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§ 95835. Changes to Entity Type and Reassignment of Facilities Already Registered to Different ...

17 CA ADC § 95835Barclays Official California Code of Regulations

Barclays California Code of Regulations
Title 17. Public Health
Division 3. Air Resources
Chapter 1. Air Resources Board
Subchapter 10. Climate Change (Refs & Annos)
Article 5. California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms
Subarticle 5. Registration and Accounts
17 CCR § 95835
§ 95835. Changes to Entity Type and Reassignment of Facilities Already Registered to Different Entity Accounts.
Currentness
(a) Assignment of Facilities to Entity Accounts.
(1) Subdivision of MRR Facilities with Distinct ARB IDs Currently Registered in the Tracking System. The following provisions apply to facilities that are currently registered in the tracking system and wish to change their entity type or account assignment(s):
(A) A facility may not be subdivided without a demonstration of a change to the continuity of its ownership and control, as defined in MRR, to one or more of its constituent units.
(B) The subdivided units must complete all the requirements of MRR before they can be reassigned from existing tracking system accounts, including the assignment of an ARB ID to each subdivided unit.
(C) The subdivided units must complete the disclosure process outlined in section 95835(b).
(D) The entity seeking the subdivision must either indicate the existing accounts to which the subdivided facilities will be assigned or complete an application for a new account, or for closure of an existing account, if applicable.
(2) Assignment of a New Facility to an Account. The owner or operator of a new facility that has received an ARB ID but that is not yet assigned to a tracking system account must register pursuant to section 95830 and request either a new account or assignment of the facility to an existing account.
(3) Changing Account Assignments within a Direct Corporate Association. Members of a direct corporate association may request a change to the distribution of facilities within their set of accounts only once per compliance period. Approved changes to consolidate or opt-out of account consolidation pursuant to section 95830(b)(3) will be effective at the beginning of the next compliance period provided that the request is made by June 30 of the year immediately preceding that next compliance period.
(b) Change of Facility Ownership. When the ownership of a facility changes, whether by merger, acquisition, or any other means, the successor entity after the change in ownership is expressly liable for the unsurrendered compliance obligation of the predecessor covered entity that is party to the change in ownership transaction. For the avoidance of doubt, the unsurrendered compliance obligation of the predecessor covered entity consists of the quantity of verified reported emissions, assigned emissions, and emissions that have been released from the subject facility but not reported yet for which the covered entity would be required to submit compliance instruments to CARB absent the change of ownership, but that the covered entity has not surrendered to CARB at the time of the change of ownership. Subarticle 7 compliance requirements are interpreted and enforced in light of the successor entity being expressly liable for the unsurrendered compliance obligation of the predecessor covered entity. When the ownership of a facility changes, the following information must be submitted to CARB within 30 calendar days of finalization of the ownership change:
(1) A description of the merger or acquisition and the effective date of the change of ownership, including whether the merger or acquisition is the purchase of a facility or facilities from another entity or the purchase of an entity that owns a facility or facilities;
(2) Both the legal and operating names and the tracking system entity IDs of the entities owning the facility or facilities prior to the change of ownership;
(3) The legal name, operating name, and the tracking system entity ID of the purchasing entity, if any;
(4) Written direction regarding whether the purchased facility or facilities will be added to a consolidated entity account or whether the purchased facility or facilities will be associated with an entity that will opt-out of account consolidation pursuant to section 95830(b)(3);
(5) Documentation with signatures (original or electronic pursuant to section 95803(a)) by a director or officer from the entity owning the facility or facilities and from the purchasing entity, notifying ARB of the change of ownership;
(6) Any changes to disclosures or new disclosures pursuant to section 95833;
(7) Direction regarding the disposition of compliance instruments that must be transferred by the jurisdiction to the purchasing entity. Compliance instruments can be transferred only between accounts of the same type (e.g., from a compliance account to a compliance account) and any administrative transfers required may be requested as a one-time occurrence scheduled to occur within five business days after the facility or facilities are transferred in the tracking system to the purchasing entity;
(8) It is the responsibility of the entities participating in the change of ownership to transfer any compliance instruments from tracking system holding accounts that they control prior to closure. Prior to closure, the Executive Officer may transfer compliance instruments from an entity's compliance account to its holding account upon request by the entity. If a covered entity no longer owns or operates any active facility in its tracking account due to a change of facility ownership, then that covered entity may exit the Program and close its tracking system accounts within five business days after the facility or facilities are transferred in the tracking system to the purchasing entity.
(c) Eligibility for a Change of Entity Type.
(1) Eligibility of an Opt-In Covered Entity to Change Its Entity Type.
(A) After a compliance period, an opt-in covered entity may choose to exit the Program or apply for a new tracking system account to change its entity type to a voluntarily associated entity provided that it meets the requirements specified in section 95813(g).
(B) An opt-in covered entity choosing to exit the Program must fulfill its compliance obligations as required pursuant to subarticle 7 and report and verify emissions data, product data, and any other data required pursuant to MRR for its final year with a compliance obligation to allow for any true-up allocations pursuant to subarticles 8 and 9 before requesting a change of entity type.
(2) Eligibility of a Covered Entity or Opt-In Covered Entity to Change Its Entity Type.
