1. (a) Allowance Price Containment Reserve. Upon creation of the Allowance Price Containment Reserve Account, the Executive Officer shall transfer allowances to the Allowance Price Containment Reserve, as follows:

   1. (1) One percent of the allowances from budget years 2013-2014;
   2. (2) Four percent of the allowances from budget years 2015-2017; and
   3. (3) Seven percent of the allowances from budget years 2018-2020.

2. (b) Advance Auction. Upon creation of the Auction Holding Account, the Executive Officer shall transfer 10 percent of the allowances from budget years 2015-2020 to the Auction Holding Account.

   1. (1) These allowances will be eligible to be sold pursuant to section 95910(c)(2).
   2. (2) All Advance Auction allowances not sold pursuant to section 95910(c)(2) will be auctioned pursuant to section 95910.
   3. (3) The proceeds from the sale of these allowances will be deposited into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8, and will be available for appropriation by the Legislature for the purposes designated in California Health and Safety Code sections 38500 et seq. and consistent with the requirements of Chapter 4.1 (commencing with Section 39710) of Part 2 of Division 26 of the California Health and Safety Code and Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.

3. (c) Upon creation of the Voluntary Renewable Electricity Reserve Account, the Executive Officer shall transfer allowances to the Voluntary Renewable Electricity Reserve Account, as follows:

   1. (1) 0.5 percent of the allowances from budget years 2013-2014; and
   2. (2) 0.25 percent of the allowances from budget years 2015-2020.

4. (d) Electricity Related Allocation.

   1. (1) Electrical Distribution Utility Sector Allocation for Budget Years 2013-2020. Allowances available for allocation to electrical distribution utilities each budget year shall be 97.7 million metric tons multiplied by the cap adjustment factor in Table 9-2 for each budget year 2013-2020. The Executive Officer will allocate to the limited use holding account and allowance allocation holding account pursuant to sections 95892(b) and 95831(a)(6) for each electrical distribution utility by October 24 of each calendar year from 2013-2019 for allocations from 2014-2020 annual allowance budgets.
   2. (2) Allocation to Public Wholesale Water Agencies. The Executive Officer will place an annual individual allocation in the annual allocation holding account, pursuant to sections 95895 and 95831(a)(6), of a public wholesale water agency by October 24 of each calendar year from 2014-2019 for allocations from 2015-2020 annual allowance budgets.

5. (e) Allocation to Industrial Covered Entities. Allowances allocated for the purposes of industry assistance shall be transferred to annual allocation holding accounts for industrial sectors listed in Table 8-1. Allowances in the annual allocation holding account are transferred to the Holding Account on January 1 of the vintage year of the allowances.

   1. (1) The Executive Officer will allocate allowances to each eligible covered entity by October 24 of each calendar year 2014-2019 for allocations from 2015-2020 annual allowance budgets.
   2. (2) Allocation to eligible covered entities shall be conducted using the assistance factors specified for each listed industrial activity found in Table 8-1 and the methodology set forth in section 95891.
   3. (3) The total amount of allowances allocated for the purposes of industry assistance shall not exceed the available amount of allowances after accounting for allocations made pursuant to sections 95870(a) through (d) and sections 95870(f) and (h). If the amount calculated under the methodology set forth in section 95891 exceeds the amount of allowances available, the number of allowances available will be prorated equally across all eligible industrial covered entities. The proration will be calculated using the share of allowances available after accounting for all allocations made pursuant to sections 95870(a) through (d) and sections 95870(f) and (h) compared to total allowances that would be distributed according to the methodology set forth in section 95891.
   4. (4) Industrial entities that purchase electricity or legacy contract qualified thermal output pursuant to a legacy contract and who receive allocation under this section shall have their allocation reduced as specified in section 95891(e).
6. (f) Allocation to University Covered Entities and Public Service Facilities. The Executive Officer will place an annual individual allocation in the annual allocation holding account of each eligible university covered entity and public service facility by October 24 of each calendar year from 2015-2019 for allocations from 2016-2020 annual allowance budgets. A public service facility providing steam to a publicly owned educational facility is not eligible for any allocation of allowances provided under other provisions of this regulation. In the event a publicly owned educational facility that receives qualified thermal output from a public service facility becomes an opt-in covered entity and receives allowances for the emissions from qualified thermal output sold to the university by the public service facility pursuant to section 95891(d), the publicly owned educational facility shall unconditionally transfer to the public service facility allowances relating to the qualified thermal output provided by such public service facility. So long as the publicly owned educational facility remains an opt-in covered entity and provides such allowances to the public service facility, such public service facility will not be eligible for any disposition of allowances provided under this section.
7. (g) Allocation to Legacy Contract Generators. Allowances will be allocated to legacy contract generators with an industrial counterparty pursuant to section 95894 for the term of the contract. The Executive Officer will transfer allowance allocations into each eligible generator's annual allocation holding account by October 24 of each calendar year for eligible legacy contract emissions pursuant to the methodology set forth in section 95894.
8. (h) Natural Gas Supplier Sector Allocation. Allowances available for allocation to natural gas suppliers each budget year shall be calculated as set forth in section 95893. The Executive Officer will transfer allowances into each eligible natural gas supplier's allowance allocation holding account and/or limited use holding account pursuant to sections 95893(b) and 95831(a)(6) by October 24 of each calendar year from 2014 through 2019 for allocations from 2015 through 2020 annual allowance budgets.
9. (i) Auction Proceeds for AB 32 Statutory Objectives. All remaining allowances not allocated for uses specified in sections 95870(a) through (h), section 95870(j), or section 95911(h) will be designated for sale at auction. The proceeds from the sale of these allowances will be deposited into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8, and will be available for appropriation by the Legislature for the purposes designated in California Health and Safety Code sections 38500 et seq. and consistent with the requirements of Chapter 4.1 (commencing with Section 39710) of Part 2 of Division 26 of the California Health and Safety Code and Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.

