MBUAPCD RULE 215 BANKING OF EMISSIONS REDUCTIONS
LAST REVISED 03/20/96

컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴
RULE 215.    BANKING OF EMISSIONS REDUCTIONS
컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴

(Adopted October 20, 1982; Revised: 6-13-83, 5-10-84, 12-16-87, 6-14-89,
6-26-91, 4-21-93, 5-17-95 and 3-20-96.)

                                 CONTENTS


PART 1 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
 1.1   Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
 1.2   Applicability . . . . . . . . . . . . . . . . . . . . . . . . . .  3
 1.3   Exemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
 1.4   Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . .  3
 1.5   References. . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
 1.6   General Banking Provisions. . . . . . . . . . . . . . . . . . . .  3

PART 2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
 2.1   Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
 2.2   Baseline. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
 2.3   Best Available Control Technology (BACT). . . . . . . . . . . . .  4
 2.4   Chlorofluorocarbon (CFC). . . . . . . . . . . . . . . . . . . . .  5
 2.5   Community ERC Account . . . . . . . . . . . . . . . . . . . . . .  5
 2.6   District. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
 2.7   Emission Reduction Credit (ERC) . . . . . . . . . . . . . . . . .  5
 2.8   Enforceable Emission Reduction. . . . . . . . . . . . . . . . . .  6
 2.9   ERC Registry. . . . . . . . . . . . . . . . . . . . . . . . . . .  6
 2.10    Essential Public Services . . . . . . . . . . . . . . . . . . .  6
 2.11    Federal Clean Air Act and Amendments (the Act). . . . . . . . .  6
 2.12    Gasoline. . . . . . . . . . . . . . . . . . . . . . . . . . . .  6
 2.13    Halogenated Hydrocarbons. . . . . . . . . . . . . . . . . . . .  7
 2.14    Halon . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7
 2.15    Hydrochlorofluorocarbon (HCFC). . . . . . . . . . . . . . . . .  7
 2.16    Hydrofluorocarbon (HFC) . . . . . . . . . . . . . . . . . . . .  7
 2.17    Major Stationary Source . . . . . . . . . . . . . . . . . . . .  7
 2.18    Offset. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7
 2.19    Ozone-depleting Compound (ODC). . . . . . . . . . . . . . . . .  8
 2.20    Permanent Emission Reduction. . . . . . . . . . . . . . . . . .  8
 2.21    Quantifiable Emission Reduction . . . . . . . . . . . . . . . .  8
 2.22    Reactive Organic Compound (ROC) . . . . . . . . . . . . . . . .  8
 2.23    Real Emission Reduction . . . . . . . . . . . . . . . . . . . .  8
 2.24    Reasonably Available Control Technology (RACT). . . . . . . . .  9
 2.25    Surplus Emission Reduction. . . . . . . . . . . . . . . . . . .  9
 2.26    Temporary Source. . . . . . . . . . . . . . . . . . . . . . . .  9
 2.27    Transfer of Ownership . . . . . . . . . . . . . . . . . . . . . 10

PART 3 REQUIREMENTS:  CREATING ERCs. . . . . . . . . . . . . . . . . . . 10
 3.1   Eligible Emission Reduction Credits (ERCs). . . . . . . . . . . . 10
 3.2   Calculation of Emissions Reductions Eligible for ERCs . . . . . . 10
 3.3   Sources of Emissions Reductions . . . . . . . . . . . . . . . . . 11

PART 4 REQUIREMENTS:  BANKING ERCs . . . . . . . . . . . . . . . . . . . 13
 4.1   ERC Registry and Tracking System. . . . . . . . . . . . . . . . . 13
 4.2   Procedures for Banking ERCs . . . . . . . . . . . . . . . . . . . 14
 4.3   Banking Certificate . . . . . . . . . . . . . . . . . . . . . . . 15
 4.4   Public Notification and Comment . . . . . . . . . . . . . . . . . 16
 4.5   Appeal to the Hearing Board . . . . . . . . . . . . . . . . . . . 16
 4.6   Procedure for Transferring ERCs . . . . . . . . . . . . . . . . . 16
 4.7   General Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
 4.8   ERC Registry Fee. . . . . . . . . . . . . . . . . . . . . . . . . 17
 4.9   Annual Registry Fee . . . . . . . . . . . . . . . . . . . . . . . 17

