Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) An ARB offset credit issued under this
article will remain valid unless invalidated pursuant to this
section.
(b) Timeframe for
Invalidation. ARB may invalidate an ARB offset credit pursuant to this section
within the following timeframe if a determination is made pursuant to section
95985(f):
(1) Within eight years of issuance of an ARB
offset credit, if the ARB offset credit is issued for early action pursuant to
the Program for Recognition of Early Action Offset Credits, or within eight
years of the date that corresponds to the end of the Reporting Period for which
the ARB offset credit is issued, if the ARB offset credit is issued pursuant to
section 95981.1, unless one of the
following requirements is met:
(A) The Offset
Project Operator or Authorized Project Designee for an offset project developed
under the Compliance Offset Protocol in section
95973(a)(2)(C)1.
or an early action quantification methodology approved pursuant to the Program
for Recognition of Early Action Offset Credits for the same project type, does
all of the following:
1. Has a different
verification body that has not verified the Offset Project Data Report for the
issuance of ARB offset credits, and meets the requirements for conflict of
interest pursuant to section
95979 and rotation of verification
bodies pursuant to section
95977.1(a),
conduct a second independent regulatory verification pursuant to sections
95977 through
95978, except for section
95977.1(b)(3)(M),
for the same Offset Project Data Report, or as provided in sections
95990(a)(3)(B) and
(a)(4) for projects developed under an
approved early action quantification methodology. Although the requirements in
section 95977.1(b)(3)(M)
do not need to be met under this section, any misreporting, discrepancies, and
omissions found during the full offset verification services must be included
in the offset material misstatement calculation performed pursuant to section
95977.1(b)(3)(Q).
If minor correctible errors that do not result in an offset material
misstatement are found during the full offset verification services and the
verification body does not identify any other nonconformance that would result
in an adverse Offset Verification Statement, the verification body must issue a
Qualified Positive Offset Verification Statement and identify the correctable
errors on the Offset Verification Statement;
2. The second regulatory verification must be
completed within three years of the issuance of the ARB offset credits through
the submittal of an Offset Verification Statement pursuant to section
95977.1(b)(3)(R)1.,
and the Offset Project Operator or Authorized Project Designee must receive a
Positive or Qualified Positive Offset Verification Statement from the new
verification body for the same Offset Project Data Report, or as provided in
section 95990(a)(3)(B) and
(a)(4) for projects developed under an
approved early action quantification methodology.
a. If the offset project is listed with an
Offset Project Registry, the verification body must submit the detailed
verification report and Offset Verification Statement for the second regulatory
verification to the Offset Project Registry and ARB.
b. The Offset Project Registry must review
the offset verification documents pursuant to section
95987(e)(1)(E)
and submit a report to ARB that includes the details and findings of the Offset
Project Registry's review. During its review, the Offset Project Registry may
request additional information from the verification body and Offset Project
Operator or Authorized Project Designee, if applicable, and may request
clarifications and revisions to the materials, if necessary.
c. The Offset Project Registry has 45
calendar days to review the offset verification information once complete and
accurate verification documents are received from the verification
body.
d. The Offset Project
Registry has an additional 15 working days to submit its report to ARB. ARB
will review the Offset Project Registry report and determine based on the
report and all the information submitted by the verification body and Offset
Project Operator or Authorized Project Designee, if applicable, if the
invalidation timeframe will be reduced. During its review, ARB may request
additional information, clarifications, and revisions to the materials, if
necessary.
3. If the
requirements in sections
95985(b)(1)(A)1.
and 2. are met, the ARB offset credits issued under the Offset Project Data
Report may only be subject to invalidation according to the following
timeframes:
a. Within three years of the date
that corresponds to the end of the Reporting Period for which the ARB offset
credits are issued, if the ARB offset credits are issued pursuant to section
95981; and
b. Within three years of the date for which
ARB offset credits are issued, if the ARB offset credits are issued pursuant to
the Program for Recognition of Early Action Offset Credits;
or
(B) The
Offset Project Operator or Authorized Project Designee for an offset project
developed under one of the protocols listed in section
95985(b)(1)(B)5.
