[Federal Register Volume 67, Number 251 (Tuesday, December 31, 2002)]
[Rules and Regulations]
[Pages 79861-79874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32386]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-7428-2]
RIN 2060-AK44


Protection of Stratospheric Ozone: Additional Reconsideration of 
Petition Criteria and Incorporation of Montreal Protocol Decisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: With this action, EPA is making minor revisions to the 
accelerated phaseout regulations that govern the production, import, 
export, transformation and destruction of substances that deplete the 
ozone layer under the authority of Sections 604, 605, 606, and 614 of 
Title VI of the Clean Air Act Amendments of 1990 (CAA or the Act). As 
part of this action, EPA is clarifying the petition process for imports 
of used class I controlled substances. Today's amendments also reflect 
changes in U.S. reporting obligations under the Montreal Protocol on 
Substances that Deplete the Ozone Layer (Protocol) due to a recent 
decision

[[Page 79862]]

by countries that are Parties to this international agreement. 
Additionally, in response to a petition submitted to EPA, the Agency is 
removing the requirement in the petition process for imports of used 
class I controlled substances that a person must certify knowledge of 
tax liability.

EFFECTIVE DATE: This rule is effective on January 30, 2003.

ADDRESSES: Materials supporting this rulemaking and comments are 
contained in Public Docket No. A-92-13, U.S. Environmental Protection 
Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460. The docket 
is located in Room M-1500, Waterside Mall (Ground Floor). Dockets may 
be inspected from 8am until 12 noon, and from 1:30 p.m. until 3 p.m., 
Monday through Friday. EPA may charge a reasonable fee for copying 
docket materials.

FOR FURTHER INFORMATION CONTACT: The Stratospheric Ozone Protection 
Hotline at 1-800-269-1996 between the hours of 10 a.m. and 4 p.m. 
Eastern Standard Time, or Suzie Kocchi, U.S. Environmental Protection 
Agency, Global Programs Division (6205J), 1200 Pennsylvania Ave., NW., 
Washington, DC, 20460, (202)-564-5289, [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. What Is the Legislative and Regulatory Background of Phasing Out 
Production and Consumption of Controlled Substances That Deplete the 
Ozone Layer?
II. What Is the Context for Today's Final Rule
III. What Are EPA's Responses to Comments?
    A. What Are the results of Sections EPA Withdrew on October 5, 
1998 (63 FR 53290) From the Direct Final Rule Published on August 4, 
1998 (63 FR 41627)?
    B. What Are EPA's Responses to Comments Regarding the Petition 
Process To Import Used Controlled Substances?
    1. Section 82.3--What Are the Definitions for the Phrases 
``Individual Shipment,'' ``Non-Objection Notice,'' and ``Source 
Facility''?
    2. Section 82.4--What Quantity Constitutes a Separate Violation?
    3. Section 82.13--What Are the Changes to the Process for 
Submitting a Petition To Import Used Class I Controlled Substances?
    a. Changing the de minimis Quantity for an Individual Shipment 
for which a Person Is Required To Submit a Petition To Import Used 
Class I Controlled Substances.
    b. How Much Time Will EPA Have for Reviewing Petitions?
    c. What Are the Revised and Expanded Information Requirements 
for a Petition To Import Used Class I Controlled Substances?
    d. Why Is the Information Requirement Regarding the 
Certification of Tax Liability for Used Class I Controlled 
Substances Being Removed From the Petition Process?
    e. On What Grounds Can EPA Issue an Objection Notice to a 
Petition for the Import of Used Class I Controlled Substances?
    f. What Must Accompany the Shipment of Used Class I Controlled 
Substances through U.S. Customs Clearance?
    C. Why Does This Rule Not Affect the Provisions for Transferring 
Essential-Use Allowances in 40 CFR 82.12?
    D. Why Does This Rule Not Include Recordkeeping and Reporting 
Requirements in 40 CFR 82.13 for Quantities of Class I Controlled 
Substance Used as a Process Agent?
    E. What Changes Is EPA Making to the Recordkeeping and Reporting 
Requirements for Entities Allocated Essential-Use Allowances?
IV. What Is the Address for Submission of Reports and Petitions?
V. Administrative Requirements
VI. Judicial Review

I. What Is the Legislative and Regulatory Background of Phasing Out 
Production and Consumption of Controlled Substances that Deplete the 
Ozone Layer?

    The current regulatory requirements of the Stratospheric Ozone 
Protection Program that limit production and consumption of ozone-
depleting substances were promulgated by the Environmental Protection 
Agency (EPA or the Agency) in the Federal Register on December 20, 1994 
(59 FR 65478), May 10, 1995 (60 FR 24970), August 4, 1998 (63 FR 
41625), and October 5, 1998 (63 FR 53290). The regulatory program was 
originally published in the Federal Register on August 12, 1988 (53 FR 
30566), in response to the 1987 signing of the Montreal Protocol on 
Substances that Deplete the Ozone Layer (Protocol).\1\ The U.S. was one 
of the original signatories to the 1987 Montreal Protocol and the U.S. 
ratified the Protocol on April 4, 1988. Congress then enacted, and 
President Bush signed into law, the Clean Air Act Amendments of 1990 
(CAA or the Act) that included Title VI on Stratospheric Ozone 
Protection. Today's actions amend the existing EPA regulations 
published under Sections 604, 605, 606 and 614 of the CAA governing the 
production and consumption of ozone-depleting substances. Today's 
amendments are designed to ensure the U.S. meets its obligations under 
the Protocol and the CAA.
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    \1\ Several revisions to the original 1988 rule were issued on 
the following dates: February 9, 1989 (54 FR 6376), April 3, 1989 
(54 FR 13502), July 5, 1989 (54 FR 28062), July 12, 1989 (54 FR 
29337), February 13, 1990 (55 FR 5005), June 15, 1990 (55 FR 24490) 
and June 22, 1990 (55 FR 25812) July 30, 1992 (57 FR 33754), and 
December 10, 1993 (58 FR 65018).
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    EPA derives its authority for today's action from sections 602, 
604, 605, 606, and 614 of the CAA. One of today's changes is made to 
reflect a decision taken by the Parties to the Protocol. EPA is acting 
in accordance with section 614 of the CAA in amending the regulations 
to reflect this change. Section 614 of the CAA states that Title VI of 
the Act ``shall be construed, interpreted, and applied as a supplement 
to the terms and conditions of the Montreal Protocol, as provided in 
Article 2, paragraph 11 thereof, and shall not be construed, 
interpreted, or applied to abrogate the responsibilities or obligations 
of the United States to implement fully the provisions of the Montreal 
Protocol. In the case of conflict between any provision of [Title VI of 
the CAA] and any provision of the Montreal Protocol, the more stringent 
provision shall govern.'' Section 606 of the CAA allows EPA to 
accelerate the phaseout schedules found in sections 604 and 605 of the 
Act. Today's action adjusts the regulatory framework promulgated under 
section 606, while retaining the accelerated phaseout dates.
    The requirements contained in the final rules published in the 
Federal Register on December 20, 1994 (59 FR 65478), May 10, 1995 (60 
FR 24970), August 4, 1998 (63 FR 41625), and October 5, 1998 (63 FR 
53290) establish an Allowance Program. The Allowance Program and its 
history are described in the notice of proposed rulemaking (NPRM) 
published in the Federal Register on November 10, 1994 (59 FR 56276). 
The control and the phaseout of production and consumption of ozone-
depleting substances as required under the Protocol and CAA are 
accomplished through the Allowance Program.
    In developing the Allowance Program, EPA collected information on 
the amounts of ozone-depleting substances produced, imported, exported, 
transformed and destroyed within the United States for specific 
baseline years for specific chemicals. This information was used to 
establish the U.S. production and consumption ceilings for these 
chemicals. The data were also used to assign company-specific 
production and import rights to companies that were in most cases 
producing or importing during the specific year of data collection. 
These production or import rights are called ``allowances.'' Due to the 
complete phaseout of many of the ozone-depleting chemicals, the 
quantities of production allowances and consumption allowances granted 
to