PART 5 REQUIREMENTS:   COMMUNITY ERC ACCOUNT . . . . . . . . . . . . . . 17
 5.1   Funding for the Community ERC Account . . . . . . . . . . . . . . 17
 5.2   Access to the Community ERC Account . . . . . . . . . . . . . . . 18
 5.3   Procedure for Obtaining Community Emission Reduction Credits. . . 18
 5.4   Administrative Requirements . . . . . . . . . . . . . . . . . . . 19

PART 6 REQUIREMENTS FOR USING ERCs . . . . . . . . . . . . . . . . . . . 19
 6.1   Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
 6.2   Procedure for Use of ERCs . . . . . . . . . . . . . . . . . . . . 20
 6.3   Moratorium on Use of Banked ERCs. . . . . . . . . . . . . . . . . 21
PART 1 GENERAL


 1.1   Purpose

       The purpose of this Rule is to establish procedures for the
       creation, banking (storage), and use of emission reduction
       credits.  


 1.2   Applicability

       This Rule shall apply to all applicants desiring to establish,
       deposit, withdraw, transfer or use emission reduction credits in
       the District ERC Registry.


 1.3   Exemptions

       Reserved.


 1.4   Effective Date

       This Rule, as most recently revised is effective on March 20,
       1996.


 1.5   References

   1.5.1 The requirements of this Rule arise from the provisions of the
         California Clean Air Act and amendments (Health and Safety
         Code Section 40910 et seq.) and Health and Safety Code Section
         40709 et seq.

   1.5.2 Other related rules include: Rule 207 (Review of New or
         Modified Sources) and Rule 218 (Title V: Federal Operating
         Permits).


 1.6   General Banking Provisions

       The District may allow the banking of eligible criteria
       pollutant emission reduction credits for offset transactions or
       for use in the future in accordance with those limitations set
       forth in this Rule.  The criteria pollutants are:  reactive
       organic compounds, nitrogen oxides, sulfur oxides, carbon
       monoxide, total suspended particulates, and PM10 .  Emission
       reduction credits shall not be granted for carcinogenic or toxic
       air contaminants, as defined in District Rule 1000, or ozone-
       depleting compounds, as defined in Part 2 of this Rule, except
       as reactive organic compounds.  Only emission reduction credits
       which are surplus, enforceable, real,  permanent, and
       quantifiable as defined in Part 2 herein, are eligible for
       banking, trading, or use pursuant to this Rule.  The District
       may terminate, diminish or eliminate banked emission reduction
       credits if necessary to attain or preserve ambient air quality
       standards.



 PART 2  DEFINITIONS


Related definitions may be found in Part 2 of Rule 207.  For the
purposes of this Rule, the following definitions shall apply.


 2.1   Banking 

       The system of quantifying, certifying, recording, and storing
       ERCs for future use or transfer.  Consists of procedures which
       allow sources to store emission reduction credits for future use
       or sale subject to conditions set out in this District Rule.


 2.2   Baseline

       The actual emissions of a source prior to modification as
       determined by Rule 207.


 2.3   Best Available Control Technology (BACT)

       As defined in Part 2 of Rule 207, for any stationary source the
       most stringent of the following, unless the applicant
       demonstrates to the satisfaction of the District that such
       limitations imposed on other sources are not achievable:

   2.3.1   the most effective emission control device or technique
           which has been required or used for the type of equipment
           comprising such a category of stationary source; or

   2.3.2   the most stringent emissions limitation which has been
           required or used for the type of equipment comprising such a
           category of stationary source; or

   2.3.3   any other emission control device or technique determined to
           be technologically feasible and cost-effective by the
           District.

   2.3.4   BACT shall not be less stringent than the emission control
           required by any applicable provision of District, ARB,
           State, or federal laws or regulations, unless the applicant
           demonstrates to the satisfaction of the District that such
           limitations are not achievable.

   2.3.5   In no event shall the application of BACT result in the
           emission of any pollutant which exceeds the limitations of
           any applicable standard in 40 CFR part 60, New Source
           Performance Standards, or in 40 CFR part 61, National
           Emission Standards for Hazardous Air Pollutants, or 40 CFR
           part 63, National Emission Standards for Hazardous Air
           Pollutants for Source Categories.


 2.4   Chlorofluorocarbon (CFC)

       As defined in Part 2 of Rule 207, the family of chemical
       compounds containing carbon, fluorine and chlorine; containing
       at least one carbon atom and having no hydrogen atoms and no
       double bonds; and which includes, without limitation,
       trichlorofluoromethane (CFC-11), dichlorodifluoromethane
       (CFC-12), 1,1,1-trichloro-2,2,2-trifluoroethane (CFC-113), 1-
       chloro-1,1-difluoro-2-chloro-2,2-difluoroethane (CFC-114), and
       chloropentafluoroethane (CFC-115).


