Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) If the Executive Officer determines that
any basis for invalidation set forth in subsection (b)(1) below occurred, in
addition to taking any enforcement action, he or she may: suspend, restrict,
modify, or revoke an LRT-CBTS account; modify or delete a Certified CI;
restrict, suspend, or invalidate credits; or recalculate the deficits in an
LRT-CBTS account. For purposes of this section, "Certified CI" includes any
determination relating to carbon intensity made pursuant to sections
95488 through
95488.10, or relating to a
credit-generating activity approved under section
95489.
(b)
Determination that a Credit,
Deficit Calculation, or Certified CI is Invalid.
(1)
Basis for Invalidating.
The Executive Officer may modify or delete a Certified CI and invalidate
credits or recalculate deficits based on any of the following:
(A) Any of the information used to generate
or support the Certified CI was incorrect for reasons including the omission of
material information or changes to the process following submission;
(B) Any material information submitted in
connection with any Certified CI or credit transaction was incorrect;
(C) Fuel reported under a given pathway was
produced or transported in a manner that varies in any way from the methods set
forth in any corresponding pathway application documents submitted pursuant to
sections 95488 through
95488.10;
(D) Fuel transaction or other data reported
into LRT-CBTS and used in calculating credits and deficits was incorrect or
omitted material information;
(E)
Credits or deficits were generated or transferred in violation of any provision
of this subarticle or in violation of other laws, statutes or
regulations;
(F) A person obligated
to provide records under this subarticle refused to provide such records or
failed to produce them within the required time; and
(G) The sequestered
CO2 associated with credits generated for verified
greenhouse gas emission reductions by a CCS project was released or otherwise
leaked to the atmosphere.
(H) For
purposes of this section, "material information" means:
1. Information that would affect by any
amount the Executive Officer's determination of a carbon intensity score,
expressed on a gCO2e/MJ basis to two decimal places,
or
2. Information that would affect
by any whole integer the number of credits or deficits generated under sections
95486,
95486.1,
95486.2,
95489, or resulting from any
transaction or other activity reported in the
LRT-CBTS.
(2)
Notice. Upon making an initial determination that a credit
(other than a provisional credit), deficit calculation, or Certified CI (other
than a provisionally certified CI) may be subject to modification, deletion,
recalculation, or invalidation under subsection (b)(1), above, the Executive
Officer will notify all potentially affected parties, including those who hold
or generate credits or deficits based on a Certified CI that may be invalid,
and may notify any linked program. The notice shall state the reason for the
initial determination, and may be distributed using the LRT-CBTS. Any party
receiving such notice may submit, within 20 days, any information that it wants
the Executive Officer to consider. The Executive Officer may request
information or documentation from any party likely to have information or
records relevant to the validity of a credit, deficit calculation, or Certified
CI. Within 20 days of any such request, a regulated entity shall make records
and personnel available to assist the Executive Officer in determining the
validity of the credit, deficit calculation, or Certified CI.
(3)
Interim Account
Suspension. When the Executive Officer makes an initial determination
pursuant to the preceding subsection, the Executive Officer may immediately
take steps to suspend an account or a Certified CI as needed to prevent
additional accrual of credits or deficits under the Certified CI and to prevent
transfer of potentially invalid credits or deficits. Suspension of an account
may include locking an account within the LRT-CBTS to prevent credit transfers
or report alteration.
(4)
Final Determination. Within 50 days after making an initial
determination under sections
95495(b)(1) and
(2), above, the Executive Officer shall make
a final determination based on available information whether, in his or her
judgment, any of the bases listed in subsection (b)(1) exists, and notify
affected parties and any linked program. If the final determination invalidates
credits or deficit calculations, the corresponding credits and deficits will be
added to or subtracted from the appropriate LRT-CBTS accounts. Where such
action creates a deficit in a past compliance period, the deficit holder has 60
days from the date of the final determination to purchase sufficient credits to
eliminate the entire deficit. A return to compliance does not preclude further
enforcement actions.
(5)
Adjustment of Invalidated Credits or Miscalculated Deficits.
The Executive Officer will seek the following options to address any invalid
credits or miscalculated deficits in the program:
(A) First, the Executive Officer may remove
the invalid credits from, or add miscalculated deficits to, the account of the
credit or deficit generator, or other entity deemed responsible for the
invalidation or miscalculation in the final determination pursuant to section
95486. The entity is responsible
for returning its account to compliance.
(B) Next, the Executive Officer may choose to
retire credits from the Buffer Account to address invalidated credits or
uncovered deficits.
(C) After
exercising options in subsection (A) and (B) above, the Executive Officer may
remove remaining invalid credits from an entity's account that holds or
previously held invalid credits. The entity is responsible for returning its
account to compliance.
(D) The
Executive Officer will not remove invalid credits from entities that purchased
those credits in the Credit Clearance Market, pursuant to section
95485(c).
1. New
section filed 11-16-2015; operative 1-1-2016 (Register 2015, No.
47).
2. Amendment of section heading and section filed 1-4-2019;
operative 1-4-2019 pursuant to Government Code section
11343.4(b)(3)
(Register 2019, No. 1).
3. New subsection (b)(5)(D) filed 5-27-2020;
operative 7-1-2020 (Register 2020, No. 22).
Note: Authority cited: Sections
38510,
38530,
38560,
38560.5,
38571,
38580,
39600,
39601,
41510,
41511
and
43018,
Health and Safety Code; 42
U.S.C. section 7545; and Western Oil and Gas
Ass'n v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121
Cal.Rptr. 249 (1975). Reference: Sections
38501,
38510,
39515,
39516,
38571,
38580,
39000,
39001,
39002,
39003,
39515,
39516,
41510,
41511
and
43000,
Health and Safety Code; Section
25000.5,
Public Resources Code; and Western Oil and Gas Ass'n v. Orange County Air
Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249
(1975).