does the following:
1. Has a subsequent Offset
Project Data Report verified pursuant to sections
95977 through
95978 by a different verification
body than the one which conducted the most recent verification, and that meets
the requirements for conflict of interest pursuant to section
95979 and rotation of verification
bodies pursuant to section
95977.1(a), or as
provided in section
95990(a)(3)(A)
for projects developed under an approved early action quantification
methodology; and
2. The
verification conducted by a different verification body for the subsequent
Offset Project Data Report and used to reduce the invalidation timeframe of any
ARB offset credits must be completed through the submittal of an Offset
Verification Statement pursuant to section
95977.1(b)(3)(R)1.
within, at a maximum, three years from the date that ARB offset credits were
issued for the Reporting Period, or as provided in section
95990(a)(3)(A)
for projects developed under an approved early action quantification
methodology. The verification of the subsequent Offset Project Data Report must
result in a Positive or Qualified Positive Offset Verification Statement from
the new verification body.
3. If
the requirements in sections
95985(b)(1)(B)1.
and 2. are met, the ARB offset credits issued pursuant to section
95981 for no more than three
Reporting Periods prior to the Reporting Period for which the subsequent Offset
Project Data Report was verified by a different verification body, or the ARB
offset credits issued pursuant to the Program for Recognition of Early Action
Offset Credits for any number of Early Action Reporting Periods prior to the
Reporting Period for which the subsequent Offset Project Data Report was
verified by a different verification body, may only be subject to invalidation
according to the following timeframes:
a.
Within three years of the date that corresponds to the end of the Reporting
Period for which the ARB offset credits are issued, if the ARB offset credits
are issued pursuant to section
95981; and
b. Within three years of the date for which
ARB offset credits are issued, if the ARB offset credits are issued pursuant to
the Program for Recognition of Early Action Offset Credits.
4. If an offset project developed under one
of the Compliance Offset Protocols listed in section
95985(b)(1)(B)5.
is in the last Reporting Period of a crediting period, and will not have a
renewed crediting period, the invalidation timeframe for up to the last three
Reporting Periods may be reduced from eight years to three years if the
following requirements are met for the last Offset Project Data Report of the
crediting period:
a. The Offset Project
Operator or Authorized Project Designee has a different verification body than
has verified the Offset Project Data Reports identified in section
95985(b)(1)(B)4.
and that meets the requirements for conflict of interest pursuant to section
95979 and rotation of verification
bodies pursuant to section
95977.1(a)
conduct a second independent regulatory verification pursuant to sections
95977 through
95978, except for section
95977.1(b)(3)(M),
for the last Offset Project Data Report of the crediting period. Although the
requirements in section
95977.1(b)(3)(M)
do not need to be met under this section, any misreporting, discrepancies, and
omissions found during the full offset verification services must be included
in the offset material misstatement calculation performed pursuant to section
95977.1(b)(3)(Q);
and
b. The second regulatory
verification must be completed within three years of the issuance of the ARB
offset credits through the submittal of an Offset Verification Statement
pursuant to section
95977.1(b)(3)(R)1.
and the Offset Project Operator or Authorized Project Designee must receive a
Positive or Qualified Positive Offset Verification Statement from the new
verification body for the same last Offset Project Data Report.
i. If the offset project is listed with an
Offset Project Registry, the verification body must submit the detailed
verification report and Offset Verification Statement for the second regulatory
verification to the Offset Project Registry and ARB.
ii. The Offset Project Registry must review
the offset verification documents pursuant to section
95987(e)(1)(E)
and submit a report to ARB that includes the details and findings of the Offset
Project Registry's review. During its review, the Offset Project Registry may
request additional information from the verification body and Offset Project
Operator or Authorized Project Designee, if applicable, and may request
clarifications and revisions to the materials, if necessary.
iii. The Offset Project Registry has 45
calendar days to review the offset verification information once complete and
accurate verification documents are received from the verification
body.
iv. The Offset Project
Registry has an additional 15 working days to submit its report to ARB. ARB
will review the Offset Project Registry report and determine based on the
report and all the information submitted by the verification body and Offset
Project Operator or Authorized Project Designee, if applicable, and may request
additional information, clarifications, and revisions to the materials, if
necessary.
5.
