questions for all of you gentlemen. I am going 
to submit them to our chairman so that you can respond at an 
appropriate time. I am down to the wire here. So thank you all 
very much.
    And I yield back, Mr. Chairman.
    Mr. Tonko. The gentlewoman yields back. That concludes the 
questioning of our panel.
    I have before me a number of documents that have been 
mutually agreed to. I request unanimous consent to enter them 
into the record.
    Mr. Shimkus. No objection.
    Mr. Tonko. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Tonko. And I would like to thank again our witnesses 
for joining us at today's hearing.
    I remind members that, pursuant to committee rules, they 
have 10 business days by which to submit additional questions 
for the record to be answered by our witnesses. I ask each of 
our witnesses to respond promptly to any such questions that 
you may receive.
    And at this time, the subcommittee is adjourned.
    [Whereupon, at 1:28 p.m., the subcommittee was adjourned.]
    
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