 2.5   Community ERC Account

       A special account administered by the District within the ERC
       Registry for those ERCs set aside for essential public services
       projects.


 2.6   District

       Refers to the Monterey Bay Unified Air Pollution Control
       District (MBUAPCD) and its authorized representatives.


 2.7   Emission Reduction Credit (ERC) 

       An actual emission reduction which has been confirmed by the
       District in accordance with this Rule, and which represents a
       permanent, quantifiable, real, surplus and enforceable decrease
       in emissions below the applicable baseline, which has been
       registered with the District in the ERC Registry in accordance
       with the requirements of this Rule.


 2.8   Enforceable Emission Reduction

       An emission reduction which can be verified for accuracy by the
       District.  In general, specified by restrictions imposed by
       permit conditions.


 2.9   ERC Registry

       The public record of the creation, deposit, use and transfer of
       ERCs. 


 2.10    Essential Public Services

   2.10.1    a sewage treatment plant, which is publicly owned and
             operated, and is consistent with the locally approved Air
             Quality Management Plan; or

   2.10.2    a prison, jail or correctional facility; or

   2.10.3    a police or fire fighting facility; or

   2.10.4    a school operated by a local school district; or

   2.10.5    a hospital which is publicly owned, or operated or which
             receives public funds; or

   2.10.6    construction and operation of a publicly owned and
             operated landfill gas control or processing facility; or

   2.10.7    a publicly owned or nonprofit water delivery operation.


 2.11    Federal Clean Air Act and Amendments (the Act)

       Federal Clean Air Act and amendments (42 U.S.C Section 7401 et
       seq.)


 2.12    Gasoline

       As defined in District Rule 1002, any organic liquid (including
       petroleum distillate and methanol) having a Reid vapor pressure
       of four pounds per square inch (4 psi) or greater and used as a
       motor vehicle fuel; or any fuel which is commonly or
       commercially known or sold as gasoline.


 2.13    Halogenated Hydrocarbons

       As defined in Part 2 of Rule 207, 1,1,1-trichloroethane,
       methylene chloride,  trichlorofluoromethane (CFC-11),
       dichlorodifluoromethane (CFC-12), chlorodifluoromethane
       (HCFC-22), trifluoromethane (HFC-23), 1,1,1-trichloro-2,2,2-
       trifluoroethane (CFC-113), 1-chloro-1,1-difluoro-2-chloro-2,2-
       difluoroethane (CFC-114), and chloropentafluoroethane (CFC-115).


 2.14    Halon

       Any fully halogenated carbon compound containing bromine and
       chlorine and/or fluorine, and includes, without limitation,
       halon-1211, halon-1301, and halon-2402.


 2.15    Hydrochlorofluorocarbon (HCFC)

       As defined in Part 2 of Rule 207, any member of the family of
       chemical compounds containing hydrogen, carbon, fluorine and
       chlorine, and which includes, without limitation,
       chlorodifluoromethane (HCFC-22).


 2.16    Hydrofluorocarbon (HFC)

       As defined in Part 2 of Rule 207, any member of the family of
       chemical compounds containing hydrogen, carbon, and fluorine,
       and which includes, without limitation, trifluoromethane (HFC-
       23).


 2.17    Major Stationary Source

       The definition of "Major Stationary Source" in Part 2 of Rule
       207.


 2.18    Offset

       As defined in Part 2 of Rule 207, where used as a noun, an
       emission reduction from an existing source, whether or not under
       the same ownership as a proposed project, that is necessary to
       mitigate an emission increase of an affected pollutant from the
       proposed project that would otherwise prevent the lawful
       issuance by the District of an Authority to Construct or a
       Permit to Operate.  When used as a verb, the process of
       providing such an emission reduction.


 2.19    Ozone-depleting Compound (ODC)

       Any CFC, halon, HCFC, HFC or the chemical compound of 1,1,1-
       trichloroethane (methyl chloroform), or carbon tetrachloride.


 2.20    Permanent Emission Reduction

       An emission reduction which is assured for the life of the
       corresponding increase, whether limited or unlimited in
       duration, and the benefits of which do not diminish or disappear
       over time.


 2.21    Quantifiable Emission Reduction

       An emission reduction, the rate and characteristics of which can
       be determined by the District based on emission factors, stack
       tests, monitored values, operating rates and averaging times,
       process or production inputs, modeling, or other reasonable
       measurement practices.


