California Code of Regulations
Title 17 - Public Health
Division 3 - Air Resources
Chapter 1 - Air Resources Board
Subchapter 10 - Climate Change
Article 5 - California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms
Subarticle 3 - Applicability
Section 95813 - Opt-in Covered Entities

(a) An entity that meets the requirements of section 95811, but does not exceed the inclusion thresholds set forth in section 95812 may elect to voluntarily opt-in to the Cap-and-Trade Program.

(b) An entity that does not qualify to opt in to the Program pursuant to section 95813(h) and that voluntarily elects to participate in this Program under this section must submit its request to the Executive Officer for approval by March 1 of the calendar year immediately preceding the first year in which it voluntarily elects to be subject to a compliance obligation pursuant to this section. The request for approval to be an opt-in covered entity shall specify the first year in which the entity elects to be subject to a compliance obligation. The Executive Officer shall evaluate such applications, designate approved applicants as opt-in covered entities, and, for approved applicants, specify the first year in which the opt-in covered entity will be subject to a compliance obligation.

(c) An entity that voluntarily elects to participate in this Program under section 95813(b) may rescind its request to opt in to the Program by October 1 of the calendar year prior to the first year in which it voluntarily elects to be subject to a compliance obligation pursuant to section 95813(b). An entity that voluntarily elects to participate in the Cap-and-Trade Program under section 95813(h) may rescind its request to opt in to the Program by October 1 of the calendar year in which it requests approval to be an opt-in covered entity.

(d) An opt-in covered entity is subject to all reporting, verification, enforcement, registration, and compliance obligations that apply to covered entities. An opt-in covered entity's first reporting and verification year shall be the calendar year immediately preceding the first year in which it voluntarily elects to be subject to a compliance obligation pursuant to this section, unless the entity opts in pursuant to section 95813(h), in which case the entity must continue to report and verify emissions, product data (if applicable), and all other data required by MRR.

(e) An opt-in covered entity may be eligible to receive freely allocated allowances subject to subarticles 8 and 9.

(f) Opt-in participation shall not affect the allowance budgets set forth in subarticle 6.

(g) Opting out. At the end of any given compliance period, an opt-in covered entity may choose to opt out of the Program provided its annual emission levels for any data year remain below the inclusion thresholds set forth in section 95812. An entity choosing to opt out of the Program must either fulfill its compliance obligations as required pursuant to subarticle 7 or surrender allowances equivalent to all the directly allocated allowances it has received from the budget years for the compliance period in question. An opt-in covered entity that wishes to opt-out of this Program must apply to the Executive Officer by September 1 of the last year of a compliance period.

(h) An entity that was previously a covered entity, meets the requirements of section 95811, and drops below the inclusion thresholds set forth in section 95812 for an entire compliance period, may request approval from the Executive Officer to voluntarily opt in to the Cap-and-Trade Program. This request to the Executive Officer must be submitted by June 1 of the first year of the new compliance period immediately after a compliance period during which the entity's emissions were below the inclusion thresholds. To qualify for opt-in covered entity status under this section (95813(h)), the entity can only request to be an opt-in covered entity starting in the year the request is submitted. The Executive Officer shall evaluate such applications and designate approved applicants as opt-in covered entities.