BUTTE COUNTY AQMD RULES AND REGULATIONS

Rule 431 May 28, 2009 431-1

Rule 431 Emission Reduction Credits and Banking

(Adopted February 15, 1995; Amended July 18, 1996; Amended and Recodified June 24, 1999; 

Amended May 24, 2001; Recodified August 22, 2002; Amended May 28, 2009)

RULE 431 CONTENTS

1. PURPOSE

2. APPLICABILITY

3. DEFINITIONS

4. REGISTRATION OF EMISSION REDUCTION CREDITS

5. ADJUSTMENTS TO EMISSION REDUCTION CREDITS

6. TRANSFER AND USE OF EMISSION REDUCTION CREDITS

7. ELIGIBILITY OF OPEN BIOMASS EMISSION REDUCTION CREDITS

8. APPLICATION PROCEDURES FOR OPEN BIOMASS EMISSION REDUCTION 

CREDITS

9. ADMINISTRATIVE PROCEDURES AND TIMETABLE FOR OPEN BIOMASS 

EMISSION REDUCTION CREDITS

10. OPEN BIOMASS BURNING EMISSION REDUCTION CREDIT 

CALCULATIONS

11. DISTRICT ENFORCEMENT CONSIDERATIONS FOR OPEN BIOMASS 

EMISSION REDUCTION CREDITS

12. ELIGIBILITY OF STATIONARY SOURCE EMISSIONS REDUCTIONS FOR 

CREDIT

13. APPLICATION PROCEDURE FOR STATIONARY SOURCE EMISSION 

REDUCTION CREDITS

14. ADMINISTRATIVE PROCEDURES AND TIMETABLE FOR STATIONARY 

SOURCE EMISSION REDUCTION CREDITS

15. STATIONARY SOURCE ERC CALCULATIONS

16. COMMUNITY BANK
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Rule 431 May 28, 2009 431-2

RULE 431

1 PURPOSE

1.1 To provide a mechanism for permitted and non-permitted emission sources to 

deposit, transfer, and use Emission Reduction Credits (ERCs) as offsets as 

allowed by applicable laws and regulations. To ensure that all emission 

reductions are transferred through the Butte County Air Quality Management 

District’s (DISTRICT’s) emission reduction credit bank pursuant to the 

California Health and Safety Code (HSC). All transfers and uses of emission 

reductions that are required under the DISTRICT’s New Source Review 

(NSR), Rule 430 of this Regulation, shall be processed in accordance with 

this Rule. 

1.2 To define ERC eligibility standards, quantitative procedures, and 

administrative practices and to ensure that ERCs are real, permanent, 

quantifiable, surplus, and enforceable. 

1.3 To provide a mechanism for intra-basin transfer and use of banked ERCs.

1.4 To ensure that open biomass burning is restricted or prohibited for a parcel for 

which an ERC certificate has been issued exists.

1.5 To ensure that Phase Down emission reductions qualify as air quality offsets 

and emission reduction credits.

1.6 To set forth procedures for disbursing ERCs from the Community Bank.

2 APPLICABILITY: The provisions of this Rule apply to the deposit, transfer, and 

use of 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 DISTRICT Administrative Code Part B.

3 DEFINITIONS: 

3.1 Actual Emissions: Means the measured or estimated emissions that most 

accurately represent the emissions from an emissions unit.

3.2 Actual Emission Reductions: Means a reduction in actual emissions from 

an emissions unit. Actual emission reductions shall be calculated on a 

quarterly basis, pursuant to Sections 10 or 15 of this Rule, and shall meet the 

following requirements:

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

3.2.2 Emission reductions shall be in excess of any emission reductions 

that are:

3.2.2.1 Required or encumbered by any laws, rules, 

regulations or orders; or

3.2.2.2 Attributed to a control measure proposed or contained 

in a State Implementation Plan; or

3.2.2.3 Contained as measures in the adopted DISTRICT Air 

Quality Attainment Plan for attaining annual 

reductions required for the California Clean Air Act 

(CCAA) and the Federal Clean Air Act. Actual 

emission reductions attributed to a proposed control 

measure may be re-eligible as actual emission 

reductions in the following circumstances:

3.2.2.3.1 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;

3.2.2.3.2 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.