[[Page 79863]]

companies for those chemicals were gradually reduced and eventually 
eliminated. Production allowances and consumption allowances continue 
to exist for only one specific class I controlled ozone-depleting 
substance--methyl bromide. All other production or consumption of class 
I controlled substances is prohibited under the Protocol and the CAA, 
but for a few narrow exemptions.
    In the context of the regulatory program, the use of the term 
consumption may be misleading. Consumption does not mean the ``use'' of 
a controlled substance, but rather is defined as production plus 
imports minus export of controlled substances (Article 1 of the 
Protocol and Section 601 of the CAA). Class I controlled substances 
that were produced or imported through the expenditure of allowances 
prior to their phaseout date can continue to be used by industry and 
the public after that specific chemical's phaseout under these 
regulations, unless otherwise precluded under separate regulations.
    The specific names and chemical formulas for the controlled ozone-
depleting substances in the Groups of class I controlled substances are 
in Appendix A and Appendix F in Subpart A of 40 CFR Part 82. The 
specific names and chemical formulas for the class II controlled ozone-
depleting substances are in Appendix B and Appendix F in Subpart A.
    Although the regulations phased out the production and consumption 
of class I, Group II (halons) on January 1, 1994, and all other class I 
controlled substances (except methyl bromide) on January 1, 1996, a 
very limited number of exemptions exist, consistent with U.S. 
obligations under the Protocol. The regulations allow for the 
manufacture of phased-out class I controlled substances, provided the 
substances are either transformed, or destroyed. (40 CFR 82.4(b)) They 
also allow limited manufacture if the substances are (1) exported to 
countries listed under Article 5 of the Protocol, (2) produced for 
essential uses as authorized by the Protocol and the regulations, or 
(3) produced with destruction or transformation credits. (40 CFR 82.4 
(b))
    The regulations allow import of phased-out class I controlled 
substances provided the substances are either transformed or destroyed. 
(40 CFR 82.4(d)) Limited exceptions to the ban on the import of phased-
out class I controlled substances also exist if the substances are: (1) 
Previously used, (2) imported for essential uses as authorized by the 
Protocol and the regulations, or (3) a transhipment or a heel. (40 CFR 
82.4(d))

II. What Is the Context for Today's Final Rule?

    On August 4, 1998, EPA published a direct final rule and a 
concurrent notice of proposed rulemaking in the Federal Register (63 FR 
41625, 63 FR 41652). EPA received comments on some portions of the 
rulemakings and therefore published a partial withdrawal of the direct 
final rule in the Federal Register on October 5, 1998 (63 FR 53290). In 
Part III of today's action, EPA responds to comments and describes the 
Agency's final action changing the Allowance Program in Subpart A of 40 
CFR Part 82.

III. What Are EPA's Responses to Comments?

A. What Is Happening to the Sections EPA Withdrew on October 5, 1998 
(63 FR 53290) From the Direct Final Rule Published on August 4, 1998 
(63 FR 41627)?

    1. The definition for individual shipment is contained in this 
rule.
    2. The definition for non-objection notice is contained in this 
rule.
    3. The definition for source facility is contained in this rule.
    4. The definition for national security allowances is contained in 
the Notice of Proposed Rulemaking published in the Federal Register on 
July 20, 2001 (66 FR 38064).
    5. The revision of newly designated 40 CFR 82.4(j), addressing the 
prohibition on the import of any used class I controlled substance by a 
person that has not received a non-objection notice, is contained in 
this rule.
    6. The paragraph (t)(3) in newly designated 40 CFR 82.4(t) proposed 
allocating essential-use allowances for quantities of a specific class 
I controlled substance by means of a confidential letter for pre-2000 
control periods, thus it is no longer applicable and is not contained 
in any rule.
    7. The paragraph (u)(3) in newly designated 40 CFR 82.4(u), 
addressing national security production allowances for HCFC-141B, is 
contained in the Notice of Proposed Rulemaking published in the Federal 
Register on July 20, 2001 (66 FR 38064).
    8. The paragraph (a)(5) in revised 40 CFR 82.9(a), addressing the 
baseline amounts for Article 5 production allowances, is contained in 
the direct final rule published in the Federal Register on November 28, 
2000 (65 FR 70795).
    9. The addition of 40 CFR 82.9(g), addressing national security 
production allowances for HCFC-141B, is contained in the Notice of 
Proposed Rulemaking published in the Federal Register on July 20, 2001 
(66 FR 38064).
    10. The addition of 40 CFR 82.12(a)(3), addressing essential-use 
allowances for metered-dose inhalers (MDIs), is contained in the direct 
final rule published in the Federal Register on March 13, 2001 (66 FR 
14760).
    11. The addition of 40 CFR 82.13(f)(2)(xvii), (g)(1)(xvii), and 
(g)(4)(xv) and the revision of newly designated 40 CFR 
82.13(f)(3)(xiii), which relate to proposed recordkeeping and reporting 
for process agent uses of controlled substances, are not contained in 
this final rule because of a Decision by the Parties to the Protocol in 
the intervening time. The Agency will consider whether to take action 
to address process agent uses of controlled substances in future 
rulemakings.
    12. The revision of 40 CFR 82.13 (g)(2) and (3), addressing the 
petition process for submitting a request to import a used class I 
controlled substance, is contained in this rule.
    13. The revision of 40 CFR 82.13(u), addressing reporting 
requirements for essential use allowances, is contained in this rule.

B. What Are EPA's Responses to Comments Regarding the Petition Process 
To Import Used Controlled Substances?

    In the direct final rule and concurrent proposal published in the 
Federal Register on August 4, 1998, EPA set forth changes to the 
petition process for the import of used controlled substances. EPA's 
goal was to clarify existing provisions and to strengthen the Agency's 
ability to ensure that material is, in fact, previously used before it 
is imported. EPA received twelve comments on amendments to the petition 
process for importing used controlled substances and therefore withdrew 
all the amendments related to the petition process before the rule 
became effective on October 5, 1998.
    The petition process for importing used controlled substances is 
found in various paragraphs (40 CFR 82.3 through 40 CFR 82.13) of the 
Stratospheric Ozone Protection Program. In responding to comments, this 
preamble begins with changes in Section 82.3--Definitions, then 
addresses comments on the changes in Section 82.4--Prohibitions, and 
finally, addresses comments on changes in Section 82.13--Recordkeeping 
and reporting requirements.

[[Page 79864]]