 2.22    Reactive Organic Compound (ROC)

       As defined in Rule 207, any member of the family of compounds
       containing at least one atom of carbon, except:  methane, carbon
       monoxide, carbon dioxide, carbonic acid, metallic carbides or
       carbonates, ammonium carbonates, acetone, ethane,
       parachlorobenzotrifluoride, volatile methyl siloxanes, and
       halogenated hydrocarbons.


 2.23    Real Emission Reduction

       Those emission reductions that have actually occurred, have been
       implemented and are not artificially devised.


 2.24    Reasonably Available Control Technology (RACT)

       "Reasonably available" means an emission limitation that has
       been currently achieved and demonstrated, i.e., the particular
       limit has been achieved and been proven feasible for a
       reasonable amount of time.  RACT must be the most stringent of
       the following control options:

   2.24.1    the most effective emission limits in existing regulations
             that are currently in effect in any district whose federal
             nonattainment status is designated as moderate;

   2.24.2    emission limits identified in existing Suggested Control
             Measures (SCMs), model rules, or EPA's Control Techniques
             Guidelines (CTGs) or other such documents;

   2.24.3    emission limits in post-1988 suggested control measures
             which are not identified as best available retrofit
             control technology (BARCT);

   2.24.4    the lowest emission limit that can be achieved by the
             specific source by the application of control technology
             taking into account technological feasibility and cost-
             effectiveness, and the specific design features or extent
             of necessary modifications to the source;

   2.24.5    the lowest emission limit achieved for the source category
             that is technically feasible, economically reasonable or
             achieved in practice anywhere (including outside of the
             U.S.);

   2.24.6    any combination of control technologies that will achieve
             emission reductions equivalent to those resulting from the
             most effective option listed above.


 2.25    Surplus Emission Reduction

       Emission reductions not already required by any federal, State,
       Air Resources Board, District, or local agreement, law, order,
       plan, regulation, requirement, or rule.


 2.26    Temporary Source

       A stationary source with a maximum operational lifetime of no
       more than 90 continuous days.


 2.27    Transfer of Ownership

       A change in ownership of a stationary source from one person to
       another.




PART 3 REQUIREMENTS:  CREATING ERCs


 3.1   Eligible Emission Reduction Credits (ERCs)

   3.1.1   Emission reductions eligible for ERC banking may include
           only those emissions reductions provided for in Part 3
           herein.  

   3.1.2   The emission reductions must be real, surplus, enforceable,
           permanent, and quantifiable in accordance with Authorities
           to Construct issued pursuant to District Regulation II and
           as confirmed and evidenced by revised permit conditions
           which may include and not be limited to the following:

     3.1.2.1   hours of operation;

     3.1.2.2   production rate or input rate;

     3.1.2.3   record-keeping or reporting;

     3.1.2.4   enforceable test methods; and,

     3.1.2.5   minimum time period over which the above will be
               averaged.

   3.1.3   Any new emissions reduction credits entered into the ERC
           Registry shall be discounted in value by 10 percent.  The
           portion of ERCs discounted shall become Community ERCs and
           be deposited into the Community ERC Account, described in
           Part 5 herein.  


 3.2   Calculation of Emissions Reductions Eligible for ERCs

       The calculation of emissions reductions eligible for ERCs shall
       be done in accordance with the following:

   3.2.1   the historical emissions before modification shall reflect:

     3.2.1.1   the actual operating conditions of the source which is
               applying for reduction credit, and the baseline
               emissions shall be determined by source tests,
               continuous emission monitors, or other methods approved
               by the District when an EPA approved test method does
               not exist; 

     3.2.1.2   the amount of emissions remaining if appropriate BACT
               had been applied to all existing equipment or processes
               prior to shutdown;

   3.2.2   the emissions after the modification which will result in
           emission reductions shall be determined by source tests,
           continuous emissions monitors, or, when no EPA approved test
           methods exist, other methods approved by the District; 

   3.2.3   the same emission calculation method should be used to
           quantify the emission levels before and after reduction;

   3.2.4   credit for the emissions reductions determined in
           Subsections 3.2.1 and 3.2.2 above shall be calculated as
           provided in the provisions of Rule 207 as in effect at the
           time the Banking Certificate is issued in accordance with
           Section 4.3 herein.
 