10. (j) Allocation to Waste-to-Energy Facilities. Vintage 2020 allowances available for allocation to waste-to-energy facilities shall be calculated as set forth in section 95891(f)(1). The Executive Officer will place vintage 2020 allowances in the annual allocation holding account of each eligible waste-to-energy facility by October 24, 2019. An amount of vintage 2020 true-up allowances will be placed in the annual allocation holding account of each eligible waste-to-energy facility by October 24, 2019 to account for 2018 and 2019 emissions.

    Table 8-1: Assistance Factors and Covered Industrial Sectors

    Assistance Factor (AF_a) by Budget Year

    Leakage Risk Classification

    NAICS Sector Definition

    NAICS Code

    Activity (a)

    2013-2014

    2015-2017

    2018-2020

    2021-2030

    Thermal EOR Crude Oil Extraction

    100%

    100%

    100%

    100%

    Crude Petroleum and Natural Gas Extraction

    211111

    Non-Thermal Crude Oil Extraction

    100%

    100%

    100%

    100%

    Natural Gas Processing >25 MMscf/day

    100%

    100%

    100%

    100%

    Natural Gas Liquid Extraction

    211112

    Natural Gas Liquid Processing

    100%

    100%

    100%

    100%

    All Other Metal Ore Mining

    212299

    Rare Earth Production

    100%

    100%

    100%

    100%

    Potash, Soda, and Borate Mineral Mining

    212391

    Mining and Manufacturing of Soda Ash and Related Products

    100%

    100%

    100%

    100%

    Mining and Manufacturing of Borates

    100%

    100%

    100%

    100%

    High

    All Other Nonmetallic Mineral Mining

    212399

    Diatomaceous Earth Mining

    100%

    100%

    100%

    100%

    Freshwater Diatomite Filter Aids Manufacturing

    100%

    100%

    100%

    100%

    Wet Corn Milling

    311221

    Wet Corn Milling

    100%

    100%

    100%

    100%

    Paper (except Newsprint) Mills

    322121

    Paper (except Newsprint) Mills

    100%

    100%

    100%

    100%

    Recycled Boxboard Manufacturing

    100%

    100%

    100%

    100%

    Paperboard Mills

    322130

    Recycled Linerboard (Testliner) Manufacturing

    100%

    100%

    100%

    100%

    Recycled Medium (Fluting) Manufacturing

    100%

    100%

    100%

    100%

    All Other Petroleum and Coal Products Manufacturing

    324199

    Coke Calcining

    100%

    100%

    100%

    100%

    All Other Basic Inorganic Chemical Manufacturing

    325188

    Sulfuric Acid Regeneration

    100%

    100%

    100%

    100%

    Cyclic Crude, Intermediate, and Gum and Wood Chemical Manufacturing

    325194

    Cyclic Crude, Intermediate, and Gum and Wood Chemical Manufacturing

    100%

    100%

    100%

    100%

    All Other Basic Organic Chemical Manufacturing

    325199

    All Other Basic Organic Chemical Manufacturing

    100%

    100%

    100%

    100%

    Nitrogenous Fertilizer Manufacturing

    100%

    100%

    100%

    100%

    Nitrogenous Fertilizer Manufacturing

    325311

    Nitric Acid Production

    100%

    100%

    100%

    100%

    High

    Calcium Ammonium Nitrate Solution Production

    100%

    100%

    100%

    100%

    Flat Glass Manufacturing

    327211

    Flat Glass Manufacturing

    100%

    100%

    100%

    100%

    Glass Container Manufacturing

    327213

    Container Glass Manufacturing

    100%

    100%

    100%

    100%

    Cement Manufacturing

    327310

    Cement Manufacturing

    100%

    100%

    100%

    100%

    Lime Manufacturing

    327410

    Lime Manufacturing

    100%

    100%

    100%

    100%

    Dolime Manufacturing

    100%

    100%

    100%

    100%

    Mineral Wool Manufacturing

    327993

    Fiber Glass Manufacturing

    100%

    100%

    100%

    100%

    Iron and Steel Mills

    331111

    Steel Production Using an Electric Arc Furnace

    100%

    100%

    100%

    100%

    Rolled Steel Shape Manufacturing

