United States--Mexico Economic Partnership Act--Continue

Floor Speech

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Mr. Barrasso. Mr. President, Senator Carper, ranking member of the Committee on Environment and Public Works, Senator John Kennedy, and I, as chairman of the Committee on Environment and Public Works, are the principal Senate authors of section 103 in Division S of the Consolidated Appropriations Act, 2021--the American Innovation and Manufacturing, ``AIM'', Act of 2020, hereinafter ``section 103''. This bipartisan legislation will phase down the production and consumption of hydrofluorocarbons, HFCs, which are potent greenhouse gases that contribute to climate change. As authors, we submit these comments to provide the Senate with additional information regarding the development of section 103.

Section 103 establishes a new, national program administered by the U.S. Environmental Protection Agency, EPA, to phase down the production and consumption of certain HFC substances. Section 103 vests EPA with authority to phase down the production and consumption of these substances in a comprehensive manner. It is designed to provide regulatory certainty. Specifically, section 103 requires EPA to implement an 85 percent phase down of the production and consumption of regulated HFC substances, so those levels reach approximately 15 percent of their 2011-2013 average annual levels by 2036. Importantly, this section includes provisions to safeguard consumers and American manufacturers from cost increases during the phase down while still adhering to the phase down timetable in subsection (e)(2)(C).

The text of section 103 reflects bipartisan, necessary improvements to the original, introduced text in the Senate. On March 4, 2020, Senator Kennedy filed amendment No. 1504 to S. 2657, which was identical to stand-alone legislation, S. 2754, the American Innovation and Manufacturing Act of 2019. Ranking Member Carper of the U.S. Senate Committee on Environment and Public Works Committee, EPW, cosponsored amendment No. 1504 and S. 2754. EPW Chairman Barrasso opposed amendment No. 1504 and S. 2754 as introduced, hereinafter ``introduced legislation''.

On March 25, 2020, Chairman Barrasso and Ranking Member Carper began an electronic information-gathering process on S. 2754 by EPW to solicit the views of stakeholders. This process allowed EPW to hear safely from many stakeholders during the COVID-19 pandemic. The extensive information-gathering process generated filings from a range of industries, States, interest groups, and individuals.

We relied on the valuable information gained through that process to improve the introduced legislation and to reach collective agreement on amended text. This agreement was filed as amendment No. 2655 to S. 2657 on September 10, 2020. Section 103 closely resembles the text of amendment No. 2655.

Our agreed-upon changes to the introduced legislation have focused in a few key areas identified by Chairman Barrasso. The first key area is ``essential uses'' of regulated HFC substances. The introduced legislation offered immediate relief for some special circumstances, including feedstocks and process agents. For example, in a provision that has been present in all versions of the legislation, subsection (e)(4)(A) assures there are no regulatory requirements for ``a regulated substance that is used and entirely consumed (except for trace quantities) in the manufacture of another chemical.'' Where trace quantities of an HFC regulated substance, including impurities or unreacted feedstock chemical, remain through transformation of a regulated HFC substance into another product, that activity is covered by the exemption as soon as the Act is enacted into law.

The introduced legislation did not provide immediate protection for essential uses. Subsection (e)(4)(B) now provides that relief for essential uses. Congress has identified six essential uses in subsection (e)(4)(B)(iv) that are designated by law as essential uses upon enactment: No. 1, propellant in metered dose inhalers; No. 2, defense sprays; No. 3, structural composite preformed polyurethane foam for marine use and trailer use; No. 4, the etching of semiconductor material or wafers and the cleaning of chemical vapor deposition chambers within the semi-conductor manufacturing sector; No. 5, mission-critical military end uses, such as armored vehicle engine and shipboard fire suppression systems and systems used in deployable and expeditionary applications; and No. 6, onboard aerospace fire suppression.

In implementing this legislation, EPA must allocate, by rule, the full quantity of allowances needed by each of these six congressionally designated uses for at least 5 years. This rulemaking only determines the quantities of mandatory allowances that are allocated to each of the six uses above.

Under subsection (e)(4)(B)(i)-(iii), EPA may, by rule, designate other uses as essential uses and allocate any such use a quantity of allowances, provided certain criteria are met and subject to the applicable phasedown timelines and regulations for the production and consumption of HFCs under (e)(2)-(3). The Administrator is required to review each essential use application every 5 years and shall continue to make available essential use allowances if the Administrator determines, subject to notice and opportunity for public comment, that statutory criteria are met under subsection (e)(4)(B)(v).

The second key area of change from the introduced legislation is express preemption of certain State and local laws, reflected in subsection (k)(2). With respect to an exclusive use for which a mandatory allocation of allowances is provided under subsection (e)(4)(B)(iv)(I), subsection (k)(2)(A) preempts any enforcement of a statute or administrative action by a State or political subdivision of a State for 5 years from the date of enactment. Preemption is potentially extendable for up to--but not more than--10 years, as provided in subsection (k)(2)(B).

The third key area of change from the introduced legislation is the protection of consumers and businesses from cost increases. Of particular note, under subsection (f)(2)(B), EPA cannot accelerate the 15-year regulatory timeline faster than HFC consumption levels that the market is already achieving. However, EPA must ensure any level set under this subsection is at least as stringent as the production and consumption levels of regulated substances required under subsection (e)(2)(C) for a given year, as provided in subsection (f)(6). Language to protect consumers and businesses, particularly residential and small business consumers, has also been added to regulatory provisions throughout the bill, including essential uses (subsection (e)(4)-(5)), accelerated schedule (subsection (f)), and technology transitions (subsection (i)).

Together we support section 103. We thank our House colleagues for working together with us to improve further our Senate agreement reached in September 2020. Through negotiations with leaders of the U.S. House of Representatives Committee on Energy and Commerce, we agreed to additional changes to improve legislative clarity, including language to help protect affordability for residential and small business consumers while also protecting the environment.

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