1. Section 82.3--What Are the Definitions for the Phrases ``Individual 
Shipment'', ``Non-Objection Notice'', and ``Source Facility''?
    EPA proposed to add definitions for the phrases ``individual 
shipment'', ``non-objection notice'', and ``source facility'' in order 
to clarify the meaning of existing requirements pertaining to the 
petition process for imports of used controlled substances.
    EPA received one comment on the definition of ``individual 
shipment.'' The comment asks for a clarification of the phrase ``not to 
be dis-aggregated'' in the definition. The comment also points out an 
inconsistency between this phrase and the phrase ``not to be 
aggregated'' in the initial paragraph under 40 CFR 82.13(g)(2). With 
this action, EPA is adding a definition of ``individual shipment'' to 
40 CFR 82.3 that does not employ the phrase ``not to be dis-
aggregated'', and is removing the phrase ``not to be aggregated'' from 
the pre-existing language in 40 CFR 82.13(g)(2). The intent of the 
definition continues to be the same as explained in the rule published 
in the Federal Register on August 4, 1998: that an importer shall 
submit a petition to import a specific quantity of used class I 
controlled substance as a single U.S. Customs entry. If an importer 
cannot arrange for the entire quantity to be shipped as one entry 
through U.S. Customs, the importer is required to submit to EPA a 
separate petition for the quantity of each individual U.S. Customs 
entry of a used controlled substance.
    EPA received no comments on the definition of ``non-objection 
notice.'' EPA is finalizing this definition as proposed.
    EPA received one comment on the definition of ``source facility.'' 
The commenter states that the phrase ``exact location'' is too 
specific, believing that it could refer to the valve or fitting on the 
piece of equipment from which the used controlled substance is 
recovered. The commenter points out that the valve or fitting will not 
have a mailing address. The commenter suggests replacing the phrase 
``exact location'' with the word ``site.'' EPA believes there may be 
some merit to the commenter's concern about the specificity of the 
proposed phrase. EPA's intent was to refer to the postal address of the 
owner of the equipment from which the ozone-depleting substance was 
recovered, not the exact location of the specific piece of equipment. 
However, to maintain the consistency of the wording within the 
definition, EPA is replacing the phrase ``exact location'' with the 
word ``location'' rather than site.
    In response to one commenter's confusion over the meaning of the 
word ``recover'', used in the definition of ``source facility'', EPA 
would like to clarify that to recover a controlled substance means to 
remove it from its intended use system. EPA does not consider the 
transfer of a controlled substance from one container to another to be 
the ``recovery'' of the controlled substance.
2. Section 82.4--What Quantity Constitutes a Separate Violation?
    EPA received one comment on the proposed new language for 40 CFR 
82.4(j), which includes a prohibition on the import of any used class I 
controlled substance by a person that has not received a non-objection 
notice in accordance with 40 CFR 82.13(g). The commenter believes that 
the phrase ``exact quantity, in kilograms'' is more precise than can be 
currently met by common commercial practices because it implies that a 
tiny fraction of a kilogram would be a violation. EPA believes that the 
final sentence of 40 CFR 82.4(j) clearly indicates that it is ``every 
kilogram of importation'' that would be a violation and that this 
sentence clarifies the phrase, ``exact quantity, in kilograms.'' If a 
person receives a non-objection notice from EPA for a specific 
quantity, such as 450 kilograms, the wording in the prohibition would 
make the 451st kilogram a separate violation. If the specific quantity 
approved was 450 kilograms, the import of 450 kilograms plus a tiny 
fraction of a kilogram would not result in a violation.
3. Section 82.13--What Are the Changes to the Process for Submitting a 
Petition To Import a Used Class I Controlled Substance?
    The following discussion responds to adverse comments received on 
EPA's proposed petition process. Provisions on which the Agency 
received no adverse comments are being finalized as proposed.
a. Changing the de minimis Quantity for an Individual Shipment for 
Which a Person Is Required To Submit a Petition to Import Used Class I 
Controlled Substances
    EPA is reducing the de minimis amount for an individual shipment 
for which a person is required to submit a petition to import used 
class I controlled substances. Section 81.13(g)(2) of the final rule 
published in the Federal Register on May 10, 1995, requires a person to 
submit a petition to import used class I controlled substances ``for 
each individual shipment over 150 pounds.'' A de minimis amount of 150 
pounds was established in the May 10, 1995 final rule to allow 
companies to import small samples of material so they could run 
laboratory analyses and determine if reclamation would be physically 
possible and economically justifiable before importing a large tank. 
EPA has since learned that samples of class I controlled substances are 
generally taken from large ISO-tanks using special cylinders that 
generally weigh less than 2 pounds. EPA is therefore setting the de 
minimis quantity at five (5) pounds. EPA believes that a quantity of 
150 pounds is much larger than necessary to conduct laboratory analysis 
for a prospective import. A de minimis level of five pounds allows a 
company to take three samples from a large ISO-tank so the samples can 
be sent to a laboratory testing facility in the U.S. without being 
subject to the petition requirements for used material. In developing 
today's amendments, EPA also considered requiring that a person who 
wishes to import any quantity of used class I controlled substance, 
regardless of the size, be required to submit a petition, thereby 
eliminating the de minimis level altogether. EPA decided not to 
eliminate the de minimis level altogether in order to minimize burden 
on the regulated community and conserve Agency resources.
b. How Much Time Will EPA Have for Reviewing Petitions?
    EPA received seven (7) comments regarding the proposed extension of 
time for the Agency's review of petitions from 15 working days to 40 
working days. Five of these comments support the extension of time for 
the review of petitions, recognizing the importance of independent 
verification of the submitted information. The five supportive comments 
also indicate that companies could easily anticipate the longer review 
period and manage their business practices accordingly. Two commenters 
suggest that the 40 working day review period would be too long because 
of possible shifts in market demand during this time and the need to 
buy the material overseas in a shorter period. EPA believes that a 40-
day review period is necessary because of the need to confirm foreign 
governments' restrictions and requirements for exports of used 
controlled substances, as well as to independently verify the source 
facility information provided in the petition. In addition, EPA wishes 
to point out that many shipments of used class I controlled substances 
over the past 5 years were made at least 6 months after

[[Page 79865]]

the Agency issued a non-objection notice. Thus, today's action extends 
the time for EPA's review of a petition to 40 working days in order to 
balance the goals of responsiveness to legitimate requests to import 
used class I controlled substances and thoroughness in identifying 
abuses of the petition process.
    An additional two (2) comments object to the removal of the 
provision for automatic approval of petitions if the Agency does not 
issue a notice within the 40 working-day review period. The commenters 
state that the petition process already impedes the normal time of a 
commercial import transaction. The automatic approval provisions were 
originally included in the process to ensure that the Agency's review 
did not unduly delay commercial transactions. However, EPA again notes 
that many shipments of used class I controlled substances over the last 
five years were made more than 6 months after the date EPA issued a 
non-objection notice. EPA believes that because today's action would 
make the automatic approval process inconsistent with the prohibition 
in 40 CFR 82.4(j) that requires an importer of used class I controlled 
substance to receive a non-objection notice, as well as being 
inconsistent with the requirement that the non-objection notice 
accompany the shipment through U.S. Customs, the automatic approval 
provision should be removed from the petition process. In eliminating 
the automatic approval provision EPA is committing to continued 
expeditious review and processing of petitions to avoid delays in 
commercial transactions. We believe that today's changes to the 
petition process will better ensure that the material entering the 
United States is, in fact, previously used class I controlled substance 
so the U.S. meets its obligations under the Montreal Protocol and 
prevents illegal imports under the Clean Air Act.
c. What Are the Revised and Expanded Information Requirements for a 
Petition To Import Used Class I Controlled Substances?
    EPA listed fourteen (14) information requirements that were 
numbered (i) through (xiv) in the August 4, 1998, direct final rule and 
concurrent proposal. No adverse comments were received by EPA on 
information requirements 40 CFR 82.13(g)(2)(i) through (iii), (vii), 
(ix) through (xi), (xiii), and (xiv), accordingly, EPA is finalizing 
these requirements as proposed.
    Comments on the proposed information requirement in 40 CFR 
82.13(g)(2)(iv) point out that the phrase ``dated documents'' is 
ambiguous. The proposed information requirement in (iv) was, ``A 
detailed description of the previous use of the controlled substance at 
each source facility and dated documents indicating the date the 
material was put into the equipment at each source facility (material 
must have remained in the equipment at least 24 months prior to 
recovery to be considered previously used)''. The commenters suggest 
that the phrase ``dated documents'' needs clarification as to whether 
the Agency is seeking documents dated at the time the ODS was put into 
the equipment or documents dated at the time a person submits a 
petition certifying, to the best of their knowledge, when the ODS was 
put into the equipment. In addition, several commenters express concern 
that finding documents that are dated from the time the ODS was put 
into the equipment may be virtually impossible because enterprises only 
keep documents for a limited number of years and the equipment could 
have been filled with the ozone-depleting substance many years ago. 
Finally, several commenters point out a number of practical objections 
to the requirement that the ODS must have remained in the equipment for 
at least 24 months. Two commenters suggest that instead of requiring 
documents regarding the date when the controlled substance was put into 
equipment EPA could request such documents be submitted, when possible, 
but at a minimum require the petitioner to certify a ``best estimate'' 
of the length of time that the ODS was in the equipment. EPA believes 
that these are useful suggestions. In addition, EPA believes that the 
practical realities cited by commenters regarding a minimum residence 
time for the ODS in equipment makes such a requirement unworkable. 
Thus, instead of retaining the language from the proposal, EPA is 
adopting the following language in today's final action: ``A detailed 
description of the previous use of the controlled substance at each 
source facility and a best estimate of when the specific controlled 
substance was put into the equipment at each source facility, and, when 
possible, documents indicating the date the material was put into the 
equipment.'' EPA believes that it has discretion under the existing 
rules to allow an import to proceed if a petition contains the best 
available information.
    EPA received one comment on the proposed information requirement in 
40 CFR 82.13(g)(2)(v), which requires the person submitting a petition 
for the import of used ODS to include, ``A list of the name, make and 
model number of the equipment from which the material was recovered at 
each source facility.'' The commenter states that obtaining such 
information may not always be possible. The commenter emphasizes that 
the chain of custody for used refrigerant may involve multiple 
transfers of ownership. EPA believes that the submission of this 
information is vital to the Agency's ability to verify that the 
controlled substance was, in fact, previously used and is not simply a 
quantity of falsely labeled controlled substance that was newly 
produced. EPA uses information about the specific equipment to verify 
that the quantity a petitioner wants to import could have been 
recovered from that equipment during the normal course of its 
operation. In general, the Agency has access to technical 
specifications for most equipment, including their typical ODS 
``charge'' or amount of ODS they can hold. Over the years, the Agency 
has received many petitions to import tens of metric tonnes of an ODS 
claimed to have been recovered from specific equipment when the 
equipment's specifications indicated that the amount specified in the 
petition would not typically have been held in, or recovered from, the 
specific equipment (even in leaky, malfunctioning situations) over a 10 
year period. Based on these kinds of analyses, and contact with the 
source facility, EPA can more readily determine whether controlled 
substances were previously used. The Agency also wants to note that 
most petitions received to date have included this information. 
Finally, EPA believes that the petitioner must take some responsibility 
for ensuring that the ODS was previously used before submitting a 
petition, and to do this the petitioner should follow the chain of 
custody of the material back to the source facility and equipment from 
which it was recovered. This diligence in tracing ODS back to the 
source facility would allow a petitioner to include the specific 
information about the equipment from which it was recovered. Because 
U.S. obligations under the Protocol limit imports to zero after the 
phaseout, the Agency's ability to independently verify that a quantity 
of ODS was, in fact, recovered at a source facility from specific 
equipment is the most critical step in ensuring the U.S. compliance 
under the international treaty. Therefore, EPA is promulgating this 
requirement as proposed.
    Several commenters supported the information requirement in 40 CFR 
82.13(g)(2)(vi), which requires the,

