A.  Applicability Of This Rule.  The provisions of this
                    Rule apply to the deposit, transfer, and use of emission
                    reduction credits (ERCs) from stationary sources and 
                    open biomass burning sources of air pollution emissions.  
                    References in this rule to non-permitted source, permit 
                    exempt, shutdown, curtailment, authority to construct 
                    and permit to operate do not apply to open biomass 
                    burning sources.  Additional details and procedures 
                    covering open biomass burning sources can be found in
                    the Manual of Procedures (MOP) for this rule.

                B.  Purposes Of This Rule:

                    1.  To provide a mechanism for permitted and
                        non-permitted emission sources to deposit, transfer, 
                        and use ERCs as offsets as allowed by applicable 
                        laws and regulations.  To ensure that all emission 
                        reductions are transferred through the District's 
                        emission reduction credit bank pursuant to the 
                        Health and Safety Code.  All transfers and uses of 
                        emission reductions that are required under the 
                        District's New Source Review (NSR) Rule, Sec. 51., 
                        shall be processed in accordance with this rule.

                    2.  To define ERC eligibility standards, quantitative
                        procedures, and administrative practices and to 
                        ensure that ERCs are real, permanent, quantifiable, 
                        surplus, and enforceable.  Reductions in emissions 
                        from the required phasedown of rice straw burning 
                        qualify as surplus pursuant to Section 41865 of the
                        California Health and Safety Code.

                    3.  To provide a mechanism for intrabasin transfer
                        and use of banked ERCs.

                    4.  To ensure that open biomass burning is prohibited
                        for a parcel for which an ERC exists.

                C.  Definitions Of Terms:

                     1.  Actual emissions are the measured or estimated 
                         emissions that most accurately represent the 
                         emissions from an emissions unit.

                     2.  Actual emission reductions means a reduction
                         in actual emissions from an emissions unit 
                         selected for emission offsets or banking.  Actual 
                         emission reductions shall be calculated on a 
                         quarterly basis, pursuant to Section D. of this
                         rule, and shall meet the following requirements:

                         a.  Emission reductions shall be real, enforceable, 
                             quantifiable, and permanent.

                         b.  Emission reductions shall be in excess of
                             any emission reductions that are:

                             1.  Required or encumbered by any laws, rules, 
                                 regulations or orders;  or

                             2.  Attributed to a control measure noticed 
                                 for workshop, or proposed or contained in 
                                 a State Implementation Plan; or 
                             3.  Contained as near-term measures in the
                                 adopted District Air Quality Attainment 
                                 Plan for attaining annual reductions 
                                 required for the California Clean Air Act 
                                 (CCAA).  Actual emission reductions 
                                 attributed to a proposed control measure, 
                                 may be re-eligible as actual emission 
                                 reduction in the following circumstances:
                                 a.  For control measures identified in
                                     the District Air Quality Attainment 
                                     Plan or State Implementation Plan, no 
                                     rule has been adopted within 
                                     two (2) years from the scheduled 
                                     adoption date provided, however, the 
                                     Air Pollution Control Officer(APCO) 
                                     has not extended the scheduled 
                                     adoption date:

                                 b.  For control measures not identified in 
                                     the District Air Quality Attainment 
                                     Plan or State Implementation Plan, no 
                                     rule has been adopted within 
                                     two (2) years from the date of the 
                                     latest public workshop notice.

                     3.  Affected pollutants are all air pollutants for 
                         which an ambient air quality standard has been 
                         established by the U.S. Environmental Protection 
                         Agency (EPA) or the California Air Resources Board 
                         (ARB), and the precursors to such pollutants.
                     4.  An applicant is the person, entity, landowner or 
                         their designee applying for an ERC certificate.
                     5.  Bankable emissions are reductions in affected 
                         pollutants which meet the provisions of the 
                         District's Banking and NSR Rules.

