HB 51-USE OF DESIGNATED REFRIGERANTS  2:31:14 PM CHAIR BJORKMAN reconvened the meeting and announced the consideration of HOUSE BILL NO. 51 "An Act relating to refrigerants designated as acceptable for use under federal law." 2:31:37 PM At ease. 2:32:29 PM CHAIR BJORKMAN reconvened the meeting and invited the bill sponsor to present the bill. 2:32:45 PM REPRESENTATIVE STANLEY WRIGHT, District 22, Alaska State Legislature, Juneau, Alaska, sponsor of HB 51, stated that this bill adds a section to Alaska statutes that would allow, but not mandate, transition away from hydrofluorocarbons (HFC), joining a nationwide effort to phase in the use of less polluting alternatives. He deferred to Mr. Henthorn to read the sponsor statement. 2:34:05 PM BILL HENTHORN, Intern, Representative Stanley Wright, Alaska State Legislature, Juneau, Alaska, read the sponsor statement for HB 51: [Original punctuation provided.] Alaska is one of the states where legislation is needed to prepare for the transition away from hydrofluorocarbons (HFCs). HFCs are chemicals that are most commonly found in industrial and residential air conditioning systems in the form of refrigerant, According to the Climate and Clean Air Coalition, "The most abundant HFC is 3,790 times more damaging to the climate than carbon dioxide over a 20-year period" (CCA) House Bill 51 aims to give the Heating, Ventilation, and Air Conditioning (HVAC) Industry the framework it needs to begin the transitioning process in the future in a safe and efficient manner, allowing for them to stay as competitive as possible while also lowering the global warming potential by approximately 75% through switching to HFC alternatives. To move forward with the goal of switching out HFCs, the legislature must ensure that the building codes in Alaska cannot stop the use of a HFC alternative as long as the equipment needed to use it is installed properly and complies with the necessary safety standards. Supporting the switch to HFC alternative refrigerants will nationally contribute to the projected creation of around 33,000 jobs as well as maintaining 138,400 other existing jobs from now to 2027. This will embolden Alaska's economy and ensure that we do all we can to support the need for green energy techniques and industries in the future. In combination with other states, the federal transition to HFC alternatives is projected to decrease America's greenhouse gas emissions by a total of 2.4 billion metric tons of Carbon Dioxide for the next 15 years. The importance of allowing our industrial leaders to have a functional environment in which to do business, as well as working on our levels of greenhouse gas emissions are two very important, related subjects and HB 51s passage will be a fantastic approach to helping both. 2:36:40 PM SENATOR DUNBAR said the bill reads, "notwithstanding a provision of the state building code" and it allows for federally approved hydrofluorocarbon (HFC) alternatives to be used. He asked if there were any current provisions in the state building code that forbid the use of HFC alternatives. MR. HENTHORN deferred the question to Mr. Nerozzi. 2:37:12 PM MIKE NEROZZI, Director, Government Affairs, Air-Conditioning, Heating, and Refrigeration Institute (AHRI), Arlington, Virgina, responded to Senator Dunbar's question, stating that the building code itself is prohibited. Most states that have a statewide building code operate on a three year update cycle, typically adopting the ICC model codes that are several versions behind the most up-to-date code. All of the previous iterations of model codes are prohibited except for the newly released 2024 ICC model codes. Previous codes do not list these alternatives as permitted refrigerants. HB 51 would provide a bridge for Alaska to continue to allow the sale of equipment containing HFCs until the state can adopt the 2024 codes containing the permitted refrigerants. SENATOR DUNBAR asked whether these refrigerants are permitted under federal law. 2:39:06 PM MR. NEROZZI answered yes. HB 51 is part of an international transition away from HFC refrigerants that emerged from the 2020 American Innovation and Manufacturing Act which directed the U.S. Environmental Protection Agency to phasedown HFC-based refrigerants. Federal law fully allows these refrigerants, but building codes need to be updated to complete the transition smoothly. SENATOR DUNBAR asked whether federal law preempts state law in this case. MR. NEROZZI answered no, federal law would not preempt state law. States have full autonomy over their building codes. 2:41:13 PM CHAIR BJORKMAN asked Mr. Nerozzi would whether he had any closing comments. MR. NEROZZI paraphrased from the two prepared statements. They read as follows: [Original punctuation included.] TESTIMONY OF MIKE NEROZZI DIRECTOR OF GOVERNMENT AFFAIRS ON BEHALF OF THE AIR-CONDITIONING, HEATING, AND REFRIGERATION INSTITUTE BEFORE THE ALASKA HOUSE OF REPRESENTATIVES LABOR AND COMMERCE COMMITTEE HEARING ON HOUSE BILL 51 FEBRUARY 10, 2023 Good morning, Chairman Sumner and members of the Labor and Commerce Committee. My name is Mike Nerozzi, Director of Government Affairs for the Air- Conditioning, Heating, and Refrigeration Institute (AHRI). Thank you for allowing me to speak with you today and convey AHRI's strong support for House Bill 51, sponsored by Representative Wright, which will provide American manufacturers in the heating, ventilation, air conditioning, and refrigeration (HVACR) and water heating