The provisions in sections
95985(b)(1)(B)1.
through 4. apply if an offset project is developed under one of the following
Compliance Offset Protocols, and the provisions in sections
95985(b)(1)(B)1.
through 3. apply for any early action quantification methodologies approved
pursuant to the Program for Recognition of Early Action Offset Credits for the
same project types, as well as any applicable provisions in section
95990(a)(3)(A):
a. The Compliance Offset Protocols in section
95973(a)(2)(C)2.;
b. The Compliance Offset Protocols in section
95973(a)(2)(C)3.;
c. The Compliance Offset Protocols in section
95973(a)(2)(C)4.;
d. The Compliance Offset Protocols in section
95973(a)(2)(C)5.;
or
e. The Compliance Offset
Protocol in section
95973(a)(2)(C)6.
(c) Grounds for Initial Determination of
Invalidation. ARB may determine that an ARB offset credit is invalid for the
following reasons:
(1) The Offset Project Data
Report contains errors that overstate the amount of GHG reductions or GHG
removal enhancements by more than 5.00 percent;
(A) If ARB finds that there has been an
overstatement by more than 5.00 percent, ARB shall determine how many GHG
reductions and GHG removal enhancements were achieved by the offset project for
the applicable Reporting Period. Within 10 calendar days of this determination,
ARB will notify the verification body that performed the offset verification
and the Offset Project Operator or Authorized Project Designee. Within 25
calendar days of receiving the written notification by ARB, the verification
body shall provide any available offset verification services information or
correspondence related to the Offset Project Data Report. Within 25 calendar
days of receiving the written notification by ARB, the Offset Project Operator
or Authorized Project Designee shall provide data that is required to calculate
GHG reductions and GHG removal enhancements for the offset project according to
the requirements of this article, the detailed offset verification report
prepared by the verification body, and other information requested by ARB. The
Offset Project Operator or Authorized Project Designee shall also make
available personnel who can assist ARB's determination of how many GHG
reductions and GHG removal enhancements were achieved by the offset project for
the applicable Reporting Period.
1. ARB will
determine the actual GHG reductions and GHG removal enhancements achieved by
the offset project for the applicable Reporting Period based on, at a minimum,
the following information:
a. The GHG sources,
GHG sinks, and GHG reservoirs within the offset project boundary for that
Reporting Period; and
b. Any
previous Offset Project Data Reports submitted by the Offset Project Operator
or Authorized Project Designee, and the Offset Verification Statements rendered
for those reports.
2. In
determining how many GHG reductions and GHG removal enhancements were achieved
by the offset project for the applicable Reporting Period, ARB may use the
following methods, as applicable:
a. The
applicable Compliance Offset Protocol;
b. In the event of missing data, ARB will
rely on the missing data provisions pursuant to section
95976, and, if applicable, the
Compliance Offset Protocol; and
c.
Any information reported under this article for this Reporting Period and past
Reporting Periods.
3. ARB
shall determine how many GHG reductions and GHG removal enhancements were
achieved by the offset project for the applicable Reporting Period using the
best information available, including the information in section
95985(c)(1)(A)1.
and methods in section
95985(c)(1)(A)2.,
as applicable.
(B) If ARB
determines that an overstatement has occurred pursuant to section
95985(c)(1), ARB
shall determine the amount of ARB offset credits that correspond to the
overstatement using the following equation, rounded to the nearest whole ton:
If: IARBOC >
ROPDR X 1.05
Then: OR =
IARBOC - ROPDR
Where:
"OR" is the amount of overstated
GHG reductions and GHG removal enhancements for the applicable Offset Project
Data Report, rounded to the nearest whole ton;
"IARBOC" is the number of ARB
offset credits issued under the applicable Offset Project Data Report pursuant
to section
95981.1 or the Program for
Recognition of Early Action Offset Credits;
"ROPDR" is the number of GHG
reductions and GHG removal enhancements determined by ARB pursuant to section
95985(c)(1) for
the applicable Offset Project Data Report;
(2) The offset project activity and
implementation of the offset project was not in accordance with all local,
regional, state, and national environmental and health and safety laws and
regulations that apply based on the offset project location and that directly
apply to the offset project, including as specified in the applicable
Compliance Offset Protocol, as determined pursuant to section
95973(b), during
the Reporting Period for which the ARB offset credit was issued.