 3.3   Sources of Emissions Reductions

   3.3.1   Innovative Control Technology and Process Improvements. 
           Emission reductions resulting from innovative control
           techniques or process improvements below current and actual
           emissions, but not to exceed the allowable emissions, may be
           banked as ERCs:

     3.3.1.1   after the transmittal of documentation of the emission
               reduction and issuance of a Permit to Operate
               identifying the emission limitation for the source and
               reflecting the emission reduction; and

     3.3.1.2   when appropriate, submitted in an application for an
               Authority to Construct permit submitted within two years
               before issuance of the Permit to Operate for the
               innovative control technique or process improvement.

     3.3.1.3   If non-traditional alternatives to stationary source
               controls, including alternate fuels, mobile source or
               transportation measures, are proposed for emission
               reduction credits, these must meet the same criteria of
               enforceable, quantifiable, permanent, real and surplus,
               as would traditional stationary source control
               techniques, and the District shall not issue ERCs
               created from mobile sources unless EPA concurs with
               granting of the ERCs on a case-by-case basis.

       3.3.1.3.1   These emissions reduction credits may be calculated
                   by methods other than the calculation methodology
                   requirements of Subsection 3.2.4 herein, if deemed
                   appropriate by the District.  

       3.3.1.3.2   Emission reduction credits developed in accordance
                   with this Subsection shall be subject to the
                   provisions of Subsection 3.3.2.2 herein.

       3.3.1.3.3   Emission reduction credits developed in accordance
                   with this Subsection may be subject to limitations
                   on their useful lifetimes as offsets.

   3.3.2   Changes in Permit to Operate Conditions.  Emission
           reductions resulting from changes in permit conditions which
           result in actual emissions reductions documented as required
           by this Rule, may be banked.  

     3.3.2.1   ERCs developed in accordance with this Subsection shall
               not be credited until after an Authority to Construct
               and a Permit to Operate has been issued as based on the
               application submitted by the source owner.  For the case
               of shutdown sources, these reductions must represent
               emissions from a source had the source been applying
               BACT as defined in Rule 207.  All conditions and
               allowances specified or implied in the initial Permit to
               Operate shall terminate immediately upon the issuance of
               the Authority to Construct and associated ERCs issued in
               accordance with this Subsection.  The Authority to
               Construct and Permit to Operate shall contain conditions
               which limit the operation of the source so that
               emissions from the source do not exceed the levels
               determined pursuant to Subsection 3.2.2 herein to ensure
               that emissions reductions will be real and enforceable.

     3.3.2.2   Where the source of offsets is not subject to a District
               permit, a District permit with enforceable permit
               conditions, containing specific emission limitations,
               must be obtained by the recipient of such offsets.  A
               written agreement shall be required between the
               applicant and the owner or operator of such a source of
               offsets, which agreement, by its terms, shall be
               enforceable by the District as a third party
               beneficiary.  Any breach of such an agreement shall be a
               violation of this Rule.  The permit and agreement shall
               be submitted to the California Air Resources Board to be
               forwarded to the federal Environmental Protection Agency
               as part of the State Implementation Plan.

     3.3.2.3   Application for emission reduction credits developed in
               accordance with this Subsection must be submitted to the
               District within 60 days of issuance of the modified
               Permit to Operate.

   3.3.3   Source Shutdowns or Curtailments.  Emissions reductions from
           a source shutdown or curtailment may be banked for ERCs for
           use for any new stationary source or modification provided
           the source owner can demonstrate the following as required
           by this Rule:

     3.3.3.1   the reductions are real, enforceable, quantifiable,
               surplus, and permanent;

     3.3.3.2   the reductions are not accounted for in the District Air
               Quality Management Plan;

     3.3.3.3   the reductions are not required by District Regulations
               which limit emissions or define BACT for the source;
               and,

     3.3.3.4   the reductions represent emissions from a source had the
               source been applying BACT as defined in Rule 207.

     3.3.3.5   Application for emission reduction credits must be
               submitted within 60 days of surrender or cancellation of
               the permits or 60 days of the last date of operation for
               non-permitted sources.  Shutdown credits for which
               applications are not received by the District within 60
               days may be deposited into the Community ERC Account by
               the District provided the credits meet the requirements
               of this Rule. 

     3.3.3.6   Emission reductions resulting from the shutdown of a
               stationary source in any of the following categories
               shall not be eligible for deposit into the ERC Registry:

       3.3.3.6.1   gasoline dispensing facilities; or

       3.3.3.6.2   dry cleaning facilities.




PART 4 REQUIREMENTS:  BANKING ERCs 


 4.1   ERC Registry and Tracking System

       Emission reduction credits (ERCs) are the common currency of all
       banking, trading, selling, and tracking activities which use
       emission reduction activities provided for in this Rule.

