Section 95856 - Timely Surrender of Compliance Instruments by a Covered Entity(a) A covered entity must surrender one compliance instrument for each metric ton of CO2e of GHG emissions for the annual and full compliance period compliance obligations calculated pursuant to this subarticle beginning with the emissions data report for 2013 emissions and each subsequent year in which the covered entity has a compliance obligation.(b) Compliance Instruments Valid for Surrender. (1) A compliance instrument listed in subarticle 4 may be used to satisfy a compliance obligation.(2) To fulfill a compliance obligation, a compliance instrument issued pursuant to sections 95820(a) and 95821(a) must be issued from an allowance budget year within or before the year for which an annual compliance obligation is calculated or the last year of a compliance period for which a full compliance period compliance obligation is calculated, unless:(A) The allowance is a Reserve Allowance or a non-vintage allowance issued by a program approved by ARB pursuant to section 95941 as specified in section 95821(a);(B) The allowance is used to satisfy an excess emissions obligation; or(C) The allowance is eligible for compliance use pursuant to sections 95856(h)(1)(D) and 95856(h)(2)(D).(c) A covered entity must transfer from its holding account to its compliance account a sufficient number of valid compliance instruments to meet the compliance obligation set forth in sections 95853 and 95855.(d) Deadline for Surrender of Annual Compliance Obligations. For any year in which a covered entity has an annual compliance obligation pursuant to section 95855, it must fulfill that obligation:(1) By November 1, 5 p.m. Pacific Standard Time (or Pacific Daylight Time, when in effect), of the calendar year following the year for which the obligation is calculated if the entity reports by April 10 pursuant to section 95103 of MRR; or(2) By November 1, 5 p.m. Pacific Standard Time (or Pacific Daylight Time, when in effect), of the calendar year following the year for which the obligation is calculated if the entity reports by June 1 pursuant to section 95103 of MRR.(3) In years 2015, 2018, and 2021 there is no annual compliance obligation for the preceding compliance period, only a full compliance period compliance obligation.(4) Transfers to compliance accounts may be restricted during the time the tracking system is processing the surrender of the annual compliance obligation.(e) Determination of Full Compliance Period Compliance Obligation.(1) When a positive or qualified positive emissions data verification statement or assigned emissions for any year is received by ARB, then those emissions for the source categories in section 95852 contribute to the full compliance period compliance obligation pursuant to section 95853.(2) If a positive or qualified positive emissions data verification statement for any year of the compliance period is not received by ARB by the applicable verification deadline as set forth in MRR, ARB will assign emissions according to the requirements set forth in section 95103(g) of MRR for the emissions for the source categories in section 95852. The assigned emissions value then contributes to the full compliance period compliance obligation pursuant to section 95853.(f) Surrender of Full Compliance Period Compliance Obligation. (1) The covered entity must transfer sufficient valid compliance instruments to its compliance account to fulfill its full compliance period compliance obligation by November 1, 5 p.m. Pacific Standard Time (or Pacific Daylight Time, when in effect), of the calendar year following the final year of the compliance period. Transfers to compliance accounts may be restricted during the time the tracking system is processing the surrender of the full compliance period compliance obligation.(2) The total number of compliance instruments submitted to fulfill the full compliance period compliance obligation is subject to the quantitative use limit pursuant to section 95854.(3) The surrender of compliance instruments must equal the full compliance period compliance obligation calculated pursuant to section 95853 less compliance instruments surrendered to fulfill the annual compliance obligation for the years in the compliance period.(g) In determining whether the covered entity has fulfilled its compliance obligations, the Executive Officer shall:(1) In the case of annual and full compliance period compliance obligations, determine the status of compliance with the annual or full compliance period compliance obligation by evaluating the number and types of compliance instruments in the Compliance Account; and(A) Retire the compliance instruments surrendered; and(B) Inform programs to which California is linked or recognizes, pursuant to subarticles 12 and 14, of the retirements, including the serial numbers of the compliance instruments retired.