                     6.  Banking system means the procedures for
                         quantifying, certifying, recording, and storing 
                         ERCs for future use or transfer.
                     7.  A banking register is the document that records 
                         all ERC applications, deposits, withdrawals, 
                         transfers, and other transactions including the 
                         claiming of open biomass burning offset credits by 
                         stationary sources existing prior to first adoption 
                         of this Rule.
                     8.  Biomass means material derived from the harvesting 
                         of crops or removal of vegetation, including timber,
                         except for material from processed dimensional 

                     9.  The estimated control efficiency of the proposed 
                         air pollution control technology which will be
                         incorporated, by means of enforceable permit 
                         conditions, in the authority to construct and 
                         permit to operate.  Emission reductions attributed 
                         to lowering throughput rates or operating hours 
                         shall not be considered in determining control 

                    10.  Emission reduction credits are reductions of
                         actual emissions from an emission source that are 
                         registered with the District in accordance with 
                         this banking rule.  Reductions will be specified 
                         by pollutant, by location, and in units of pounds 
                         per calendar quarter.

                    11.  An emissions unit is an identifiable operation, 
                         process or control equipment, such as an article,
                         machine, or other contrivance, which emits, may 
                         emit, or results in the emissions of any affected 
                         pollutant directly or as fugitive emissions.

                    12.  An ERC certificate is a document certifying title 
                         to defined quantities and types of emission 
                         reductions issued by the District to the owner(s) 
                         identified on the certificate.

                    13.  Historic actual emissions are actual emissions 
                         from an existing emissions unit averaged over the 
                         two consecutive years immediately preceding the 
                         date of application.  If the last two years are 
                         unrepresentative of normal operations as 
                         determined by the APCO, then two consecutive years 
                         of the last five years may be used.  Where an 
                         emissions unit has been in operation for less than 
                         two years, a shorter averaging period of at least 
                         one year may be used, providing it represents the 
                         full operational history of the emissions unit.  
                         For open biomass burning the emissions baseline 
                         years will be a five-year period (1988 through 
                         1992) and emissions shall be calculated under
                         Section K of this rule.

                    14.  A no-burn list is a list of parcels for which ERCs 
                         exist and which will not receive burn permits.

                    15.  Non-permitted emissions are emissions of 
                         pollutants into the atmosphere from sources that 
                         do not have air pollution operating permits.  
                         Non-permitted sources include exempt facilities.

                    16.  Offset means using an emission decrease from
                         one or more sources to compensate for an emission 
                         increase in a non-attainment pollutant or its 
                         precursor from a new or modified source subject to 
                         the requirements of the District's New Source
                         Review Rule.

                    17.  A parcel is a legally identifiable piece of land, 
                         or a portion of that land, or combined lands, 
                         under common ownership and as registered with the 
                         County Assessor's office for tax purposes.

                    18.  The potential to emit is the maximum daily 
                         capacity of a stationary source or emissions unit 
                         to emit affected pollutants under its physical and 
                         operational design.  Any physical or operational 
                         limitation on the daily capacity of the source or 
                         unit to emit a pollutant, including pollution
                         control equipment and restrictions in hours of 
                         operation, type of material combusted, stored, or 
                         processed, shall be treated as part of its design 
                         limitation if they are incorporated into the
                         applicable permit as enforceable permit conditions.
                    19.  Proposed emissions means the potential to emit for 
                         a new or post-modification emissions unit.

                    20.  A registered owner is the person, entity, landowner 
                         or their designee in whose name the ERC certificate 
                         is issued and listed in the banking register.

                    21.  Shutdown means either the earlier of the permanent 
                         cessation of emissions from a source or an 
                         emission unit or the surrender of that unit's or 
                         source's operating permit.  If prior to the 
                         surrender of the operating permit, the APCO 
                         determines that the source or emission unit has 
                         been removed or fallen into an inoperable and 
                         unmaintained condition, the APCO may notify the 
                         owner of the intent to cancel the permit.  If the 
                         owner cannot demonstrate to the satisfaction of 
                         the APCO, or does not respond within 60 days from 
                         the District's notice to cancel the permit, that 
                         the owner intended to operate again, then the APCO 
                         may cancel the permit and deem the source shutdown 
                         as of the date of the last emissions.

