ENGROSSED SECOND SUBSTITUTE HOUSE BILL 2401
State of Washington 68th Legislature 2024 Regular Session
By House Appropriations (originally sponsored by Representatives
Duerr, Doglio, Berry, Fitzgibbon, Ramel, and Pollet)
READ FIRST TIME 02/05/24.
1 AN ACT Relating to providing for the responsible management of
2 refrigerant gases with a higher global warming potential than carbon
3 dioxide that are used in appliances or other infrastructure;
4 reenacting and amending RCW 43.21B.110 and 43.21B.300; adding a new
5 section to chapter 82.04 RCW; adding a new chapter to Title 70A RCW;
6 and prescribing penalties.
7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
8 NEW SECTION. Sec. 1. INTENT. (1) The legislature finds that
9 hydrofluorocarbons are climate pollutants that pose significant
10 threats to our environment. Although hydrofluorocarbons currently
11 represent a small portion of the state's greenhouse gas emissions,
12 emissions of hydrofluorocarbons have been rapidly increasing in the
13 United States and worldwide, and they are hundreds to thousands of
14 times more potent at trapping heat than carbon dioxide. Preventing
15 the release of hydrofluorocarbons is among the highest global impact
16 measures to address the climate crisis.
17 (2) In 2019 and 2021, the legislature took significant steps
18 towards reducing greenhouse gas emissions from hydrofluorocarbons by
19 transitioning to the use of less damaging hydrofluorocarbons or other
20 suitable substitutes in several new end-uses including their largest
21 end-uses where they are used as refrigerants as well instituting a
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 1 statewide refrigerant management program. However, significant
2 sources of hydrofluorocarbons and refrigerant emissions in Washington
3 remain unaddressed because vast quantities of refrigerants are
4 contained inside the installed base of heating and cooling equipment
5 beyond those covered by the statewide refrigerant management program.
6 There is a dire need for improving life-cycle refrigerant management
7 to prevent those refrigerants from being emitted into the atmosphere.
8 (3) On a national and global scale, the United States has begun
9 implementing a phasedown of hydrofluorocarbons. The United States has
10 ratified the global Kigali amendment to the Montreal protocol, an
11 international agreement to phase down the production and consumption
12 of hydrofluorocarbons by 85 percent by 2036. Domestically, in 2020,
13 the United States congress enacted the American innovation and
14 manufacturing act which closely matches the Kigali amendment's phase-
15 down schedule. Any state actions that complement the phasedown by
16 reducing demand of newly produced hydrofluorocarbons will help
17 actualize the vast climate benefits expected from the American
18 innovation and manufacturing act and the Kigali amendment.
19 (4) As in any circular economy, an important lever for reducing
20 demand for new or virgin material is to maximize the recovery,
21 recycling, reclaiming, and reuse of existing material. The same
22 principle can be successfully applied to refrigerants. However, the
23 current state regulatory environment notably lacks a mechanism to
24 ensure that refrigerants and greenhouse gases are recovered,
25 reclaimed, and put back into the economy for reuse. Recognizing the
26 benefits of minimizing refrigerant releases and maximizing
27 reclamation, the United States environmental protection agency has
28 recently proposed rules to require the use of reclaimed refrigerants
29 in various sectors, including commercial and industrial refrigeration
30 as well as air conditioners and heat pumps. Due to those pending
31 federal regulations requiring the use of reclaimed refrigerants, it
32 is in the state's interest to incentivize a refrigerant recovery,
33 reclamation, and recycling program to ensure an adequate supply of
34 refrigerant chemicals exists for Washington users as the transition
35 to chemicals with lower climate-polluting risks takes place.
36 (5) Implementation of extended producer responsibility schemes in
37 Washington and other leading states, including a financial incentive
38 payment to be paid to service technicians and others for recovered
39 gas, will incentivize a greater supply of used fluorinated
40 refrigerants removed from equipment, which can then be reclaimed and
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 1 reused. Increasing the supply of reclaimed refrigerants available to
2 fulfill the demand for refrigerants in existing and new equipment
3 will support smooth implementation of federal regulations under the
4 American innovation and manufacturing act. It will also increase the
5 supply of refrigerants for ramping new heat pump adoption to
6 decarbonize the building stock. Overall, greater reclamation of
7 hydrofluorocarbons will not only prevent direct greenhouse gas
8 emissions but also support the state's building electrification and
9 heat pump adoption goals.
10 (6) Once the need for reclaimed refrigerants has passed in the
11 future, the most polluting refrigerant chemicals should be safely
12 destroyed.
13 NEW SECTION. Sec. 2. DEFINITIONS. The definitions in this
14 section apply throughout this chapter unless the context clearly
15 requires otherwise.
16 (1)(a) "Bulk" means a covered refrigerant of any amount that is
17 in a container for the transportation or storage of that substance
18 such as cylinders, drums, ISO tanks, and small cans.
