(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, or2. 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).Cal. Code Regs. Tit. 17, § 95495
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).
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).