3.2.3 Notwithstanding Section 3.2.2.1 of this Rule, emission reductions 

due to the decreased open burning of rice fields that were planted 

prior to the Connelly-Areias-Chandler Rice Straw Burning 

Reduction Act of 1991 shall qualify as actual emission reductions in 

accordance with HSC Section 41865(r)(1). 

3.3 Affected Pollutants: Means 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 (CARB), and the 

precursors to such pollutants.

3.4 Applicable Requirements: Means air quality requirements with which a 

facility must comply pursuant to the State Implementation Plan, the Federal 

Clean Air Act as amended in 1990 and implementing regulations, and other 

provisions of the United States Code of Federal Regulations, and DISTRICT 

Rules, Regulations or permit requirements.
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3.5 Applicant: The person, entity, landowner or their designee applying for an 

ERC certificate.

3.6 Bankable Emissions: Reductions in affected pollutants which meet the 

applicable provisions of the DISTRICT's banking and NSR Rules.

3.7 Banking System: The procedures of quantifying, certifying, recording, and 

storing ERCs for future use or transfer. 

3.8 Banking Register: 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.

3.9 Biomass: Material derived from the harvesting of crops or removal of 

vegetation, including timber, except for material from processed dimensional 

timber.

3.10 COMMUNITY BANK: A depository of certified emission reduction credits 

available for loan at no cost to essential public services for compliance with 

offset requirements specified in Rule 430-New Source Review..

3.11 Control Efficiency: Means the ratio of controlled emissions to uncontrolled 

emissions 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 efficiency.

3.12 Emission Reduction Credits: 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.

3.13 Emissions Unit: Means an identical operation, parcel(s), 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. 

3.14 Enforceable: Means real, quantifiable, permanent, verifiable and legally 

binding. 

3.15 ERC Certificate: A document certifying title to defined quantities and types 

of emission reductions issued by the DISTRICT to the owner(s) identified on 

the certificate.
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3.16 Essential Public Services: The following facilities shall be considered 

essential public services:

3.16.1 A sewage treatment plant; or

3.16.2 A prison, jail or correctional facility; 

3.16.3 A police or fire fighting facility; or

3.16.4 A school; or

3.16.5 A hospital; or

3.16.6 A landfill gas control or processing facility; or

3.16.7 A water delivery operation; or

3.16.8 An environmental cleanup operation;or

3.16.9 A biomass to energy conversion facility.

3.17 Historic Actual Emissions: Means actual emissions from an existing 

emissions unit averaged over the two (2) consecutive years immediately 

preceding the date of application. If the last two (2) years are unrepresentative

of normal operations as determined by the APCO, then two (2) consecutive 

years of the previous five (5) years may be used. Where an emissions unit has 

been in operation for less than two (2) years, a shorter averaging period of at 

least one (1) year may be used, providing it represents the full operational 

history of the emissions unit. For rice straw burning the phase down 

emissions baseline years will be a five-year period (1988 through 1992). 

3.18 No-burn List: A list of parcels for which ERCs exist and which will not 

receive burn permits. 

3.19 Non-permitted Emissions: Emissions of pollutants into the atmosphere 

from sources that do not have air pollution operating permits. Non-permitted 

sources include exempt facilities.

3.20 Offsets: The use of 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 NSR Rule.

3.21 Parcel(s): A legally identifiable piece of land, or a portion of that land, or 

combined lands under common ownership, as registered with the County 

Assessor's office for property tax purposes.

3.22 Permanent: Means verifiable, real, quantifiable and legally binding emission 

reductions which continue or endure without fundamental or marked change. 

3.23 Phase Down: Refers to any parcel(s) that was planted with rice during the 

years from 1988-1992.

3.24 Potential to Emit: Refers to the maximum daily capacity of a stationary 
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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.

3.25 Proposed Emissions: The potential to emit for a new or post-modification 

emissions unit.

3.26 Quantifiable: Means the ability to estimate emission reductions in terms of 

both their amount and characteristics. The same method of estimating 

emissions should generally be used to quantify the emission levels before and 

after the reduction.

3.27 Quarterly: Means calendar quarters beginning in January, April, July and 

October.