19 (b) A covered refrigerant that must first be transferred from a
20 container to another container, vessel, or piece of equipment in
21 order to realize its intended use is a bulk substance.
22 (c) A covered refrigerant contained in a manufactured product
23 such as an appliance, an aerosol can, or a foam is not a bulk
24 substance.
25 (2) "Covered refrigerant" means any fluorinated regulated
26 refrigerant or substitute, as those terms are defined in chapter
27 70A.60 RCW, that are used for heat transfer purposes to provide a
28 cooling or heating effect.
29 (3) "Department" means the Washington state department of
30 ecology.
31 (4)(a) "Destruction" means the expiration of a covered
32 refrigerant to the destruction and removal efficiency actually
33 achieved.
34 (b) Technologies used for destruction of covered refrigerants
35 should be limited to the federally approved list of destruction
36 technologies maintained under 40 C.F.R. Sec. 84.2 as it existed as of
37 January 1, 2024.
38 (5) "Distributor" or "wholesaler" means any person or entity
39 engaged in the distribution, wholesale sale, sale, or other
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 1 commercial furnishing of any covered refrigerant or precharged
2 equipment, except for service technicians transferring refrigerant to
3 end-user consumers as part of a service call.
4 (6) "Partner participant" means an entity that is not a producer
5 but is a part of the supply chain of covered refrigerants. "Partner
6 participants" includes, but is not limited to, refrigerant
7 distributors, wholesalers, reclaimers, and service technicians.
8 (7)(a) "Precharged equipment" means any appliance or
9 refrigeration, air conditioning, or heat pump equipment or other
10 equipment containing a quantity of covered refrigerant already added
11 or charged into the equipment or appliance prior to installation in
12 the field.
13 (b) "Precharged equipment" does not include equipment that does
14 not contain any covered refrigerant already added or charged into the
15 equipment prior to installation in the field, or that solely contains
16 refrigerants other than covered refrigerants.
17 (c) "Precharged equipment" does not include equipment that
18 contains only a covered refrigerant that is certified to be the
19 responsibility of another producer under subsection (8)(b) or (c) of
20 this section.
21 (8)(a) "Producer" includes:
22 (i) With respect to covered refrigerants, the person or entity
23 who is the first point of sale for covered refrigerants that are
24 sold, offered for sale, distributed, or otherwise entered into
25 commerce in or into Washington;
26 (ii) With respect to precharged equipment:
27 (A) If the precharged equipment is sold under the brand of the
28 precharged equipment manufacturer, the producer is the person that
29 manufactures the precharged equipment;
30 (B) If the precharged equipment is sold under a retail brand or
31 under a brand owned by a person other than the manufacturer, the
32 producer is the brand owner;
33 (C) If there is no person to which (a)(ii)(A) or (B) of this
34 subsection applies, the producer is the person that is the licensee
35 of a brand or trademark under which the precharged equipment is used
36 in a commercial enterprise, sold, offered for sale, or distributed in
37 or into this state, whether or not the trademark is registered in
38 this state;
39 (D) If there is no person described in (a)(ii)(A) through (C) of
40 this subsection within the United States, the producer is the person
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 1 who is the importer of record for the precharged equipment into the
2 United States for use in a commercial enterprise that sells, offers
3 for sale, or distributes the precharged equipment in this state;
4 (E) If there is no person described in (a)(ii)(A) through (D) of
5 this subsection with a commercial presence within the state, the
6 producer is the person who first sells, offers for sale, or
7 distributes the precharged equipment in or into this state.
8 (b) A person is the "producer" as defined in (a) of this
9 subsection except where another person has mutually signed an
10 agreement with a producer as defined in (a) of this subsection that
11 contractually assigns responsibility to the producer, and the person
12 has joined a registered refrigerant stewardship organization as the
13 responsible producer for that covered refrigerant, precharged
14 equipment, or refrigerant contained in the precharged equipment. In
15 the event that another person is assigned responsibility as the
16 producer under this subsection (8)(b), the producer under (a) of this
17 subsection must provide written certification of that contractual
18 agreement to the refrigerant stewardship organization and to the
19 department.
20 (c) "Producer" does not include any person who only manufactures,
21 sells, offers for sale, distributes, or imports into the state
22 precharged equipment if the gas contained in the precharged equipment
23 is supplied by a producer that has joined a registered refrigerant
24 stewardship organization as the producer for that precharged
25 equipment and the covered refrigerant contained in the precharged
26 equipment under this chapter. Such a producer of gas that is included
27 in precharged equipment must provide written certification of that
28 membership to both the producer of the precharged equipment and the
29 refrigerant stewardship organization of which the gas producer is a
30 member.
31 (9) "Reclaimer" means any person undertaking reclamation of
32 covered refrigerants in compliance with federal requirements,
33 including recordkeeping and reporting and all other requirements
34 stipulated under 40 C.F.R. Sec. 84, as it existed as of January 1,
35 2024.