(h) Annual and Full Compliance Period Compliance Instrument Requirements. (1) When a covered entity or opt-in covered entity surrenders compliance instruments to meet its annual compliance obligation pursuant to section 95856(d), the Executive Officer will retire them from the Compliance Account in the following order: section 95856(d), the Executive Officer will retire them from the Compliance Account in the following order:(A) Offset credits specified in section 95820(b) and sections 95821(b) through (d), up to eight percent of the emissions with a compliance obligation pursuant to section 95854;(B) Reserve Allowances followed by non-vintage allowances issued by a program approved by ARB pursuant to section 95941 as specified in section 95821(a);(C) Allowances specified in sections 95820(a) and 95821(a) with earlier vintage allowances retired first;(D) The current calendar year's vintage allowances and allowances allocated just before the annual surrender deadline up to the true-up allowance amount as determined in sections 95891(b), 95891(c), 95891(c)(2)(B), 95891(f)(1), or 95894(c)-(e) if an entity was eligible to receive true up allowances pursuant to section 95891(b), 95891(c), 95891(c)(2)(B), 95891(f)(1), or 95894(c)-(e); and(E) Price ceiling units specified in section 95915.(2) When a covered entity or opt-in covered entity surrenders compliance instruments to meet its full compliance period compliance obligation pursuant to section 95856(f), the Executive Officer will retire them from the Compliance Account in the following order:(A) Offset credits specified in section 95820(b) and sections 95821(b) through (d) with oldest credits retired first and subject to the quantitative usage limit set forth in section 95854;(B) Reserve Allowances followed by non-vintage allowances issued by a program approved by ARB pursuant to section 95941 as specified in section 95821(a);(C) Allowances specified in sections 95820(a) and 95821(a) with earlier vintage allowances retired first;(D) The current calendar year's vintage allowances and allowances allocated just before the full compliance period surrender deadline up to the true-up allowance amount as determined in section 95891(b), 95891(c), 95891(c)(2)(B), 95891(f)(1), or 95894(c)-(e) if an entity was eligible to receive true up allowances pursuant to section 95891(b), 95891(c), 95891(c)(2)(B), 95891(f)(1), or 95894(c)-(e); and(E) Price ceiling units specified in section 95915.(3) An entity that is not eligible to receive true up allowances pursuant to section 95891(b), 95891(c), 95891(c)(2)(B), 95891(f)(1) or 95894(c)-(e) cannot use the current calendar year's vintage allowances or allowances allocated just before the current surrender deadline to meet the timely surrender of compliance instrument requirements in section 95856.(4) An electric distribution utility will not be in violation of section 95892(d)(7) when the Executive Officer retires compliance instruments if the electric distribution utility has a quantity of eligible compliance instruments not allocated pursuant to section 95870(d) in its compliance account at the time the timely surrender of compliance instruments by a covered entity is due, pursuant to section 95856, that is at least equal to its compliance obligation for any transactions for which the use of allocated allowance value is prohibited under section 95892(d)(7).Cal. Code Regs. Tit. 17, § 95856
1. New section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code section 11343.4 (Register 2011, No. 50).
2. Amendment of subsection (b)(2) filed 8-29-2012; operative 9-1-2012 pursuant to Government Code section 11343.4 (Register 2012, No. 35).
3. Amendment filed 6-26-2014; operative 7-1-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 26).
4. Amendment filed 9-18-2017; operative 10-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
5. Amendment of subsections (b)(2)(A), (e)(1)-(2) and (h)(1)(B)-(D), new subsection (h)(1)(E), amendment of subsections (h)(2)(A)-(D), new subsection (h)(2)(E) and amendment of subsections (h)(3)-(4) 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.
1. New section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code section 11343.4 (Register 2011, No. 50).
2. Amendment of subsection (b)(2) filed 8-29-2012; operative 9-1-2012 pursuant to Government Code section 11343.4 (Register 2012, No. 35).
3. Amendment filed 6-26-2014; operative 7/1/2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 26).
4. Amendment filed 9-18-2017; operative 10/1/2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
5. Amendment of subsections (b)(2)(A), (e)(1)-(2) and (h)(1)(B)-(D), new subsection (h)(1)(E), amendment of subsections (h)(2)(A)-(D), new subsection (h)(2)(E) and amendment of subsections (h)(3)-(4) filed 3-29-2019; operative 3/29/2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13).