3.28 Real: Means emission reductions that are not artificial, fraudulent or illusory.

3.29 Registered owner: The person, entity, landowner or their designee in whose 

name the ERC certificate is issued and listed in the banking register.

3.30 Restricted Burn List: Means a list of parcels for which ERCs exist and can 

receive a restricted burn permit.

3.31 Restricted Burn Permit: Means a permit to burn specific fields within an 

emissions unit or parcel of land for which an ERC certificate has been issued. 

The restricted burn permit ensures that the actual emissions are less than or 

equal to the amount allotted to the permit holder.

3.32 Shutdown: Either the earlier of the permanent cessation of emissions from a 

source or an emissions 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 emissions unit has been removed or fallen into an 

inoperable or 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. 

3.33 Source: Any building, structure, facility, or emissions 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 
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Rule open biomass burning will be considered a source and such activity 

requires an annual burning permit.

3.34 Surplus: Means emission reductions that are in excess of any emission 

reductions which are proposed or contained in a DISTRICT Air Quality 

Attainment Plan for attaining reductions required to attain and maintain 

federal and State ambient air quality standards. Emission reductions due to the 

decreased open burning of rice fields that were planted prior to the ConnellyAreias-Chandler Rice Straw Burning Reduction Act of 1991 shall qualify as 

surplus emission reductions in accordance with HSC Section 41865(r) (1).

3.35 Transfer: The conveyance of an ERC certificate from one entity to another 

by the DISTRICT.

4 REGISTRATION OF EMISSION REDUCTION CREDITS

4.1 The DISTRICT shall maintain a bank register, which shall consist of the 

following: 

4.1.1 A record of all deposits, withdrawals, and other transactions with 

regard to the DISTRICT's banking system.

4.1.2 A record of all open biomass burning offset credits derived from 

reduced burning within the DISTRICT and which credits are 

claimed by stationary sources existing prior to the adoption of this 

Rule (pre-existing source).

4.2 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.

4.3 The APCO may only grant an ERC certificate after the emission reductions 

have actually occurred and upon satisfaction of the following applicable 

provisions:

4.3.1 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, a 

revised Permit to Operate must be issued. This revised permit must 

include specific quantifiable emission limits reflecting the reduced 

emissions.

4.3.2 If the emission reductions were created as a result of the shutdown 

of a permitted source or emitting unit, the Permit to Operate or 

permit to burn has been surrendered and voided or modified to 

ensure that the emissions reductions are permanent.

4.4 When all the requirements of this Rule have been satisfied and the emission 
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reductions have 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.

4.5 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.

4.6 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 therefore and provide such proof of identity as 

the APCO may require.

4.7 ERC certificates issued pursuant to Section 7 of this Rule shall be valid and 

effective only after, and on the condition that, the ERC certificate is recorded 

as a condition of the parcel deed. The notice of recording shall be in a form 

approved by the DISTRICT, and include the following information at a 

minimum: owner of the ERC certificate, Assessor Parcel Number, owner of 

the property, notice of open burning restriction and date of recording.

4.8 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.

4.9 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 landowner's designee.

4.10 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.

4.11 The APCO may reissue lost or destroyed ERC certificates after the registered 

owner certifies in writing that the original has been lost or destroyed.
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5 ADJUSTMENTS TO EMISSION REDUCTION CREDITS

5.1 Except as provided in Section 5.2 below, the DISTRICT shall take five 

percent (5%) of the emission reductions before the 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. 

5.2 An applicant may restrict use of the ERCs only for the 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.

5.3 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 reductions 

which have been banked shall not reduce or eliminate the ERC.

5.4 Owners of ERC certificates may donate their ERCs to the DISTRICT for 

purposes of assisting the DISTRICT towards attainment of the air quality 

standards. Such donations shall be deposited into the Community Bank.

6 TRANSFER AND USE OF EMISSION REDUCTION CREDITS

6.1 The 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 DISTRICT’s NSR Rule.

6.2 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.

6.3 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, provided the 

DISTRICT has procedures for adjusting the ERC at the end of the lease 

period to account for the facility historic actual emissions. However, no 

transfers shall be made until application is made to the DISTRICT and 

approval given by the APCO. 

