(Adopted June 6, 2008)(Amended January 9, 2009)(Amended May 7, 2010) (Amended May 6, 2011)

RULE 314. FEES FOR ARCHITECTURAL COATINGS

(a) Purpose The purpose of this rule is to recover the Dist rict’s cost of implementing the architectural coatings program and programs related to ar chitectural coatings, and the revenues shall only be used for such purposes. Califor nia Health and Safety Code Section 40522.5 provides authority for the District to adopt a fee schedule on areawide or indirect sources of emissions which are regulated, but for whic h permits are not issued by the District, to recover the costs of programs related to these sources.

(b) Applicability This rule applies to architectural coatings manufacturers that distribute or sell their manufactured architectural coatings into or with in the District for use in the District and are subject to Rule 1113 - Architectural Coa tings. This rule also applies to big box

retailers that distribute or sell architectural coa tings into or within the District for use in the District and are subject to Rule 1113 – Architectural Coatings. This includes products sold through big box retailers with dist ribution centers located within or outside the District. This rule does not apply to architectural coatings sold in this District for shipment and application outside of this District or to aerosol coating products.

(c) Definitions For the purpose of this rule, the following definitions shall apply: (1) AEROSOL COATING PRODUCT means a pressurized coating product containing pigments or resins that di spenses product ingredients by means of a propellant, and is packaged in a disposab le can for hand-held application, or for use in specialized equipment for ground marking and traffic marking applications. (2) ANNUAL QUANTITY AND EMISSIONS REPORT includes the quantity of each architectural coating distributed or sold into or within the District for use in the District during each calendar year, re ported as gallons and their associated VOC content, as supplied, reported in grams per liter, for each product in all

container sizes. (3) APPURTENANCES are accessories to a sta tionary structure, including, but not limited to: hand railings, cabinets, bathroomand kitchen fixtures, fences, rain314 – 1Rule 314 (cont.) (Amended May 6, 2011)

gutters and down-spouts, window scr eens, lamp-posts, heating and air conditioning equipment, other mechanical e quipment, large fixed stationary tools, signs, motion picture and television production sets, and concrete forms. (4) ARCHITECTURAL COATINGS are any coatings applied to stationary structures and their appurtenances, to mobile homes, to pavements, or to curbs. (5) ARCHITECTURAL COATINGS MANUFACTURER is any company or person that imports, manufactures, produces, pack ages, or repackages architectural coatings for sale or distribution for use in the District. (6) BIG BOX RETAILER is a physically large-ch ain retail outlet that is classified by the U.S. Department of Labor under Sta ndard Industrial Classification code 5211: Lumber and Other Building Materials Deal ers, and listed by the Executive Officer as such prior to end of each calendar year. (7) COATING is a material which is applied to a surface in order to beautify, protect, or provide a barrier to such surface. (8) EXEMPT COMPOUNDS are as defined in Rule 102 - Definition of Terms. (9) FORMULATION DATA is the actual product recipe which itemizes all the ingredients contained in a product incl uding VOCs and the quantities thereof used by the manufacturer to create the product. Material Safety Data Sheets (MSDS)

are not considered formulation data. (10) GRAMS OF VOC PER LITER OF COATING, LESS WATER AND LESS EXEMPT COMPOUNDS, is the weight of VOC per combined volume of VOC and coating solids and can be calculated by the following equation:

Grams of VOC per Liter of Coating, Less Water and Less Exempt Compounds = Ws

- Ww - Wes Vm

- Vw - Ves

Where: W s = weight of volatile compounds in grams W w = weight of water in grams W es = weight of exempt compounds in grams V m = volume of material in liters V w = volume of water in liters V es = volume of exempt compounds in liters

For coatings that contain reactive dilu ents, the Grams of VOC per Liter of Coating, Less Water and Less Exempt Compounds, shall be calculated by the following equation:

Grams of VOC per Liter of Coating, Less Water and Less Exempt Compounds = W s - W w - W es V m - V w - V es

314-2Rule 314 (cont.) (Amended May 6, 2011)

Where: W s = weight of volatile compounds emitted during curing, in grams W w = weight of water emitted during curing, in grams W es = weight of exempt compounds emitted during curing, in grams V m = volume of the material prior to reaction, in liters V w = volume of water emitted during curing, in liters V es = volume of exempt compounds emitted during curing, in liters (11) GRAMS OF VOC PER LITER OF MATER IAL is the weight of VOC per volume of material and can be calculated by the following equation:

Gram s o f VOC per L iter o f M aterial = W s - W w - W es V m

Where: W s = weight of volatile compounds in grams W w = weight of water in grams W es = weight of exempt compounds in grams V m = volume of the material in liters

(12) PRODUCT is an architectural coating which is identified by means of a unique product code and product name or product line (if applicable), as written on the container label and that is subject to one of the coating category VOC limits specified in Rule 1113 paragraphs (c)(1) or (c)(2) Table of Standards. (13) PRODUCT LINE is a group of coatings that: (A) Belong to the same coating category in Rule 1113 Table of Standards, (B) Have the same vehicle technology (solvent or water), (C) Are of the same resin type, (D) Are recommended for the same use (either interior, exterior or dual use), (E) Have the same form (either single - or multiple - component form), (F) Do not exceed a coating (regulatory) VOC range of 25 grams per liter between the highest and lowest coating in the group, and (G) If included in the Averaging Compliance Option Program, meet subparagraphs (A) to (G) of this definition and have all grouped products

either above a limit or below a limit. (14) RESPONSIBLE PARTY for a corporation is a corporate officer or an authorized representative so delegated by a corporate officer. Delegation of an authorized representative must be made in writing to the Executive Officer. A responsible

314-3Rule 314 (cont.) (Amended May 6, 2011)

party for a partnership or sole proprietors hip is the general partner or proprietor, respectively. (15) VOLATILE ORGANIC COMPOUND (VOC) is as defined in Rule 1113 – Architectural Coatings.

(d) Requirement to Obtain a Manufacturer Identification (ID) Number (1) An architectural coatings manufacturer subj ect to this rule at any time during the calendar year 2008 shall apply to the Dist rict for a manufacturer ID number on or before December 31, 2008. An architectural coatings manufacturer that becomes subject to this rule in any year subsequent to calendar year 2008 shall apply to the District for a manufacturer ID number on or before December 31 of that year. (2) Change or Acquisition of an Arch itectural Coatings Manufacturer (A) When there is a change or acquisition of an architectural coatings

manufacturer with a District issu ed manufacturer ID number, the successor architectural coatings manufacturer shall apply for a

manufacturer ID number on or before December 31 of the calendar year of the change or acquisition, unless th e successor architectural coatings manufacturer already has a District i ssued manufacturer ID number. The

successor manufacturer shall include th e previous architectural coatings

manufacturer ID number in their A nnual Quantity and Emissions Report for the first year after the change or acquisition. (B) Acquisition of an architectural co atings manufacturer shall not be considered a change in ownership if the architectural coatings manufacturer who is acquired conti nues to file Annual Quantity and Emissions Reports and pay fees under its District issued ID number.

(e) Requirement to Submit an Annual Quantity and Emissions Report (1) For each calendar year (January 1 through December 31) beginning with 2008 and continuing with each subsequent cale ndar year, an architectural coatings manufacturer shall, in a format determin ed by the Executive Officer, submit to the District by April 1 of the following calenda r year (the official reporting due date) an Annual Quantity and Emissions Report signed by a responsible party certifying that all information submitted (including electronic submittal) is true

and correct. Information included in the Annual Quantity and Emission Report that was obtained from a company not owned or controlled by the reporting architectural coatings manufacturer shall be certified as true and correct to the

314-4Rule 314 (cont.) (Amended May 6, 2011)

best knowledge of the responsible part y signing the certification. The Annual Quantity and Emissions Report shall include, but not be limited to, the following: (A) Manufacturer information including th e manufacturer ID number issued by the District; (B) Each architectural coating product c ode and product name or product line (if applicable); (C) Whether the coatings are waterborne or solventborne; (D) Whether the coatings are for interior, exterior, or dual use; (E) The applicable coating category listed in the Table of Standards in Rule 1113 – Architectural Coatings; (F) The grams of VOC per liter of co ating, less water and less exempt compounds for each product as supplied for use by the manufacturer; (G) The grams of VOC per liter of material for each product as supplied or for multi-component coatings as recomme nded for use by the manufacturer. Additionally, for solvent-based coatings, grams of VOC per liter of material with maximum thinning allo wed with a VOC, as listed in the Technical Data Sheet, shall also be included. (H) Total annual quantity of each product distri buted or sold into or within the District for use in the District, as supplied, and reported in gallons for all container sizes. The annual quantity of each product shall include products sold through big box retailers with distribution centers located

within or outside the District. Arch itectural coatings manufacturers shall use the list of big box retailers mainta ined by the Executive Officer as of the end of the calendar year for purposes of reporting quantities of products distributed or sold in the District through big box retailers; and (I) For any product with VOC content higher than the applicable limit in Rule 1113, an indication whether the product has been sold under any of the following provisions of Rule 1113 – Architectural Coatings: (i) Sell-through provisions (ii) Averaging Compliance Option (iii) Small container exemption (iv) Other (with explanation). (2) An architectural coatings manufacturer that acquires another architectural coatings manufacturer shall provide the information specified in subparagraph (e)(1)(A) through (e)(1)(I) for the acquired architectural coatings manufacturer for the entire calendar year.