                    22.  A source is any building, structure, facility, or 
                         emission unit which emits or may emit any affected 
                         pollutant directly or as a fugitive emission.  A 
                         source may have a permit to operate or be exempt 
                         from permit.  For purposes of this rule open 
                         biomass burning will be considered a source and 
                         such activity requires an annual burning permit.

                    23.  A transfer is the conveyance of an ERC 
                         certificate from one entity to another.

                D.  Eligibility of Emissions Reductions for Credits.
                    Upon application to the District within 365 days of date 
                    of adoption or 365 days after the emission reductions 
                    occurred the following emissions reductions may qualify 
                    for ERC certificates.  For open biomass burning the 
                    application period and eligibility requirements are 
                    specified in other Sections of this Rule.  Emission 
                    reductions will be deemed to have occurred on the date
                    when emissions actually decreased.  For open biomass 
                    burning the emission reduction will be deemed to have 
                    occurred when the parcel(s) has been put onto the 
                    no-burn list.  The District may claim emission 
                    reductions not applied for as ERCs under this rule, 
                    from any source, and use such emission reductions 
                    toward attainment of air quality standards or deposit 
                    the emission reductions into the community bank.  
                    Sections D(1,2,3,5,6,7) of this rule do not apply to 
                    open biomass burning sources.

                    1.  For non-permitted sources the following
                        additional requirements shall apply:

                        a.  Emissions must have been included in the
                            1987 emissions inventory.

                        b.  The applicant for the ERCs must apply for and 
                            obtain a Permit to Operate from the District or 
                            execute a legally binding contract with the 
                            District or through other enforceable means.

                        c.  An applicant who proposes to bank emissions 
                            from permit exempt sources must relinquish the 
                            exempt status and obtain permits for any new or 
                            modified sources of the same type.

                        d.  If the emission reduction is due to the
                            shutdown of a non-permitted source, the 
                            applicant must demonstrate to the satisfaction 
                            of the APCO that the emissions reductions from 
                            the source meet all applicable requirements of
                            this rule.  The source can no longer be 
                            operated within the District unless and until a 
                            Permit to Operate is obtained from the District.

                    2.  Under no circumstances shall any emissions
                        reductions occurring before date of adoption, other 
                        than as described in Section D.3. of this rule be 
                        eligible for ERC certificates.

                    3.  Emissions reductions occurring after December 31, 
                        1987 and before date of adoption.

                        a.  Emission reductions formally recognized by the 
                            District (in written form, emission databases, 
                            etc.) shall be deemed eligible emission 
                            reductions, provided the APCO determines that 
                            such emission reductions comply with the
                            definition of actual emission reduction.

                    4.  Emissions reductions occurring after date of
                        adoption, the following criteria must be met in 
                        order to deem such emissions reductions eligible 
                        for ERC banking:

                        a.  Emission reductions are calculated in
                            accordance with District procedures contained 
                            in the NSR Rule or, for biomass burning, in 
                            this rule and comply with the definition of 
                            actual emission reductions.

                    5.  A source which obtained offsets pursuant to the 
                        District's New Source Review Rule and was issued 
                        an Authority to Construct after December 31, 1987, 
                        may apply to bank such offsets if the Authority to 
                        Construct is canceled or if the Permit to Operate 
                        is voluntarily modified or surrendered or is
                        revoked by the District.

                    6.  The following emission reductions are not eligible 
                        for ERCs for banking:

                        a.  Emission reductions from the shutdown or
                            curtailment of retail gasoline dispensing or 
                            retail dry cleaning operations.  These 
                            facilities may be eligible if they can
                            demonstrate to the satisfaction of the APCO that 
                            their emission reductions are not offset by 
                            increases in demand and emissions from other 
                            similar sources within the District.

                        b.  Emission reductions occurring from the
                            shutdown or curtailment of a stationary source 
                            for which the offsets originally provided are 
                            no longer enforceable by the District.