    331221

    Hot Rolled Steel Sheet Production

    100%

    100%

    100%

    100%

    Other Food Crops Grown Under Cover

    111419

    Other Food Crops Grown Under Cover

    100%

    100%

    100%

    100%

    Food Manufacturing

    311

    Food Manufacturing

    100%

    100%

    100%

    100%

    Aseptic Tomato Paste Processing

    100%

    100%

    100%

    100%

    Aseptic Whole and Diced Tomato Processing

    100%

    100%

    100%

    100%

    Fruit and vegetable canning

    311421

    Non-Aseptic Tomato Paste and Tomato Puree Processing

    100%

    100%

    100%

    100%

    Non-Aseptic Whole and Diced Tomato Processing

    100%

    100%

    100%

    100%

    Non-Aseptic Tomato Juice Processing

    100%

    100%

    100%

    100%

    Medium

    Whole Chicken and Chicken Parts Processing

    100%

    100%

    100%

    100%

    Poultry Processing

    311615

    Poultry Deli Product Processing

    100%

    100%

    100%

    100%

    Protein Meal and Fat Processing

    100%

    100%

    100%

    100%

    Dehydrated Garlic Processing

    100%

    100%

    100%

    100%

    Dehydrated Onion Processing

    100%

    100%

    100%

    100%

    Dried and Dehydrated Food Manufacturing

    311423

    Dehydrated Chili Pepper Processing

    100%

    100%

    100%

    100%

    Dehydrated Spinach Processing

    100%

    100%

    100%

    100%

    Dehydrated Parsley Processing

    100%

    100%

    100%

    100%

    Fluid Milk Product Processing

    100%

    100%

    100%

    100%

    Butter processing

    100%

    100%

    100%

    100%

    Condensed Milk Processing

    100%

    100%

    100%

    100%

    Milk Powder (Low Heat) Processing

    100%

    100%

    100%

    100%

    Milk Powder (Medium Heat and High Heat) Processing

    100%

    100%

    100%

    100%

    Dairy Product Manufacturing

    31151

    Buttermilk Powder Processing

    100%

    100%

    100%

    100%

    Medium

    Intermediate Dairy Ingredients Processing

    100%

    100%

    100%

    100%

    Cheese Processing

    100%

    100%

    100%

    100%

    Lactose Processing

    100%

    100%

    100%

    100%

    Whey Protein Concentrate Processing

    100%

    100%

    100%

    100%

    Deproteinized Whey Processing

    100%

    100%

    100%

    100%

    Almond Blanching

    100%

    100%

    100%

    100%

    Almond Flavoring

    100%

    100%

    100%

    100%

    Roasted Nuts and Peanut Butter Manufacturing

    311911

    Almond Pasteurizing

    100%

    100%

    100%

    100%

    Pistachio Flavoring

    100%

    100%

    100%

    100%

    Pistachio Hulling and Drying

    100%

    100%

    100%

    100%

    Fried Potato Chips Processing

    100%

    100%

    100%

    100%

    Baked Potato Chips Processing

    100%

    100%

    100%

    100%

    Snack Food Manufacturing

    31191

    Corn Chips Processing

    100%

    100%

    100%

    100%

    Corn Curls Processing

    100%

    100%

    100%

    100%

    Pretzel Processing

    100%

    100%

    100%

    100%

    Beet sugar manufacturing

    311313

    Beet sugar manufacturing

    100%

    100%

    100%

    100%

    Breweries

    312120

    Brewing

    100%

    100%

    100%

    100%

    Lager Beer Manufacturing

    100%

    100%

    100%

    100%

    Medium

    Distilled Spirits Production

    100%

    100%

    100%

    100%

    Dry Color Concentrate Production

    100%

    100%

    100%

    100%

    Wineries

    312130

    Grape Juice Concentrate Production

    100%

    100%

    100%

    100%

    Grape Seed Extract Production

    100%

    100%

    100%

    100%

    Liquid Color Concentrate Production

    100%

    100%

    100%

    100%

    Textile Mills

    313

    Textile Processing

    100%

    100%

    100%

    100%

    Cut and Sew Apparel Manufacturing

    3152

