California Code of Regulations › Title 17 - Public Health › Division 3 - Air Resources › Chapter 1 - Air Resources Board › Subchapter 8.5 - Consumer Products › Article 4 - Alternative Control Plan › Section 94547 - Surplus Reductions and Surplus Trading

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The Executive Officer shall issue
					 Executive Orders (Surplus Reduction Certificates) which establish and quantify,
					 to the nearest pound of VOC reduced, any Surplus Reductions achieved by a
					 responsible ACP party operating under an ACP. The Surplus Reductions can be
					 bought from, sold to, or transferred to a responsible ACP party operating under
					 an ACP, as provided in subsection (b) of this section. All Surplus Reductions
					 shall be calculated by the Executive Officer at the end of each compliance
					 period within the time specified in the approved ACP. Surplus Reduction
					 Certificates shall not constitute instruments, securities, or any other form of
					 property.
(b) The issuance, use,
					 and trading of all Surplus Reductions shall be subject to the following
					 provisions:
(1) For the purposes of this
					 article, VOC reductions from sources of VOCs other than consumer products
					 subject to the VOC standards specified in section
					 94509 may not be used to generate
					 Surplus Reductions;
(2) Surplus
					 Reductions are valid only when generated by a responsible ACP party, and only
					 while that responsible ACP party is operating under an approved ACP;
(3) Surplus Reductions are valid only after
					 the Executive Officer has issued an Executive Order pursuant to subsection (a)
					 of this section.
(4) Any Surplus
					 Reductions issued by the Executive Officer may be used by the responsible ACP
					 party who generated the surplus until the reductions expire, are traded, or
					 until the ACP is cancelled pursuant to section
					 94551;
(5) Surplus Reductions cannot be applied
					 retroactively to any compliance period prior to the compliance period in which
					 the reductions were generated;
(6)
					 Except as provided in subsection (b)(7)(B) of this section, only small or
					 one-product businesses selling products under an approved ACP may purchase
					 Surplus Reductions. An increase in the size of a small business or one-product
					 business shall have no effect on Surplus Reductions purchased by that business
					 prior to the date of the increase.
(7) While valid, Surplus Reductions can be
					 used only for the following purposes:
(A) to
					 adjust either the ACP Emissions of either the responsible ACP party who
					 generated the reductions or the responsible ACP party to which the reductions
					 were traded, provided the Surplus Reductions are not to be used by any
					 responsible ACP party to further lower its ACP Emissions when its ACP Emissions
					 are equal to or less than the ACP Limit during the applicable compliance
					 period; or
(B) to be traded for the
					 purpose of reconciling another responsible ACP party's shortfalls, provided
					 such reconciliation is part of the reconciliation of shortfalls plan approved
					 by the Executive Officer pursuant to section
					 94543(a)(7)(J).
(8) A valid Surplus Reduction shall be in
					 effect starting five (5) days after the date of issuance by the Executive
					 Officer, for a continuous period equal to the number of days in the compliance
					 period during which the Surplus Reduction was generated. The Surplus Reduction
					 shall then expire at the end of its effective period.
(9) At least five (5) working days prior to
					 the effective date of transfer of Surplus Reductions, both the responsible ACP
					 party which is selling Surplus Reductions and the responsible ACP party which
					 is buying the Surplus Reductions shall, either together or separately, notify
					 the Executive Officer in writing of the transfer. The notification shall
					 include all of the following:
(A) the date the
					 transfer is to become effective;
(B) the date the Surplus Reductions being
					 traded are due to expire;
(C) the
					 amount (in pounds of VOCs) of Surplus Reductions that are being
					 transferred;
(D) the total purchase
					 price paid by the buyer for the Surplus Reductions;
(E) the contact persons, names of the
					 companies, street and mail addresses, and phone numbers of the responsible ACP
					 parties involved in the trading of the Surplus Reductions;
(F) a copy of the Executive Officer-issued
					 Surplus Reductions Certificate, signed by both the seller and buyer of the
					 certificate, showing transfer of all or a specified portion of the Surplus
					 Reductions. The copy shall show the amount of any remaining non-traded Surplus
					 Reductions, if applicable, and shall show their expiration date. The copy shall
					 indicate that both the buyer and seller of the Surplus Reductions fully
					 understand the conditions and limitations placed upon the transfer of the
					 Surplus Reductions and accept full responsibility for the appropriate use of
					 such Surplus Reductions as provided in this section.
(10) Beginning on January 1, 2024, in order
					 to generate surplus reductions, a product with a VOC Standard under section
					 94509(a) that
					 falls within the ranges in Table 94547(b)(10) 'Column A' may not exceed the
					 corresponding percent of that standard identified in Table 94547(b)(10) 'Column
					 B'.
Table 94547(b)(10)
Column
								A
Column B
20% < VOC Standard < 100%
97%
1% < VOC Standard < 20%
95%
VOC Standard < 1%
90%