                        c.  Emission reductions occurring from the shutdown 
                            or curtailment of a stationary source for which 
                            the District originally provided the required 

                    7.  Emission reduction credits resulting from
                        shutdowns or curtailment of sources shall not be 
                        more than the quantity of emissions that would have 
                        been emitted had the source operated in compliance 
                        with rules and regulations applicable to the source 
                        at the time of shutdown or curtailment.

                E.  Application Procedures For Emission Reduction Credits

                    1.  Any person, entity, landowner, or authorized
                        agent, which owns or operates a source at which an 
                        eligible emission reduction has occurred or will 
                        occur may apply for an ERC certificate in accordance 
                        with the requirements of this Rule.  For open 
                        biomass burning sources, if the applicant is not the
                        landowner, written authorization from the landowner 
                        must be included with the application for an ERC 

                    2.  The person or entity requesting the ERC certificate 
                        shall make an application on forms supplied by the

                    3.  The application may be for reductions in one or 
                        more affected pollutants.  The application shall 
                        contain sufficient information to allow for 
                        adequate evaluation of actual emission reductions.  
                        The application for an ERC certificate for open 
                        biomass burning may include more than one parcel 
                        but must have separate emission calculations for 
                        each parcel or portion of a parcel covered in the 

                    4.  Applicants may claim confidentiality of information 
                        contained in the application pursuant to applicable
                        provisions of the Federal Clean Air Act, Government 
                        Code, and the Health and Safety Code

                    5.  Applications shall be submitted within 365 days 
                        after the emission reduction occurs or within 
                        365 days of date of adoption whichever is later.  
                        Applications for reductions in open biomass burning 
                        must be submitted by May 1 of each year.  The 
                        application may be submitted for any burning 
                        reductions occurring in the previous or current 
                        calendar year ending December 31.

                    6.  To verify emission reductions claimed in 
                        conjunction with an application for an ERC 
                        certificate, the District may require source tests 
                        by ARB approved methods, continuous monitoring, 
                        production records, fuel use records, or any other 
                        appropriate means.  For open biomass burning,
                        verification of emission reductions shall be in 
                        accordance with Section K. and the MOP.

                F.  Administrative Procedures And Timetable.  For ERCs for 
                    open biomass burning reductions, a separate 
                    administrative timetable is found in the Manual of 

                    1.  The APCO shall determine whether an ERC application 
                        is complete not later than thirty (30) calendar days
                        following receipt of the application, or after a 
                        longer time period agreed upon in writing by both 
                        the applicant and the APCO.

                    2.  If the APCO determines that the application is not 
                        complete, the applicant shall be notified in writing 
                        of the decision, specifying the additional 
                        information that is required.  The applicant shall 
                        have  sixty (60) days, or a longer time period 
                        agreed upon in writing by both the applicant and 
                        the APCO, to submit the requested information.  
                        Upon receipt of additional information, the APCO 
                        shall have another thirty (30) days to determine 
                        completeness.  If no information is submitted or 
                        the application is still incomplete, the APCO may 
                        cancel the application with written notification to 

                    3.  Upon determination that the application is complete, 
                        the APCO shall notify the applicant and ARB in 
                        writing.  Thereafter, only information to clarify, 
                        correct, or otherwise supplement the information 
                        submitted in the application may be requested by 
                        the District.

                    4.  Withdrawal of a ERC application by an applicant 
                        shall result in cancellation of the application; 
                        any re-submittal will be processed as a new 

                    5.  Upon acceptance of an application as complete, the 
                        APCO shall have 180 days to take final action on
                        the application after considering all written 
                        comments.  Upon completion of the initial 
                        assessment, the APCO shall provide written notice 
                        of such to the applicant and shall also provide
                        written notice to the ARB and the EPA and publish 
                        notice in a local newspaper of general circulation.  
                        The notice shall specify the applicant, the 
                        quantity of emission reduction credits requested 
                        and a copy of the initial assessment.  The notice
                        requirements shall be waived by the APCO if the 
                        emission reduction credits applied for are less 
                        than 10,000 pounds per quarter per pollutant except 
                        for CO which is 20,000 pounds per quarter, and open 
                        biomass burning credits for less than 500 acres
                        per parcel.