6.4 Except as provided below, all emission reductions to be used as offsets under 

the NSR Rule must first be processed through this Rule and receive an ERC 

certificate in accordance with the requirements of this Rule. Onsite 
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reductions in emissions which are contemporaneous with onsite increases in 

emissions from other emissions units and meet the requirements of the NSR 

Rule are not required to go through this ERC/Banking Rule.

6.5 ERCs which result from stationary source shutdowns and curtailments shall 

not be used as offsets for a new or modified stationary source where permitted 

emissions would exceed emission thresholds established for the DISTRICT in 

the Federal Clean Air Act for major source modifications, unless the applicant 

can establish the following:

6.5.1 The proposed new source or modification is a replacement, and the 

shutdown or curtailment occurred after August 7, 1977, or

6.5.2 An application for credit was filed with the DISTRICT within 180 

days of the date of the last emission; and

6.5.2.1 The crediting of shutdown emissions complies with 

the most recent emission trading policy or regulations 

of EPA; and

6.5.2.2 The DISTRICT has met statutory planning mandates 

and air quality improvement milestones.

6.6 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, on a per pollutant basis, of emission offsets purchased for, 

or acquired by, the new or modified source.

7 ELIGIBILITY OF OPEN BIOMASS EMISSION REDUCTION CREDITS: 

Except as noted below, emission reductions must comply with the definition of 

historic actual emission reductions, and will be deemed to have occurred when the 

parcel(s) has been placed on the no-burn list or restricted burn list. An applicant may 

apply for ERCs for the amount calculated using Section 10 of this Rule. Applicants 

that have been required to phase down rice straw burning under the Connelly-AreiasChandler Rice Straw Burning Reduction Act of 1991 are eligible for the actual 

emission reductions that have occurred from the time that the field was initially 

planted with rice, subject to the following:

7.1 Emission reductions from decreased open burning of rice fields that were 

planted prior to the Connelly-Areias-Chandler Rice Straw Burning Reduction 

Act of 1991, and burned any one of the years 1988-1992 are eligible for 

banking 100% of the actual emission reductions able to be quantified 

respective to any one (1) of the five (5) baseline years.

7.2 Emission reductions from decreased open burning of rice fields that were 

planted after 1992 are eligible for banking those reductions calculated based 

on the historic actual emissions, subject to the calculation procedures of 

Section 10 of this Rule.
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8 APPLICATION PROCEDURES FOR OPEN BIOMASS EMISSION 

REDUCTION CREDITS 

8.1 Any person, entity, landowner, or authorized agent, which owns or operates 

an emissions unit for which eligible emission reductions have occurred or will 

occur may apply for an ERC certificate in accordance with the requirements 

of this Rule. If the applicant is not the landowner, written authorization from 

the landowner must be included with the application for an ERC certificate.

8.2 The person or entity requesting the ERC certificate shall make an application 

on forms supplied by the DISTRICT.

8.3 The application may be for reductions in one or more affected pollutants.

8.4 Applicants may claim confidentiality of information contained in the 

application pursuant to applicable provisions of the Federal Clean Air Act, 

Government Code, and HSC.

9 ADMINISTRATIVE PROCEDURES AND TIMETABLE FOR OPEN 

BIOMASS EMISSION REDUCTION CREDITS: The APCO shall prepare the 

administrative procedures and timetable for open biomass ERCs in the DISTRICT 

Administrative Code Part B.

10 OPEN BIOMASS BURNING EMISSION REDUCTION CREDIT 

CALCULATIONS: The DISTRICT Administrative Code Part B contains emission 

factors (EF), fuel loading factors (FL), default historical burn fractions (HBF), and 

default quarterly burn fractions (QBF). Default HBFs and QBFs may be used to 

calculate the ERCs. The following information will be used in the calculation of 

ERCs; however, when using default HBF and QBF factors, Sections 10.3 and 10.4 

below do not apply:

10.1 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 DISTRICT 

Administrative Code Part B, and acreage burned (AB) during the eligibility 

period. The applicant shall use county burn permit/authorization records or 

other verifiable records to validate the information as specified in the 

DISTRICT Administrative Code Part B. The type of biomass residue and the 

AB will be used in the ERC calculation.