[[Page 79866]]

``[n]ame, address, contact person, phone number and fax number of the 
exporter and of all persons to whom the material was transferred or 
sold after it was recovered from the source facility.'' However, they 
suggested that EPA retain discretion to approve a petition if some of 
the information regarding ownership in the chain of custody is not 
available. EPA believes that it has discretion under the existing rules 
to allow an import to proceed if a petition contains the best available 
information. Similarly, under the new rules, EPA ``may'' object to a 
petition if the petition lacks any of the information required under 40 
CFR 82.13(g)(2); however, it is not obligated to do so. EPA is 
modifying the proposed language for 40 CFR 82.13(g)(3)(iv) to clarify 
that it is retaining the discretion not to object to a petition.
    EPA received three comments on the proposed information requirement 
in 40 CFR 82.13(g)(2)(viii), which required the importer to submit ``* 
* * a copy of the contract for the purchase of the controlled substance 
that includes the name, address, contact person, phone number and fax 
number of the purchaser.'' The commenters request that EPA clarify this 
information requirement. EPA intended that the petitioner provide a 
copy of the contract for the purchase of the controlled substance by 
the ultimate user in the United States. The commenters argue that in 
many cases the petitioner does not know the ultimate purchaser of the 
material at the time the petition is being submitted. EPA believes that 
in some instances the importer of a used controlled substance will 
already know the purchaser, but this will not always be the case. 
Therefore, EPA is revising the proposed language so that the final 
requirement reads: ``A description of the intended use of the used 
controlled substance, and when possible, the name, address, contact 
person, phone number and fax number of the ultimate purchaser in the 
United States.''
    EPA received several comments on the proposed information 
requirement in 40 CFR 82.13(g)(2)(xii), which requires that the 
importer submit ``An export license from the appropriate government 
agency in the country of export and, if recovered in another country, 
the export license from the appropriate government agency in that 
country.'' One of the comments was supportive of the requirement. The 
other comments suggested that there might not be such a government 
authority and that the licensing requirements are ``not yet determined 
at this time.'' EPA believes that with the adoption in 1997 of Article 
4B to the Montreal Protocol, which requires all Parties to establish a 
licensing system for imports and exports, and in light of Decision IX/
8, also adopted in 1997, which requires each Party to identify a 
contact person for inquiries about imports and exports, each petitioner 
should be able to meet the reporting requirement. See Handbook for the 
International Treaties for the Protection of the Ozone Layer, available 
at http://www.unep.ch/ozone/Handbook2000.shtml. Accordingly, EPA is 
adopting this requirement as proposed.
d. Why Is the Information Requirement Regarding the Certification of 
Tax Liability for Used Class I Controlled Substances Being Removed From 
the Petition Process?
    EPA is removing the requirement in 40 CFR 82.13(g)(2) (viii) of the 
current rule from the list of information to be included with a 
petition to import used class I controlled substances. EPA received no 
adverse comments on the removal of this requirement. The provision 
required an importer to certify that the purchaser of the used, 
recycled or reclaimed substance ``is liable for the payment of the 
tax.'' See 60 FR 24970 (May 10, 1995). EPA published a stay of this 
provision on January 31, 1996 (61 FR 3316), and published an extension 
of the stay on June 11, 1996 (61 FR 29485). EPA believes it is more 
appropriate to defer interpretation of regulatory requirements 
regarding excise taxes for ozone-depleting chemicals to the Internal 
Revenue Service (IRS), the Federal agency given authority for these 
taxes under the Omnibus Budget Reconciliation Act of 1989, the Omnibus 
Budget Reconciliation Act of 1990 and the Energy Policy Act of 1992. 
EPA understands from the IRS that there is an excise tax on bulk 
shipments of class I controlled substances, used class I controlled 
substances, products containing class I controlled substances and 
products made with but not containing class I controlled substances. 
However, EPA requests that all questions regarding the excise taxes on 
ozone-depleting chemicals be directed to the Internal Revenue Service.
e. On What Grounds Can EPA Issue an Objection Notice to a Petition for 
the Import of Used Class I Controlled Substances?
    EPA proposed nine (9) reasons for issuing an objection notice in 
response to a petition to import used class I controlled substances. 
These proposed reasons were labeled (A) through (I) of 40 CFR 
82.13(g)(3) in the direct final rule and concurrent proposal. EPA 
received no adverse comments on reasons (A), (C) and (D); accordingly, 
these reasons are being adopted as proposed.
    In the proposed rule, reason (B) for issuing an objection notice 
read as follows: ``If the Administrator determines that any portion of 
the petition contains false or misleading information or has reason to 
believe that the petition contains false or misleading information.'' 
The adverse comment on reason (B) for issuing an objection notice 
states that reason (B) would allow EPA to issue an objection notice if 
EPA ``has reason to believe'' that a petition contains false or 
misleading information and this action would be ``based on 
unsubstantiated allegations or unfounded belief.'' Since the petition 
process is designed to enable EPA to independently verify whether the 
class I controlled substance was previously used, EPA's decision hinges 
on whether the material was recovered from the intended use system 
(i.e., equipment such as a refrigeration chiller or a fire suppression 
system). The intent of the petition process is to protect against the 
illegal entry of virgin (i.e., un-used) class I controlled substances, 
which would be contrary to the United States' obligations under the 
Montreal Protocol and the requirements of the Clean Air Act, while at 
the same time not unduly impeding commerce. Accordingly, EPA is 
creating a process based on documentation and cross-checking of 
information that focuses on whether the ODS was removed from equipment. 
Logistically EPA cannot actually witness the removal of the ODS from 
the equipment. Therefore, EPA must be able to rely on written and 
verbal statements made by both U.S. and foreign persons or entities or 
agencies to independently verify whether the ODS was previously used. 
Under these circumstances, EPA believes that it is reasonable to issue 
an objection notice if the Agency has information regarding the 
willingness of a company or individual listed in the petition to create 
and/or provide false or misleading information. However, EPA agrees 
that the phrase, ``has reason to believe'', may be too vague. Thus, in 
today's action, EPA is modifying reason (B) for issuing an objection 
notice to read: ``if the Administrator determines that any portion of 
the petition contains false or misleading information, or the 
Administrator has information from other U.S. or foreign government 
agencies indicating that the petition contains false or misleading 
information.''
    Under reason (E) in the proposed rule, EPA could issue an objection 
notice ``If allowing the import of the used class I controlled 
substance would run counter to the spirit of statements made by

