[Code of Federal Regulations]

[Title 40, Volume 17]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 40CFR82.23]



[Page 503-505]

 

                   TITLE 40--PROTECTION OF ENVIRONMENT

 

         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)

 

PART 82_PROTECTION OF STRATOSPHERIC OZONE--Table of Contents

 

              Subpart A_Production and Consumption Controls

 

Sec.  82.23  Transfers of allowances of class II controlled substances.



    (a) Inter-company transfers. Effective January 1, 2003, a person 

(``transferor'') may transfer to any other person (``transferee'') any 

quantity of the transferor's class II consumption allowances, production 

allowances, export production allowances, or Article 5 allowances for 

the same type of allowance as follows:

    (i) The transferor must submit to the Administrator a transfer claim 

setting forth the following:

    (A) The identities and addresses of the transferor and the 

transferee;

    (B) The name and telephone numbers of contact persons for the 

transferor and the transferee;

    (C) The type of allowances being transferred, including the names of 

the class II controlled substances for which allowances are to be 

transferred;

    (D) The quantity (in kilograms) of allowances being transferred;

    (E) The control period(s) for which the allowances are being 

transferred;

    (F) The quantity of unexpended allowances of the type and for the 

control period being transferred that the transferor holds under 

authority of this subpart on the date the claim is submitted to EPA; and

    (G) For trades of consumption allowances, production allowances, 

export production allowances, or Article 5 allowances, the quantity of 

the 0.1 percent offset applied to the unweighted quantity traded that 

will be deducted from the transferor's allowance balance.

    (ii) The Administrator will determine whether the records maintained 

by EPA indicate that the transferor possesses unexpended allowances 

sufficient to cover the transfer claim on the date the transfer claim is 

processed. The transfer claim is the quantity (in kilograms) to be 

transferred plus, in the case of transfers of production or consumption 

allowances, 0.1 percent of that quantity. The Administrator will take 

into account any previous transfers, any production, and allowable 

imports and exports of class II controlled substances reported by the 

transferor. Within three working days of receiving a complete transfer 

claim, the Administrator will take action to notify the transferor and 

transferee as follows:

    (A) The Administrator will issue a notice indicating that EPA does 

not object to the transfer if EPA's records show that the transferor has 

sufficient unexpended allowances to cover the transfer claim. In the 

case of transfers of production or consumption allowances, EPA will 

reduce the transferor's balance of unexpended allowances by the quantity 

to be transferred plus 0.1 percent of that quantity. In the case of 

transfers of export production or Article 5 allowances, EPA will reduce 

the transferor's balance of unexpended allowances, respectively, by the 

quantity to be transferred. The transferor and the transferee may 

proceed with the transfer when EPA issues a no objection notice. 

However, if EPA ultimately finds that the transferor did not have 

sufficient unexpended allowances to cover the claim, the transferor and 

transferee, where applicable, will be held liable for any knowing 

violations of the regulations of this subpart that occur as a result of, 

or in conjunction with, the improper transfer.

    (B) The Administrator will issue a notice disallowing the transfer 

if EPA's records show that the transferor has insufficient unexpended 

allowances to cover the transfer claim, or that the transferor has 

failed to respond to one or more Agency requests to supply information 

needed to make a determination. Either party may file a notice of 

appeal, with supporting reasons, with the Administrator within 10 

working days after receipt of notification. The Administrator may affirm 

or vacate the disallowance. If no appeal is taken by the tenth working 

day after notification, the disallowance shall be final on that day.



[[Page 504]]



    (iii) The transferor and transferee may proceed with the transfer if 

the Administrator does not respond to a transfer claim within the three 

working days specified in paragraph (a)(1)(ii) of this section. In the 

case of transfers of production or consumption allowances, EPA will 

reduce the transferor's balance of unexpended allowances by the quantity 

to be transferred plus 0.1 percent of that quantity. In the case of 

transfers of export production allowances or Article 5 allowances, EPA 

will reduce the transferor's balance of unexpended allowances by the 

quantity to be transferred plus 0.1 percent of that quantity. If EPA 

ultimately finds that the transferor did not have sufficient unexpended 

allowances to cover the claim, the transferor and/or the transferee, 

where applicable, will be held liable for any knowing violations of the 

regulations of this subpart that occur as a result of, or in conjunction 

with, the improper transfer.

