Section 95985 - Invalidation of ARB Offset Credits(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; andb. 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; and2. 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; andb. 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); andb. 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.; ore. 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; andb. 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; andc. 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; andc. 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; andc. 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: Click here to view image
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.Cal. Code Regs. Tit. 17, § 95985
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.
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).