[[Page 79867]]

government officials in the country of recovery or export regarding 
controlled ozone-depleting substances.'' The adverse comment on reason 
(E) for disallowing a petition points to the lack of specificity in the 
phrase, ``counter to the spirit of statements made by government 
officials in the country of recovery or export regarding controlled 
ozone-depleting substances.'' EPA agrees that this language is too 
broad and, therefore, with today's action clarifies and adds 
specificity through the use of the phrase, ``counter to government 
restrictions from either the country of recovery or export regarding 
controlled ozone-depleting substances.''
    EPA received several similar comments on reasons (F) and (G) for 
disallowing petitions to import used class I controlled substances. In 
the proposed rule, reason (F) was: ``If the Administrator has received 
information indicating that a person listed in the petition has at any 
time been willing to produce false information regarding trade in 
controlled substances, including information required by EPA or 
required by the appropriate government agency in the exporting 
country.'' Reason (G) was: ``If the Administrator has received 
information indicating that a person listed in the petition is in 
violation of a requirement in any regulation published by the U.S. 
Environmental Protection Agency.'' The comments object to the likely 
use of ``hearsay'' and information ``incorrectly or maliciously'' 
provided to EPA during its petition review. EPA agrees that the 
potential for abuse of these reasons by competitors or disgruntled 
employees is too great. Thus, reasons (F) and (G) are not being 
included in today's action.
    EPA received many comments on reason (H) which, as proposed, said 
that EPA may issue an objection notice, ``[i]f the Administrator 
determines that, for the current control period, the U.S. demand for 
the controlled substance cited in the petition can be satisfied by 
domestic stockpiles and estimated recycling and reclamation of 
quantities contained in domestic equipment.'' One company that provides 
waste management services commented that any ban on imports of a used 
class I substance should not apply to imports for disposal. 
Additionally, commenters say there might be reasons for importing 
quantities of a controlled substance beyond immediate demand that 
wouldn't be evident to the Agency. The commenters also state that EPA 
lacks the expertise to determine market supply and demand for ozone-
depleting substances. Considering the impact coupled with the 
administrative burden associated with the market analysis that would be 
required, in today's action EPA is not going final with reason (H) as a 
reason for EPA to issue an objection notice.
    As proposed, reason (I) stated that EPA could issue an objection 
notice, ``[i]f reclamation capacity is installed or is being installed 
for that specific controlled substance in the country of recovery or 
country of export and the capacity is funded in full or in part through 
the Multilateral Fund.'' The two adverse comments regarding reason (I) 
claim that a country with a reclamation facility paid for by the 
Multilateral Fund of the Montreal Protocol may not have a need for the 
substance and thus may not have an incentive to reclaim and reuse it 
domestically. However, if the Executive Committee of the Montreal 
Protocol's Multilateral Fund decided to allocate money to a country for 
the construction of a reclamation facility, the Executive Committee 
would consider the demand for the substance within that country and 
region before approving the disbursement of funds. Therefore, EPA 
believes no used controlled class I substances should be imported from 
countries where reclamation capacity, for that specific controlled 
substance, has been or is being installed through the assistance of the 
Multilateral Fund. The United States contributes approximately one 
fourth of all funds going to the Multilateral Fund, the general purpose 
of which is to assist countries operating under Article 5(1) of the 
Protocol to make the transition away from ozone-depleting substances; 
and a transition policy includes the development of reclamation 
facilities in order to optimize the use of existing ozone-depleting 
substances so as to avoid unnecessary production of virgin materials. 
Thus, EPA views the importation of used class I controlled substances 
from countries where reclamation capacity has been supported by the 
Multilateral Fund to run counter to the aims of a global phaseout 
strategy. Accordingly, EPA is adopting reason (I) as proposed. In 
today's action, it appears as reason (F) for issuing an objection 
notice.
f. What Must Accompany the Shipment of Used Class I Controlled 
Substances Through U.S. Customs Clearance?
    EPA is adding a requirement that the petition, and the non-
objection notice from EPA that approves the import of a used class I 
controlled substance, accompany each shipment through U.S. Customs. The 
Agency did not receive any comments on this proposed requirement. In 
the preamble to the final rule published in the Federal Register on May 
10, 1995, EPA suggested that the petition and EPA approval letter 
accompany the shipment of used class I controlled substances through 
U.S. Customs. However, EPA did not make this a requirement. Today EPA 
is adding this requirement to 40 CFR 82.13(g) such that all importers 
of used class I controlled substances must provide these documents to 
bring a shipment into the United States. The experience of the past 5 
years has shown that presenting the petition and the EPA-approval 
letter with a shipment facilitates the shipment's clearance through 
U.S. Customs.

C. Why Does This Rule Not Affect the Provisions for Transferring 
Essential-Use Allowances in 40 CFR 82.12?

    The direct final rule and concurrent proposal published in the 
Federal Register on August 4, 1998 (63 FR 41625, 63 FR 41652 contained 
aprovision allowing transfers of essential-use authorizations for 
metered-dose inhalers (MDIs) in emergency situations. EPA received 
adverse comment on this provision and withdrew it from the direct final 
rule on October 5, 1998 (63 FR 53290). The commenters believed that the 
scope of the transfer provision was too narrow. EPA subsequently 
revisited the issue of transfers following the Parties' agreement to 
Decision XII/2 in December 2000, which allows transfers of essential 
use authorizations and CFCs produced with such authorizations more 
broadly. EPA has now finalized a broader transfer provision and a 
system to monitor and track the various types of MDI essential-use 
transfers. For more information see the final rule published in the 
Federal Register on February 11, 2002 (67 FR 6352).

D. Why Does This Rule Not Include Recordkeeping and Reporting 
Requirements in 40 CFR 82.13 for Quantities of Class I Controlled 
Substance Used as a Process Agent?

    The direct final rule and concurrent proposal contained 
requirements to maintain and submit a certification that a quantity of 
class I controlled substance would be used as a process agent. We 
received adverse comment on these proposed recordkeeping and reporting 
requirements and withdrew them from the direct final rule on October 5, 
1998. In the time between the proposed rule and today's action, the 
Parties to the Protocol agreed to Decision X/14 on process agent uses 
of controlled substances. Decision X/14 stated process agent uses of 
controlled substances should be treated as feedstock uses until the end 
of 2001. The Parties to the Protocol are conducting ongoing discussions 
in order

[[Page 79868]]

to determine how process agent uses of controlled substances should be 
accounted for beyond 2001. Because of this new Decision by the Parties 
to the Protocol, EPA is not taking action on the requirements proposed 
prior to the Decision. The Agency will consider whether to take action 
to address process agent uses of controlled substances in future 
rulemaking.

E. What Are the Changes to the Recordkeeping and Reporting Requirements 
for Entities Allocated Essential-Use Allowances?

    The direct final rule and concurrent proposal contained changes to 
the recordkeeping and reporting requirements for entities allocated 
essential-use allowances. EPA received adverse comment on these 
proposed requirements and withdrew them from the direct final rule on 
October 5, 1998. After considering comments, EPA is finalizing a 
revised version of these requirements in today's action.
    EPA is changing the recordkeeping and reporting requirements for 
entities allocated essential-use allowances for two reasons. First, EPA 
wishes to meet its Montreal Protocol obligations under Decision VIII/9 
to complete the yearly ``Reporting Accounting Framework for Essential 
Uses other than Laboratory and Analytical Applications'' (Accounting 
Framework). Second, the reporting requirements provide EPA and the Food 
and Drug Administration with information on the amount of MDIs 
containing CFCs manufactured annually. This information is important 
for making decisions regarding the amount of CFCs that should be 
nominated to the Parties to the Montreal Protocol for essential use 
authorizations in subsequent years.
    The Accounting Framework, included in annex IV of the document 
entitled ``Report of the Eighth Meeting of the Parties to the Montreal 
Protocol on Substances That Deplete the Ozone Layer'' (UNEP/OzL.Pro.8/
12), is designed to assist the Parties in, among other things, 
monitoring the amount of controlled substances acquired through exempt 
essential-use production or import. Since 1996, EPA has requested each 
company receiving essential use allowances to complete the Accounting 
Framework under the authority of section 114 of the CAA. Today's final 
rule requires entities allocated essential use allowances to submit the 
information necessary for EPA to complete the U.S. aggregate Accounting 
Framework by January 30th of each year.
    The following chart identifies the information that EPA requires 
from essential use allowances holders in order to complete the 
accounting framework, and where EPA will obtain this information after 
publication of this final rule.