(A) For offset projects using a protocol from
sections 95973(a)(2)(C)1.,
2., 4., or 5., if ARB finds that the offset project is out of regulatory
compliance, then ARB shall determine how many GHG reductions and GHG removal
enhancements were achieved by the offset project for the applicable Reporting
Period. Within 10 calendar days of this determination, ARB will notify the
verification body that performed the offset verification and the Offset Project
Operator or Authorized Project Designee. Within 25 calendar days of receiving
the written notification by ARB, the verification body shall provide any
available offset verification services information or correspondence related to
the relevant Offset Project Data Report(s). Within 25 calendar days of
receiving the written notification by ARB, the Offset Project Operator or
Authorized Project Designee shall provide data that is required to calculate
GHG reductions and GHG removal enhancements for the offset project according to
the requirements of this article, the detailed offset verification report
prepared by the verification body, and other information requested by ARB. The
Offset Project Operator or Authorized Project Designee shall also make
available personnel who can assist ARB's determination of how many GHG
reductions and GHG removal enhancements were achieved by the offset project for
the applicable Reporting Period.
1. ARB will
determine the actual GHG reductions and GHG removal enhancements achieved by
the offset project for the applicable Reporting Period based on, at a minimum,
the following information:
a. The GHG sources,
GHG sinks, and GHG reservoirs within the offset project boundary for that
Reporting Period;
b. Any previous
Offset Project Data Reports submitted by the Offset Project Operator or
Authorized Project Designee, and the Offset Verification Statements rendered
for those reports; and
c. Any
information relating to the regulatory compliance of the offset project
provided by the Offset Project Operator, Authorized Project Designee, or
regulatory oversight body.
2. In determining how many GHG reductions and
GHG removal enhancements were achieved by the offset project for the applicable
Reporting Period, ARB may use the following methods, as applicable:
a. The applicable Compliance Offset
Protocol;
b. In the event of
missing data, ARB will rely on the missing data provisions pursuant to section
95976, and, if applicable, the
Compliance Offset Protocol; and
c.
Any information reported under this article for this Reporting Period and past
Reporting Periods.
3. ARB
shall determine how many GHG emission reductions and GHG removal enhancements
were achieved by the offset project for the applicable Reporting Period using
the best information available, including the information in section
95985(c)(2)(A)
(1.) and methods in section
95985(c)(2)(A)
(2.), as applicable.
4. If ARB
determines that an offset project is out of regulatory compliance pursuant to
section 95985(c)(2), then
ARB shall determine the amount of overstated ARB offset credits, rounded to the
nearest whole number, that correspond to the time period that the offset
project is determined to be out of regulatory compliance pursuant to section
95973(b)(1)(E).
All offset credits corresponding to this time period shall be deemed ineligible
for crediting, and therefore any offset credits corresponding to this time
period are subject to invalidation.
(B) For offset projects using a protocol from
sections 95973(a)(2)(C)3.,
or 6., if ARB finds that the offset project is out of regulatory compliance,
then ARB shall determine that all ARB offset credits issued for the applicable
Reporting Period are subject to invalidation; or
(3) ARB determines that offset credits have
been issued in any other voluntary or mandatory program within the same offset
project boundary and for the same Reporting Period in which ARB offset credits
were issued for GHG reductions and GHG removal enhancements.
(4) The following shall not be grounds for
invalidation:
(A) An update to a Compliance
Offset Protocol will not result in an invalidation of ARB offset credits issued
under a previous version of the Compliance Offset Protocol; or
(B) A reversal that occurs under a forest
offset project. If such a reversal occurs the provisions in section
95983
apply.
(d)
Suspension of Transfers. When ARB makes an initial determination pursuant to
section 95985(c) it will
immediately block any transfers of ARB offset credits for the applicable Offset
Project Data Report. Once ARB makes a final determination pursuant to section
95985(f) the
block on transfers for any valid ARB offset credits will be
cancelled.
(e) Identification of
Affected Parties. If ARB makes an initial determination that one of the
circumstances listed in section
95985(c) has
occurred, ARB will identify the following parties:
(1) The current holders that hold any ARB
offset credits in their Holding and/or Compliance Accounts from the applicable
Offset Project Data Report;
(2) The
entities for which ARB transferred any ARB offset credits from the applicable
Offset Project Data Report into the Retirement Account; and
(3) The current, or most recent (in the case
of an offset project after the final crediting period), Offset Project Operator
and Authorized Project Designee, and, for forest offset projects the current,
or most recent (in the case of an offset project after the final crediting
period), Forest Owner(s).