(A) Effect of Reduced Emissions on a Covered Entity's Compliance Obligation. A covered entity that reports annual covered GHG emissions less than 25,000 metric tons of CO2e per year during one entire compliance period may request a change to its entity type from the Executive Officer by the deadlines specified in section 95835(e)(1). If the covered entity does not complete the change in entity type by the deadline and if the covered entity is not an opt-in covered entity, then the Executive Officer will consider the entity as a voluntarily associated entity for the assignment of purchase limit and holding limit, if applicable. If the entity does not apply to change its entity type by the deadline, then the Executive Officer maintains the ability to suspend or revoke the registration and any compliance instruments remaining in the entity's tracking system accounts will be consigned on the entity's behalf or transferred pursuant to section 95835(f) or 95890(k).
(B) Effect of a Facility Shutdown on a Covered Entity's Compliance Obligation. Once a covered or opt-in covered entity has fully met the reporting cessation requirements of section 95101(i) of MRR due to ceasing to operate, full facility shutdown, and cessation of all activities subject to reporting under section 95101(c) of MRR, ARB will begin the account closure process pursuant to section 95835(f). Fuel suppliers and electric power entities may not claim eligibility for a change of entity type under this provision, and may only request to close their accounts if no further activity is expected.
(C) A fuel supplier or electric power entity that is eligible for a change in entity type and has fully met the reporting and verification requirements of section 95101(h) of MRR, and for fuel suppliers the requirements of section 95103(n)(2)(D) of MRR, may exit the Cap-and-Trade Program pursuant to section 95835(f).
(3) A voluntarily associated entity is eligible to request to exit the Cap-and-Trade Program at any time.
(4) The Executive Officer may close the account of a voluntarily associated entity if no compliance instruments are transferred into or out of the account for a period of two years.
(d) Options for Changing Entity Type. When an entity qualifies for a change in entity type pursuant to section 95835(c), the following shall apply:
(1) A covered entity may elect to remain in the Cap-and-Trade Program as an opt-in covered entity pursuant to section 95813(h) and does not need to apply for a new set of tracking system accounts; or
(2) A covered entity or an opt-in covered entity may elect to remain in the Cap-and-Trade Program and apply for a new tracking system account as a voluntarily associated entity pursuant to section 95814; or
(3) An entity that has fully met the reporting cessation requirements of section 95101(i) of MRR may elect to exit the Cap-and-Trade Program pursuant to section 95835(f).
(e) If a covered entity or opt-in covered entity qualifies for a change in entity type, it may request a change by completing the following requirements:
(1) Request Deadlines.
(A) A covered entity requesting a change in entity type pursuant to section 95835(c)(2)(A) must make the request to the Executive Officer by September 30 of the first calendar year after the end of a compliance period.
(B) A covered entity or opt-in covered entity requesting a change in entity type pursuant to section 95835(c)(2)(B) has 30 days from the completion of the MRR cessation of reporting provisions per section 95101(i), or within 30 calendar days of the finalization of the ownership change, whichever is sooner, to request to remain in the Program and apply as a voluntarily associated entity.
(C) A covered entity whose request to be an opt-in covered entity pursuant to section 95813(h) was approved by the Executive Officer must request a change in entity type by September 30 of the same year as the deadline specified in section 95813(h).
(D) An opt-in covered entity that intends to exit the program entirely must make a request to the Executive Officer by September 30 of the first calendar year immediately after the end of a compliance period.
(2) A covered entity or opt-in covered entity that qualifies for account closure pursuant to section 95835(c)(2)(B) must, after fulfilling its compliance obligation for its final year of operations pursuant to section 95856 and addressing final allocation provisions pursuant to section 95835(f), elect one of the following options:
(A) Request to close its tracking system accounts, comply with MRR cessation of reporting provisions pursuant to section 95101(h) or (i), and apply to be in the tracking system as a voluntarily associated entity as defined in section 95814; or
(B) Request to consolidate its holding and compliance accounts with an existing account held by another entity pursuant to section 95830(b)(3) with whom it has a direct corporate association and comply with MRR cessation of reporting provisions pursuant to section 95101(h) or (i); or
(C) Request to close its tracking system accounts within 30 calendar days after the entity is qualified to request an account closure, comply with MRR cessation of reporting provisions per section 95101(h), and exit the Program.
(f) Account Closure for Entities Exiting the Program.
(1) Return of Initial Allocation for Entities Exiting the Program. An entity may not exit the Program pursuant to section 95835 until the entity has satisfied the requirements in 95890(k). If an entity has met the cessation requirements pursuant to MRR section 95101(h) or (i) and remains in the Program solely to meet the requirements of section 95890(k), then the entity need not report and verify data pursuant to MRR for any time period after which the MRR cessation requirements have been met.
(2) When an entity requests that ARB close its accounts in the tracking system, it must arrange to transfer all compliance instruments out of its accounts before the accounts can be closed. If the entity has compliance instruments in its compliance or holding account when a request for account closure is submitted, then the entity may request a one-time administrative transfer for ARB to either:
(A) Transfer the compliance instruments from its compliance account to the entity's holding account to allow the entity to transfer the allowances out of its account; or
(B) Transfer the compliance instruments from its compliance and holding accounts to the account of another registered entity or to the Retirement Account at the request of the entity closing the account.
(3) When the entity's accounts are clear of compliance instruments then the accounts will be closed.

Credits

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.
History
1. New section filed 9-18-2017; operative 10-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
2. Amendment of subsection (b) filed 5-30-2018; operative 7-1-2018 (Register 2018, No. 22).
This database is current through 5/10/24 Register 2024, No. 19.
Cal. Admin. Code tit. 17, § 95835, 17 CA ADC § 95835
End of Document