36 (10) "Reclamation" or "reclaim" means the reprocessing of a
37 recovered covered refrigerant or substitute to recover usable
38 products or regenerate the material, including to at least the purity
39 specified in the air conditioning, heating, and refrigeration
40 institute (AHRI) standard 700-2016 and verifying this purity using
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 1 the analytical methodology prescribed in the standard, and meets the
2 reclamation standard of containing no greater than 15 percent virgin
3 or new material by weight.
4 (11) "Recovery" means the process by which a regulated
5 refrigerant is:
6 (a) Removed, in any condition, from equipment in a manner
7 consistent with 40 C.F.R. 82.158, as it existed as of January 1,
8 2024, or in a manner consistent with federal regulations updated
9 after January 1, 2024, and subsequently adopted by the department by
10 rule; and
11 (b) Stored in an external container, with or without testing or
12 processing of the regulated refrigerant.
13 (12) "Recovery rate" means the proportion of the total amount of
14 recovered covered refrigerant that is collected and subsequently
15 undergoes reclamation or destruction as a fraction of the estimated
16 total amount of covered refrigerant that is available for recovery
17 from equipment in a given year, as calculated by the refrigerant
18 stewardship organization and approved by the department.
19 (13) "Refrigerant stewardship organization" means a producer that
20 directly implements a stewardship plan under this chapter or a
21 nonprofit entity formed to implement a stewardship plan under this
22 chapter, including the collection and management of covered
23 refrigerants, and the disbursement of funds to incentivize enhanced
24 refrigerant recovery, reclamation, and destruction.
25 (14) "Retail establishment" means a person who sells precharged
26 equipment containing covered refrigerants in or into this state or
27 offers or otherwise makes available covered precharged equipment to a
28 customer, including other businesses, for use in this state.
29 (15) "Service technician" means any person certified by the
30 United States environmental protection agency under section 608 or
31 609, as appropriate, of the federal clean air act, as it existed as
32 of January 1, 2024, or the federal American innovation and
33 manufacturing act of 2020, as it existed as of January 1, 2024.
34 NEW SECTION. Sec. 3. REQUIREMENT THAT PRODUCERS IMPLEMENT A
35 PROGRAM. (1) Beginning January 1, 2025, any producer who sells, or
36 otherwise enters into commerce, bulk covered refrigerants or
37 precharged equipment containing a covered refrigerant into the state
38 of Washington must register with the department through a refrigerant
39 stewardship organization. Beginning January 1, 2025, each producer
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 1 must participate in a refrigerant stewardship organization and
2 appropriately fund the operations of the refrigerant stewardship
3 organization.
4 (2) Beginning July 1, 2025, a producer that does not participate
5 in a registered refrigerant stewardship organization is prohibited
6 from selling bulk covered refrigerants or precharged equipment in or
7 into Washington.
8 (3) By December 1, 2027, in order to be eligible to receive an
9 incentive payment from a refrigerant stewardship organization
10 consistent with section 8 of this act, each entity that is not a
11 producer but sells, resells, distributes, or otherwise enters into
12 commerce bulk covered refrigerants after the first point of sale must
13 register with a refrigerant stewardship organization as a partner
14 participant in the refrigerant stewardship organization. A partner
15 participant may include, but is not limited to, refrigerant
16 distributors, wholesalers, reclaimers, and service technicians.
17 Partner participants are not required to fund a refrigerant
18 stewardship organization, but may be recipients of financial
19 incentives aimed at enhancing refrigerant recovery. In order to be
20 eligible to receive a financial incentive payment, partner
21 participants must keep records and report information to a
22 refrigerant stewardship organization in the manner necessary to
23 enable the refrigerant stewardship organization to fulfill its
24 reporting requirements to the department under section 10 of this
25 act.
26 (4) Beginning January 1, 2028, producers, through a refrigerant
27 stewardship organization, shall implement the plan approved by the
28 department as outlined in section 4 of this act.
29 NEW SECTION. Sec. 4. STEWARDSHIP PLAN COMPONENTS. (1) By May 1,
30 2027, a refrigerant stewardship organization or organizations must
31 submit a plan to the department for review and approval. Within 120
32 days of submission, the department must review and may approve a plan
33 provided it contains and adequately addresses the following
34 components:
35 (a) Includes contact information for each producer in the plan;
36 (b)(i) Identifies the brands and equipment models of each
37 producer of precharged equipment containing covered refrigerants
38 participating in the plan; and
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 1 (ii) Identifies the producers for each type of bulk covered
2 refrigerant manufactured, imported, or distributed into the state;
3 (c) Proposes the implementation mechanisms through which the
4 program expects to meet the requirements of the performance
5 assessment established in section 5 of this act and describes the
6 methods used to calculate whether the program is achieving its
7 performance targets, including a specific description of the data
8 sources and calculations to be relied upon in calculating a recovery
9 rate for department approval;
10 (d) Includes a detailed and