(Adopted October 15, 1993)(Amended December 7, 1995)


(a) Purpose

The purpose of this rule is to define the RECLAIM trading unit and to establish trading requirements for RECLAIM.

(b) Nature of RECLAIM Trading Credits (RTCs)

  1. An RTC is a limited authorization to emit RECLAIM pollutants in accordance with the restrictions and requirements of District rules and state and federal law.

  2. An RTC may be bought, sold, traded or otherwise transferred or acquired in accordance with the provisions of this rule.

  3. An RTC shall not constitute a security or other form of property, but may be used as collateral or security for indebtedness.

  4. The District reserves the right to amend the RECLAIM rules in response to program reevaluations pursuant to Rule 2015 - Backstop Provisions, or at other times. Nothing in District rules shall be construed to limit the District's authority to condition, limit, suspend or terminate any RTCs or the authorization to emit which is represented by a Facility Permit.

(c) Term of RTCs

  1. An RTC shall be denominated in terms of one pound of a RECLAIM pollutant and shall have a term of one year. Cycle 1 facilities, representing approximately half of the total RTCs allocated in each trading zone, will receive RTCs that have an issue date of January 1 and an expiration date of December 31. The remaining Cycle 2 facilities will receive RTCs that have an issue date of July 1 and an expiration date of June 30.

  2. A Facility Permit holder may acquire and use RTCs issued in either cycle regardless of the facility's initial RTC allocation cycle. However, the expiration date of an RTC is not affected by trading for use in the other cycle.

  3. A Facility Permit holder may acquire and use expired RTCs to reconcile emissions during a quarter in which the annual Allocation was exceeded, if the following conditions are met:

    (A) such transaction and use occurs during the reconciliation period immediately following the quarter during which the subject emissions occurred; and

    (B) the RTCs are used to reconcile emissions that occurred during the RTC term.

(d) RTC Listing

The Executive Officer will maintain an RTC Listing specifying all RTCs held by each facility or person. The listing is the official and controlling record of RTC holdings. The Executive Officer will amend the RTC Listing upon any of the following actions:

  1. RTC transfer;

  2. change in name of an RTC holder;

  3. expiration of unused RTCs;

  4. a reduction of a facility's annual emission Allocation pursuant to Rule 2010 (b)(1)(A); or

  5. at the end of each quarter's reconciliation period.

(e) Acquisition of RTCs

RTCs may be acquired only as follows:

  1. Initially, the Facility Permit holder is granted, pursuant to Rule 2002, RTCs for each year equal to the facility's annual Allocation for that year.

  2. Any person may acquire RTCs through purchase, trade or other means of transfer from any person who holds RTCs. The following requirements shall govern the transfer of RTCs:

    (A) The transfer of RTCs shall be effective only upon amendment by the Executive Officer of the RTC Listing.

    (B) The Executive Officer shall not amend the RTC Listing unless the seller and the buyer have jointly filed a Registration of RTC Transfer. The Registration of RTC Transfer shall include, but not be limited to, the following information:

    (i) identification of the seller and buyer;

    (ii) RTC issue date;

    (iii) the amount and type of emissions;

    (iv) the transaction date and the date on which the transfer is to be effective;

    (v) the Regulation XIII zone and the RECLAIM trading zone from which the RTCs originated;

    (vi) the price per pound of emissions, if sold;

    (vii) if the RTCs for transfer are for the current compliance year, the seller shall indicate one or more of the following four causes for the generation of RTCs:

    (I) process change;

    (II) addition of control equipment;

    (III) production decrease; or

    (IV) equipment or facility shutdown.

    If the seller is not a RECLAIM facility, and cause for generation has been previously reported, no cause need be indicated.

    (viii) if the RTCs for transfer are valid for a subsequent compliance year, the seller shall comply with clause (vii) or may alternatively indicate that the manner of generating the RTCs has not yet been determined;

    (ix) the buyer shall indicate one or more of the following three uses of the RTCs:

    (I) issuance of RTC Certificate;

    (II) increase of Allocation to satisfy annual compliance or increased production; or

    (III) use under Rule 2005 - New Source Review for RECLAIM.

    (C) Joint registration may be submitted by an agent, broker, or other intermediary representing the buyer and seller. Such parties, upon approval by the Executive Officer, may report summarized price information, such as daily or weekly volumes with closing prices.

    (D) The Executive Officer shall not amend the RTC Listing to identify a new holder of RTCs, or to add RTCs to an existing RTC holder, until an equivalent amount of RTCs are debited from the seller.

    (E) When RTCs are transferred from an Allocation, the debit shall result in an automatic amendment of the Allocation.

    (F) When the buyer is a RECLAIM facility, the Executive Officer shall amend the buyer's Allocation or issue an RTC certificate in the name of the buyer, as requested pursuant to subparagraph (e)(2)(G).

    (G) When the buyer is not a RECLAIM facility the Executive Officer will issue an RTC certificate in the name of the buyer.

(f) Date of Eligibility for Trading of RTCs

  1. RTCs issued as part of an Allocation are eligible for transfer upon approval of the Facility Permit;

  2. RTCs credited pursuant to Rule 2008 - Mobile Source Credits, are eligible for transfer upon issuance; and

  3. RTCs to replace existing ERCs held by non-RECLAIM facilities pursuant to Rule 2002 (c)(5) are eligible for transfer upon issuance.

(g) RTC Certificates

  1. RTC Certificates may only be issued by the Executive Officer for RTCs which are not part of an Allocation.

  2. RTC Certificates shall designate the name of the holder, the Regulation XIII zone and RECLAIM trading zone from which the RTC originated, the issue date, the expiration date, and an annual emissions value.

  3. RTC Certificates may be acquired by transfer as set forth in subdivision (e). In addition, a Facility Permit holder may elect to reduce the Allocation and, upon such amendment to the Facility Permit by the Executive Officer, shall be issued an RTC Certificate. The value of the certificate shall be equivalent to the reduction in the Allocation in the year for which the certificate is issued.

  4. RTC certificates may be surrendered for application to create or increase an Allocation.

(h) Retirement of RTCs

RTCs may be surrendered to the District for retirement from the market. All RTC retirements will be documented annually through the annual program audit, and used to provide further progress for clean air. RTCs retired to their issue date shall be exempt from the RTC Allocation Fee specified in Rule 301 - Permit Fees.

(i) RTC Trading Prohibition

No person shall, in connection with any agreement or proposed agreement for the transfer of any RTC, knowingly make or cause to be made to any other person any false report or statement regarding RTCs.