(a) A CSAPR NOX Ozone Season Group 1 allowance may be banked for future use or transfer in a compliance account or a general account in accordance with paragraph (b) of this section.

(b) Any CSAPR NOX Ozone Season Group 1 allowance that is held in a compliance account or a general account will remain in such account unless and until the CSAPR NOX Ozone Season Group 1 allowance is deducted or transferred under §97.511(c), §97.523, §97.524, §97.525, §97.527, or §97.528 or removed under paragraph (c) of this section.

(c) Replacement of CSAPR NOX Ozone Season Group 1 allowances with CSAPR NOX Ozone Season Group 2 allowances. Notwithstanding any other provision of this subpart or any provision of a SIP revision approved under §52.38(b)(4) or (5) of this chapter, the Administrator will remove CSAPR NOX Ozone Season Group 1 allowances from compliance accounts and general accounts and allocate in their place amounts of CSAPR NOX Ozone Season Group 2 allowances as provided in paragraphs (c)(1) through (5) of this section and will record CSAPR NOX Ozone Season Group 2 allowances in lieu of initially recording CSAPR NOX Ozone Season Group 1 allowances as provided in paragraph (c)(6) of this section.

(1) As soon as practicable after the completion of deductions under §97.524 for the control period in 2016, but not later than March 1, 2018, the Administrator will temporarily suspend acceptance of CSAPR NOX Ozone Season Group 1 allowance transfers submitted under §97.522 and, before resuming acceptance of such transfers, will take the following actions with regard to every general account and every compliance account except a compliance account for a CSAPR NOX Ozone Season Group 1 source located in a State listed in §52.38(b)(2)(i) of this chapter or Indian country within the borders of such a State:

(i) The Administrator will remove all CSAPR NOX Ozone Season Group 1 allowances allocated for the control periods in 2015 and 2016 from each such account.

(ii) The Administrator will determine a conversion factor equal to the greater of 1.0000 or the quotient, expressed to four decimal places, of the sum of all CSAPR NOX Ozone Season Group 1 allowances removed from all such accounts under paragraph (c)(1)(i) of this section divided by the product of 1.5 times the sum of the variability limits for the control period in 2017 set forth in §97.810(b) for all States except a State listed in §52.38(b)(2)(i) of this chapter.

(iii) The Administrator will allocate to and record in each such account an amount of CSAPR NOX Ozone Season Group 2 allowances for the control period in 2017, where such amount is determined as the quotient of the number of CSAPR NOX Ozone Season Group 1 allowances removed from such account under paragraph (c)(1)(i) of this section divided by the conversion factor determined under paragraph (c)(1)(ii) of this section, rounded up to the nearest whole allowance, except as provided in paragraphs (c)(4) and (5) of this section.

(2) As soon as practicable after approval of a SIP revision under §52.38(b)(6) of this chapter for a State listed in §52.38(b)(2)(i) of this chapter, but not later than the allowance transfer deadline defined under §97.802 for the initial control period described with regard to such SIP revision in §52.38(b)(6)(ii)(A) of this chapter, the Administrator will temporarily suspend acceptance of CSAPR NOX Ozone Season Group 1 allowance transfers submitted under §97.522 and, before resuming acceptance of such transfers, will take the following actions with regard to every general account and every compliance account, unless otherwise provided in such approval of the SIP revision:

(i) The Administrator will remove from each such account all CSAPR NOX Ozone Season Group 1 allowances for such initial control period and each subsequent control period that were allocated to units located in such State under this subpart or that were allocated or auctioned to any entity under a SIP revision for such State approved by the Administrator under §52.38(b)(4) or (5) of this chapter, whether such CSAPR NOX Ozone Season Group 1 allowances were initially recorded in such account or were transferred to such account from another account.

(ii) The Administrator will determine a conversion factor equal to the greater of 1.0000 or the quotient, expressed to four decimal places, of the NOX Ozone Season Group 1 trading budget set forth for such State in §97.510(a) divided by the NOX Ozone Season Group 2 trading budget set forth for such State in §97.810(a).

(iii) The Administrator will allocate to and record in each such account an amount of CSAPR NOX Ozone Season Group 2 allowances for each control period for which CSAPR NOX Ozone Season Group 1 allowances were removed from such account, where each such amount is determined as the quotient of the number of CSAPR NOX Ozone Season Group 1 allowances for such control period removed from such account under paragraph (c)(2)(i) of this section divided by the conversion factor determined under paragraph (c)(2)(ii) of this section, rounded up to the nearest whole allowance, except as provided in paragraphs (c)(4) and (5) of this section.

(3) As soon as practicable after approval of a SIP revision under §52.38(b)(6) of this chapter for a State listed in §52.38(b)(2)(i) of this chapter, but not before the completion of deductions under §97.524 for the control period before the initial control period described with regard to such SIP revision in §52.38(b)(6)(ii)(A) of this chapter and not later than the allowance transfer deadline defined under §97.802 for such initial control period, the Administrator will temporarily suspend acceptance of CSAPR NOX Ozone Season Group 1 allowance transfers submitted under §97.522 and, before resuming acceptance of such transfers, will take the following actions with regard to every compliance account for a CSAPR NOX Ozone Season Group 1 source located in such State, provided that if the provisions of §52.38(b)(2)(i) of this chapter or a SIP revision approved under §52.38(b)(5) of this chapter will no longer apply to any source in any State or Indian country within the borders of any State with regard to emissions occurring in such initial control period or any subsequent control period, the Administrator instead will permanently end acceptance of CSAPR NOX Ozone Season Group 1 allowance transfers submitted under §97.522 and will take the following actions with regard to every general account and every compliance account:

(i) The Administrator will remove from each such account all CSAPR NOX Ozone Season Group 1 allowances allocated for all control periods before such initial control period.