   4.1.1   The District shall develop a banking registry for eligible
           ERCs (ERC Registry) and pollutant reduction tracking system. 
           

     4.1.1.1   Such system shall assure the banking and use of ERCs do
               not interfere with the attainment or maintenance of any
               State or National Ambient Air Quality Standard, or any
               air quality increment set forth in Rule 207.  

     4.1.1.2   Such system shall also assure that the use of ERCs does
               not contravene relevant requirements of 42 U.S.C.,
               Section 7401 et seq., (federal Clean Air Act and
               Amendments), or the State Health and Safety Code (HSC).

   4.1.2   An ERC Registry established by the District in accordance
           with this Section shall be accessible to the public and
           should include but not be limited to the following:

     4.1.2.1   a log of all entries; 

     4.1.2.2   a cumulative tally of banked ERCs; 

     4.1.2.3   an account for each depositor; and 

     4.1.2.4   a Community ERC Account, as described in Part 5 herein.

   4.1.3   Confidentiality considerations may apply to pertinent
           activities and data utilized in the ERC tracking system.


 4.2   Procedures for Banking ERCs

   4.2.1   The applicant shall submit an application to the District
           describing the proposed reduction in sufficient detail for
           the District to make a preliminary determination regarding
           the eligibility of the reductions for banking credit.

   4.2.2   The District shall determine within 30 days of receipt of
           the application whether that submittal is complete.  After
           an application is deemed complete:

     4.2.2.1   an evaluation shall be made to determine whether or not
               the eligibility criteria of this Rule are met, and,

     4.2.2.2   the baseline emissions of the equipment shall be
               determined as specified in 3.2 herein. 

   4.2.3   After issuing an initial preliminary decision on the
           application, the District shall follow the appropriate
           noticing requirements in this Rule.  After the close of the
           public comment period, the District shall consider the
           public input and issue a final preliminary decision on the
           application.  Such decision shall be issued no later than
           180 days after receipt of a completed application unless an
           extension is requested by the applicant.

   4.2.4   After the reductions are achieved, the new emissions level
           shall be determined as specified in 3.2 herein.

   4.2.5   After verification of the emissions reductions, the District
           shall issue a Banking Certificate to the applicant which
           reflects the provisions of Section 5.1 herein.

   4.2.6   Banking Certificates for ERCs are then valid immediately
           upon receipt by the District of the necessary fees provided
           for in Part 4 herein.


 4.3   Banking Certificate

       Thirty (30) days after verification of emission reductions
       pursuant to this Rule, the District shall issue a Banking
       Certificate to the applicant to confirm emission reductions
       which will be credited in the ERC Registry.  

   4.3.1   Only emission reductions for which such a Banking
           Certificate has been issued, and for which necessary fees
           determined pursuant to Part 4 of this Rule have been paid,
           are eligible for sale, transfer, or other uses provided for
           in this Rule.

   4.3.2   The Banking Certificate shall contain a quantification of
           emissions reductions in the units in which offsets are
           required in Rule 207, the location of the source, the
           source's operating schedule, and applicable permit
           conditions (e.g., stack parameters, particle size,
           temperature and the velocity of plume, existence of
           hazardous pollutants, daily and seasonal emission rates)
           which limit the operation of the source so that emissions
           from the source do not exceed levels determined pursuant to
           Subsection 3.2.2 herein, to ensure that the respective
           emission reduction will be real and enforceable.

   4.3.3   Effective as of July 1, 1994, Banking Certificates, and the
           ERCs they evidence, shall be valid until surrendered to the
           District to satisfy offset requirements or until terminated
           by operation of law or amendment of this Rule.  


 4.4   Public Notification and Comment

       Before final preliminary approval of the banking of ERCs of any
       affected pollutant, or declaring a moratorium on further banking
       of ERCs or further use of ERCs as provided for in Section 6.3
       herein, the District shall publish in at least one newspaper of
       general circulation within the District, and send to any
       individual submitting a written request to the District for
       notification, a notice stating the initial preliminary decision
       of the District to approve the banking of applicable ERCs or to
       declare a moratorium on further banking or use of ERCs, inviting
       written public comment for a 30-day period following the date of
       publication.  During this period, which may be extended by the
       District, the District may elect to hold a public meeting to
       receive oral comments from the public.  After considering all
       such comments, the District shall make a final preliminary
       decision concerning such banking within ten days of the close of
       the comment period.