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(3) By January 30, 2009, and every year thereaf ter, a big box retailer shall report to the architectural coatings manufacturer of that product the total annual quantity of each coating product distributed through its di stribution centers for sale or sold in the District for the previous calendar year (January 1 through December 31), as supplied, in a format determined by the Executive Officer. Big box retailers shall use the list maintained by the Executive Offi cer as of the end of the calendar year of big box retailers for purposes of reporting to the appropriate architectural coatings manufacturer the quantities of products distributed or sold in the District. The report submitted to each architectural coatings manufacturer shall be signed by a responsible party certifying that all in formation reported is true and correct. The report shall also be submitted to each architectural coatings manufacturer in an electronic spreadsheet format.

(f) Recordkeeping Architectural Coatings Manufacturers shall: (1) Maintain a copy of the signed application form submitted to the District to obtain the manufacturers ID number, and the writte n response from the District issuing a manufacturer ID number. The copies sh all be maintained for five (5) years beyond the date on each document, and made available upon request by the

Executive Officer. (2) Maintain records to verify data us ed to prepare the Annual Quantity and Emissions Report from architectural coatings distribut ed or sold into or within the

District for use in the District and compliance with applicable rules and regulations. The records shall be maintain ed for five (5) years and made available upon request by the Executive Officer. Such records shall include but not be

limited to: (A) Product formulation records (includi ng both grams of VOC per liter of coating and grams of VOC per liter of material): (i) Laboratory reports [including percent weight of non-volatiles, water, and exempts (if applicable); density of the coating; and raw laboratory data] of test methods conducted as specified in paragraph (m)(1) or (ii) Product formulation data or physical properties analyses, as applicable, with a VOC calculation demonstration; and (B) Production records including, if applicable , batch tickets with the date of manufacture, batch weight and volume; and

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(C) Distribution records: (i) Customer lists or store distribution lists or both (as applicable) and (ii) Shipping manifests or bills of lading or both (as applicable); and (D) Sales records consisting of point of sale receipts or invoices to distributors or both, as applicable.

(g) Fees (1) Manufacturer ID Number Fee An architectural coatings manufacturer applying for a manufacturer ID number with the District as specified in pa ragraphs (d)(1) and (d)(2) shall pay a nonrefundable application fee of $174.57 at the time of submitting the application. (2) Annual Quantity and Emissions Fees (A) An architectural coatings manufacturer shall begin paying fees at the rates specified below, on or before Apr il 1, 2009 and each subsequent April 1 (the official due date). Fees are based on the annual quantity and emissions of architectural coatings dist ributed or sold into or within the District for use in the District for the previous calendar year.

Phased-in Fee Rate (i) April 1, 2009 pay an annual quantity fee of $0.018 per gallon of paint and an annual emission fee of $123 per ton of VOC

emissions. (ii) April 1, 2010 pay an annual quantity fee of $0.027 per gallon of paint and an annual emission fee of $185 per ton of VOC

emissions. (iii) April 1, 2011 and each subsequent April 1, pay an annual quantity fee of $0.037 per gallon of paint and an annual emission fee of $249.44 per ton of VOC emissions.

(B) If an architectural coatings manufacturer submits the Annual Quantity and Emissions Report in such a manner th at District staff has to manually enter the data into the District database, then the architectural coatings manufacturer shall pay at the time of submittal a non-refundable fee of $285.95 for the first two hours of District time. The architectural coatings

manufacturer shall be assessed additi onal fees at the rate of $142.99 per hour for any additional time beyond the first two hours.