    Cut and Sew Apparel Manufacturing

    100%

    100%

    100%

    100%

    Petroleum Refineries

    324110

    Petroleum Refining

    100%

    100%

    100%

    100%

    Asphalt Paving Mixture and Block Manufacturing

    324121

    Asphalt Paving Mixture and Block Manufacturing

    100%

    100%

    100%

    100%

    Industrial Gas Manufacturing

    325120

    On-Purpose Hydrogen Gas Production

    100%

    100%

    100%

    100%

    Liquid Hydrogen Production

    100%

    100%

    100%

    100%

    Ethyl Alcohol Manufacturing

    325193

    Ethyl Alcohol Manufacturing

    100%

    100%

    100%

    100%

    Biological Product (Except Diagnostic) Manufacturing

    325414

    Biological Product (Except Diagnostic) Manufacturing

    100%

    100%

    100%

    100%

    Gypsum Product Manufacturing

    327420

    Plaster Manufacturing

    100%

    100%

    100%

    100%

    Stucco Manufacturing

    100%

    100%

    100%

    100%

    Ground or Treated Mineral and Earth Manufacturing

    327992

    Ground or Treated Mineral and Earth Manufacturing

    100%

    100%

    100%

    100%

    Pickled Steel Sheet Production

    100%

    100%

    100%

    100%

    Rolled Steel Shape Manufacturing

    331221

    Cold Rolled and Annealed Steel Sheet Production

    100%

    100%

    100%

    100%

    Galvanized Steel Sheet Production

    100%

    100%

    100%

    100%

    Medium

    Tin Steel Plate Production

    100%

    100%

    100%

    100%

    Secondary Smelting and Alloying of Aluminum

    331314

    Aluminum and Aluminum Alloy Billet Manufacturing

    100%

    100%

    100%

    100%

    Secondary Smelting, Refining, and Alloying of Nonferrous Metal (Except Copper and Aluminum)

    331492

    Lead Acid Battery Recycling

    100%

    100%

    100%

    100%

    Iron Foundries

    331511

    Iron Foundries

    100%

    100%

    100%

    100%

    Ductile Iron Pipe Manufacturing

    100%

    100%

    100%

    100%

    Hardware Manufacturing

    332510

    Hardware Manufacturing

    100%

    100%

    100%

    100%

    Turbine and Turbine Generator Set Units Manufacturing

    333611

    Testing of Turbines and Turbine Generator Sets

    100%

    100%

    100%

    100%

    Pharmaceutical and Medicine Manufacturing

    325412

    Pharmaceutical and Medicine Manufacturing

    100%

    100%

    100%

    100%

    Nonferrous Forging

    332112

    Nonferrous Metal Forging

    100%

    100%

    100%

    100%

    Seamless Rolled Ring

    100%

    100%

    100%

    100%

    Low

    Automobile Manufacturing

    336111

    Automobile Manufacturing

    100%

    100%

    100%

    100%

    Aircraft Manufacturing

    336411

    Aircraft Manufacturing

    100%

    100%

    100%

    100%

    Guided Missile and Space Vehicle Manufacturing

    336414

    Guided Missile and Space Vehicle Manufacturing

    100%

    100%

    100%

    100%

    Support Activities for Air Transportation

    4881

    Support Activites for Air Transportation

    100%

    100%

    100%

    100%

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 and Section 16428.8, Government Code.

History

1. New subarticle 8 (section 95870) and 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 subsection (e)(2)(A) filed 2-15-2012 pursuant to section 100, title 1, California Code of Regulations (Register 2012, No. 7).

3. Amendment of subsection (d) filed 8-29-2012; operative 9-1-2012 pursuant to Government Code section 11343.4 (Register 2012, No. 35).

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 section heading and section filed 9-18-2017; operative 10-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).

6. Amendment of subsections (b)(1)-(2) and (e)(3), amendment of subsection (i), repealer of subsection (i)(1), new subsection (j) and amendment of Table 8-1 filed 3-29-2019; operative 3-29-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13).