                    6.  Publication of the notice shall commence a
                        thirty (30) day public comment period during which 
                        the APCO shall accept written comments on the 
                        merits of the ERC application.  Upon conclusion of 
                        this thirty (30) day period, the APCO shall have 
                        another thirty (30) days to render a decision to 
                        approve, conditionally approve, or deny the 
                        application.  This decision shall be provided in 
                        writing to the applicant.

                    7.  The applicant or any other party may appeal the 
                        APCO's decision following provisions specified in 
                        District regulations.

                G.  Registration Of Emission Reduction Credits

                     1.  The District shall maintain a bank register, which 
                         shall consist of the following:

                         a.  A record of all deposits, withdrawals, and 
                             other transactions with regard to the 
                             District's banking system.

                         b.  A record of all open biomass burning offset 
                             credits derived from reduced burning within 
                             the District and which are claimed by 
                             stationary sources existing prior to the 
                             adoption of this rule (pre-existing source).

                     2.  Offset credits claimed from reduced open biomass 
                         burning by a pre-existing stationary source within 
                         the District shall be reported to the District for 
                         incorporation into the banking register.  Such 
                         offsets shall be incorporated into the banking 
                         register within two years after the date of Rule
                         adoption.  The offsets shall not be subject to 
                         adjustments under Section H of this rule.  In the 
                         event that open burning biomass offset credits are 
                         claimed by a pre-existing stationary source and 
                         obtained from outside the District, the District 
                         shall report the claiming of such credits to the 
                         District of origin of the biomass material.

                     3.  In the event that open burning biomass emission 
                         credits are claimed by a new or modified stationary
                         source as offsets and obtained from outside the 
                         District, the District shall report the claiming of 
                         such offset credits to the District of origin of 
                         the biomass material.

                     4.  The APCO may only grant an ERC certificate after 
                         the emission reductions have actually occurred and 
                         upon satisfaction of either of the following 
                         applicable provisions:

                         a.  If the emission reductions were created as a 
                             result of greater operating efficiencies, 
                             reduced throughput, shortened operating hours, 
                             or from the application of more efficient 
                             control technology and a revised Permit to 
                             Operate was issued.  This revised permit must 
                             include specific quantifiable emission limits 
                             reflecting the reduced emissions.

                         b.  If the emission reductions were created as a 
                             result of the shutdown of a permitted source or 
                             emitting unit, and the Permit to Operate has 
                             been surrendered and voided or modified to 
                             ensure that the emissions reductions are
                     5.  When all the requirements of this rule have been 
                         satisfied and the emission reduction has actually 
                         occurred, the APCO shall issue the ERC certificate.  
                         After granting an ERC certificate, the name on the 
                         certificate shall be entered into the banking 
                         register.  Such information may be made available 
                         for public inspection.

                     6.  All ERC certificate information concerning titles, 
                         interests, liens, restrictions, encumbrances, and 
                         other changes of record shall be identified in the 
                         District's banking register until the certificate 
                         is canceled or nullified by operation of law.

                     7.  Each ERC certificate shall be numbered, bear the 
                         date of issuance, be signed by the APCO, bear the 
                         seal of the District, and contain information 
                         regarding the quantity and type of ERCs.  One copy 
                         of the ERC certificate shall be retained by the 
                         District and the original shall be delivered to the
                         applicant.  Transmittal of the ERC certificate to 
                         the owner shall be accomplished in person or by 
                         registered mail.  The person accepting the ERC 
                         certificate shall sign a receipt therefor and
                         provide such proof of identity as the APCO may 
                     8.  At the option of joint owners of ERCs, such 
                         persons may receive one ERC certificate for the 
                         entirety or separate ERC certificates reflecting 
                         each proportional share and separate ownership.  
                         The District's bank shall reflect the 
                         consolidation or separation of the ERCs.  
                     9.  Title to an ERC certificate shall be deemed 
                         registered at the time the required information 
                         concerning the ERC is entered into the banking 
                         register.   Title will be vested in the applicant's 
                         name or his/her designee and shall inure to the 
                         benefit of his or her heirs.  In the case of ERCs 
                         granted for open burning of biomass, title will be 
                         vested with the landowner or the landowner's 

                    10.  All dealings with ERCs and all liens, 
                         restrictions, encumbrances, and changes subsequent 
                         to the first registration shall be deemed to be 
                         subject to the terms of this regulation, and to 
                         such amendments and alterations as may hereafter 
                         be made.