10.2 Acreage Burned (AB): 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. Phase down acreage must have been burned for 

at least one of the five (5) baseline years of 1988 through 1992. The applicant 
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shall use county burn permit/authorization records or other verifiable records 

to determine the acreage.

10.3 Historical Burn Fraction (HBF): The applicant shall provide available data 

on historical biomass burn percentage for the parcel(s). The historical burn 

fraction (0-1) is an adjustment to the amount of ERCs 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 phase down period. 

10.4 Quarterly Burn Fraction (QBF): The applicant may provide available data 

on quarterly biomass burning for the parcel(s). The applicant may use county 

burn permit authorization records or other verifiable records to determine the 

date(s) of burning.

10.5 The biomass fuel loading (FL) and emission factors (EF) set forth in the 

DISTRICT Administrative Code Part B or other best available data as

approved by the APCO shall be used for the crops indicated.

10.6 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. This reduction in the total acreage covered will be 

reflected in the emission credits applicable to the parcel(s). The DISTRICT 

shall either:

10.6.1 Identify the portion(s) of the parcel(s) covered by the discount 

acreage (i.e. the acreage eligible for a burn permit) and place the 

remaining acreage on a no-burn list. This portion will not be 

allowed to change without prior DISTRICT notification and 

approval; or,

10.6.2 Place the parcel(s) covered by the ERC certificate on a restricted 

burn list. Burning can only occur on specified fields within the 

parcel(s) after the DISTRICT has issued a restricted burn permit for 

the emissions unit (parcel(s)).

10.7 The District will determine a quarterly ERC value for each pollutant based on 

the following calculation:

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

11 DISTRICT ENFORCEMENT CONSIDERATIONS FOR OPEN BIOMASS 

EMISSION REDUCTION CREDITS

11.1 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:
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11.1.1 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. 

11.1.2 The registered owner may surrender the ERC certificate to the 

DISTRICT for cancellation and burn the parcel(s) pursuant to 

current agricultural burning regulations. 

11.2 DISTRICT enforcement considerations related to ERC certificates are the 

following:

11.2.1 To meet the requirement of enforceability, a contract, permit 

conditions, No-burn list or restricted burn list, and/or other means 

shall be utilized. 

11.2.1.1 The primary means of enforcing open biomass burning 

ERCs will be by placing the parcels on a No-Burn list 

or restricted burn list. Based on the DISTRICT’s 

enforcement and tracking policy for biomass ERCs, a 

restricted burn permit or No-burn list 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 11.1 of this Rule.

11.2.1.2 At the time of application, the applicant for an open 

biomass burning ERC certificate must provide 

information to the DISTRICT on the disposition of the 

biomass. 

11.2.1.3 Emission reduction credits used to offset project 

emissions in another district shall be implemented 

through an interdistrict agreement to ensure their 

enforceability and permanence.

11.2.2 Prior to the issuance of an ERC certificate, the registered owner of 

an ERC-designated parcel(s)/field(s) shall provide notification by 

certified mail to all growers leasing land covered by the certificate 

that open biomass burning is restricted. A copy of the certified letter 

and receipt shall be provided to the DISTRICT and maintained in 

the DISTRICT files. 

11.2.3 Facilities that claim open burning emission reduction offsets 

pursuant to HSC 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 
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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. 

11.3 To further ensure enforceability of this Rule refer to the DISTRICT 

Administrative Code Part B which contains ERC and offset tracking, open 

biomass burn permitting, and other procedures related to the implementation 

of this Rule.

12 ELIGIBILITY OF STATIONARY SOURCE EMISSION REDUCTIONS FOR 

CREDITS: Upon application to the DISTRICT, within 365 days after the emission 

reductions occurred, the following emission reductions may qualify for ERC 

certificates. Emission reductions will be deemed to have occurred on the date when 

emissions actually decreased. 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.

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

12.1.1 Emissions must have been included in the 1987 Emission Inventory.

12.1.2 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.

12.1.3 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.

12.1.4 If the emission reductions are due to the shutdown of a nonpermitted source, the applicant must demonstrate to the satisfaction 

of the APCO that the emission 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.

12.2 Under no circumstances shall any emission reductions occurring before the 

date of adoption, other than as described in Section 12.3 of this Rule, be 

eligible for ERC certificates.