(f) Final Determination and Process of
Invalidation. ARB will notify the parties identified in section
95985(e) of its
initial determination pursuant to section
95985(c), and
provide each party an opportunity to submit additional information to ARB prior
to making its final determination, as follows:
(1) ARB will include the reason for its
initial determination in its notification to the parties identified in section
95985(e).
(2) After notification the parties identified
in section
95985(e) will
have 25 calendar days to provide any additional information to ARB.
(3) ARB may request any information as needed
in addition to the information provided under this section.
(4) The Executive Officer will have 30
calendar days after all information is submitted under this section to make a
final determination that one or more conditions listed pursuant to section
95985(c) has
occurred and whether to invalidate ARB offset credits.
(A) The parties identified pursuant to
section 95985(e) will be
notified of ARB's final determination of invalidation pursuant to this
section.
(B) Any approved program
for linkage pursuant to subarticle 12 will be notified of the invalidation at
the time of ARB's final determination pursuant to this
section.
(g)
Removal of Invalidated ARB Offset Credits from Holding, Compliance, and/or
Forest Buffer Accounts. If the Executive Officer makes a final determination
pursuant to section
95985(f) that an
ARB offset credit is invalid, then:
(1) ARB
offset credits will be removed from any Holding, Compliance, or Forest Buffer
Account, as follows;
(A) If an ARB offset
credit is determined to be invalid due to the circumstance listed in section
95985(c)(1) or
95985(c)(2)(A),
then:
1. ARB will determine which ARB offset
credits will be removed from the Compliance and/or Holding Accounts of each
party identified in section
95985(e)(1)
according to the following equation, truncated to the nearest whole ton:
Click
here to view image
Where:
"OR" is the amount of overstated
GHG reductions and GHG removal enhancements for the applicable Offset Project
Data Report calculated pursuant to section
95985(c)(1) or
(c)(2)(A);
"IARBOC" is the number of ARB
offset credits issued under the applicable Offset Project Data Report pursuant
to section
95981.1 or the Program for
Recognition of Early Action Offset Credits;
"TOTHolding" is the total number
of ARB offset credits currently being held in a Compliance and/or Holding
Account by each party identified in section
95985(e)(1) for
the applicable Offset Project Data Report; and
"HARBOC" is the total number of
ARB offset credits, rounded to the nearest whole ton, that will be removed from
the Holding and/or Compliance Account of each party identified in section
95985(e)(1).
2. ARB will determine the quantity of ARB
offset credits issued under the applicable Offset Project Data Report in the
amount calculated pursuant to section
95985(g)(1)(A)
and remove a quantity of ARB offset credits from any Holding and/or Compliance
Account of the parties identified in section
95985(e)(1).
3. ARB will determine the quantity of ARB
offset credits issued under the applicable Offset Project Data Report, for all
projects that contribute to the Forest Buffer Account, in the amount calculated
pursuant to section
95985(c)(1) or
(c)(2)(A) multiplied by the project's
reversal risk rating and remove that quantity of ARB offset credits from the
Forest Buffer Account.
(B) If an ARB offset credit is determined to
be invalid due to the circumstances listed in sections
95985(c)(2)(B) or
(c)(3), ARB will remove all ARB offset
credits issued under the applicable Offset Project Data Report from any Holding
and/or Compliance Account of the parties identified in section
95985(e)(1), and
from the Forest Buffer Account.
(2) The parties identified pursuant to
section 95985(e) will be
notified of which serial numbers were removed from any Compliance, Holding,
and/or Forest Buffer Accounts.
(3)
Any approved program for linkage pursuant to subarticle 12 will be notified of
which serial numbers were removed from any Compliance, Holding, and/or Forest
Buffer Accounts.
(h)
Requirements for Replacement of ARB Offset Credits.