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(h) Request to Amend the Annual Quantity and Emissions Report and Refund Request of

Emission Fees (1) An architectural coatings manufacturer shall submit a written request (referred to as an “Amendment Request”) for any propos ed revisions to previously submitted Annual Quantity and Emissions Reports. Amendment requests submitted after one (1) year from the official due da te of the subject Annual Quantity and Emissions Report shall include a non-re fundable standard evaluation fee of $285.95. In addition, evaluation time beyond two hours shall be assessed at the rate of $142.99 per hour not to exceed 10 hours. Amendment requests received within one year (1) from the official due date of a previously submitted Annual Quantity and Emissions Report shall not incur any such evaluation fees. The Amendment Request shall include a ll supporting documentation and revised applicable reports. (2) An architectural coatings manufacturer shall submit a written request (referred to as a “Refund Request”) to correct the previously submitted Annual Quantity and Emissions Report and request a refund of overpaid fees. Refund Requests must be submitted within one (1) year from the official due date of the subject Annual Quantity and Emissions Report to be cons idered valid. The Refund Request shall include a revised Annual Quantity and Emissions Report and all applicable supporting documentation. If the Refund Request submitted results in a refund, then the architectural coatings manufacturer shall incur no evaluation fee. If the refund request results in no refund, then the architectural coatings manufacturer shall pay the standard evaluation f ee and the hourly evaluation fees, as appropriate, specified in paragraph (h)(1).

(i) Fee Payments and Late Surcharge (1) Fee payments are the responsibility of the architectural coatings manufacturer. (2) If both the fee payments and the Annual Quantity and Emissions Report for the previous calendar year are not received by May 30, they shall be considered late; and a surcharge for late payment sh all be imposed for fees past due as set forth in paragraph (i)(3). Architectural coatings manufacturers subject to paragraph (d)(2) on or after July 1 of the reporting year sh all have an additional 6 months, or any additional time approved by the Executive Officer, to submit the fee payments and the Annual Quantity and Emissions Report for the acquired architectural coatings manufacturer. For the purpose of this paragraph, the fee payments and the Annual Quantity and Emissions Report shall be considered to be timely

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received by the District if it is postmarke d on or before May 30. If May 30 falls on a Saturday, Sunday, or a state holida y, the fee payments and Annual Quantity and Emissions Report may be postmarked on the next business day following the Saturday, Sunday, or the state holiday with the same effect as if they had been postmarked on May 30. (3) If fee payments for the Annual Quantity and Emissions Report (including any unreported quantity and emissions) are not received within the time prescribed by paragraph (i)(2), a late payment surcharg e shall be assessed on the fees past due and added to the fee rate in paragraph (g)(2)(A), according to the following

schedule:

Less than 30 days 5% of past due amount 30 to 90 days 15% of past due amount 91 days to one year 25% of past due amount More than one year 50% of past due amount

(4) Fee Payment Subject to Validation Acceptance of a fee payment does not constitute validation of the emission data.

(j) Service Charge for Returned Checks Any person who submits a check to the District on insufficient funds or on instructions to stop payment, absent an overcharge or other legal entitlement to withhold payment, shall be subject to a $25.00 service charge.

(k) Confidentiality of Information Subject to the provisions of the Califor nia Public Records Act (Govt. Code § 6250- 6276.48) information submitted to the Execu tive Officer may be designated as confidential. The designation must be clear ly indicated on the reporting form, identifying exactly which information is deemed confiden tial. District guidelines require a detailed and complete basis for such claim in the event of a public records request.

(l) Violation It shall be a violation of this rule for any architectural coatings manufacturer to distribute or sell their manufactured architectural coatings into or within the Di strict for use in the District, without having a manuf acturer ID number issued by the District, within the time specified in subdivision (d).

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314-10 (m) Test Methods For the purpose of this rule, test methods are as specified in Rule 1113.

(n) Severability If any provision of this rule is held by j udicial order to be invalid, or invalid or inapplicable to any person or circumstance, su ch order shall not affect the validity of the remainder of this rule, or the validity or a pplicability of such provision to other persons

or circumstances. In the event any of the exceptions to this rule are held by judicial order to be invalid, the persons or circumstances covered by the exception shall instead be required to comply with the remainder of this rule.

(o) Distributor(s) List On or before January 1, 2009, and each subseque nt January 1, all architectural coatings manufacturers subject to this rule shall provide to the District a list of all U.S. distributors to whom they supply architectural coatings , including but not limited to private label coatings and toll manufactured coatings. The list shall be in a format determined by the

Executive Officer and shall include the dist ributors name, address, contact person and phone number.

(p) Exemption (1) Notwithstanding the provisions of subparagr aph (g)(2), fees shall not be assessed on coatings with 5 or less grams of VOC per liter of material. (2) Fees shall not be assessed on recycled coatings distributed or sold into or within the District by a certified recycled paint manufacturer. Recycled Coating is as defined in Rule 1113, and certified recycled paint manufacturer shall be as certified pursuant to Rule 1113.