12.3 Emission reductions occurring after December 31, 1987 and before the date of 

adoption. The following criteria must be met in order to deem such emission 

reductions eligible for ERC banking:

12.3.1 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 
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Rule 431 May 28, 2009 431-15

reductions.

12.4 A stationary source which obtained offsets pursuant to the DISTRICT's NSR 

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.

12.5 The following emission reductions are not eligible for ERCs for banking:

12.5.1 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.

12.5.2 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.

12.5.3 Emission reductions occurring from the shutdown or curtailment of 

a stationary source for which the DISTRICT originally provided the 

required offsets.

12.6 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.

12.7 Shutdowns or curtailments must have occurred after December 31, 1987 for 

State requirements, and November 15, 1990 for federal requirements 

applicable to major stationary sources and major modifications; or

12.8 The emissions from the emissions unit to be shutdown or curtailed are 

included in the DISTRICT's 1987 Emission Inventory for State requirements, 

and in the 1990 Emission Inventory for federal requirements applicable to 

major stationary sources and major modifications; and

12.9 Applicants for ERCs due to the shutdown of permitted or non-permitted 

emissions units shall demonstrate to the satisfaction of the APCO that such 

equipment will no longer operate within the district, except as provided in 

Section 12.1.4 of this Rule.

13 APPLICATION PROCEDURES FOR STATIONARY SOURCE EMISSION 

REDUCTION CREDITS

13.1 Any person, entity, landowner, or authorized agent, which owns or operates a 

source at which eligible emission reductions have occurred or will occur may 
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Rule 431 May 28, 2009 431-16

apply for an ERC certificate in accordance with the requirements of this Rule. 

13.2 The person or entity requesting the ERC certificate shall make an application 

on forms supplied by the DISTRICT.

13.3 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.

13.4 Applicants may claim confidentiality of information contained in the 

application pursuant to applicable provisions of the Federal Clean Air Act, 

Government Code, and HSC.

13.5 To verify emission reductions claimed in conjunction with an application for 

an ERC certificate, the DISTRICT may require source tests by CARB 

approved methods, continuous monitoring, production records, fuel use 

records, or any other appropriate means. 

14 ADMINISTRATIVE PROCEDURES AND TIMETABLE FOR STATIONARY 

SOURCE EMISSION REDUCTION CREDITS

14.1 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.

14.2 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 

the applicant. 

14.3 Upon determination that the application is complete, the APCO shall notify 

the applicant and CARB in writing. Thereafter, only information to clarify, 

correct, or otherwise supplement the information submitted in the application 

may be requested by the DISTRICT.

14.4 Withdrawal of an ERC application by an applicant shall result in cancellation 

of the application; any re-submittal will be processed as a new application.

14.5 Upon acceptance of an application as complete, the APCO shall have 180 

days to take final action on the application after considering all written 
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Rule 431 May 28, 2009 431-17

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 CARB and 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.

14.6 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.

14.7 The applicant or any other party may appeal the APCO's decision following 

provisions specified in DISTRICT Regulations.

15 STATIONARY SOURCE ERC CALCULATIONS: Calculations of emission 

reductions shall be determined by the methods described in the DISTRICT’s NSR 

Rule.

16 COMMUNITY BANK

16.1 Application for ERCs from the Community Bank: An applicant for loan 

of ERCs from the Community Bank shall apply to the APCO and certify the 

project is an essential public service.

16.2 Loan Term: The base loan term shall be based on project duration as 

represented in the application and confirmed by the APCO.

16.3 Community Bank Loan Provisions

16.3.1 The APCO shall issue an ERC certificate for each pollutant valid for 

the term of the loan.

16.3.2 The APCO shall not issue ERC certificates for amounts that exceed 

the amounts contained in the Community Bank

16.3.3 Community Bank ERCs cannot be transferred or banked by a source,

except back into the Community Bank.

16.3.4 If a project or source for which an Authority to Construct has been 

granted with ERCs from the Community Bank is terminated prior to 

the commencement of operation, the APCO shall return the ERCs to 

the Community Bank

16.3.5 At the end of the loan term or premature termination of the project, 

the ERCs, less the offset ratio amount retired pursuant to Rule 430, 

shall be returned to the Community Bank.