 4.5   Appeal to the Hearing Board

       Any person dissatisfied with the final preliminary determination
       made by the District pursuant to this Rule, may, within 30 days
       of the District's decision, petition the District Hearing Board
       for a hearing to review the District's decision.  The decision
       of the Hearing Board shall be final.  Only those persons
       submitting written comments during the public comment period
       provided under Section 4.4, or in the event oral testimony is
       given during  any public meeting provided for under Section 4.4,
       those persons providing such testimony shall have the right
       pursuant to the provisions to appeal the decision of the
       District.


 4.6   Procedure for Transferring ERCs

       Emission reduction credits may be transferred by the registered
       holder of the ERCs, upon submittal of an application for ERC
       transfer by the registered holder to the District, and payment
       of all outstanding obligations to the District.  ERCs may be
       transferred in whole or in part.  Transfer of the banked
       reductions shall not be effective until the District informs the
       holder that notification of the transfer has been received and
       recorded in the ERC Registry.  If reductions are transferred in
       part, the Banking Certificate must be surrendered to the
       District and a new ERC Banking Certificate issued to reflect the
       partial transfer.  Sources operating in violation of any
       District rule or regulation shall not be eligible to transfer
       ERCs or receive transferred ERCs.

       Ten percent of ERCs used to offset temporary sources shall be
       deposited into the Community ERC Account for use as specified in
       Section 5 of this Rule.


 4.7   General Fees

       To the extent that ERCs are credited to the ERC Registry
       developed pursuant to this Rule the fees specified in Sections
       4.8 and 4.9 below shall be paid within 30 days of the issuance
       of Banking Certificates.  ERC Banking Certificates are not in
       effect and cannot be traded or used in any manner unless the
       appropriate fees required herein have been fully paid.


 4.8   ERC Registry Fee

       Every applicant shall pay an initial registration fee of $300.00
       for registration in the ERC Registry.  However, if the District
       determines that this fee does not fairly represent the
       District's engineering, inspecting, and evaluation costs in
       processing the subject application, the District shall assess an
       additional registry fee based on the actual estimated costs
       incurred by the District in processing the application at a rate
       of $80.00 per hour .  Registry fees assessed under this schedule
       may be appealed to the Hearing Board in accordance with
       Regulation VI provisions. 


 4.9   Annual Registry Fee 

       Every person registered in the ERC Registry shall pay an annual
       banking fee of $100.00.  However, the District may assess an
       additional annual registry fee based on the actual estimated
       costs incurred by the District in maintaining the subject ERC
       Registry account at a rate of $80.00 per hour.  Annual registry
       fees assessed under this schedule may be appealed to the Hearing
       Board in accordance with Regulation VI provisions. 




PART 5 REQUIREMENTS:   COMMUNITY ERC ACCOUNT


 5.1   Funding for the Community ERC Account

   5.1.1   The District shall, at the time of any ERC deposit, deduct
           ten percent of the emissions reductions relative to criteria
           pollutants deposited in the ERC Registry to be placed into
           the Community ERC Account.

   5.1.2   Any other actual emission reductions which the District
           determines to be surplus under the provisions of Subsection
           3.3.3.5 and Section 4.6 may also be included in the
           Community ERC Account.

   5.1.3   The District shall return the Community ERC Account credits
           from a stationary source which has received credits from the
           Community ERC Account back into the Community ERC Account,
           under the following condition:

     5.1.3.1   an Authority to Construct using Community ERCs is
               terminated prior to the commencement of operation.


 5.2   Access to the Community ERC Account

       Essential public services, as defined in Section 2.10 herein,
       shall be eligible for access to the Community ERC Account if the
       following conditions have been met prior to or in the same
       permitting action where access to the Community ERC Account is
       proposed:

     5.2.1   the source has provided the maximum amount of required
             offsets available on-site by modifying existing equipment
             or processes at the stationary source to meet at least
             RACT standards; and

     5.2.2   the source has demonstrated to the satisfaction of the
             District that it is not feasible to secure offsets from
             other sources.


 5.3   Procedure for Obtaining Community Emission Reduction Credits

   5.3.1   If an applicant holds any emission reduction credits, access
           to the Community ERC Account shall not be allowed, unless
           the applicant is proposing to provide such credits as
           offsets in the same permitting action where access to the
           special account is proposed.

   5.3.2   On or before December 31st of each year, the District shall
           determine the amount of Community ERCs which are available
           for withdrawal from the Community ERC Account for the
           upcoming year.

     5.3.2.1   Additional emissions reductions obtained by the District
               and not included in the yearly determination may be
               added, at the discretion of the District, to the
               previously established amount of Community ERCs.