(1) If an ARB offset credit that is issued to
a non-sequestration offset project or an urban forest offset project, or that
is issued to a U.S. forest offset project on or after July 1, 2014, and is in
the Retirement Account, and it is determined to be invalid pursuant to section
95985(f) for only
the circumstances listed in section
95985(c)(1) or
(c)(2)(A), then:
(A) Each party identified in section
95985(e)(2) must
replace ARB offset credits in the amount calculated for the individual party
according to the following equation, truncated to the nearest whole ton:
Click
here to view image
Where:
"RARBOC" is the calculated total
number of retired ARB offset credits for the applicable Offset Project Data
Report, rounded to the nearest whole ton, that must be replaced by each
individual party identified in section
95985(e)(2);
"TOTRetired" is the total number
of ARB offset credits for which ARB transferred the ARB offset credits from the
applicable Offset Project Data Report into the Retirement Account for the
individual party specified in section
95985(e)(2);
"IARBOC" is the number of ARB
offset credits issued under the applicable Offset Project Data Report pursuant
to section
95981.1 or the Program for
Recognition of Early Action Offset Credits; and
"OR" is the amount of overstated
GHG reductions and GHG removal enhancements calculated pursuant to section
95985(c)(1) or
(c)(2)(A) for the applicable Offset Project
Data Report.
(B) Each party
identified in section
95985(e)(2) must
replace ARB offset credits in the amount calculated pursuant to section
95985(h)(1)(A)
with valid ARB offset credits or other approved compliance instruments pursuant
to subarticle 4, within six months of notification by ARB pursuant to section
95985(g)(2).
(C) If each party identified in section
95985(e)(2) does
not replace each invalid ARB offset credit in the amount calculated pursuant to
section 95985(h)(1)(A)
within six months of notice of invalidation pursuant to section
95985(g)(2), each
unreplaced invalidated ARB offset credit will constitute a violation for that
party pursuant to section
96014.
1. If the party identified in section
95985(e)(2) is no
longer in business pursuant to section
95101(h)(2) of
MRR, ARB will require the Offset Project Operator identified in section
95985(e)(3) to
replace each invalidated ARB offset credit and will notify the Offset Project
Operator that they must replace them.
2. If the Offset Project Operator is required
to replace the ARB offset credits pursuant to section
95985(h)(1)(C)1.
the Offset Project Operator must replace each ARB offset credit with a valid
ARB offset credit or another approved compliance instrument pursuant to
subarticle 4, within six months of notification by ARB pursuant to section
95985(h)(1)(C)1.
3. If the Offset Project Operator is required
to replace the ARB offset credits pursuant to section
95985(h)(1)(C)1.,
and the Offset Project Operator does not replace each invalid ARB offset credit
within six months of notification by ARB pursuant to section
95985(h)(1)(C)1.,
each unreplaced invalidated ARB offset credit will constitute a violation for
that Offset Project Operator pursuant to section
96014.
(D) ARB will determine the quantity of ARB
offset credits issued under the applicable Offset Project Data Report in the
amount calculated pursuant to section
95985(h)(1)(A)
and invalidate that quantity of ARB offset credits.
(E) The parties identified pursuant to
section 95985(e) will be
notified of the quantity of ARB offset credits that were invalidated.
(F) Any approved program for linkage pursuant
to subarticle 12 will be notified of which serial numbers were
invalidated.
(2) If an
ARB offset credit that is issued to a non-sequestration offset project or an
urban forest project, or that is issued to a U.S. forest offset project on or
after July 1, 2014, and is in the Retirement Account, and it is determined to
be invalid pursuant to section
95985(f) for any
circumstance listed in sections
95985(c)(2)(B) and
(c)(3), then:
(A) The party identified in section
95985(e)(2) must
replace each ARB offset credit it requested ARB to transfer into the Retirement
Account for the applicable Offset Project Data Report with a valid ARB offset
credit or another approved compliance instrument pursuant to subarticle 4,
within six months of notification by ARB pursuant to section
95985(g)(2).
(B) If the party identified in section
95985(e)(2) does
not replace each invalid ARB offset credit within six months of the notice of
invalidation pursuant to section
95985(g)(2), each
unreplaced invalidated ARB offset credit will constitute a violation for that
party pursuant to section
96014.
1. If the party identified in section
95985(e)(2) is no
longer in business pursuant to section
95101(h)(2) of
MRR ARB will require the Offset Project Operator identified in section
95985(e)(3) to
replace each invalidated ARB offset credit and will notify the Offset Project
Operator that they must replace them.
2. If the Offset Project Operator is required
to replace the ARB offset credits pursuant to section
95985(h)(2)(B)1.,
the Offset Project Operator must replace each ARB offset credit with a valid
ARB offset credit or another approved compliance instrument pursuant to
subarticle 4, within six months of notification by ARB pursuant to section
95985(h)(2)(B)
(1.).