----------------------------------------------------------------------------------------------------------------
                                                      Data                             Source of data
----------------------------------------------------------------------------------------------------------------
A..................................  Year of Essential Use................  The previous calendar year (e.g. the
                                                                             year 2001 accounting framework is
                                                                             sent to the Parties on January 31,
                                                                             2002)
B..................................  Amount of Class I ODS Exempted for     The amount of essential use
                                      Year of Essential Use.                 allowances granted by the Parties
                                                                             for the calendar year of the
                                                                             accounting framework
C..................................  Amount Acquired by Production........  The total amount of ODS produced in
                                                                             the U.S. under essential use
                                                                             exemptions. This data is compiled
                                                                             from the companies' quarterly
                                                                             reports already required under 40
                                                                             CFR 82.13(u)
D..................................  Amount Acquired for Essential Uses by  The total amount of ODS imported
                                      Import and Country(s) of Manufacture.  into the U.S. under essential use
                                                                             exemptions. This data is compiled
                                                                             from the companies' quarterly
                                                                             reports already required under 40
                                                                             CFR 82.13(u)
E..................................  Total Acquired for Essential Uses....  Row C + Row D
F..................................  Total essential use allowances         Row B - Row E
                                      authorized but not acquired.
G..................................  Amount of ODSs On Hand at Start of     This amount is equal to the amount
                                      Year.                                  the company reported to be ``on
                                                                             hand at end of year'' in the
                                                                             previous year accounting framework.
H..................................  Available for Use in Current Year....  Row G + Row E
I..................................  The Amount of ODS Used for Essential   EPA is adding the requirement that
                                      Use.                                   this amount be reported within the
                                                                             first 30 days of January each year.
                                                                             (See 40 CFR 82.13(u)(2)(i))
J..................................  Quantity of ODS Contained in Products  EPA is adding the requirement that
                                      Exported.                              this amount be reported within the
                                                                             first 30 days of January each year.
                                                                             (See 40 CFR 82.13(u)(2)(ii))
K..................................  Quantity of ODS Destroyed or           EPA is adding the requirement that
                                      Recycled..                             this amount be reported within the
                                                                             first 30 days of January each year.
                                                                             (See 40 CFR 82.13(u)(2)(iii))
L..................................  Quantity of ODS On Hand at the End of  Row H,-Row I,-Row K
                                      Year.
----------------------------------------------------------------------------------------------------------------

    For I, ``The Amount of ODS Used for Essential Use'' the quantity to 
be reported includes CFCs that are included in marketable (i.e., not 
defective) CFC MDIs, CFCs used to clean the lines of the manufacturing 
equipment, and CFCs that are lost as fugitive emissions during 
manufacture. This amount does not include CFCs that are in non-
marketable CFC MDIs that are subsequently destroyed or recycled.
    For K, ``Quantity of ODS Destroyed or Recycled'' the quantity to be 
reported includes CFCs from non-marketable CFC MDIs that are 
subsequently recycled or destroyed. It also includes any CFCs that are 
recaptured from the manufacturing process that are recycled or 
destroyed.
    With this final rule, companies are required to supply EPA with the 
minimum amount of information necessary to complete the accounting 
framework. In the above chart, rows C and D encompass previously 
existing requirements and rows I, J, and K represent added 
requirements. The data today's regulation specifically requires 
essential use allowance holders to report appears in rows C, D, I , J, 
and K. However, EPA highly recommends that essential use allowances 
holders complete the accounting framework in its entirety to assure 
that the completed framework is an accurate depiction of the amount of 
CFCs each company has on hand at the end of the year.
    EPA has simplified some of the proposed reporting requirements, in

[[Page 79869]]

part due to public comment. First, EPA has reordered the reporting 
requirements under 40 CFR 82.13(u)(2) in order to more closely follow 
the list of information necessary to complete the Essential Use 
Accounting Framework. Second, EPA has reworded the language of the 
reporting requirements to clarify which requirements apply to all 
holders of essential use allowances and which apply only to companies 
that hold allowances to produce CFC MDIs. Third, EPA has omitted 40 CFR 
82.13(u)(4), which requested the quantity of each controlled substance 
that was emitted during the essential use, and 40 CFR 82.13(u)(5), 
which requested, for MDIs, the quantity that was incorporated into 
marketable MDIs. These paragraphs were redundant. The quantity emitted 
and the quantity incorporated into marketable MDIs should be reported 
as part of the quantity ``used for essential use'' reported in 40 CFR 
82.12(u)(2)(i).
    EPA proposed that essential use allowance holders be required to 
submit reports on a quarterly basis. In response to the proposal, EPA 
received comments suggesting that the reporting should be on an annual 
basis, rather than on a quarterly basis. One commenter suggested that 
EPA allow annual reporting of information required by today's action 
while retaining quarterly reporting of the information currently 
required. EPA is adopting the commenter's suggestion. The existing 
requirements call for essential-use holders to report quarterly the 
quantity of each controlled substance received from each importer or 
producer, and are incorporated into 40 CFR 82.13(u)(1) without change. 
The new requirements are listed in 40 CFR 82.13(u)(2) and call for 
annual reporting.
    EPA's practice has been to request companies to report quantities 
that are recycled together with quantities that are destroyed through 
letters requesting information under section 114 of the CAA. Today's 
rule slightly modifies the proposed language for 40 CFR 82.13(u)(3), 
which has been renumbered as (u)(2)(iii), to reflect this practice. 
Thus, the new (u)(2)(iii) requires reporting on the quantities of CFCs 
destroyed and the quantities of CFCs recycled.
    EPA is clarifying the need for annual information to be submitted 
within 20 days after the end of the year, when possible, because this 
information needs to be incorporated into the U.S. nomination to the 
Parties to the Protocol for future-year essential-use exemptions. 
Although the regulation will require submission of the reports within 
30 days after the end of the year, EPA is requesting the information be 
submitted within 20 days after the end of the year, when possible, in 
order to assist the Agency in meeting the January 31st deadline for 
submission of the U.S. essential-use nomination as required by the 
Parties to the Protocol in Decision VIII/9, paragraph 8.
    One commenter objected to EPA's proposed reporting requirement that 
holders of essential use allowances for production of MDIs report ``the 
total number of units of each specific product manufactured in the 
control period (including marketable and defective units)'' (40 CFR 
82.13(u)(9)), renumbered 40 CFR 82.13(u)(2)(vi)). The commenter stated 
that there was insufficient reason given in the proposal for requesting 
submission of this information. With today's action, EPA is adopting a 
slightly modified version of this reporting requirement by simply 
asking for ``the total number of marketable units of each specific 
metered-dose inhaler product manufactured in the control period.'' EPA 
believes this information is necessary for several reasons. The first 
is to validate the quantity of CFCs each company is requesting for 
future control periods, and to assist the Food and Drug Administration 
(FDA) in determining what is medically necessary for specific 
allocations of essential-use allowances for each company. See CAA 
section 604(d)(2). The second reason is to assist EPA and FDA in 
developing the U.S. nomination of essential use allowances for CFCs to 
the Parties to the Protocol. As the U.S. transition to non-CFC MDIs 
progresses (and as more non-CFC MDIs are approved by FDA) the U.S. will 
eventually begin a process of removing particular CFC-based MDIs from 
the market. While this U.S. transition to non-CFC MDIs happens, it will 
be important for EPA and FDA to have historical data on the numbers of 
units of specific marketed MDI products to accurately adjust the 
allocation of essential-use allowances and to develop future-year U.S. 
nominations for consideration by the Parties to the Protocol.

IV. What Is the Address for Submission of Reports and Petitions?

    Since the publication of the direct final rule, the concurrent 
proposal and the withdrawal notice, the mailing address for EPA and the 
name of the Division have changed. Therefore, today's action corrects 
the address for submission of reports and petitions under the 
definition of the ``Administrator,'' to EPA (6205J), Global Programs 
Division, 1200 Pennsylvania Ave., NW., Washington, DC, 20460.

V. Administrative Requirements

A. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more by 
State, local and tribal governments, in the aggregate, or by the 
private sector, in any one year. Viewed as a whole, all of today's 
amendments do not create a Federal mandate resulting in costs of $100 
million or more in any one year for State, local and tribal 
governments, in the aggregate, or for the private sector. Thus, today's 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA. EPA has also determined that this rule

[[Page 79870]]

contains no regulatory requirements that might significantly or 
uniquely affect small governments; therefore, EPA is not required to 
develop a plan with regard to small governments under section 203. 
Finally, because this proposal does not contain a significant 
intergovernmental mandate, the Agency is not required to develop a 
process to obtain input from elected State, local, and tribal officials 
under section 204.

B. Regulatory Flexibility Analysis

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule. EPA has also 
determined that this rule will not have a significant economic impact 
on a substantial number of small entities.
    For purposes of assessing the impact of today's rule on small 
entities, small entities are defined as: (1) A small business that is 
identified by the North American Industry Classification System code 
(NAICS) in the Table below.