                    11.  The APCO may re-issue lost or destroyed ERC
                         certificates after the owner certifies in writing 
                         that the original has been lost or destroyed.

                H.  Adjustments To Emission Reduction Credits

                    1.  Except as provided in Section H.2., below, the 
                        District shall place five percent (5%) of the 
                        emissions reductions before ERCs are granted and 
                        apply the emissions toward attainment of the air 
                        quality standards or place the emissions into a 
                        community bank controlled by the District for use 
                        by essential public services, such as sewage 
                        treatment, schools, hospitals, fire fighting, 
                        police, jail, water delivery, and mandated cleanup 

                    2.  An applicant may restrict use of the ERCs only for 
                        applicants own future use, at the same parcel or 
                        site, in which case the District will not adjust 
                        the ERCs.  The applicant may have the restriction 
                        removed by the District upon payment of costs 
                        incurred by the District to re-issue an 
                        unrestricted ERC certificate.

                    3.  Deposits are permanent until used by the depositor 
                        or any party to whom the ERC certificate has been
                        transferred.  After issuance of the certificate, 
                        subsequent changes in regulations to require the 
                        type of emission reduction which has been banked 
                        shall not reduce or eliminate the ERC.

                    4.  Owners of ERC certificates may donate their ERCs to 
                        the District for purposes of assisting the District
                        towards attainment of the air quality standards.

                I.  Transfer And Use Of Emission Reduction Credits

                    1.  ERCs may be used at the time of, or anytime after 
                        deposit into the District's banking system by the
                        registered owner, or owner's designee of the ERC 
                        certificate to provide offsets for increase in 
                        emissions from new or modified sources subject to 
                        the New Source Review Rule.

                    2.  Transfer in whole or in part of an ERC certificate 
                        shall be done by the registered owner in accordance
                        with applicable procedures of this rule.  Upon 
                        payment of a transfer fee a new ERC certificate, 
                        certifying the title or interest in the ERC, shall 
                        be issued and the original certificate shall be 
                        canceled.  Such cancellation shall be recorded in 
                        the banking register.

                    3.  Nothing in this rule prevents the lease or 
                        temporary transfer, in whole or in part, of ERCs 
                        represented by certificates to be used as offsets.  
                        However, no transfers shall be made until 
                        application is made to the District and approved by
                        the APCO.

                    4.  Except as provided below, all emissions reductions 
                        to be used as offsets under the New Source Review 
                        rule must first be processed through this rule and 
                        receive an ERC certificate in accordance with the 
                        requirements of this rule.  Onsite reductions in 
                        emissions which are contemporaneous with onsite 
                        increases in emissions from other emission units 
                        and meet the requirements of the NSR Rule are not 
                        required to go through this ERC/Banking Rule.

                    5.  ERCs which result from stationary source shutdowns 
                        and curtailments shall not be used as offsets for a 
                        new or modified stationary source where the 
                        permitted emissions would exceed emissions 
                        thresholds established for the District in the
                        Federal Clean Air Act for major source 
                        modifications, unless the applicant can establish 
                        the following:

                        a.  The proposed new source or modification is a 
                            replacement and the shutdown or curtailment 
                            occurred after August 7, 1977, or

                        b.  An application for credit was filed with the 
                            District within 180 days of the date of last 
                            emission; and

                            1.  The crediting of shutdown emissions complies 
                                with the most recent emission trading policy 
                                of regulations of the US Environmental 
                                Protection Agency; and

                            2.  The District has met statutory planning 
                                mandates and air quality improvement 

                    6.  On transfer of ownership of ERCs to a stationary 
                        source for use as offsets the registered owner shall
                        provide information to the District on costs, if 
                        any, in dollars per ton, of emission offsets 
                        purchased for, or acquired by, the new or modified 

                J.  Stationary Source ERC Calculations.  Calculations of 
                    emission reductions shall be determined by the methods
                    described in the District's NSR Rule.