industry with the certainty needed to comply with forthcoming federal regulations phasing down the use of hydrofluorocarbons (HFCs) refrigerants. AHRI represents more than 330 manufacturers of air conditioning, heating, commercial refrigeration, and water heating equipment. Our member companies produce more than 90 percent of the residential and commercial air conditioning, heating, and commercial refrigeration equipment made in North America. In North America, the annual economic activity resulting from the HVACR industry is approximately $256 billion. In the United States alone, AHRI member companies, along with distributors, contractors, and technicians employ more than 1.3 million people, and more than 700 jobs in Alaska. In December 2020, the American Innovation and Manufacturing Act (AIM Act) was signed into law by President Trump, which directs the U.S. Environmental Protection Agency (EPA) to issue rules that will phase down the use of current refrigerants, restricting their use in certain applications such as commercial refrigeration, chillers, and air conditioning. This allows for an orderly transition to next generation refrigerants, many of which are made in the United States. However, our manufacturers face a pressing challenge. Building codes need to be updated this year to remove regulatory barriers to the use of these new refrigerants. Efforts are underway to do so, both in Alaska and across the country, but the regulatory timelines for these efforts are two to three years away. This is too late for American manufacturers and Alaskan consumers. HB 51 amends the state building code to allow any substitute refrigerant deemed safe under federal standards to be used in Alaska. This will eliminate the mismatch of the building code schedule and enable the use of new refrigerant one to two years earlier, ensuring that there is no regulatory disruption for consumers, by making new products available for sale in Alaska on the same schedule as other states. In short, HB 51 eliminates a timing barrier without imposing any new regulatory standards. It simply allows for harmonization with the 2024 model codes, benefitting consumers and businesses that rely on air conditioning and refrigeration equipment. Thank you again for the opportunity to present testimony at this hearing. AHRI looks forward to continuing to work with the Alaska State Legislature to achieve both the economic and environmental benefits of the phase down of HFCs. [Original punctuation included.] February 4, 2023 RE: Building code legislation to support HFC phasedown In December 2020, former President Trump signed into law the American Innovation and Manufacturing Act (AIM Act), which directs the U.S. Environmental Protection Agency (EPA) to issue rules that will phasedown the use of hydrofluorocarbons (HFCs) and authorizes EPA to restrict the use of HFCs in certain applications, such as commercial refrigeration, chillers, and stationary air conditioning equipment. As a result, building codes in all fifty states must be updated to enable the safe, efficient transition to HFC replacement refrigerants in HVACR equipment. Manufacturers, distributors, contractors, and consumers need the building code update to be completed as soon as possible before the refrigerant transition goes into effect. To that end, states must adopt legislation specifying that building codes cannot prohibit the use of a substitute refrigerant allowed by EPA. HFCs are chemicals, with a high global warming potential, that are typically used in refrigerants. Today, HVACR manufacturers use HFCs in most of the equipment they produce. The new federal regulations will require manufacturers to begin producing equipment that utilize new substitute refrigerants that have a lower global warming potential. Over the past decade, the HVACR industry has spent hundreds of millions of dollars preparing for this transition. We have invested in research and development, facility construction and expansion, and training, to ensure a safe and efficient transition when the federal regulations go into effect in the U.S. This orderly, national transition will allow U.S. manufacturers to maintain technological leadership in the global HVACR marketplace, while creating new domestic jobs and driving domestic economic growth. The phasedown is projected to create 33,000 new manufacturing jobs and will also help sustain 138,400 existing jobs between now and 2027, while increasing direct manufacturing output by $12.5 billion. State legislation is essential to the orderly and effective phasedown of HFCs, and we urge states to pass legislation that will ensure a victory U.S. manufacturers, distributors, contractors, and consumers by preparing for an orderly transition to next generation refrigerants. Signed, Air-Conditioning, Heating, and Refrigeration Institute Alliance for Responsible Atmospheric Policy Heating, Air-conditioning, & Refrigeration Distributors International Plumbing-Heating-Cooling ContractorsNational Association Contact: Mike Nerozzi, Director of Government Affairs, AHRI mnerozzi@ahrinet.org "Economic Impacts of U.S. Ratification of the Kigali Amendment." Industry Forecasting at the University of Maryland (INFORUM) and JMS Consulting, 2018. CHAIR BJORKMAN thanked Mr. Nerozzi and solicited questions. 2:44:46 PM SENATOR GRAY-JACKSON thanked Representative Wright for doing the right thing. She said she welcomes all efforts to address climate change. [CHAIR BJORKMAN held HB 51 in committee.]