------------------------------------------------------------------------
                                                          Size standard
         Type of enterprise              NAICS code        (number of
                                                           employees)
------------------------------------------------------------------------
Organic Chemical Wholesaling........            422690               100
------------------------------------------------------------------------

(2) a small governmental jurisdiction that is a government of a city, 
county, town, school district or special district with a population of 
less than 50,000; and (3) a small organization that is any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impacts of today's final rule on 
small entities, EPA concludes that this action will not have a 
significant economic impact on a substantial number of small entities. 
This rule changes the recordkeeping and reporting requirements for 
Essential Use Allowance holders and clarifies the petition process for 
import of used class I controlled substances. The Essential Use 
Allowances holders are large corporations. The clarifications to the 
petition process affects importers of which there could be some small 
entities. EPA receives approximately 140 petitions a year. On average, 
a single entity submits three to five (3-5) petitions per year. 
Further, the average petition preparation time is 2-3 hours. EPA 
estimates the additional information required in the revised petition 
process finalized with this rule involves approximately thirty (30) 
more minutes of preparation time. Additionally, the information can be 
generally be found in the same location and from the same sources as 
the information required for the current petition process. Assuming 75 
dollars is equivalent to one (1) hour worth of work for a small entity, 
the revised petition process would cost an average of 113-187 
additional dollars each year per entity.
    Although this final rule will not have a significant economic 
impact on a substantial number of small entities, EPA nonetheless has 
tried to reduce the impact of the rule on all entities by rejecting a 
regulatory alternative that had been under consideration, which would 
have eliminated the de minimis exception to the petition process.

C. Executive Order 12866

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

D. Applicability of Executive Order 13045--Children's Health Protection

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62FR19885, April 23, 1997) applies to 
any rule that: (1) is determined to be ``economically significant'' as 
defined under Executive Order 12866, and (2) concerns an environmental 
health or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. If the regulatory action meets 
both criteria, the Agency must evaluate the environmental health or 
safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that are based on health or safety risks, such that 
the analysis required under section 5-501 of the Order has the 
potential to influence the regulation. This rule is not subject to 
Executive Order 13045 because it implements specific standards 
established by Congress in Title VI of the Clean Air Act.

E. Paperwork Reduction Act

    The Office of Management and Budget (OMB) has approved the 
information collection requirements contained in this rule under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and 
has assigned OMB control number 2060-0170.
    The information collection under this rule is authorized under 
sections 603(b) and 114 of the Clean Air Act (CAA). This information 
collection is conducted to meet U.S. obligations under Article 7, 
Reporting Requirements, of the Montreal Protocol on Substances that 
Deplete the Ozone Layer (Protocol); and to carry out the requirements 
of Title VI of the CAA, including sections 603 and 614.
    The reporting requirements included in the amendments to the 
current rule are designed to:
    (1) Ensure compliance with the restrictions on production, import 
and export of controlled ozone-depleting substances after the January 
1, 1996 phaseout of class I substances (except methyl bromide);
    (2) Allow exempted production and import for certain essential uses 
and the consequent tracking of that production and import;
    (3) Address industry and Federal concerns regarding the illegal 
import of controlled substances mislabelled as ``used'' that are 
undercutting U.S. markets;

[[Page 79871]]

    (4) Respond to industry comments on the functioning of the program 
to streamline reporting and eliminate administrative inefficiencies;
    (5) Satisfy U.S. obligations under the international treaty, the 
Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol), to report data under Article 7;
    (6) Fulfill statutory obligations under Section 603(b) of Title VI 
of the Clean Air Act Amendments of 1990 (CAA) for reporting and 
monitoring;
    (7) Provide information to report to Congress on the production, 
use and consumption of class I and class II controlled substances as 
statutorily required in Section 603(d) of Title VI of the CAA.
    EPA informs respondents that they may assert claims of business 
confidentiality for any of the information they submit. Information 
claimed confidential will be treated in accordance with the procedures 
for handling information claimed as confidential under 40 CFR Part 2, 
Subpart B, and will be disclosed only if EPA determines that the 
information is not entitled to confidential treatment. If no claim of 
confidentiality is asserted when the information is received by EPA, it 
may be made available to the public without further notice to the 
respondents (40 CFR 2.203).
    The information collection requirements for this action have an 
estimated reporting burden averaging 23.3 hours per response. This 
estimate includes time for reviewing instructions, searching existing 
data sources, gathering and maintaining the data needed and completing 
the collection of information.
    The estimate includes the time needed to comply with EPA's 
reporting requirements, as well as that used for the completion of the 
reports under the amended regulations.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                No. of           Responses/                            Hours per
                   Collection activity                       respondents         Respondent      Total responses        response          Total hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Producer's Report.......................................                  8                  4                 32                 16              512.00
Importer's Report.......................................                 12                  4                 48                 16              768.00
Notification of Trade...................................                  2                  1                  2                  2                4.00
Export Report...........................................                 10                  1                 10                 80              800.00
Lab Certification.......................................              1,000                  1              1,000                  1            1,000.00
Class II Report.........................................                 14                  4                 56                 16              896.00
Transformation & Destruction............................                 15                  1                 15                 80            1,200.00
Essential Use Allowance Holders.........................                 12                  4                 48                 32            1,536.00
Lab Suppliers...........................................                  4                  4                 16                 24              384.00
Lab Suppliers--Reference Standards......................                 10                  1                 10                 16              160.00
                                                         --------------------
    Total Burden Hrs....................................  .................  .................  .................  .................            7,260.00
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

F. Executive Order 13132 (Federalism)

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This rule does not have federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. The accelerated phaseout 
regulations are administered and enforced solely by the Federal 
government, and are not currently delegated to State or local 
governments. Thus, the requirements of section 6 of the Executive Order 
do not apply to this rule.

G. Executive Order 13175 (Consultation and Coordination With Indian 
Tribal Governments)

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments,'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This final rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
This rule extends an exemption used by large, multinational 
corporations that either produce, import or export class I, group VI 
ozone-depleting substances. It has no effect on tribal governments. 
Thus, Executive Order 13175 does not apply to this rule.

H. The National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Pub. L. 104-113, Section 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus

[[Page 79872]]

standards in its regulatory activities unless to do so would be 
inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, and business 
practices) that are developed or adopted by voluntary consensus 
standards bodies. The NTTAA directs EPA to provide Congress, through 
OMB, explanations when the Agency decides not to use available and 
applicable voluntary consensus standards. This rulemaking does not 
involve technical standards. Therefore, EPA did not consider the use of 
any voluntary consensus standards.

I. Executive Order 13211 (Energy Effects)

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

J. Congressional Review

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This rule is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective January 30, 2003.

VI. Judicial Review

    Under section 307(b)(1) of the Clean Air Act, EPA hereby finds that 
these regulations are of national applicability. Accordingly, judicial 
review of this action is available only by the filing of a petition for 
review of this action in the United States Circuit Court of Appeals for 
the District of Columbia Circuit within 60 days of publication. Under 
section 307(b)(2) of the Act, the requirements that are the subject of 
today's rule may not be challenged later in judicial proceedings 
brought to enforce these requirements.

List of Subjects in 40 CFR Part 82

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

    Dated: December 18, 2002.
Christine Todd Whitman,
Administrator.

    For the reasons set out in the preamble, title 40, Chapter I of the 
Code of Federal Regulations is amended as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

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

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

Subpart A--Production and Consumption Controls

    2. Section 82.3 is amended by adding new definitions in 
alphabetical order for the terms ``Individual shipment'', ``Non-
Objection notice'', and ``Source facility,'' and revising the 
definition of ``Administrator.'' To read as follows:


Sec.  82.3  Definitions.

* * * * *
    Administrator means the Administrator of the United States 
Environmental Protection Agency or his authorized representative. For 
purposes of reports and petitions, the Administrator must be written at 
the following mailing address: EPA (6205J), Global Programs Division, 
1200 Pennsylvania Ave., NW., Washington, DC 20460.
* * * * *
    Individual shipment means the kilograms of a used controlled 
substance for which a person may make one (1) U.S. Customs entry as 
identified in the non-objection notice from the Administrator under 
Sec.  82.13(g).
* * * * *
    Non-Objection notice means the privilege granted by the 
Administrator to import a specific individual shipment of used 
controlled substance in accordance with Sec.  82.13(g).
* * * * *
    Source facility means the location at which a used controlled 
substance was recovered from a piece of equipment, including the name 
of the company responsible for, or owning the piece of equipment, a 
contact person at the location, the mailing address for that specific 
location, and a phone number and a fax number for the contact person at 
the location.
* * * * *
    3. Section 82.4 is amended by revising paragraph (j) to read as 
follows:


Sec.  82.4  Prohibitions.