                K.  Open Biomass Burning ERC Calculations.  The MOP contains 
                    emission factors (EF), fuel loading factors (FL),
                    default historical burn fractions (HBF), and default 
                    quarterly burn fractions (QBF).  Default HBFs and QBFs 
                    shall be used to calculate the ERCs.  An alternative 
                    use of parcel specific HBFs and QBFs may be used after 
                    a methodology is developed and receives written ARB 
                    concurrence.  The alternative method is to address 
                    specific geographic areas with specific air quality
                    problems.  The following information will be used in the
                    calculation of ERCs, however when using default HBF and 
                    QBF factors, paragraphs 3 and 4 below do not apply:

                    1.  Basic information.  The applicant shall provide 
                        data on the crop type, exact location of the parcel
                        including assessor's parcel number and other 
                        information regarding parcel location required in 
                        the MOP, acreage burned (AB), and date(s) of open 
                        biomass burning within the baseline period.  The 
                        applicant shall use county burn permit/authorization
                        records or other verifiable records to validate the 
                        information as specified in the MOP.  The type of 
                        biomass residue and the acreage burned (AB) will be 
                        used in the ERC calculation.

                    2.  Acreage Burned.  The applicant for emission 
                        reductions from open biomass burning shall provide 
                        the acreage burned for each parcel(s) of land for 
                        which ERCs are applied.  Acreage must have been 
                        burned for at least one of the five (5) baseline 
                        years of 1988 through 1992. The applicant shall use
                        county burn permit/authorization records or other 
                        verifiable records to determine the acreage.

                    3.  Historical burn fraction (HBF).  The applicant 
                        shall provide data on historical biomass burn
                        percentage for the parcel(s) during the 
                        five (5) baseline years of 1988 through 1992.  The 
                        historical burn fraction (0-1) is an adjustment to 
                        the amount of ERC available.  The applicant may use
                        county burn permit/authorization records or other 
                        verifiable records to determine the amounts of 
                        prior burning.  For rice straw burning a historical 
                        burn fraction of one (1)  will be used for the 

                    4.  Quarterly burn fraction (QBF).  The applicant shall 
                        provide available data on quarterly biomass burning 
                        for the parcel(s) during the five (5) baseline years 
                        of 1988 through 1992.  The applicant may use county 
                        burn permit/authorization records or other 
                        verifiable records to determine the date(s) of 
                        burning.  The quarters are defined as Jan-Mar, 
                        Apr-Jun, Jul-Sep, and Oct-Dec.

                    5.  The biomass fuel loading (FL) and emission factors 
                        (EF) set forth in the MOP shall be used for the 
                        crops indicated.  Alternatively, the applicant may 
                        propose and the District shall select the 
                        appropriate biomass fuel loading and emission 
                        factors to be used in the calculations from the 
                        Annual Agricultural Burning Plan for the Sacramento 
                        Valley Air Basin or other best available data.
                    6.  Discount acreage (DA).  The applicant may reduce 
                        the total acreage covered by the ERC certificate to 
                        allow for continued burning of a portion of the 
                        total acreage of the parcel(s).  This reduction in 
                        the total acreage covered will be reflected in the 
                        emission credits applicable to the parcel(s).  The 
                        portion of the parcel(s) that is covered by the 
                        discount acreage (i.e. the acreage eligible for a 
                        burn permit) must be clearly identified.  This 
                        portion will not be allowed to change without prior 
                        District notification and approval.