3. If the Offset Project
Operator is required to replace the ARB offset credits pursuant to section
95985(h)(2)(B)1.,
and the Offset Project Operator does not replace each invalid ARB offset credit
within six months of notification by ARB pursuant to section
95985(h)(2)(B)1.,
each unreplaced invalidated ARB offset credit will constitute a violation for
that Offset Project Operator pursuant to section
96014.
(C) The parties identified pursuant to
section 95985(e) will be
notified of which serial numbers were invalidated.
(D) Any approved program for linkage pursuant
to subarticle 12 will be notified of which serial numbers were
invalidated.
(3) The
Offset Project Operator, identified in section
95985(e)(3), of
an offset project that had ARB offset credits removed from the Forest Buffer
Account pursuant to section
95985(g)(1)(A)3.
or (g)(1)(B) must replace a percentage of the ARB offset credits removed from
the Forest Buffer Account equal to the percentage of ARB offset credits retired
from the Forest Buffer Account for unintentional reversals as of the date the
Executive Officer makes the final determination of invalidation, rounding up to
the next whole number, with a valid ARB offset credit or another approved
compliance instrument pursuant to subarticle 4, within six months of
notification by ARB pursuant to section
95985(g)(2). If
the Offset Project Operator does not replace the required number of ARB offset
credits within six months of notification by ARB pursuant to section
95985(g)(2), each
unreplaced invalidated ARB offset credit will constitute a violation for that
Offset Project Operator pursuant to section
96014.
(i) Requirements for Replacement of ARB
Offset Credits for U.S. Forest Offset Projects Issued on or prior to July 1,
2014.
(1) If an ARB offset credit that is
issued on or prior to July 1, 2014 is in the Retirement Account from a U.S.
forest offset project and it is determined to be invalid pursuant to section
95985(f) for only
the circumstance listed in section
95985(c)(1),
then:
(A) The Forest Owner identified in
section 95985(e)(3) must
replace ARB offset credits in the amount calculated according to the following
equation, truncated to the nearest whole ton:
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Where:
"RFARBOC" is the total number of
retired ARB offset credits for the applicable U.S. forest offset project's
Offset Project Data Report, rounded to the nearest whole ton, that must be
replaced by the Forest Owner;
"TFRetired" is the total number
of ARB offset credits issued for the applicable U.S. forest offset project's
Offset Project Data Report for which ARB transferred any ARB offset credits
from into the Retirement Account;
"IFARBOC" is the number of ARB
offset credits issued under the applicable Offset Project Data Report for the
U.S. forest offset project pursuant to section
95981.1 or the Program for
Recognition of Early Action Offset Credits; and
"OFR" is the amount of
overstated GHG reductions and GHG removal enhancements calculated pursuant to
section 95985(c)(1) for
the U.S. forest offset project for the applicable Offset Project Data
Report.
(B) The Forest Owner
identified in section
95985(e)(3) must
replace ARB offset credits in the amount calculated pursuant to section
95985(i)(1)(A)
with valid ARB offset credits or other approved compliance instruments pursuant
to subarticle 4, within six months of notification by ARB pursuant to section
95985(g)(2).
(C) If the Forest Owner identified in section
95985(e)(3) does
not replace each invalid ARB offset credit in the amount calculated pursuant to
section 95985(i)(1)(A)
within six months of notice of invalidation pursuant to section
95985(g)(2), each
unreplaced invalidated ARB offset credit will constitute a violation for that
Forest Owner pursuant to section
96014.
(D) ARB will determine the lowest serial
numbers assigned to ARB offset credits issued under the applicable Offset
Project Data Report in the amount calculated pursuant to section
95985(i)(1)(A)
and invalidate those serial numbers.
(E) The Forest Owner identified pursuant to
section 95985(e)(3) will
be notified of which serial numbers were invalidated.
(F) Any approved program for linkage pursuant
to subarticle 12 will be notified of which serial numbers were
invalidated.
(2) If an
ARB offset credit issued on or prior to July 1, 2014 in the Retirement Account
from a U.S. forest offset project is determined to be invalid pursuant to
section 95985(f) for any
circumstance listed in sections
95985(c)(2)(B) and
(c)(3):
(A)
The Forest Owner identified in section
95985(e)(3) must
replace each ARB offset credit transferred by ARB into the Retirement Account
for the applicable Offset Project Data Report with a valid ARB offset credit or
another approved compliance instrument pursuant to subarticle 4, within six
months of notification by ARB pursuant to section
95985(g)(2).