* * * * *
    (j) Effective January 1, 1995, no person may import, at any time in 
any control period, a used class I controlled substance, without having 
received a non-objection notice from the Administrator in accordance 
with Sec.  82.13(g)(2) and (3). A person who receives a non-objection 
notice for the import of an individual shipment of used controlled 
substances may not transfer or confer the right to import, and may not 
import any more than the exact quantity, in kilograms, of the used 
controlled substance cited in the non-objection notice. Every kilogram 
of importation of used controlled substance in excess of the quantity 
cited in the non-objection notice issued by the Administrator in 
accordance with Sec.  82.13(g)(2) and (3) constitutes a separate 
violation.
* * * * *

    4. Section 82.13 is amended by revising paragraphs (g)(2), (g)(3), 
and (u) to read as follows:


Sec.  82.13  Recordkeeping and reporting requirements.

* * * * *
    (g) * * *
    (1) * * *
    (2) Petitioning--Importers of Used, Recycled or Reclaimed 
Controlled Substances. For each individual shipment over 5 pounds of a 
used controlled substance as defined in Sec.  82.3, an importer must 
submit directly to the Administrator, at least 40 working days before 
the shipment is to leave the foreign port of export, the following 
information in a petition:
    (i) Name and quantity in kilograms of the used controlled substance 
to be imported;
    (ii) Name and address of the importer, the importer ID number, the 
contact person, and the phone and fax numbers;
    (iii) Name, address, contact person, phone number and fax number of 
all previous source facilities from which the used controlled substance 
was recovered;
    (iv) A detailed description of the previous use of the controlled 
substance at each source facility and a best estimate of when the 
specific controlled substance was put into the equipment at each source 
facility, and, when possible, documents indicating the date the 
material was put into the equipment;

[[Page 79873]]

    (v) A list of the name, make and model number of the equipment from 
which the material was recovered at each source facility;
    (vi) Name, address, contact person, phone number and fax number of 
the exporter and of all persons to whom the material was transferred or 
sold after it was recovered from the source facility;
    (vii) The U.S. port of entry for the import, the expected date of 
shipment and the vessel transporting the chemical. If at the time of 
submitting a petition the importer does not know the U.S. port of 
entry, the expected date of shipment and the vessel transporting the 
chemical, and the importer receives a non-objection notice for the 
individual shipment in the petition, the importer is required to notify 
the Administrator of this information prior to the actual U.S. Customs 
entry of the individual shipment;
    (viii) A description of the intended use of the used controlled 
substance, and, when possible, the name, address, contact person, phone 
number and fax number of the ultimate purchaser in the United States;
    (ix) Name, address, contact person, phone number and fax number of 
the U.S. reclamation facility, where applicable;
    (x) If someone at the source facility recovered the controlled 
substance from the equipment, the name and phone and fax numbers of 
that person;
    (xi) If the imported controlled substance was reclaimed in a 
foreign Party, the name, address, contact person, phone number and fax 
number of any or all foreign reclamation facility(ies) responsible for 
reclaiming the cited shipment;
    (xii) An export license from the appropriate government agency in 
the country of export and, if recovered in another country, the export 
license from the appropriate government agency in that country;
    (xiii) If the imported used controlled substance is intended to be 
sold as a refrigerant in the U.S., the name and address of the U.S. 
reclaimer who will bring the material to the standard required under 
section 608 (Sec.  82.152(g)) of the CAA, if not already reclaimed to 
those specifications; and
    (xiv) A certification of accuracy of the information submitted in 
the petition.
    (3) Starting on the first working day following receipt by the 
Administrator of a petition to import a used class I controlled 
substance, the Administrator will initiate a review of the information 
submitted under paragraph (g)(2) of this section and take action within 
40 working days to issue either an objection-notice or a non-objection 
notice for the individual shipment to the person who submitted the 
petition to import the used class I controlled substance.
    (i) For the following reasons, the Administrator may issue an 
objection notice to a petition:
    (A) If the Administrator determines that the information is 
insufficient, that is, if the petition lacks or appears to lack any of 
the information required under Sec.  82.13(g)(2);
    (B) If the Administrator determines that any portion of the 
petition contains false or misleading information, or the Administrator 
has information from other U.S. or foreign government agencies 
indicating that the petition contains false or misleading information;
    (C) If the importer wishes to import a used class I controlled 
substance from a country which is, for that particular controlled 
substance, out of compliance regarding its phaseout obligations under 
the Protocol or the transaction in the petition is contrary to other 
provisions in the Vienna Convention or the Montreal Protocol;
    (D) If the appropriate government agency in the exporting country 
has not agreed to issue an export license for the cited individual 
shipment of used controlled substance;
    (E) If allowing the import of the used class I controlled substance 
would run counter to government restrictions from either the country of 
recovery or export regarding controlled ozone-depleting substances;
    (F) If reclamation capacity is installed or is being installed for 
that specific controlled substance in the country of recovery or 
country of export and the capacity is funded in full or in part through 
the Multilateral Fund.
    (ii) Within ten (10) working days after receipt of the objection 
notice, the importer may re-petition the Administrator, only if the 
Administrator indicated ``insufficient information'' as the basis for 
the objection notice. If no appeal is taken by the tenth working day 
after the date on the objection notice, the objection shall become 
final. Only one appeal of re-petition will be accepted for any petition 
received by EPA.
    (iii) Any information contained in the re-petition which is 
inconsistent with the original petition must be identified and a 
description of the reason for the inconsistency must accompany the re-
petition.
    (iv) In cases where the Administrator does not object to the 
petition based on the criteria listed in paragraph (g)(3)(i) of this 
section, the Administrator will issue a non-objection notice.
    (v) To pass the approved used class I controlled substances through 
U.S. Customs, the petition and the non-objection notice issued by EPA 
must accompany the shipment through U.S. Customs.
    (vi) If for some reason, following EPA's issuance of a non-
objection notice, new information is brought to EPA's attention which 
shows that the non-objection notice was issued based on false 
information, then EPA has the right to:
    (A) Revoke the non-objection notice;
    (B) Pursue all means to ensure that the controlled substance is not 
imported into the United States; and
    (C) Take appropriate enforcement actions.
    (vii) Once the Administrator issues a non-objection notice, the 
person receiving the non-objection notice is required to import the 
individual shipment of used class I controlled substance within the 
same control period as the date stamped on the non-objection notice.
    (viii) A person receiving a non-objection notice from the 
Administrator for a petition to import used class I controlled 
substances must maintain the following records:
    (A) a copy of the petition;
    (B) the EPA non-objection notice;
    (C) the bill of lading for the import; and
    (D) U.S. Customs entry documents for the import that must include 
one of the commodity codes from Appendix K to this subpart.
* * * * *
    (u) Holders of Essential-Use Allowances--Reporting.
    (1) Within 30 days of the end of every quarter, any person 
allocated essential-use allowances must submit to the Administrator a 
report containing the quantity of each controlled substance, in 
kilograms, purchased and received from each producer and each importer 
during that quarter as well as from which country the controlled 
substance was imported.
    (2) Any person allocated essential-use allowances must submit to 
the Administrator a report containing the following information within 
30 days of the end of the control period, and, if possible, within 20 
days of the end of the control period:
    (i) The gross quantity of each controlled substance, in kilograms, 
that was used for the essential use during the control period; and
    (ii) The quantity of each controlled substance, in kilograms, 
contained in exported products during the control period; and

[[Page 79874]]

    (iii) The quantity of each controlled substance, in kilograms, that 
was destroyed or recycled during the control period; and
    (iv) The quantity of each controlled substance, in kilograms, held 
in inventory as of the last day of the control period, that was 
acquired with essential use allowances in all control periods (i.e. 
quantity on hand at the end of the year); and
    (v) The quantity of each controlled substance, in kilograms, in a 
stockpile that is owned by the company or is being held on behalf of 
the company under contract, and was produced or imported through the 
use of production allowances and consumption allowances prior to the 
phaseout (i.e. class I ODSs produced before their phaseout dates); and
    (vi) For essential use allowances for metered-dose inhalers only, 
the allowance holder must report the total number of marketable units 
of each specific metered-dose inhaler product manufactured in the 
control period.
* * * * *
[FR Doc. 02-32386 Filed 12-30-02; 8:45 am]
BILLING CODE 6560-50-P