(ii) The Administrator will determine a conversion factor equal to the greater of 1.0000 or the quotient, expressed to four decimal places, of the sum of all CSAPR NOX Ozone Season Group 1 allowances removed from all such accounts under paragraph (c)(3)(i) of this section divided by the product of 1.5 times the variability limit for such initial control period set forth for such State in §97.810(b).

(iii) The Administrator will allocate to and record in each such account an amount of CSAPR NOX Ozone Season Group 2 allowances for such initial control period, where such amount is determined as the quotient of the number of CSAPR NOX Ozone Season Group 1 allowances removed from such account under paragraph (c)(3)(i) of this section divided by the conversion factor determined under paragraph (c)(3)(ii) of this section, rounded up to the nearest whole allowance, except as provided in paragraphs (c)(4) and (5) of this section.

(4) Where, pursuant to paragraph (c)(1)(i), (c)(2)(i), or (c)(3)(i) of this section, the Administrator removes CSAPR NOX Ozone Season Group 1 allowances from the compliance account for a source located in a State not listed in §52.38(b)(2)(iii) of this chapter or Indian country within the borders of such a State, the Administrator will not record CSAPR NOX Ozone Season Group 2 allowances in that account but instead will allocate to and record in another compliance account or general account CSAPR NOX Ozone Season Group 2 allowances for the control periods and in the amounts determined in accordance with paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of this section, respectively, provided that the designated representative for such source identifies such other account in a submission to the Administrator and further provided that any compliance account identified in such a submission is for a source located in a State listed in §52.38(b)(2)(iii) of this chapter or Indian country within the borders of such a State.

(5)

(i) In computing any amounts of CSAPR NOX Ozone Season Group 2 allowances to be allocated to and recorded in general accounts under paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of this section, the Administrator may group multiple general accounts whose ownership interests are held by the same or related persons or entities and treat the group of accounts as a single account for purposes of such computation.

(ii) Following a computation for a group of general accounts in accordance with paragraph (c)(5)(i) of this section, the Administrator will allocate to and record in each individual account in such group a proportional share of the quantity of CSAPR NOX Ozone Season Group 2 allowances computed for such group, basing such shares on the respective quantities of CSAPR NOX Ozone Season Group 1 allowances removed from such individual accounts under paragraph (c)(1)(i), (c)(2)(i), or (c)(3)(i) of this section, as applicable.

(iii) In determining the proportional shares under paragraph (c)(5)(ii) of this section, the Administrator may employ any reasonable adjustment methodology to truncate or round each such share up or down to a whole number and to cause the total of such whole numbers to equal the amount of CSAPR NOX Ozone Season Group 2 allowances computed for such group of accounts in accordance with paragraph (c)(5)(i) of this section, even where such adjustments cause the numbers of CSAPR NOX Ozone Season Group 2 allowances allocated to some individual accounts to equal zero.

(6) After the Administrator has carried out the procedures set forth in paragraph (c)(1), (2), or (3) of this section, upon any determination that would otherwise result in the initial recordation of any CSAPR NOX Ozone Season Group 1 allowances in any account, where if such allowances had been recorded before the Administrator had carried out such procedures the allowances would have been removed from such account under paragraph (c)(1)(i), (c)(2)(i), or (c)(3)(i) of this section, respectively, the Administrator will not record such CSAPR NOX Ozone Season Group 1 allowances but instead will record CSAPR NOX Ozone Season Group 2 allowances for the control periods and in the amounts determined in accordance with paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of this section, respectively, in such account or another account identified in accordance with paragraph (c)(4) of this section.

(7) Notwithstanding any other provision of this subpart or subpart EEEEE of this part, CSAPR NOX Ozone Season Group 2 allowances may be used to satisfy requirements to hold CSAPR NOX Ozone Season Group 1 allowances under this subpart as follows, provided that nothing in this paragraph alters the time as of which any such allowance holding requirement must be met or limits any consequence of a failure to timely meet any such allowance holding requirement:

(i) After the Administrator has carried out the procedures set forth in paragraph (c)(1) of this section, the owner or operator of a CSAPR NOX Ozone Season Group 1 unit in a State listed in §52.38(b)(2)(iii) of this chapter or Indian country within the borders of such a State may satisfy a requirement to hold a given number of CSAPR NOX Ozone Season Group 1 allowances for the control period in 2015 or 2016 by holding instead, in a general account established for this sole purpose, an amount of CSAPR NOX Ozone Season Group 2 allowances for the control period in 2017, where such amount of CSAPR NOX Ozone Season Group 2 allowances is computed as the quotient of such given number of CSAPR NOX Ozone Season Group 1 allowances divided by the conversion factor determined under paragraph (c)(1)(ii) of this section, rounded up to the nearest whole allowance.

(ii) After the Administrator has carried out the procedures set forth in paragraph (c)(3) of this section, the owner or operator of a CSAPR NOX Ozone Season Group 1 unit in a State listed in §52.38(b)(2)(i) of this chapter may satisfy a requirement to hold a given number of CSAPR NOX Ozone Season Group 1 allowances for a control period before the initial control period described with regard to the State's SIP revision in §52.38(b)(6)(ii)(A) of this chapter by holding instead, in a general account established for this sole purpose, an amount of CSAPR NOX Ozone Season Group 2 allowances for such initial control period or any previous control period, where such amount of CSAPR NOX Ozone Season Group 2 allowances is computed as the quotient of such given number of CSAPR NOX Ozone Season Group 1 allowances divided by the conversion factor determined under paragraph (c)(3)(ii) of this section, rounded up to the nearest whole allowance.

[76 FR 48406, Aug. 8, 2011, as amended at 81 FR 74612, Oct. 26, 2016]