                    7.  The District will determine a quarterly ERC value 
                        for each pollutant based on the following 

                              ERCs = (AB - DA)  * HBF * FL * EF * QBF

                    8.  Stationary sources which have applied for an
                        Authority to Construct or equivalent authority prior 
                        to the date of adoption of this Rule, and which 
                        thereafter apply for an ERC(s), may utilize the 
                        calculation factors contained in the MOP on the 
                        date of first adoption of this Rule.

                L.  District Enforcement Considerations

                    1.  Revision or cancellation of ERC certificates at the 
                        request of the registered owner to allow burning of 
                        a parcel(s) for which ERCs have been granted may be 
                        handled as follows, with prior written approval from 
                        the APCO :

                        a.  The registered owner may request that the
                            District reduce the quantities of the emissions 
                            covered by the ERC certificate by the amount of 
                            emissions associated with the reduced acreage 
                            requested.  After the District revises the ERC
                            certificate that portion of the parcel may be 
                            burned in accordance with current agricultural 
                            burning regulations.  The portion of the parcel 
                            that is covered by the discount acreage (i.e. 
                            the acreage eligible for a burn permit) must be 
                            clearly identified.  This portion will not be 
                            allowed to change without prior District 
                            notification and approval.

                        b.  The registered owner may surrender the ERC 
                            certificate to the District for cancellation 
                            and burn the parcel(s) pursuant to current 
                            agricultural burning regulations.

                    2.  District enforcement considerations related to ERCs 
                        are the following:

                        a.  To meet the requirement of enforceability, a 
                            contract, permit conditions, no burn list,
                            and/or other means shall be utilized.

                            1.  The primary means of enforcing open biomass 
                                burning ERCs will be by placing the 
                                parcel(s) on a no burn list.  No burn permit 
                                will be issued for a parcel(s) if an ERC is 
                                currently in effect for that parcel unless 
                                the registered owner applies for 
                                cancellation, modification or substitution 
                                of the ERC under Section L1 of this Rule.

                            2.  To further ensure the enforceability of ERCs 
                                and offsets from open biomass burning, an 
                                owner of a parcel with ERCs who is preparing 
                                to sell that property shall either:

                                a.  Place a restriction on the parcel title, 
                                    prior to sale, foregoing all open 
                                    biomass burning on the parcel, or
                                b.  Submit an application for transfer of 
                                    ownership of the ERCs to the new 
                                    landowner, within 14 days after the 
                                    transfer of title to the parcel, 
                                    consistent with the transfer procedures 
                                    of this Rule.  The ERCs shall 
                                    automatically terminate 15 days after 
                                    transfer of the land to a new owner
                                    unless the registered owner has complied 
                                    with either of the two options in this 
                                    Section (L.2.a.2.).

                            3.  At the time of application, the applicant 
                                for ERCs for reduced open biomass burning 
                                must provide information to the District on 
                                the disposition of the biomass.

                            4.  Emission reduction credits used to offset 
                                project emissions in another district shall 
                                be implemented through an interdistrict 
                                agreement to ensure their enforceability
                                and permanence.

                        b.  Facilities that claim open burning emission 
                            reduction offsets pursuant to Health & Safety 
                            Code Sections 41605.5 and 42314.5 must keep a 
                            daily log of biomass received by type, origin, 
                            quantity, and date.  Such facilities will also 
                            be required to prepare and submit to the 
                            District a quarterly report on their emissions 
                            and corresponding biomass offsets.  The District 
                            will further require an annual status report on 
                            biomass contracts for the next year prior to 
                            reissuance of the annual Permit to Operate.

                    3.  To further ensure enforceability of this Rule, 
                        refer to the Manual of Procedures which contains 
                        ERC and offset tracking, open biomass burn 
                        permitting, and other procedures related to the 
                        implementation of the Rule.

                M.  Fees.  Fees shall be required for application, analysis, 
                    transfer and replacement of an ERC certificate, as
                    specified in District regulations or as follows:

                    1.  Stationary Sources shall pay annually an 
                        administrative fee of $60, and a $10 per ton fee.

                    2.  Open biomass burning sources shall pay the
                        Agricultural Burning Monitoring Record Maintenance 
                        Fee annually as specified in Sec 10.1 of District