    (b) Inter-pollutant transfers. (1) Effective January 1, 2003, a 

person (transferor) may convert consumption allowances or production 

allowances for one class II controlled substance to the same type of 

allowance for another class II controlled substance listed in Appendix B 

of this subpart, following the procedures described in paragraph (b)(3) 

of this section.

    (2) Inter-pollutant transfers will be permitted at any time during 

the control period and during the 30 days after the end of a control 

period.

    (3) The transferor must submit to the Administrator a transfer claim 

that includes the following:

    (i) The identity and address of the transferor;

    (ii) The name and telephone number of a contact person for the 

transferor;

    (iii) The type of allowances being converted, including the names of 

the class II controlled substances for which allowances are to be 

converted;

    (iv) The quantity (in kilograms) and type of allowances to be 

converted;

    (v) The quantity (in kilograms) of allowances to be subtracted from 

the transferor's unexpended allowances for the first class II controlled 

substance, to be equal to 100.1 percent of the quantity of allowances 

converted;

    (vi) The quantity (in kilograms) of allowances to be added to the 

transferee's unexpended allowances for the second class II controlled 

substance, to be equal to the quantity (in kilograms) of allowances for 

the first class II controlled substance being converted multiplied by 

the quotient of the ozone depletion potential of the first class II 

controlled substance divided by the ozone depletion potential of the 

second class II controlled substance, as listed in Appendix B to this 

subpart;

    (vii) The control period(s) for which the allowances are being 

converted; and

    (viii) The quantity (in kilograms) of unexpended allowances of the 

type and for the control period being converted that the transferor 

holds under authority of this subpart as of the date the claim is 

submitted to EPA.

    (4) The Administrator will determine whether the records maintained 

by EPA indicate that the convertor possesses unexpended allowances 

sufficient to cover the transfer claim on the date the transfer claim is 

processed (i.e., the quantity (in kilograms) to be converted plus 0.1 

percent of that quantity (in kilograms)). EPA will take into account any 

previous transfers, and any production, imports (not including 

transshipments or used class II controlled substances), or exports (not 

including transhipments or used class II controlled substances) of class 

II controlled substances reported by the convertor. Within three working 

days of receiving a complete transfer claim, the Administrator will take 

action to notify the convertor as follows:

    (i) The Administrator will issue a notice indicating that EPA does 

not object to the transfer if EPA's records show that the convertor has 

sufficient unexpended allowances to cover the transfer claim. EPA will 

reduce the transferor's balance of unexpended allowances by the quantity 

to be converted plus 0.1 percent of that quantity (in kilograms). When 

EPA issues a no objection notice, the transferor may proceed with the 

transfer. However, if EPA ultimately finds that the transferor did not 

have sufficient unexpended allowances to cover the claim, the transferor 

will be held liable for any violations of the regulations of



[[Page 505]]



this subpart that occur as a result of, or in conjunction with, the 

improper transfer.

    (ii) The Administrator will issue a notice disallowing the transfer 

if EPA's records show that the transferor has insufficient unexpended 

allowances to cover the transfer claim, or that the transferor has 

failed to respond to one or more Agency requests to supply information 

needed to make a determination. The transferor may file a notice of 

appeal, with supporting reasons, with the Administrator within 10 

working days after receipt of notification. The Administrator may affirm 

or vacate the disallowance. If no appeal is taken by the tenth working 

day after notification, the disallowance shall be final on that day.

    (iii) The transferor may proceed with the transfer if the 

Administrator does not respond to a transfer claim within the three 

working days specified in paragraph (b)(4) of this section. EPA will 

reduce the transferor's balance of unexpended allowances by the quantity 

(in kilograms) to be converted plus 0.1 percent of that quantity (in 

kilograms). The transferor will be held liable for any violations of the 

regulations of this subpart that occur as a result of, or in conjunction 

with, the improper transfer if EPA ultimately finds that the transferor 

did not have sufficient unexpended allowances or credits to cover the 

claim.

    (c) Inter-company transfers and Inter-pollutant transfers. If a 

person requests an inter-company transfer and an inter-pollutant 

transfer simultaneously, the quantity (in kilograms) subtracted from the 

transferor's unexpended production or consumption allowances for the 

first class II controlled substance will be equal to 100.1 percent of 

the quantity (in kilograms) of allowances that are being converted and 

transferred.

    (d) A person receiving a permanent transfer of baseline production 

allowances or baseline consumption allowances (the transferee) for a 

specific class II controlled substance will be the person who has their 

baseline allowances adjusted in accordance with phaseout schedules in 

this section.



[68 FR 2848, Jan. 21, 2003]