   5.3.3   Community ERCs shall be returned by the District to the
           Community ERC Account if the provisions of Subsection 5.1.3
           are met.

   5.3.4   Community ERCs cannot be transferred or banked by a source,
           except back into the Community ERC Account.


 5.4   Administrative Requirements

   5.4.1   The District shall track the cumulative total of emission
           credits obtained from the Community ERC Account by each
           stationary source.  

   5.4.2   Emission reductions proposed for deposit in the Community
           ERC Account shall be calculated in accordance with
           procedures established in Section 3.2 herein.

   5.4.3   All new stationary sources shall be required to comply with
           applicable District NSR BACT requirements in Rule 207 prior
           to being allowed access to the Community ERC Account.

   5.4.4   The District shall maintain public records of the source and
           amount of emission reductions obtained for deposit in the
           Community ERC Account, and transfers of these credits to
           applicants.




PART 6 REQUIREMENTS FOR USING ERCs


 6.1   Limitations

       The banking of ERCs provided for by this Rule is not intended
       to, and shall not, constitute any of the following:

   6.1.1   provide authority for the recognition of any
           pre-existing vested right to emit air contaminants;

   6.1.2   provide ERCs toward exemption of a source from BACT
           requirements contained in Rule 207; 

   6.1.3   provide ERCs toward exemption of a source from emission
           limitations established in Rule 423 or emission limitations
           for stationary sources established by the federal
           Environmental Protection Agency  in 40 Code of Federal
           Regulations (CFR) Part 60, New Source Performance Standards,
           or in 40 CFR Part 61, National Emission Standards for
           Hazardous Air Pollutants;

   6.1.4   provide ERCs for increases in hazardous air pollutants
           defined in Rule 424 based on the reduction of nonhazardous
           emissions;

   6.1.5   provide double credit of emissions reductions which have
           already been included as part of the District's baseline
           emissions in the State Implementation Plan, or for
           attainment pollutants, emissions reductions that occurred
           before the determination of emission baselines calculated
           from the air quality emission increments set forth in Rule
           207;

   6.1.6   provide ERCs for emission reductions already required by any
           permits, standards, agreements, orders, plans or
           requirements of federal, State, Air Resources Board, or
           District laws, rules and regulations, or the State
           Implementation Plan;

   6.1.7   provide ERCs for emission reductions achieved prior to April
           21, 1993, unless those reductions can be verified to meet
           the requirements of this Rule;

   6.1.8   provide ERCs for emissions reductions at non-permitted
           sources, unless the source agrees to enter into an
           enforceable tracking mechanism of such credits, obtains a
           Permit to Operate, and complies with all permit
           requirements;

   6.1.9   provide ERCs for emission reductions achieved after a
           moratorium has been declared in accordance with Section 6.3
           herein; or,

   6.1.10    provide ERCs for emissions of source shutdowns if those
             emissions are likely to be shifted to another source of
             the same type within the District, and that source will
             not be subject to the offset requirements of Rule 207.


 6.2   Procedure for Use of ERCs

   6.2.1   Banked ERCs may be used to offset emissions increases from
           new or modified sources according to the requirements of the
           provisions of Rule 207.

       6.2.1.1   Emission reduction credits for reactive organic
                 compounds which are also identified as carcinogenic or
                 toxic air contaminants under District Rule 1000 may
                 only be used as emissions offsets for reactive organic
                 compounds.

       6.2.1.2   Emission reduction credits utilized for offsets at
                 Major Sources shall have been reduced by RACT at the
                 time of use.  At the time of their use, emission
                 reduction credits will be analyzed to determine if the
                 BACT reduction at the time of deposit is equal to or
                 greater than RACT at the time of use.  If not, then
                 additional reductions will be made to meet RACT at the
                 time of use.

   6.2.2   The source owner utilizing banked ERCs must demonstrate,
           prior to such use, to the satisfaction of the District, that
           the use of the reductions as offsets will not interfere with
           the attainment or maintenance of any ambient air quality
           standard, or the exceedance of air quality increments
           identified in Rule 207.


 6.3   Moratorium on Use of Banked ERCs

         If the District determines that additional mandatory emission
         reductions will be necessary to attain federal, State, or
         District air quality standards, the District may declare a
         full or partial moratorium on the use of banked ERCs or the
         banking of ERCs of the applicable air contaminant.  Such a
         moratorium shall be lifted after the District determines that
         State and federal planning requirements are being fulfilled.

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