(B) If the Forest Owner does not replace each
invalid ARB offset credit within six months of the notice of invalidation
pursuant to section
95985(g)(2), each
unreplaced invalidated ARB offset credit will constitute a violation for that
Forest Owner pursuant to section
96014.
(C) The parties identified pursuant to
section 95985(e) will be
notified of which serial numbers were invalidated.
(D) Any approved program for linkage pursuant
to subarticle 12 will be notified of which serial numbers were
invalidated.
(3) The
Offset Project Operator identified in section
95985(e)(3) of an
offset project that had ARB offset credits removed from the Forest Buffer
Account pursuant to section
95985(g)(1)(A)3.
or (g)(1)(B) must replace a percentage of the ARB offset credits removed from
the Forest Buffer Account equal to the percentage of ARB offset credits retired
from the Forest Buffer Account for unintentional reversals as of the date the
Executive Officer makes the final determination of invalidation, rounding up to
the next whole number, with a valid ARB offset credit or another approved
compliance instrument pursuant to subarticle 4, within six months of
notification by ARB pursuant to section
95985(g)(2). If
the Offset Project Operator does not replace the required number of ARB offset
credit within six months of notification by ARB pursuant to section
95985(g)(2), each
unreplaced invalidated ARB offset credit will constitute a violation for that
Offset Project Operator pursuant to section
96014.
(j) Nothing in this section shall limit the
authority of the State of California from pursuing enforcement action against
any parties in violation of this article.
(k) Change of Forest Owner or Offset Project
Operator. When a Forest Owner or Offset Project Operator changes, whether by
merger, acquisition, or any other means, the successor Forest Owner or Offset
Project Operator, after the change in ownership, as applicable, is expressly
liable for all obligations of the predecessor Forest Owner or Offset Project
Operator to submit compliance instruments as determined pursuant to sections
95985(h)(1)(A),
95985(h)(2)(B)(1),
and/or 95985(i), as applicable. For the avoidance of doubt, this obligation of
the successor Forest Owner or Offset Project Operator, as applicable, consists
of the difference between the number of metric tons of
CO2e determined pursuant to sections
95985(h), and/or
95985(i), as applicable, and the number of valid ARB offset credits or other
approved compliance instruments submitted by the predecessor forest owner
pursuant to sections
95985(h), and/or
95985(i), as applicable.
1. New
section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code
section
11343.4
(Register 2011, No. 50).
2. Change without regulatory effect
amending subsections (c)(1)(A)3., (h)(1)(C)2.-3., (h)(2)(B)2.-3. and (i)(1)(E)
filed 2-15-2012 pursuant to section
100, title 1, California Code of
Regulations (Register 2012, No. 7).
3. Editorial correction of
subsection (c)(1)(B) (Register 2012, No. 8).
4. Amendment filed
6-26-2014; operative 7-1-2014 pursuant to Government Code section
11343.4(b)(3)
(Register 2014, No. 26).
5. Amendment of subsection (b)(1)(B)5.a.
filed 12-31-2014; operative 1-1-2015 pursuant to Government Code section
11343.4(b)(3)
(Register 2015, No. 1).
6. Amendment of subsections
(b)(1)(B)5.-(b)(1)(B)5.d. and new subsection (b)(1)(B)5.e. filed 10-20-2015;
operative 11-1-2015 pursuant to Government Code section
11343.4(b)(3)
(Register 2015, No. 43).
7. Amendment filed 9-18-2017; operative
10-1-2017 pursuant to Government Code section
11343.4(b)(3)
(Register 2017, No. 38).
8. Amendment of subsection (b)(1)(B)2. and
(c)(2)(A)-(B) and new subsection (k) filed 3-29-2019; operative 3-29-2019
pursuant to Government Code section
11343.4(b)(3)
(Register 2019, No. 13).
Note: Authority cited: Sections
38510,
38560,
38562,
38570,
38571,
38580,
39600
and
39601,
Health and Safety Code. Reference: Sections
38530,
38560.5,
38564,
38565,
38570
and
39600,
Health and Safety Code.
